The Communications Workers of America (CWA) has sent a letter to the Federal Communications Commission (FCC) that asked the FCC to reject West Virginia legislators' attempts to block Frontier Communication from taking part in the FCC’s Rural Digital Opportunity Fund (RDOF).
Frontier was among the big winners earlier this month in Phase 1 of the FCC's $9.2 billion reverse auction for RDOF. Frontier was awarded close to $371 million in RDOF funding to provide rural broadband across eight states, including West Virginia.
State and federal lawmakers in West Virginia have raised red flags in regards to Frontier’s winning bid in the RDOF auction. In a Dec. 9 letter to outgoing FCC Chairman Ajit Pai, Senator Shelley Moore Capito (R) wrote that she had concerns over Frontier's ability to provide gigabit services in West Virginia that the state is counting on to close the digital divide.
"The stakes are simply too high to provide nearly $250 million to a company that does not have the capability to deliver on the commitments made to the FCC," Capito wrote in her letter.
Last week members of the West Virginia Senate and the House of Delegate’s Technology and Infrastructure Committee, which is a bipartisan group, wrote separate letters to the FCC that asked the federal agencies to take a closer look at Frontier's RDOF bid, according to a story by The Weirton Daily Times.
On Tuesday, Communications Workers of America District 2-13 Vice President Ed Mooney sent a letter to the FCC that asked it to disregard West Virginia legislators' attempts to under-cut Frontier's winning bid for the RDOF funds. CWA represents about 1,200 Frontier employees in West Virginia and 8,000 nationwide.
In his letter, Mooney refuted the legislators’ claims that Frontier’s recent Chapter 11 bankruptcy should be a cause of concern,
“CWA members at Frontier have led the way in exposing how the company’s previous leadership’s failures to invest in broadband infrastructure — especially cutting hundreds of technician jobs across the state — have led to problems with service quality and availability for West Virginians,” Mooney said, in a statement. “While CWA supports oversight to ensure that federal funding is going directly to broadband deployment, Frontier is a major broadband provider in West Virginia and is fully capable of deploying service to additional locations. It would be unrealistic to achieve large scale build-out in the state without Frontier.”
Frontier declined to comment on the CWA's support in West Virginia.
Last week, Frontier announced Nick Jeffery, who is currently CEO of Vodafone UK, would take over the helm from current President and CEO Bernie Han on March 1. Han was named Frontier's CEO and president almost exactly a year ago after replacing Dan McCarthy. McCarthy had been with Frontier for 29 years prior to stepping down in December of last year.
Frontier Communications filed for bankruptcy on April 14 to begin a prearranged $10 billion debt-cutting proposal backed by its largest bondholders. Frontier announced it had entered into a Restructuring Support Agreement (RSA) with bondholders representing more than 75% of its $11 billion outstanding unsecured bonds. Frontier's goal was to reduce its debt by more than $10 billion and eliminate nearly $1 billion in annual interest obligations.
In August, the U.S. Bankruptcy Court for the Southern District of New York approved Frontier's plan for reorganization. According to Frontier's bankruptcy plan, four investment firms will own between 20% and 28% of the new company: Elliott Management, Franklin Mutual, Golden Tree Asset Management, and HG Vora. Frontier has said it was targeting early next year for emerging from Chapter 11 bankruptcy.
The CWA also said in its press release that the proposed December 18, 2020 Joint Settlement to resolve the West Virginia Public Service Commission's (PSC) review of the bankruptcy restructuring imposed "meaningful commitments on Frontier that will lead to large-scale upgrade of the Frontier plant in West Virginia."
The PSC settlement agreement was between Frontier, PSC staff, the PSC Consumer Advocate Division, and CWA. If the settlement agreement is approved by the full commission on Jan. 19, West Virginia would become the 11th state to accept Frontier’s bankruptcy reorganization plan.
“Based on what we’ve seen from the company’s commitments in the proposed PSC settlement, and with a new CEO starting in March who in his role at Vodafone UK placed emphasis on large scale fiber deployment as the future of broadband, we are optimistic that the company has significantly improved its financial situation and is well-positioned to play a integral role in upgrading and expanding West Virginians’ broadband networks,” Mooney said.
Frontier has garnered regulatory approvals, or favorable determinations, to emerge from Chapter 11 from 12 states: Arizona, Georgia, Illinois, Minnesota, Mississippi, Nebraska, Nevada, New York, South Carolina, Texas, Utah and Virginia. Frontier has said it was making progress on securing the remaining regulatory approvals.