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Frontier satisfies state-mandated performance goals

Three years after taking over Verizon's West Virginia landline operations, Frontier Communications Corp. officials say the company has either met or exceeded state-mandated performance goals for improving local service.

When the state Public Service Commission approved Frontier's acquisition of the Verizon network in May 2010, it imposed several conditions as part of the transaction.

Those included requiring the company to invest nearly $280 million to improve service quality and increase broadband deployment by the end of 2013. Regulators also said Frontier must ensure that at least 85 percent of households in the old Verizon network have broadband access by the end of 2014.

Frontier officials now say they have satisfied regulators' requirements well ahead of schedule.

"We have met all of those (conditions)," said Dana Waldo, Frontier's senior vice president and general manager in West Virginia.

Between July 2010 and April 2013, Frontier invested more than $300 million in improvements to its West Virginia network operations. That included both increasing access and

improving the quality of the system.

The investments appear to have caused a drop in service interruptions and customer complaints.

Company data show a 25-percent decline in network problems between July 2010 and April 2013.

Customer complaints to the PSC also dropped by 57 percent, from more than 1,500 a year in mid-2010 to a little more than 600 complaints in the 12-month period from May 2012 to May 2013.

"Spending that money and improving that network reduced the number of problems on the network," Waldo said.

The company also delivered its 85 percent broadband access goal nearly two years ahead of schedule.

According to company data, nearly 86 percent of households in the company's territory had broadband availability by the end of 2012. The number increased to 87 percent by the end of March.

While the company has met its goals, Waldo said officials don't plan to stop investing in the network - particularly in the area of broadband availability.  

"We still have expansion plans," he said. "We want to bring access to every place we can in West Virginia where it's economically feasible."

The company is also involved in federally funded initiatives to expand broadband access across the state.

Frontier has completed its portion of the state's Broadband Technology Opportunities Program, which was funded by federal money. The company spent $42 million of those funds to install 675 new miles of fiber cable and provide access to 647 communities across the state.

Frontier is also tapping funds from the Federal Communications Commission's Connect America Fund to further expand broadband in rural areas of the state. Those funds have been used to expand service in rural areas around Sissonville and East Bank in Kanawha County, as well as in rural parts of Roane and Jackson counties.

Ryan Bailey, general manager for the company's Charleston area market, said the investments are not only increasing access but speeds as well. He said the company hopes the improvements will help it pull market share away from cable-based competition.

"We're trying to increase our speed as we go to make it even more competitive," Bailey said. "Especially here in Charleston - where there's a lot of competition - our focus is about the service and the quality of."

In addition to landline-based service, the company also rolled out a satellite-based broadband service in November. The program is designed to provide access to rural homes located in places where it is not economically feasible for Frontier or cable companies to expand their line-based networks.

Waldo said the service is exceeding sales projections, with more than 5,700 customers having signed up since the launch last fall.

While the company said it's made significant strides since taking over in 2010, state Consumer Advocate Division director Byron Harris said there's still more to be done.

Harris said a key reason for Frontier's improvement statistics is the fact that Verizon gave its successor much to improve upon.

"Because Verizon did such a poor job, (Frontier has) shown great improvement - but it's improvement from a lousy level," he said. "It's still not what we'd expect from a telephone company."

Harris called Verizon a "duct tape company" that only focused on patching problems and not investing in the network.

"They were all about doing band-aid fixes and not spending any money," he said. "Now Frontier, to their credit, when they fix stuff, they fix it."

Waldo said Frontier did have to spend a great deal of money to properly fix some of Verizon's temporary solutions.

"When we acquired property, you could drive down roads and see what looked like garbage bags on the lines," Waldo said. "And those were just that - garbage bags.

"What they were trying to do was trying to keep the water out of the equipment instead of doing the right thing and putting in the weatherproof enclosures," he said.

Although Frontier has invested more than $300 million in the last three years, West Virginia on the whole still has a long way to go before it is on par with other states in terms of broadband access and use.

According to the National Telecommunications and Information Administration, West Virginia ranks 49th for broadband availability; only Montana has a lower rate.

Residents are also slow to adopt the technology.

A report released last week by the same agency found only 59.1 percent of state households subscribe to broadband service.

It also found that more than one-third - 35.4 percent - did not even own a computer. Only Mississippi had a higher percentage of households that did not own a computer.

The gap between the state's broadband access and adoption rates provides a hurdle for investment in the technology.

Waldo said Frontier has been very disciplined in its investments over the years in order to make sure it can adequately pay for its improvements. The company expects to continue that approach in the future.

"Our expenditures going forward are going to match our ability to not only finance the expansion but also attract the customers," Waldo said. "That's the catch: the adoption. You've got to think beyond just building a network, you've got to have subscribers to pay for it as well."

Waldo said industry officials have identified three barriers that keep people from adopting broadband technology: inability to operate a computer, lack of perceived value in the Internet and the price of broadband.

Waldo said Frontier has been working with several community-based organizations across the state to educate people about computers and the Internet. He also said the company would continue to take advantage of public funds to help expand access in an affordable manner.

"We're taking a look at every opportunity to expand broadband so that West Virginia will have access to broadband at percentages that are as high as anywhere else in the country," Waldo said. "That's really our goal."

Contact writer Jared Hunt at business@dailymail.com or 304-348-4836. 


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