Frontier Communications Sued Yet Again For Lying About Its Pathetic Broadband Speeds
from the do-not-pass-go,-do-not-collect-$200 dept
For a long time we’ve talked about the fact that if you really want to understand why U.S. broadband is expensive and mediocre, you should take a good hard look at Frontier Communications. The regional phone company in 25 states has, for years, been accused of neglecting to adequately upgrade or repair its network, despite millions in wasted taxpayer subsidies. Protected from both competition and accountability thanks to state and federal corruption, the company has happily price gouged captive customers without facing real penalties.
In recent years that has shifted slightly thanks largely to individual states like Washington, New York, and Minnesota, which have all sued the company at various times for neglecting its network, advertising speeds its sluggish DSL lines can’t deliver, or inundating its subscribers with bullshit fees and surcharges (a neat trick that lets ISPs advertise one price, then charge you a much higher rate).
This week Frontier found itself again under fire for, you guessed it, lying about its broadband speeds and overcharging consumers for substandard service. This latest suit (pdf) was jointly filed by the FTC, the attorneys general from Arizona, Indiana, Michigan, North Carolina, and Wisconsin, and the district attorneys? offices of LA County and Riverside County, California. Like previous suits, the new FTC suit accused Frontier of advertising speeds it knows its aging and distance-constrained DSL lines can’t deliver, failing to disclose those limits to consumers, and overbilling subscribers based on speeds they can’t actually get.
Granted there’s a reason Frontier keeps getting sued without much changing. And that’s because the fines levied upon regional telecom monopolies are usually a small fraction of the money made from exploiting captive consumers (and local governments). As such, the penalties are just viewed as the cost of doing business, get quickly brushed aside, and little really changes in the underlying market mechanics.
Thanks to the Trump administration’s net neutrality repeal (which also gutted FCC consumer protection authority), the FCC is now limited as to what it can do to thwart this behavior. That left (as telecom lobbyists intended) most oversight to the FTC, which can’t make new rules, lacks the resources and staff to adequately tackle telecom (on top of fifty million other obligations across a universe of other sectors) and is limited to enforcement actions in instances where it’s extremely clear a company is engaged in “unfair and deceptive” behavior under the FTC Act.
The telecom lobby knew all of this, which was the whole point of the net neutrality repeal. That was acknowledged by acting Commissioner Rebecca Slaughter in a statement on the lawsuit:
“As important as this case is, it also shows why the FTC can never fully fill the regulatory gap left in the wake of the repeal of Net Neutrality at the FCC, the expert agency on telecommunications services,? Acting Chair Rebecca Kelly Slaughter said of the lawsuit.
?The FTC will do what we can to hold broadband providers accountable,? she added. ?But the pandemic has underscored the essential nature of internet access; just like the country?s water, electricity, and phone services, ISPs require direct and on-going oversight. That active oversight by the proper regulator may have prevented these violations.”
While these scattershot enforcement actions do help somewhat, you can’t fix US broadband dysfunction without targeting its two root causes: regional monopolization and state and federal corruption. There are a million ways to do that: restore FCC consumer protection authority, properly fund and staff regulators, ramp up flimsy antitrust enforcement in telecom, embrace genuine pro-competition policies incumbents won’t like (including supporting community broadband), stop mindlessly rubber stamping every idiotic merger that comes down the road, and hold telecom companies accountable for repeated empty pre-merger promises. If none of that works and they remain absolutely dedicated to obnoxious behavior, break them up.
But US policy leaders decidedly don’t want to actually do any of that. One, because these companies are politically powerful campaign contributors in a pay to play system. They’re also tightly tethered to our intelligence and law enforcement apparatus, further reducing any political incentive to hold them accountable. So instead we get government policy (and a lot of press coverage and rhetoric) that treats the resulting problems as ambiguous issues that just dropped out of the sky one day (see: endless lip service about the “digital divide”) without acknowledging that corruption and monopolization are the obvious cause.