Apathy Isn't A Business Model: Major US Telcos Teeter Toward Bankruptcy

from the dysfunction-junction dept

For more than a decade we've noted how the US broadband industry's biggest problem is a lack of healthy competition. In countless markets consumers either have the choice of a terrible phone company or a cable giant. The nation's phone companies have spent the last decade refusing to upgrade (or in some cases even repair) their aging DSL lines, because they don't see residential broadband as worth their while. That in turn is giving giants like Comcast and Spectrum an ever greater monopoly in many markets, reducing the already muted incentive to compete on price or shore up comically terrible customer service.

Many US telcos now exist solely to milk subsidies while doing the absolute bare minimum. This dynamic often results in some absurd dysfunction. Like in West Virginia, where incumbent telco Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. The graft and corruption in the state is so severe, state leaders have buried reports, and, until recently, a Frontier executive did double duty as a state representative without anybody in the state thinking that was a conflict of interest.

Frontier has also been facing investigations in states like Minnesota, where regulators have questioned why the company has received taxpayer subsidies for doing little to nothing. Unsurprisingly the company has been struggling with using apathy as a business model, and there's chatter that a long awaited bankruptcy may finally be imminent. Unlike AT&T and Verizon, telcos like Frontier, Windstream, and CenturyLink don't have wireless income to offset the losses:

"Some financial analysts have been predicting a Frontier bankruptcy for several years. According to these analysts, companies such as Frontier and Windstream continue to rely, in large part, on copper network infrastructure, which can’t support the speeds that cable infrastructure can support. As a result, these telcos will continue to have difficulty competing in both the residential and business market. And unlike companies such as AT&T and Verizon, the second-tier telcos don’t have a wireless business to fuel growth."

Much of Frontier's debt came courtesy of a massive 2015 deal to acquire Verizon's unwanted territories in states like Florida, Texas, and California for $10.5 billion. Frontier's focus at the time was growth for growth's sake, despite the obvious fact that many of these customers were on aging phone and DSL lines that needed to be upgraded lest they fall apart. Like many of its companions, Frontier chose the latter option, and now faces a bankruptcy protection proceeding that was already technically paid for by the American taxpayer.

Again, the inevitable outcome of these telco bankruptcies is a bigger, stronger cable broadband monopoly. Despite the predictions of many, wireless isn't going to be a magical panacea that fixes the problem. And while low-orbit satellites may help, that sector too has its own lengthy history of failed promises. With the government recently deciding that the sector needs neither competition nor meaningful regulatory oversight to function properly, there's not much in the way accountability or repercussion for the mass of US telecom giants that simply refuse to give a damn.

Filed Under: broadband, competition, finances, telcos
Companies: frontier


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  • identicon
    Anonymous Coward, 18 Nov 2019 @ 6:58am

    I beg to disagree.

    I beg to disagree. Apathy is a business model, for the execs. Who else matters in a corporation?

    The executives have executive salaries, golden parachutes and utter immunity from accountability. Why should they care. The execs enjoy the golden life successfully. The corporation is just a means to an end.

    As for the customers, employees and non-executive share holders, well they didn't think correctly. From the exec's perspective tough on them. If anyone wants to profit from a corporation then do the dirty work to become an exec (or their kept Congress-critter).

    Therefore, apathy as a business model is a matter of perspective. Apathy us a very good business model for the executive few.

    reply to this | link to this | view in chronology ]

    • icon
      ECA (profile), 18 Nov 2019 @ 12:02pm

      Re: I beg to disagree.

      Lets see...
      Who needs employee's?
      We contract hire different groups to be called to do the Other jobs..

      They contact the customer service(hired out), then they contact an installer/repair person.(hired out on call)

      Everything else is a billing service(hired out) and thats about it.

      Whats left is a bank account, and someone to sort the cash.

      And the best part is that all these Contractors are Write off's.

      the rest can go into our pockets.

      As to Frontier and the Others that are to small to have Diversified. NO ONE will buy them.. others KNow that have a broken system that needs allot of repair, and the service they have is substandard.

      THEN comes LLC.. you cant sue the owners. Only the company is liable.. AND there isnt Much there.
      Put the money into the Owners pockets and there is NOTHING left..
      You cant even go after yearly Profits...as its all out of the bank.

      reply to this | link to this | view in chronology ]

  • icon
    TheResidentSkeptic (profile), 18 Nov 2019 @ 7:18am

    Out of service... again...

    for the 2nd week this month, I have NO service. The company just says "we know". No ETR. Totally could not care less.

    However, the bills keep coming. Gotta pay for that service that isn't being delivered.

    And that is the biggest problem. No oversight that can tell these companies that they can't bill for service not rendered.

    And no, I can't call anyone else. There are 2 providers in my area - both are re-sellers of the same DSL service over the same lines.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Nov 2019 @ 8:05am

      Re: Out of service... again...

      Should ask them to prorate your bill.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Nov 2019 @ 8:35am

      Re: Out of service... again...

      Try another area.

      reply to this | link to this | view in chronology ]

    • icon
      aerinai (profile), 18 Nov 2019 @ 8:43am

      Re: Out of service... again...

      Just complain to the FCC, they'll get right on it! Oh wait... they just forward the complaint to your carrier and don't follow up...

      Ok, another idea. Complain to the FTC and they'll get right on it! Daddy Pai said so! Oh wait... they are underfunded and have much bigger industries that are doing a lot of shady things... so scratch that.

      Ok, another idea. Complain to your state and local officials! They will definitely help you! Oh wait... their top donors were telecom and cable industry, and they just passed a law to restrict access to help that poor, struggling internet company in your area.

      Ok, another idea. Just use your 4G data plan! I mean you can't watch movies, play video games, do much of anything other than facebook and email... up until your ridiculous 'unlimited' data cap is hit, but hey, we've solved it guys! We can say the digital divide has been conquered! High Fives all around!

      reply to this | link to this | view in chronology ]

    • icon
      tom (profile), 18 Nov 2019 @ 9:40am

      Re: Out of service... again...

      Might consider a small claims court action. If you are lucky, the judge has the same crap service. And some times small claims cases are still allowed even if class action cases are forced to arbitration.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 18 Nov 2019 @ 12:39pm

        Re: Re: Or just get dangerous

        document all the times it happens as well as interactions with employees. Note service outages as well as when and how they happen “does weather knock your service out out easier then a twig? Is your service regulary going out for no reason due to non maintiance reasons? Is your interactions with support bear down we don’t know? Implying said knowledge?”

        And for the love of god...
        For the love..
        Do..not..tell...them..
        That you are doing it.
        Because if you take it to court that gives them time to mount a capable defense or retaliate.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Nov 2019 @ 12:10pm

      Re: Humble suggestion

      Them:we know
      You: you know...I don’t know but I heard some people are changing to “insert made up or real company that may or may not have a presence in your area just go with it” I’m thinking of trying it out. Do you think I should?
      Them:”sweats profusely” so what line are you on sir or madam?

      reply to this | link to this | view in chronology ]

  • icon
    davetechdirt02 (profile), 18 Nov 2019 @ 9:41am

    CenturyLink is adding fiber to my neighborhood in Denver.

    reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 19 Nov 2019 @ 8:02am

      Re:

      CenturyLink is adding fiber to my neighborhood in Denver.

      I hadn't heard about that. They're not nearly far enough north yet for me but I'll have to keep an eye on it. According to Ars, "Customers with fiber who pay for gigabit speeds are exempt from the new data caps and overage fees" which would be nice because I have a cap with Comcast.

      reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 18 Nov 2019 @ 11:26am

    But 5G will fix EVERYTHING!

    reply to this | link to this | view in chronology ]

  • identicon
    CyberKender, 18 Nov 2019 @ 3:29pm

    NetNeutrality and market competition...

    Regulation requiring sharing of pipes to end users at fair prices. Removal of area-controlled zones of service monopolies.
    Federal legalization of municipal ISP services.
    Recovery of infrastructure largely funded through government subsidies.
    These are a few of my favorite things...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Nov 2019 @ 4:58pm

    Masnick supports 230, which is why he celebrates when hardworking corporations go bankrupt while pirates steal mailing lists and financial advice. He's scared of me and the police finding the trail of breadcrumbs leading to his Google paymasters.

    Fuck you, Masnick!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Nov 2019 @ 5:20pm

      Re:

      John Smith being a bitter, impotent fuckwit? I'm shocked, I tell you, sho...

      Okay, not that shocked.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Nov 2019 @ 5:30pm

      Re:

      You know, there are medications that can help you. Perhaps you should go see your doctor.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Nov 2019 @ 11:22pm

      Re:

      if You want to be less angry, try removing the mirrors around your house.

      reply to this | link to this | view in chronology ]

    • icon
      Wendy Cockcroft (profile), 19 Nov 2019 @ 7:23am

      Re:

      **Masnick supports 230, which is why he celebrates when hardworking corporations go bankrupt while pirates steal mailing lists and financial advice. He's scared of me and the police finding the trail of breadcrumbs leading to his Google paymasters.

      Fuck you, Masnick!**

      All wrong. He supports 230 because it means he's not held responsible when Hamilton maligns me. Again.

      he celebrates when hardworking corporations go bankrupt while pirates steal mailing lists and financial advice.

      Corporations don't work, people like me work. Mike doesn't celebrate anyone going bankrupt, particularly corporations that employ large numbers of people like me who inevitably get screwed when a corporation tanks while the top tier officers make out like bandits.

      You can't steal a mailing list or financial advice by copying it. If someone copies such things it's unlikely that these things, in and of themselves, will give them any kind of advantage as people like me are likely to bin unsolicited financial advice as spam. If you're a bitter spammer annoyed that someone copied your stuff, too bad. Not worth celebrating, though.

      He's scared of me and the police finding the trail of breadcrumbs leading to his Google paymasters

      We await the globally televised perp-walking of our Glorious Leader with bated breath, Comrade Spammer.*


      *Not gonna happen. Spammer is spamming.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 19 Nov 2019 @ 8:41am

      Re:

      Seriously. Seek help. As mentioned a million times before Section 230 means the one who posted is liable not the hosting platform. It does not support piracy and "creators" can still go after those who pirate their stuff. They just can't go after the platform.

      reply to this | link to this | view in chronology ]


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