CPUC May Consider Fines for Frontier After Tricky Transition From Verizon
Frontier Communications may face penalties in California over the company’ difficult transition last April after acquiring Verizon wireline customers in the state. The California Public Utilities Commission voted 3-2 to support a proposed decision on rural call completion issues, including a section directing the Consumer Protection and Enforcement Division (CPED) “to investigate post-transition outage issues raised by dial-tone outages and 9-1-1 access issues following the transfer of Verizon, California to Frontier.” The decision as proposed also orders a re-evaluation of the CPUC’s transaction approval process to avoid a repeat in future telecom integrations. The commissioners' meeting was the last for Commissioner Mike Florio.
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Frontier has been "forthright" with the commission, providing a root cause analysis of the problems, but the agency still needs more information about what happened, Commissioner Catherine Sandoval said at the meeting. "We don't really have a solid number on how many people were out of service.”
“Frontier has and will continue to update the commission about our acquired operations in California while we remain focused on our commitments to expand broadband access and improve service,” a company spokesman said. “Together with Connect America Fund grants and our own substantial investment, we are expanding broadband access to more than 800,000 California households that currently lack high-speed Internet access creating significant benefits for customers and the communities we serve and narrowing the Digital Divide in rural California.”
CPED should investigate and decide whether to bring an adjudicatory order instituting investigation (OII) against Frontier, said a revised draft decision released Wednesday. Under the CPUC process, the division staff can bring an adjudicatory OII if it finds violations of state law or commission rules. Next, commissioners would review staff findings, hear from the parties, then consider fines and penalties. In addition, the draft decision asks consumers to submit informal or formal complaints about the telco. It directs CPED to consider adjudicatory actions for a 911 outage started by Intrado in 2014 and outages resulting from fiber cuts in Mendocino and Humboldt counties from 2014 to 2015.
CPED should analyze how Verizon and Frontier handled training, coordination and data transfer, plus issues leading to missing, corrupt and incompatible data including Verizon intellectual property licensed by Frontier in February, the draft decision said. CPED should analyze steps the telcos took to enable cutover of service and their compliance with terms of the CPUC deal approval, it said. The division should examine Frontier customer service issues including failures to book appointments for service technicians, it said. The division should dig into why Frontier didn’t act sooner to address problems, the draft said. "CPED shall examine Frontier management’s lack of situational awareness about the extent of the service outages, and steps that could have been taken to increase awareness. CPED will examine whether centralized alarms in Frontier’s networks should have alerted them to the breadth of the outages, and if alarms did not sound analyze why alarm systems were ineffective, or not available at the customer‐outage level.” Also, CPED should examine what notice Frontier gave to the commission, public safety, customers and the public about outages and options for reaching 911, it said.
Citing lessons learned from the switchover, the draft order directs the Communications Division to convene a working group to develop transactions and transfer guidance for the commission to consider in future takeovers. "We highlight the necessity in future merger or transfer proceedings for the Commission to consider the role of customer service and, if necessary, to require carriers to submit plans for customer service, training, and service process as a part of the record,” the draft order said. “These considerations might be at the forefront of future mergers.”
Carriers would be subject to stronger outage reporting requirements under the rural call completion decision. It requires carriers to report outages of 90,000 user minutes lasting 30 minutes or more. The CPUC remains concerned that “customers in Mendocino County, the Big Sur area, and other parts of California still report difficulty obtaining prompt repair to out-of-service or very poor line complaints, and in some cases report resistance by a COLR to providing basic telephone service when requested,” the draft order said.
“We have absolutely no idea how many outages are happening out there where people cannot call 911,” Sandoval said. The order provides CPUC with more information to inform its oversight of telecom companies, she said. "The lack of data was hampering our ability to ensure compliance with California law.” Commissioner Liane Randolph raised concerns about setting a 90,000-user-minute standard for reporting outages, which was reduced from 300,000 minutes in an earlier draft. The FCC Network Outage Reporting System standard is 900,000 minutes. Randolph said the state commission should take more time to consider the right amount. But Florio supported moving forward with the 90,000-minute standard “in the spirit of experimentation,” saying the commission could adjust it later if problems arise.
Florio won’t return for another CPUC members' meeting, President Michael Picker said as the meeting began. Florio’s term expires at the end of the year, a commission spokeswoman said. Sandoval’s term also is expiring, but Picker didn’t say it was her last meeting, and the spokeswoman didn't comment on that. In California, the governor appoints commissioners and the state Senate must confirm the picks within one year. While Florio apparently won’t return, Gov. Jerry Brown (D) could reappoint Sandoval.