Our recent $160 million settlement with Frontier Communications marks the largest consumer protection action of its kind in state history and represents a major step forward for improved Internet access and service for West Virginia.
Routine email and web surfing can be adequately served with yesterday’s dial-up speed of 56 kilobits per second, but today’s world is much different. The new era depends upon video capabilities and large data transfers at work, in addition to streaming entertainment at home.
For instance, satisfactorily watching just one, high-definition movie can require a connection of 5 megabits per second — a speed many West Virginians thought they were obtaining after they purchased high-speed Internet service.
Through this landmark settlement, we seek to enhance speeds and increase connectivity. The agreement reduces many consumers’ bills and over a three year period ensures heavy investment into our state’s Internet infrastructure.
Between 2013 and 2015, our office received multiple complaints from consumers who paid for Frontier’s high-speed service, which advertised speeds up to 6 Mbps.
We took those complaints seriously, initiated a comprehensive investigation and then brokered an agreement for approximately $160 million — the largest independently negotiated settlement in West Virginia’s history.
Simply put, this represents a major victory for West Virginia consumers without the cost of extensive and uncertain litigation. I appreciate that we have been able to work out an agreement with the company.
The centerpiece of this consumer protection agreement requires Frontier to spend at least $150 million to upgrade its infrastructure over the next three years. Those capital expenditures must come in addition to the $180 million in planned improvements as part of a federal program.
Of course, infrastructure upgrades will not occur overnight. That’s why another portion of the consumer protection settlement requires Frontier to reduce monthly bills for at least 28,000 customers — a provision expected to save approximately $10 million for consumers.
For customers receiving just 1.5 Mbps or less, your monthly bill will drop to $9.99 per month. That equates to a savings of $10 to $20 per month.
Frontier further agreed, as part of the consumer protection settlement, to make no attempt at passing costs associated with the settlement onto consumers through any regulatory proceeding, including those before the state Public Service Commission.
Together, the main provisions amount to approximately $160 million in benefits without the time or expense of a prolonged lawsuit that, in and of itself, offers no guaranteed benefit to consumers. Plus, the state expended no funds for outside counsel – all legal work was handled in house, saving hundreds of thousands to millions of dollars.
We hope and anticipate that this agreement will represent a game changer for West Virginia. Rest assured, it’s only the first step from our office to improve connectivity in our state. Much more needs to be done.
Since becoming attorney general, I have sought to use the authority of our office to help consumers as well as fundamentally improve the business climate of our state. Through this record-breaking settlement, we are making good on our promise and investing in West Virginia’s citizens and her future.
Patrick Morrisey is Attorney General of West Virginia.