Frontier Communications must stop lying to consumers and charging them high-speed prices for slow internet service, the Federal Trade Commission said Thursday.
Under a proposed order by the agency and two California law enforcement agencies, the Norwalk, Connecticut-based internet service provider will be prohibited from misleading consumers about its slow internet service and required to support its marketing claims.
"Frontier lied about its speeds and ripped off customers by charging high-speed prices for slow service," Samuel Levine, director of the FTC's Bureau of Consumer Protection, said in a statement. "Today's proposed order requires Frontier to back up its high-speed claims. It also arms customers lured in by Frontier's lies with free, easy options for dropping their slow service."
Frontier must also make it easy for customers to cancel their service free of charge when it fails to deliver the promised benefits, the FTC stated.
The company advertises and sells digital subscriber line (DSL) internet service in several plans, based on download speed. The FTC alleged in a May 2021 complaint that Frontier failed to deliver on promised internet speeds.
The FTC's complaint against the company included "baseless allegations and disregarded important facts," a Frontier spokesperson said in a statement sent to CBS MoneyWatch.
"Furthermore, the March 2022 settlement stipulates that we admit no wrongdoing. We settled the lawsuit in good faith to put it behind us so we could focus on our business — that's in the best interest of all our stakeholders, and especially our customers," the spokesperson stated. "Our commitment is to our customers and providing them with access to high-speed internet and improving our service in rural and underserved areas."
Thousands of complaints
Since at least January 2015, thousands of consumers have complained to Frontier and government agencies about their broadband service being slower than advertised, according to the FTC's complaint, which described Frontier as providing DSL service to about 1.3 million people in 25 states, many in rural areas.
Frontier must now substantiate its claims for new and existing customers and notify them when it is unable to do so, as well as notify people getting slower-than-advertised internet speeds, letting them change or cancel their service at no charge.
The company would also be prohibited from signing up new customers for its DSL internet service in areas where the high number of users sharing the same networking equipment results in slower service, the FTC said.
Frontier will be required to pay $8.5 million in civil penalties and costs to the Los Angeles County and Riverside County district attorneys' offices on behalf of California consumers. It will have to pay $250,000 to be distributed to its California customers harmed by the company's practices, the FTC said.
The company is also being ordered to install fiber-optic internet service — generally far faster than DSL — in 60,000 California homes over four years, at an estimated cost of $50 million to $60 million, according to the agency.
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