FTC Sues Major ISP for Lying About Broadband Speeds

The FTC and a coalition of law enforcement agencies from six states have filed suit against Frontier Communications, accusing the broadband provider of advertising broadband speeds the company repeatedly failed to deliver, while charging consumers higher prices for broadband speeds they never actually received. 

According to the full complaint, Frontier violated the FTC Act and various state laws by misrepresenting the speeds of the digital subscriber line (DSL) service the company provides 1.3 million customers across 25 states. Unlike fiber, dated DSL technology provides even slower speeds depending on distance and the quality of the copper lines used.

The FTC stated these limitations consistently weren't made clear to consumers, and Frontier repeatedly billed consumers for higher speeds they weren’t able to obtain. The suit was filed in cooperation with attorneys general from Arizona, Indiana, Michigan, North Carolina, and Wisconsin, and the district attorneys’ offices of LA County and Riverside County, California. 

In a statement, a spokesperson for Frontier stated the FTC lawsuit was “without merit.”

“Frontier’s DSL Internet speeds have been clearly and accurately articulated, defined and described in the company’s marketing materials and disclosures,” the company said.

But the FTC’s latest complaint is far from the first of its kind.

U.S. telcos have been accused repeatedly of failing to adequately upgrade or repair their aging DSL lines. But because many of these companies enjoy a regional monopoly over broadband access, they face little pressure to upgrade these networks, provide quality customer service, or charge affordable rates. The FTC says it has been inundated with such complaints for years.

In 2019, Minnesota Attorney General Lori Swanson released a report based on over a thousand complaints and half a dozen public hearings, accusing Frontier of neglecting its deteriorating phone and broadband networks. Filled with photographic evidence of disrepair, the AG stated Frontier’s negligence not only harmed consumers, it posed a public health risk. 

“Frontier customers with these outages include those with family members with urgent medical needs, such as pacemakers monitored by their medical teams via the customer’s landline,” the AG said.

The company last year struck a $900,000 settlement with Washington State Attorney General Bob Ferguson, after the state accused Frontier of advertising speeds it couldn’t deliver, and using sneaky fees to drive up the cost of consumer bills post sale. 

Frontier has also been accused of misusing federal taxpayer subsidies in states like West Virginia, intended to improve the condition of the company’s network. At the same time, Frontier executives and lobbyists have hindered and impeded local community efforts to bring better broadband service to many of these long-neglected areas.

In 2015, Frontier Communications announced it would be buying Verizon's unwanted broadband and phone customers in Florida, Texas, and California for $10.5 billion. Those customers also consistently complained of slow service, lengthy outages, spotty repairs, and high prices.

Swamped by the debt from those deals, Frontier filed for bankruptcy protection in April 2020, allowing the company to shed $11 billion in debt and emerge with a relatively clean slate this year. But the company’s latest earnings report shows the company continues to bleed phone and broadband subscribers frustrated by slow speeds and high prices.

At the telecom lobby’s behest, the Trump FCC voted in 2017 to not only eliminate net neutrality rules, but to neuter the agency’s consumer protection authority. That left policing big telecom in the lap of the FTC, an agency that has limited authority and can only take action if it’s very clear an ISP has engaged in "unfair or deceptive” behavior under the FTC Act. 

“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.”

The FCC is limited in its ability to police the telecom sector until it restores net neutrality rules and its Title II authority over broadband providers. But that can’t happen until the Biden administration fully staffs the FCC and appoints a permanent agency boss.