FCC Greenlights Frontier’s Chapter 11 Restructuring

Telco has also received regulatory approval or favorable determinations in thirteen states; expects to emerge from Chapter 11 in early 2021.

  • Frontier Communications

NORWALK, Conn.--Frontier Communications has secured approval from the FCC for its Chapter 11 restructuring plan, enabling the provider to proceed with its plans to accelerate fiber deployments across its footprint.

Frontier expects to complete the transactions contemplated under its previously confirmed Plan of Reorganization and emerge from Chapter 11 in early 2021. When it emerges from Chapter 11, Frontier will have reduced its total outstanding indebtedness by more than $10 billion and will move forward with enhanced financial flexibility to support continued investment in an improved customer experience and long-term growth.

The U.S. Bankruptcy Court for the Southern District of New York confirmed the Company’s Plan of Reorganization in August 2020.

As part of the approval, the FCC also granted Frontier a waiver that enabled the company to bid in phase one of the Rural Digital Opportunity Fund (RDOF) while the process was still ongoing. Frontier bid for and won a small piece of the phase one RDOF auction while other providers, including Charter Communications and SpaceX, won the remaining bids.

The FCC’s approval comes amidst concerns from the Communications Workers of America (CWA) and The Utility Reform Network (TURN). A chief concern between these two organizations was Frontier’s plan to conduct a "virtual separation" of the company that divided aeras between "InvestCo" states that would receive new fiber deployments and "ImproveCo" states that would not. Both groups asked the FCC to investigate those concerns before giving a decision.

"CWA believes that the public interest will be harmed if Frontier fails to invest equitably across its footprint and service to Frontier customers is allowed to further deteriorate – especially in any service areas deemed 'ImproveCo,' which may represent as much as 25% of households in Frontier's current service areas," the CWA said in a statement issued Friday.

However, the FCC countered that it found no merit in the CWA and TURN’s concerns. The regulator said Frontier is "more likely to improve service quality and invest in infrastructure than it would be absent its prompt emergence from bankruptcy." Additionally, the FCC said that Frontier remains subject to service quality requirements in all states, including in New York, where Frontier has committed to a three-year service quality improvement plan as part of the state's approval of the company's reorganization.

CWA said it will continue to watch the process as it unfolds.

"In the absence of an investigation of these issues by the FCC, some states like California are pursuing thorough oversight that is resulting in strong commitments to ensure the bankruptcy reorganization will benefit the public," CWA said in a statement. "Frontier’s recent proposed settlement to the California Public Utility Commission to gain approval of the bankruptcy restructuring plan included a commitment of $1.75bn in new capital investment, 350,000 new fiber to the premise connections, and a commitment to maintain technician staffing levels and California call center locations required to perform this work. CWA will continue its advocacy for other states to follow suit and for Frontier to use its enhanced financial flexibility to invest equitably across all the communities it serves."

Frontier said it is on track to emerge from Chapter 11 early this year, noting that it now has regulatory approvals or favorable determinations from the FCC and 13 states: Arizona, Georgia, Illinois, Minnesota, Mississippi, Nebraska, Nevada, New York, Ohio, South Carolina, Texas, Utah and Virginia. In August 2020, the U.S. Bankruptcy Court for the Southern District of New York confirmed Frontier's plan.

"We continue to make important progress in our constructive engagement with regulators across our service territories, and this approval from the FCC marks a major milestone," Bernie Han, Frontier's outgoing president and CEO, said in a statement. "We continue to await approval in just four states and are working to expedite those approvals to enable the Company to emerge from Chapter 11."

Nick Jeffery is going to leave his position as the CEO Vodafone UK to join Frontier and succeed Han as CEO starting March 1, 2021.

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