Press Release
Frontier's New Internet Overcharging Scheme Gouges Internet Users
Contact: Timothy Karr, 201-533-8838
Recent news reports indicate that although revenue for Internet provider Frontier Communications has been increasing, the company is testing a new Internet overcharging scheme that would force consumers to pay outrageously high fees for what the company arbitrarily deems “high bandwidth use.”
In a letter to some of its Minnesota customers, Frontier stated that "a reasonable amount of usage is defined as 5 gigabytes combined upload and download consumption during the course of a 30-day billing period," and that users who exceed 100 gigabytes per month of data consumption must pay $99.99 per month or face service termination.
Last month, the National Broadband Plan reported that "the average Internet user with a fixed connection consumes 9 gigabytes of data per month," and that this amount is steadily increasing as consumers integrate broadband into more facets of their lives.
Frontier is currently seeking FCC and state regulatory approval to purchase nearly five million mostly rural lines from Verizon Communications, in a deal that would add millions of new customers and saddle the company with $3.3 billion in additional debt. The transaction has been criticized by union leaders, consumer advocates and some state regulators who have made it clear that the deal would be a disaster for customers in the affected areas.
Free Press Research Director S. Derek Turner made the following statement:
"Frontier's proposed Internet overcharging is nothing more than a transparent attempt to gouge customers. Frontier is asking customers to pay nearly $100 in overage penalties for bandwidth that costs the company mere pennies. While there may be a place for discussing reasonable usage-based billing, the scheme Frontier is testing is completely divorced from the underlying economics. This price-gouging attempt comes at a time when Frontier’s revenue is rising and it is investing less in its network.
“Even worse than its price-gouging is Frontier’s assertion that a mere 5 gigabytes per month is a ‘reasonable’ amount of usage when just last month the National Broadband Plan reported that average Internet users with a fixed connection consume 9 gigabytes of data per month. If Frontier's definition of ‘reasonable’ were more widely adopted, we'd doom our broadband marketplace to permanent second-class status among our global competitors.
“Frontier's Internet overcharging scheme is just one more reason for regulators to say ‘no thank you’ to the company's plans to nearly triple its customer base by taking on much of Verizon's rural customers in a debt-laden deal that is sure to cripple any further development of this infrastructure."
In a letter to some of its Minnesota customers, Frontier stated that "a reasonable amount of usage is defined as 5 gigabytes combined upload and download consumption during the course of a 30-day billing period," and that users who exceed 100 gigabytes per month of data consumption must pay $99.99 per month or face service termination.
Last month, the National Broadband Plan reported that "the average Internet user with a fixed connection consumes 9 gigabytes of data per month," and that this amount is steadily increasing as consumers integrate broadband into more facets of their lives.
Frontier is currently seeking FCC and state regulatory approval to purchase nearly five million mostly rural lines from Verizon Communications, in a deal that would add millions of new customers and saddle the company with $3.3 billion in additional debt. The transaction has been criticized by union leaders, consumer advocates and some state regulators who have made it clear that the deal would be a disaster for customers in the affected areas.
Free Press Research Director S. Derek Turner made the following statement:
"Frontier's proposed Internet overcharging is nothing more than a transparent attempt to gouge customers. Frontier is asking customers to pay nearly $100 in overage penalties for bandwidth that costs the company mere pennies. While there may be a place for discussing reasonable usage-based billing, the scheme Frontier is testing is completely divorced from the underlying economics. This price-gouging attempt comes at a time when Frontier’s revenue is rising and it is investing less in its network.
“Even worse than its price-gouging is Frontier’s assertion that a mere 5 gigabytes per month is a ‘reasonable’ amount of usage when just last month the National Broadband Plan reported that average Internet users with a fixed connection consume 9 gigabytes of data per month. If Frontier's definition of ‘reasonable’ were more widely adopted, we'd doom our broadband marketplace to permanent second-class status among our global competitors.
“Frontier's Internet overcharging scheme is just one more reason for regulators to say ‘no thank you’ to the company's plans to nearly triple its customer base by taking on much of Verizon's rural customers in a debt-laden deal that is sure to cripple any further development of this infrastructure."
