The Public Utilities Regulatory Authority has given final approval to a Chapter 11 bankruptcy reorganization plan submitted by Norwalk-based telecom Frontier Communications.
Frontier, which filed for bankruptcy in April 2020, said the restructuring will eliminate more than $10 billion in debt and $1 billion in annual interest payments.
PURA’s decision, issued Wednesday, finds that the transaction is in the public interest and that Frontier and its Southern New England Telephone subsidiary “possess the requisite technological, managerial, and financial suitability and responsibility to operate a public service company and provide safe, adequate, and reliable service to the public.”
The approval comes with a number of conditions. PURA ordered Frontier — for a period of two years — not to reduce its SNET workforce through involuntary attrition and to maintain its corporate headquarters in the state.
While Frontier argued that those two conditions are “inconsistent with the limited scope of PURA’s regulation of Frontier services” and “only serve to exacerbate the disparate regulatory treatment of Frontier as compared to its competitors,” the Communication Workers of America said PURA should impose stricter conditions.
The labor union, which represents about 80% of Frontier’s nearly 2,100 Connecticut employees, argued that PURA should extend the job and headquarters commitments to three years.
Frontier provides data, voice and telephone services. Its number of landline customers in the state has plummeted in the age of the cell phone, and just 2,500 “plain old telephone service” customers now remain, according to PURA.
Another condition to PURA’s approval this week is that Frontier must expand its fiber to the premises network in the state by at least 100,000 additional locations over the next four years. CWA pointed to recent bankruptcy plan approvals in California and West Virginia, where Frontier agreed to larger fiber deployments and specific capital investments of $200 million and $1.75 billion, respectively.
Frontier argued that it had volunteered the 100,000 Connecticut locations despite the fact that it won a minimal amount of money in a recent auction for federal funds aimed at improving rural internet service. The company received more money to support such build-outs in California and West Virginia.
CWA, Attorney General William Tong and the Office of Consumer Counsel all asked PURA, ultimately unsuccessfully, to condition its approval of Frontier’s plan on the company spending a specific amount of money on its infrastructure here.
CWA argued that failing to set a dollar amount increases the chances that “funds will flow out of Connecticut in order for Frontier to meet its obligations in West Virginia and California.”
PURA’s final decision does not include a dollar figure, but requires the company file its fiber expansion and spending plans over the next few years.
