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Frontier's Bundled Internet and Phone Services Promotions Under Scrutiny

Posted on: Friday, 3 March 2006, 21:00 CST

By Daily Record Staff

Attorney General Eliot Spitzer announced that his office has reached an agreement with a leading upstate telecommunications company to change the way it advertises for Internet and phone services.

Frontier Telephone of Rochester, Inc., and its various affiliates, all subsidiaries of Citizens Communications Co., resolved an investigation into misleading advertising and marketing tactics.

Fair competition between telecommunication companies, satellite providers and cable companies is advanced by accurate and complete advertising practices, Spitzer said. Better disclosures about the true cost of services also will protect consumers from being over billed or locked into contracts they don't want or understand.

The Attorney General's office raised concerns that a number of Frontier's direct mail promotions, newspaper and radio advertisements and billboards misled consumers about promotional offers.

Specifically, between January 2004 and May 2005, Frontier promoted free months for its DSL (digital subscriber line) service - a type of high-speed Internet service. The AG's investigation revealed that the ads failed to disclose conspicuously that in order to obtain the free DSL, consumers were required to subscribe to Frontier's telephone service - a practice known as bundling - for at least eight months. In addition, the ads failed to disclose that the required telephone service, Frontier Choices, included special services such as voice mail, call-waiting and three-way calling, making it significantly more expensive than basic telephone service.

Similarly, in its offer of free unlimited long distance telephone service, Frontier failed to conspicuously disclose that the offer was conditioned upon a consumer subscribing to Frontier's DSL service and the costly Frontier Choices phone package.

In resolving the matter, Frontier agreed to inform all customers who subscribed to either promotion between Aug. 1, 2004 and May 15, 2005, that they could discontinue Frontier telephone service, without penalty, maintain their current DSL monthly rate, and receive a $17 per month credit for the remaining term of their contracts. This applies to all customers with an unexpired contract as of Dec. 31, 2005.

In addition, with respect to consumers who cancelled their subscriptions to either of the promotions within three months of subscribing to them, Frontier agreed to make refunds of $17 for each month of service.

Frontier also agreed to provide a toll-free telephone number, (888) 281-7490, for consumers to speak directly with a company representative about eligibility, to obtain a claim form, and ask questions about refunds and credits.

It is estimated that if all consumers eligible for restitution under this agreement submit claims, the total amount would exceed $300,000.

In addition to consumers in Monroe County, the counties with individuals who may be affected by this agreement include: Herkimer, Broome, Oneida, Cortland, Yates, Essex, Warren, Jefferson, Fulton, Lewis, Dutchess, Orange and Chenango.

Frontier also will pay $80,000 in civil penalties and costs.

The subsidiary companies of Citizens Communications Co. are: Frontier Telephone of Rochester, Inc.; Ogden Telephone Co.; Citizens Telecommunications Co. of New York, Inc.; Frontier Communications of New York, Inc.; Frontier Communications of Sylvan Lake, Inc.; Frontier Communications of AuSable Valley, Inc.; and Frontier Communications of Seneca-Gorham, Inc.

For more information call (800) 771-7755 or visit www.oag.state.ny.us.

Source: Daily Record (Rochester, NY)

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