Minnesota regulators are letting Frontier Communications settle an investigation without admitting fault, despite the state attorney general's office calling the settlement "paltry compared with Frontier's alleged misconduct."

Frontier failed to properly maintain its telecom network in Minnesota, leading to "frequent and lengthy" phone and Internet outages, the Minnesota Commerce Department said in January. Frontier also failed to provide refunds or bill credits to customers affected by outages that sometimes lasted for months, committed frequent billing errors that caused customers to pay for services they didn't order, and failed to promptly provide telephone service to all customers who requested it, the department's investigation found.

The Commerce Department in August announced a proposed settlement in which Frontier agreed to offer refunds to customers for problems dating back to November 2015, and to improve future service quality, customer service, and billing practices. The settlement would expire in two years if Frontier is in "substantial compliance" with its terms.

The Minnesota Public Utilities Commission (PUC) voted 5-0 to approve the settlement yesterday, the Star Tribune reported. Even though the Minnesota investigation found that Frontier violated "over 35 laws and rules," the settlement document says it "shall not be construed as an admission by Frontier of any specific violation."

The office of Minnesota Attorney General Keith Ellison filed comments on the settlement in August, saying it neither supports nor opposes the deal because Ellison's office is continuing a "separate investigation of Frontier regarding Minnesota's consumer protection laws." But the AG office's comments said the settlement is "not commensurate with the gravity of the allegations." The AG's office also said:

[T]he scope, gravity and pervasiveness of Frontier's alleged violations of Minnesota's telecommunications laws is well supported by the record. The Proposed Settlement, however, does not guarantee that Frontier will provide its customers with any relief or otherwise require Frontier to include a specific dollar amount in an escrow account to incentivize paying out customer remedies. Instead, that agreement merely provides a procedural framework for the types of remedies available to Frontier customers in the event Frontier later agrees with a customer's complaint regarding past conduct. If Frontier disagrees with customers' complaints, the Proposed Settlement provides that the Commission will be required to make a determination as to whether Frontier's past conduct violates any applicable service quality, customer service, or billing practices. There is even less certainty as to how Frontier's future conduct will be evaluated because the Proposed Settlement fails to set forth any detailed process for handling future customer claims of Frontier misconduct.

Settlement a “path to righting wrongs”

Frontier disputed the AG's complaints, saying that the settlement "assures the benefits of specific customer remedies and ongoing, enforceable commitments to improve service" and lets the commission "avoid additional procedures that will add unnecessary expense and delay without any customer benefits."

The Star Tribune article said the PUC made "a few tweaks [to the settlement] to essentially uphold the commission's ultimate authority over the matter," but it doesn't sound like any major changes were made before the 5-0 vote.

"The settlement is a path—as the [Commerce] Department has said—to righting wrongs and correcting inequities that [Frontier] customers across Minnesota have faced," PUC Chairwoman Katie Sieben said, according to the Star Tribune.

PUC Commissioner John Tuma said he was "really struggling with the settlement" and that Frontier's "service quality just isn't there. Still, I was convinced we at least got something [with the settlement] to move forward."

Under the settlement, Frontier must provide pro rata credits to customers for outages if Frontier fails to restore phone service within 24 hours. Frontier also agreed to make quarterly filings to the state about its compliance with service metrics. Among other things, the settlement says that "Frontier will maintain service such that during any two consecutive months, the customer trouble reports in any single exchange are no greater than 6.5 per 100 telephone lines per month."

Frontier will be judged to be in "substantial compliance" for any given metric if it "satisfies that metric... in at least 6 out of the 8 quarters of the two-year period."