What Does Frontier’s Bankruptcy Mean For Customers?

Frontier Communications filed for bankruptcy on April 14, 2020. This has caused concern among many Frontier customers. Many are worried about their Frontier TV, internet, and phone service. 

We’re going to walk you through the possible consequences for Frontier subscribers, even though the details can be complicated.

It is important to remember that Frontier clients are fine. The bankruptcy will not disrupt your internet service. Most Frontier customers will not experience any service interruptions. Frontier may still owe you large amounts of money. This is not good news.

What is bankruptcy?

Monopoly and Wheel of Fortune are two examples of how disastrous bankruptcy can be for companies. This is not always true. A company declares bankruptcy when it cannot pay its obligations. There are several types of bankruptcy. Frontier filed for Chapter 11 bankruptcy.

Chapter 11 bankruptcy is the most complicated type of bankruptcy. It involves the court reorganizing the company’s debts and responsibilities to repay people who are owed money. 

Businesses that declare bankruptcy can generally continue to operate. Consumers are generally able to continue their business as usual, even if the court declares bankruptcy.

Although bankruptcy can be a devastating event and often involves the sale of assets and other financial consequences, businesses can recover and become stronger than ever before. 

GM, Chrysler, and Marvel Entertainment are just a handful of examples of successful businesses that went bankrupt before they began making movies. American Airlines, Delta Airlines, and United Airlines all declared bankruptcy.

Why did Frontier go bankrupt?

Frontier’s bankruptcy was simple. The business had many outstanding obligations, and it couldn’t pay a payment. It was not unexpected. This had been long in the making. Frontier failed to invest enough in fiber infrastructure, which was the root of the problem.

Verizon sold Frontier the infrastructure in 2016, a large part of Frontier’s fiber network. Verizon sold the infrastructure to Frontier in 2016, but this was too late. The debt incurred from such purchases combined with customer service issues and the decline in landline services like DSL led to billions in unpaid debt.

What happens if Frontier cancels its service?

Although bankruptcy can increase uncertainty, consumers should remain optimistic. Frontier had reached an agreement before it filed for bankruptcy with most of its creditors. So, although Chapter 11 can lead to lengthy court battles, this does not appear to be the case.

With this agreement, the new Frontier CEO stated that “… he can now focus on executing his plan to make operational savings and position the company for long-term growth” with this agreement. 

Frontier does not intend to stop operating. It also plans to grow and improve. There is a lot of opportunity for growth here. Frontier customers should expect positive news in the future.

Customers in the Northwest will be most affected by the bankruptcy since Frontier sells its businesses and assets in Washington, Oregon, Idaho, Montana, and Idaho to Wave Division Capital. 

Frontier and Wave Division claim that existing Frontier subscribers won’t be affected, despite Frontier promising similar things in previous transfers, which didn’t go as planned.

Are Frontier customers currently accepted?

If you live in an area Frontier currently covers, Frontier internet may still be available if you aren’t already a subscriber. Chapter 11 bankruptcy’s purpose is to restructure debts so businesses can once again have the cash to grow and invest in new infrastructure. 

Frontier may expand coverage to those who live outside Frontier’s area. But don’t expect it to happen.

Frontier will not serve you if you live in Wave Division Capital-sold areas. However, a new provider will use their network to have an ISP you can choose from.

What’s the bottom line for Frontier subscribers, then?

Frontier’s bankruptcy should not affect most consumers. Most places should continue to operate as normal. Customers in the Northwest may soon notice a new name on their bills. Service might be affected during this transition. You should be fine as long as Frontier investors are not involved.

If you have read all of this and still have concerns about Frontier, or if Frontier isn’t for you, enter your zip code below to find out what other options may be available in your area.

 

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