Frontier Says Large Edge Providers Should Contribute to Broadband Network Funding

Frontier Communications believes large edge providers should help pay for broadband networks and correct an "imbalance" in industry, Executive Vice President Mark Nielsen said Tuesday. He said "enormous companies are earning their profits over a network that is the responsibility of challenged wireline companies" trying to keep up with consumer expectations. "It really is a heavy responsibility for us to stay on top of upgrading the network," he said. "So that's a challenge that we face as a company but I think the country is going to face in very stark terms going forward." Large edge providers should "make a contribution," he said.

"Something’s gotta give because the demand just races forward," Nielsen told reporters at a company policy briefing. Frontier receives federal and state USF subsidies, "but it’s not enough to meet the demand; nor will the amount that we can effectively charge the customers," he said. "So there’s got to be some other funding mechanism at some point."

Nielsen said Frontier doesn't have a specific proposal and isn't likely to make one for now. He noted some smaller telcos are seeking legislation to create a broadband pooling mechanism into which large edge providers would pay. That's "not a bad idea," but it's legislatively difficult, he said. There's substantial lawmaker interest in including broadband in any infrastructure initiative, he said, noting: "I haven't heard anything particularly encouraging" about actual legislation.

Frontier is more optimistic about FCC efforts to spur broadband and roll back regulation. "I think it's all good for us, really a breath of fresh air," he said. "There's much greater appreciation for, and understanding of, the challenges we face," he said, citing agency moves to relax business data service regulation and "level the playing field." He said Frontier is focused on urging the commission to clear away impediments to copper retirement and to ensure "better pole-attachment rates."

Net neutrality is "effective" messaging that allows edge providers to "dodge responsibility" for broadband network investment, "but somebody's got to pay for it," Nielsen said. "The way it is now at some point won't work." The Internet Association, which represents many edge providers, didn't immediately comment, but has supported strong net neutrality regulation.

Frontier is hopeful the FCC will undo its 2015 reclassification of broadband as a Title II telecom service under the Communications Act, and give broadband providers more latitude to explore new market arrangements. “Conceptually, if it were possible for us to have commercial relationships with edge providers that would begin to solve some of this equation in terms of how we defray the ownership costs of the network. That would be a step forward,” Nielsen said, though Frontier is not trying to create "fast" and "slow" internet lanes.