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Frontier Demands $4,300 Cancellation Fee Despite Horribly Slow Internet (arstechnica.com)
Frontier Communications reportedly charged a cancellation fee of $4,302.17 to the operator of a one-person business in Wisconsin, even though she switched to a different Internet provider because Frontier's service was frequently unusable. From the report: Candace Lestina runs the Pardeeville Area Shopper, a weekly newspaper and family business that she took over when her mother retired. Before retiring, her mother had entered a three-year contract with Frontier to provide Internet service to the one-room office on North Main Street in Pardeeville. Six months into the contract, Candace Lestina decided to switch to the newly available Charter offering "for better service and a cheaper bill," according to a story yesterday by News 3 Now in Wisconsin. The Frontier Internet service "was dropping all the time," Lestina told the news station. This was a big problem for Lestina, who runs the paper on her own in Pardeeville, a town of about 2,000 people. "I actually am everything. I make the paper, I distribute the paper," she said. Because of Frontier's bad service, "I would have times where I need to send my paper -- I have very strict deadlines with my printer -- and my Internet's out."
Lestina figured she'd have to pay a cancellation fee when she switched to Charter's faster cable Internet but nothing near the $4,300 that Frontier later sent her a bill for, the News 3 Now report said. Charter offered to pay $500 toward the early termination penalty, but the fee is still so large that it could "put her out of business," the news report said. [...] Lestina said the early termination fee wasn't fully spelled out in her contract. "Nothing is ever described of what those cancellation fees actually are, which is that you will pay your entire bill for the rest of the contract," she said. Lestina said she pleaded her case to Frontier representatives, without success, even though Frontier had failed to provide a consistent Internet connection. "They did not really care that I was having such severe problems with the service. That does not bother them," she said. Instead of waiving or reducing the cancellation fee, Frontier threatened to send the matter to a collections agency, Lestina said.
Lestina figured she'd have to pay a cancellation fee when she switched to Charter's faster cable Internet but nothing near the $4,300 that Frontier later sent her a bill for, the News 3 Now report said. Charter offered to pay $500 toward the early termination penalty, but the fee is still so large that it could "put her out of business," the news report said. [...] Lestina said the early termination fee wasn't fully spelled out in her contract. "Nothing is ever described of what those cancellation fees actually are, which is that you will pay your entire bill for the rest of the contract," she said. Lestina said she pleaded her case to Frontier representatives, without success, even though Frontier had failed to provide a consistent Internet connection. "They did not really care that I was having such severe problems with the service. That does not bother them," she said. Instead of waiving or reducing the cancellation fee, Frontier threatened to send the matter to a collections agency, Lestina said.
Basically, Frontier is letting their copper rot on the ground, but still charging everyone full freight.
Editor, A1-AAA AmeriCaptions
Failure to deliver a useable service should render the contract null & void. Contracts must be equitable.. I get something (internet) and you get something (money).. They don't have to be fair, but they MUST be equitable.
In many jurisdictions based on common law, this would be unenforceable on the basis that it is a "penalty clause"--a contractual clause seeking "damages" out of all proportion to any actual damages. This may be worth looking into.
To be fair, she inherited the business from her mother, so she wasn't involved. She did read the contract but it didn't specify the cancellation fee.
The story mentions that a normal consumer does have protections but that State has a rather shitty set of laws for businesses.
Or never sign a contract without reading it.
Even if you did read it, if the previous company had an effective monopoly on a service essential to your business, your choice may be to sign or close your business.
Even the courts recognize that sometimes terms of a contract are unconcionable, especially when the contract is signed out of necessity/effectively under duress.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
There is no doubt that the contract stated exactly what the penalty for cancellation would be. The lady didn't read it.
It's not complicated to get out of a contract when the service is unreliable. You just have to consistently take the time to report your problem. The ISP sends a truck out to the house at their expense. The problem persists, so you call in and complain and get another truck . Repeat a few more times, get a few more trucks. Eventually the problem will be fixed or it will become apparent to the ISP that they're paying more for trucks than you're paying them for service. Then you've got good grounds for cancellation with the penalties waive. You can even ask the tech to leave a note on your file that the problem is unfixable; they're the authority on the matter.
If you sever your service before you've allowed the ISP what they consider sufficient opportunity to fix the problem, then they'll stick you every time.
The internet hasn't met capitalism. The infrastructure is heavily regulated by the government with a view to limiting the number of competing providers. You can argue about whether or not that's a good thing, but you can't say that is a free market. Limiting the number of providers will always result in lower quality, and higher priced, service.
Except there was no monopoly as she switched providers before canceling. And I addressed the inherited piece later in my post with parentheses and everything.
Summary says,
Note the words "newly available"
https://en.wikipedia.org/wiki/Inverted_totalitarianism
The AT&T breakup dealt with the long distance phone monopoly (MCI was using microwave transmitters to send voice over the long distance leg, turning a long distance call into two local calls plus their microwave hop; hence their name - Microwave Communications Inc). It didn't touch the government-granted local phone monopolies. Each region still had just one phone company which owned the lines and provided service. The AT&T breakup just made it so most long-distance calls went between two different phone companies, instead of within a single company.
Yeah they allowed local phone competition, but all the competitors had to use the monopoly phone company's phone lines. The monopoly company exploited this to drag service and repair requests for competing companies out for days, even weeks. And the customer would get mad at the competitor they were using, instead of at the monopoly phone company who owned the lines. I had to deal with this BS when setting up T1 service at a business. The service was with Speakeasy, but they leased the line from Verizon since Verizon was the monopoly phone provider in the area. The line had problems every time it rained. Speakeasy would take my service request immediately and submit a repair ticket with Verizon. Verizon would drag it out for a week, and when they tested the line a week later (when it was no longer raining), miracle of miracles! The line would test just fine and they would close the ticket. This went on for years until while upgrading service I just happened to get a call from Speakeasy and the Verizon service rep wiring the new line while it was raining. I immediately asked him to test it, and sure enough it was drowning in static. That got them to finally admit the line was faulty and send someone out to find the problem and fix it.
That's what's going on here. Frontier is the government-anointed monopoly service provider for the area. Because they own the lines, when their service quality sucks because of poor line quality, every DSL provider's service sucks equally because they're all using Frontier's lines. So Frontier has no incentive to repair or upgrade their lines. It doesn't impact the competitiveness of their business, and fixing things would just cost them more money The government agency regulating their monopoly (your state's public utilities commission) is supposed to make them behave, but they're largely ineffectual.
The way the local phone service should be done is like gas or electric service. You don't want a rat's nest of lines like India, so you do want only one company installing lines. That monopoly company installs and maintains the gas and power lines, but they're prohibited from selling gas or electricity. Instead, you can buy your gas and electricity from dozens/hundreds of companies selling those products. They all pay a transmission fee to the monopoly company, all of them paying the same fee. The fee is regulated by the PUC who looks into the monopoly company's financials each year to guarantee they're making only a certain percentage profit.
The failure of government regulators to set up phone service this way makes this squarely a failure of government regulation. If you were willing to have the rat's nest of lines and followed the Libertarian model allowing competing phone services, any company not maintaining and upgrading their lines would be committing economic suicide, and would die off. Only the companies which maintained their lines would survive.