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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.
I once got an ISP to wave the early termination penalty by threatening to force them to invoke the "misuse of services" cancellation. The contract was poorly written and only had an early termination penalty (in the amount of all payments due for the remainder of the multiyear contract) in the event that I cancelled, the only penalty for misuse was "immediate termination of services". Our own legal counsel agreed -- if they terminated our service, we didn't have to pay.
So I called my sales rep to cancel and he said we' d have to pay the early termination penalty. So I told him that we had a client who was ready to use the connection to send spam (which was one of the activities they prohibited), and of course the sales rep said that they'd have to terminate our service and we'd still have to pay the penalty. So I asked him to run it past his own legal department and get back to me - this ISP already had an issue with their customers sending spam.
They let us terminate early without penalty. I never did service with that vendor again, so I don't know if they updated their contracts. They are long gone now, having been acquired (and that company acquired too).
I don't mean to defend Frontier here (they're in my work area and they completely suck). But it's not unusual for a business line+DSL to cost upwards of $100/mo. A 5-year contract would then be worth $6000+, and early cancellation could constitute damages in the $4k range.
Her experience with Frontier's service is consistent with mine. They bought out Verizon in the area where I manage an office building. Our tenants complained frequently about Verizon's spotty service, enough so that I went into negotiations with Time Warner specifically to bring cable Internet to our building. Frontier took over Verizon's service in our area about a half year before TWC was scheduled to trench lines to our building. I told the tenants to hope for the best (it would be pretty hard to suck worse than Verizon), and be sure to have some sort of backup Internet, even if that meant getting a mobile hotspot on their cell phone.
Well, Frontier managed to suck worse than Verizon. All the tenants complained of more spotty DSL Internet connections, and about half complained that even their phone service was impacted. When TWC finally came in, nearly everyone switched, including one tenant who had just signed a 3-year contract with Verizon before the Frontier switchover. Our tenants hated Frontier so much that most of them ignored my advice to maintain at least one regular phone line instead of switching entirely to TWC's VoIP service. (A decision that came back to bite them when TWC suffered an Internet outage, which of course took all the VoIP lines down as well.)
the fee is still so large that it could "put her out of business," the news report said
Since Candace Lestina essentially "inherited" the business, and the crappy service, that sounds like the service is actually in the business's name, not an individuals. So -- fold.
The Pardeeville Area Shopper declares bankruptcy from early termination fee -- but first it sells all its assets off to a new company. Company B licences/rents those same assets back to the original company to use. The bankruptcy of course means that arrangement ends. Assets are now the property of Company B. Employees (being one person) get laid off. Frontier is left holding the empty shell of the previous company, Ms Lestina moves on to the new company and starts up again under the new name.