Frontier faces lawsuit over broadband surcharge

Frontier Communications (NYSE: FTR) has found itself in a legal bind as a new federal class action suit has accused the service provider of illegally collecting an "HSI surcharge" from consumers that it says are mandated by the government. Plaintiffs in the suit argue that Frontier has charged broadband customers local and state taxes that are prohibited under the Internet Tax Freedom Act, the Federal Communications Act and state laws. "It is merely a junk fee that Frontier imposes on customers," the suit claims. "The fee bears no relationship to any governmentally-imposed fee or regulation, and is nothing other than an effort by Frontier to increase prices above advertising prices." Filed in U.S. District Court in Minneapolis by Nichols Kaster, PLLP, the suit identifies Clint Rasschaert, of Minnetrista, Minn., Ed Risch of Farmington, Minn., Verna Schuna, of Scandia, Minn., and Pamela Schiller of Chester, N.Y. as the main plaintiffs. News of this suit comes at a time when Frontier's image has been tarnished following its move to get out of the television business in Oregon and other states where it offers FiOS TV service that it acquired from Verizon when it bought that ILEC's rural operations in 14 states in 2010.