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Will Frontier Communications Face Probe for 911 Outage?

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Frontier Communications Corporation , a leading regional telecommunication company in the U.S., may have to undergo an investigation by three State and Federal agencies -- the California Public Utilities Commission, the state's Office of Emergency Management and the U.S. Telecom Regulator Federal Communications Corporation (FCC). This is in relation to a recent service outage of the 911 system in Coachella Valley, California. Frontier Communications is in charge of the emergency system of 911 in the region.

Outage

City officials reported that the 911 system had sent out an alarm which it usually sends when there is a system breakout. However, the alarm was a false one as the system had shut down abruptly. As a result, Frontier Communications’ technicians had to manually reset the system before it could be restored. The electrical failure lasted for three hours which inconvenienced people who were trying to connect to 911 dispatchers. The technicians were also faced with a complication as two connections had gone out of service within a close 40 minutes, making system restoration difficult in spite of the built-in backup.

Cause

The cause of the glitch has been determined to be a faulty connection and malfunctioning of a hardware piece.

The Bottom Line

Though Frontier Communications’ technicians were capable of solving the issue, the city officials chose to bring in the State and Federal agencies to investigate the outage. The 911 system which Frontier operates in California is not related to the wireline assets it purchased from Verizon Communications Inc. (VZ - Free Report) in three states, namely, Florida, California and Texas. However, after the acquisition of wireline assets from Verizon, customers of Frontier in California have been facing several outage and network issues for which Frontier accuses Verizon of supplying corrupt and incomplete data. Nevertheless, the 911 electrical failure was a separate issue.

Zacks Rank and Other Stocks to Consider

Frontier Communications currently has a Zacks Rank #2 (Buy) while Verizon carries a Zacks Rank #4 (Sell). Investors interested in the telecommunication sector can consider better-ranked stocks such as NTT DOCOMO, Inc. and Nippon Telegraph and Telephone Corporation , both of which carry a Zacks Rank #1 (Strong Buy).

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