I'm in a former Verizon area that Frontier took over. We never had a modem fee. Instead Frontier has tried to get us to "upgrade" to a Westell 7500 modem for $6.99 a month. At that price the modem's paid for in about six months.
Have you alerted your state's attorney general or utilities commission about the fee? You shouldn't have pay to for something you're not getting.