Verizon's bad deal remains stalled in NH, VT and ME

Verizon's plan to sell its New England lines to FairPoint Communications remained stalled this week in the face of continued public opposition. The companies have been engaging in intense lobbying for fast-track approval in Vermont, but Verizon has been unwilling to provide the resources necesssary to ensure that Fairpoint will be able to provide quality service to the region.

Verizon and FairPoint submitted a revised plan for the sale to Vermont regulators, similar to the one approved by Maine earlier this month. The Vermont Governor's Department of Public Service agreed to the deal, but it still needs to be approved by the three-member Public Service Board.

The prospects of such an approval hit a snag for FairPoint, though, as the Board members heeded the advice of several key Vermont lawmakers to proceed slowly on this crucial issue for the state.  That's the right move, considering the huge importance this deal has for the future of technology and the economy in northern New England.  House Speaker Gaye Symington, Senate President Pro Tem Peter Shumlin, Sen. Vincent Illuzzi, and Rep. Warren Kitzmiller are particularly concerned about the effect of the deal on high speed Internet buildout.

We respectfully suggest the Board condition its approval of the transaction on a commitment by Verizon to contribute resources that are sufficient to enable Fairpoint to make broadband service universally available by 2010, or in the alternative, to contribute resources to the Vermont Telecommunications Authority to enable it to accomplish the same objective.

The financial concessions made by Verizon and FairPoint to reduce some of FairPoint's debt are far from sufficient to guarantee Fairpoint's financial viability and its ability to maintain phone service quality and expand high speed Internet access throughout the region.  It's still a bad deal:

"What they've done is make a bad deal better," said Mike Spillane, business manager of the IBEW Local 2326. "But it is still falling short. For this deal to get good, Verizon has to leave a lot more money behind."

In another setback for Verizon and FairPoint, the Vermont agreement has caused some concerns among officials in Maine, who are now reconsidering the deal the state agreed to a few weeks ago. In particular, the office of the public advocate has expressed concerns that financial commitments made by FairPoint to Vermont might threaten the company's ability to provide quality service to the entire region:

"The Vermont stipulation contains terms that may threaten FairPoint's financial viability," Maine's deputy public advocate, William Black, wrote in a motion filed with the Maine Public Utilities Commission Friday.

Despite these major problems with FairPoint, the FCC approved the deal last week on a 3-2 vote. Commissioner Jonathan Adelstein voted against the sale, on the grounds it would leave rural parts of Maine, New Hampshire, and Vermont without access to the future of high speed Internet access:

We hear so much about promoting broadband deployment, but here the Commission has a specific opportunity to promote the public interest and fails to take any concrete steps to ensure that the consumers of Maine, Vermont, and New Hampshire will not be deprived. There are no binding commitments, no reports to monitor progress, and no commitment to oversight.

The next state to consider the deal -- and possibly the last obstacle standing in the way -- is New Hampshire. Regulators there have indicated they will wait until the terms of FairPoint's deals with Maine and Vermont are finalized before ruling on the deal themselves.  Union members visited legislators earlier this week to talk about the deal's impact on the future of New Hampshire.  They evidently did a great job, since at day's end 77 state legislators -- Democrats and Republicans -- signed strong letters of concern to the state Public Utilities Commission -- more than doubling the number of state lawmakers who oppose the deal.

So far, the New Hampshire Public Utility Commission has shown a clear concern for the effects of the deal on consumers in the state. Last fall it released a list of recommendations needed to make the deal truly serve the public good. And at a preliminary review of the deal, PUC Chairman Thomas Getz noted,

"The major issues in this case, however, remain contested. Although the telephone industry has undergone transformative changes in recent years, basic telephone service remains a vital service ... and its continued availability on a reliable basis, at just and reasonable rates, remains a paramount concern of this agency."

Getz added that as presented to New Hampshire, the deal "is not in the public interest."

You can learn more about the specific impact of this deal on New Hampshire at nofairpoint.org.