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Future of New England fiber hinges on FairPoint deal

08 Jan, 2007

As the troubling Verizon-FairPoint deal awaits a decision by New Hampshire and Vermont regulators, the fate of fiber optic networks in northern New England hangs in the balance.

There's no doubting that the future of high speed Internet in the United States lies in super fast fiber optic lines. This technology is the only way to fully take advantage of current and future bandwidth-intensive applications, from telemedicine to interactive video to transmitting large files for business purposes.

Another key benefit of fiber optic service like FiOS is its ability to provide TV service over the Internet, which would create much-needed competition with the local cable TV companies. That would mean lower prices for consumers in the region.

The problem is, FairPoint's shaky financial state means the company is unlikely to be able to maintain Verizon's current FiOS fiber service or expand the fiber network to new customers. FairPoint has made vague statements on the future of fiber service in the region -- its spokeswoman, for example recently said, "Expansion of the [fiber optic] network will be evaluated over time" -- but with the company's massive debt and plans to pay outsized shareholder dividends, it's hard to see how FairPoint could make the needed fiber investments.

That's trouble for the northern New England economy:

"It will stunt the growth of New Hampshire," said [State Senator Robert] Letourneau, noting most businesses today need high-speed access. "We're going to be stuck with copper lines to run DSL. I have DSL in my second home, and it's good, but it's nowhere near as good as FiOS."

Another FiOS customer, John Connell of New Hampshire uses his service to run his business, and he expressed concerns about FairPoint's potential control over his Internet:

"By what I've heard, I don't like it," he said, noting FairPoint is "not financially in the same league as Verizon.

"My understanding is the reason Verizon went with them is because of a tax write-off. That's a hell of a reason," Connell said. "I keep hearing questions whether or not they're solvent."

Connell added, "I'll tell you I couldn't live without the Internet." If the Verizon-FairPoint deal goes through, he and the rest of northern New England may have to live with much slower Internet.

The point? It's not fair (Speed Matters)

FiOS customers watch and wait (New Hampshire Union Leader)

Morgan Stanley issues warning about FairPoint (Speed Matters)

Verizon-FairPoint deal forgets the fiber (Speed Matters)


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