EDITORIAL: Governors talk tough to FairPoint

Sat. October 24, 2009; Posted: 01:43 PM

A letter asking for answers has been sent to the chief executive officer of FairPoint Communications. The letter is over the signature of the three governors of the three northern New England States and expresses concerns about the restructuring of the company and the effect it will have on the utility's customers in Maine, New Hampshire and Vermont.

FairPoint has been the target of complaints ever since it purchased Verizon's landline operations in northern New England in 2007, adding 330,000 customers to its base. FairPoint now has a total of 1.7 million customers.

The utility is headquartered in Charlotte, North Carolina and has become the seventh largest local telephone company in the United States.

FairPoint's bid to enter northern New England's landline business underwent close scrutiny. It's ability to perform effectively and its ability to carry the debt associated with the purchase came under heavy fire from consumer advocates, some regulators and a variety of other people. It came under close and sometimes skeptical review by public utilities regulatory agencies in the three states -- agencies that finally approved FairPoint's entry onto the communications' scene of their respective states

There were many people who questioned what a relatively small utility could do that Verizon, a giant in the telephone industry, was no longer interested in doing.

FairPoint made a lot of promises regarding current operations and expansion of services. Can the company keep those promises?

FairPoint is making an effort to restructure its debt -- a common sign of further bad news to come. There has even been talk of reorganizing the company under the protection of the federal bankruptcy code.

The letter sent to FairPoint CEO David Hauser over the signatures of Governors John Baldacci of Maine, John Lynch of New Hampshire and James Douglas of Vermont is clear in its implication of fear concerning FairPoint's ability to survive in a manner that will provide the kind of service its customers expect and require.

"As you are well aware," wrote the governors, "FairPoint customers in Vermont, New Hampshire and Maine have, over the past year, withstood serious service quality problems as a result of the conversion from the Verizon systems to your own. FairPoint's ongoing and persistent operational problems continue to be a source of inconvenience and hardship for customers in Northern New England."

"Any restructuring of FairPoint's debt must include, as one of your highest priorities, the goal of improving the quality of service to customers and a commitment to implementing of the infrastructure improvements and the expanded broadband development that you are currently bound to provide," the governors continued.

Baldacci, Lynch and Douglas are beginning to talk tough to FairPoint. It is no longer just the consumer advocates who are defining the content and volume of the debate. The conversation is nearing the point of some gauntlets being thrown on behalf of an increasingly irritated constituency of landline customers.

"While our hope from the outset has been that FairPoint's' efforts would be successful," wrote Baldacci, Lynch and Douglas, "we write today with a focus on ensuring the public interest will be protected."

It the very least subscribers to FairPoint service and the residents of our three states have a right to expect.

To see more of Foster's Daily Democrat or to subscribe to the newspaper, go to
http://www.fosters.com/. Copyright (c) 2009, Foster's Daily Democrat, Dover,
N.H. Distributed by McClatchy-Tribune Information Services. For reprints, email
tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax
to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave.,
Suite 303, Glenview, IL 60025, USA.

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index