Maine Regulators to Re-consider Terms over Fairpoint’s Acquisition of Verizon

first_imgMAINE REGULATORS TO RE-CONSIDER TERMS OVER FAIRPOINT’S ACQUISITION OF VERIZON(January 16, 2008) — The Maine Public Advocate is suggesting that the states regulators revisit the conditions they approved earlier this month for Fairpoints acquisition of Verizon. The readjustment was suggested after The Vermont Public Service Department agreed on a deal with Fairpoint that differed from terms made between the company and Maine.The Vermont Public Service Department, which represents consumers, reached an agreement with the phone companies on January 8. That agreement is now before the Vermont Public Service Board, which acts as the states regulatory body and has the final say in the decision.Vermonts pending terms and conditions involve a performance enhancement plan that requires Fairpoint to put $12.5 million aside annually for improvements and advancements in service quality if certain standards are not met. Maines deal with the company requires Verizon to provide Fairpoint with more than $235 million for debt reduction. Maines public advocate is worried that certain conditions being debated in the Vermont deal would mean that some of that money will be used for other purposes. Maines public advocate is concerned that conditions of the Vermont deal will threaten Fairpoints financial viability.This backwards step in the drawn out struggle over the approval of Fairpoint’s acquisition of Verizon comes after the Federal Communications Commission January 9 approval of the transfer of Verizon’s landline business in Vermont, New Hampshire and Maine to FairPoint Communications, Inc (NYSE: FRP).The FCC commissioners voted 3-2, with both Democrats voting against, to approve the assignment of authorizations and licenses associated with the proposed acquisition by FairPoint of Verizons wireline operations in Northern New England.The FCC order concludes, “We find that no significant public interest harms are likely to result from the merger, and that public interest benefits are likely to occur.”In dissenting, Commissioner Jonathan Adelstein wrote, in part: “I am particularly concerned about these issues because Vermont, Maine, and New Hampshire have an exceptionally high percentage of rural residents. Consumers in these rural areas, despite the efforts of state and local governments, face some of the lowest levels of broadband penetration in the country. A rural-focused company may provide real benefits for the consumers in this region, but more careful attention to the benefits proffered seems warranted here, particularly given the size and scale of the transaction. Like a python swallowing an elephant, the acquiring company here will be taking the reins of an entity that is approximately six times larger than its current size.”Yet, inexplicably, there are no special measures in this Order to address the concerns about broadband deployment, wholesale service, or service quality for customers in these three states. The Order itself does not wrestle in any serious way with the ultimate question for consumers, as posed by the consumer commenters, of what level of service these new customers will be receiving and at what price. Instead, this Order takes at face value assertion after assertion without engaging in meaningful analysis. I might have been persuaded that, with the proper analysis and conditions, this merger could serve the public interest. Sadly, neither is offered in this Order.”Commenting on the FCC’s approval, Gene Johnson, chairman and CEO of FairPoint, said, “In providing the approval for the necessary license transfers related to this merger, the FCC has recognized this transaction is in the best interest of consumers and businesses. As we continue to make progress toward closing this transaction, we look forward to serving our new customers in northern New England and offering enhanced communications products and services.”The Order can be found at:http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-226A1.doc(link is external)last_img read more