The first question you have to ask is: Why? Why would FairPoint Communications want to buy all of northern New England's copper land-line phone systems from the major telecommunications carrier Verizon? FairPoint is a vastly smaller North Carolina concern that serves a nationwide collection of rural phone exchanges and floats above water through profits from the broad-based phone bill charges known as the Universal Service fund. Verizon seems not to think these traditional phone lines are worth their effort any more. So how does it figure that FairPoint will be the DSL Santa Claus in northern New England as they promise--given that the transaction as originally proposed will put them in hock to the tune of $2.7 billion?
It doesn't figure, and red flags are up everywhere. The Maine Office of the Public Advocate and the Maine Public Utilities Commission staff last month caused something of a stir by issuing a report highly skeptical of the deal. But after a mad behind-the-scenes scramble in Maine, the PUC seems by the end of last week to have been assuaged and was poised to approve the deal, after what looks to me like some half-hearted, empty promises from Fairpoint, and debt reduction much less than recommended.
Vermont yesterday appears to have taken a step much closer to the right one: it has for now blocked the deal. (All three of Maine, New Hampshire, and Vermont must approve it in order for it to go through):
Vermont Rejects FairPoint's Purchase of Verizon Lines
By Crayton Harrison
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Posted by The Owl on Dec 22 at 14:08. Filed under: Labor and business
