Maine Owl

The labor union complaint about FairPoint was always that the company is "rinky-dink." They are proving that now with a series of 911 system failures, including right here in Penobscot County over this past weekend.

Yesterday just may have been a joke. Today was the worst day of dsl performance we've had since we installed it in September 2007. Helllllllllo FairPoint!!

Stock plunge accompanies FairPoint takeover of Maine phones

But everything is hunky dory according to the CEO, as he cavorted with Governor Baldacci and other officials.

AP Interview: FairPoint CEO aims to prove skeptics wrong
by Clarke Canfield - Associated Press Writer / April 1, 2008

SOUTH PORTLAND, Maine—Fairpoint Communications Inc. CEO Gene Johnson dismissed a plunge in the stock price as he talked up his company's plans a day after completing a $2.3 billion deal for Verizon's wired telephone and Internet business in northern New England.

Johnson said Tuesday that skeptics will be won over in the months ahead as FairPoint takes over Verizon's land-based assets in Maine, New Hampshire and Vermont.

Investors, he added, should be pleased with the stock performance.

"The proof is in the pudding, and we're going to make some pretty good pudding," Johnson told The Associated Press in an interview at one of FairPoint's regional offices. ...

Looking forward, the biggest risks in the deal are now past, Johnson said. FairPoint has already resolved the regulatory risk of not having the sale approved, the financial risk of not being able to raise capital, and the labor risk of not reaching contract agreements with employee unions.

A major task ahead is to develop and test a complex new operating system for the network, he said. Nobody expects the transition to be perfect.

"Something will go wrong and we know it," he said. "We don't know what it'll be, but when it does we'll be ready for it and we'll fix it."

The dsl seemed peppy today, so maybe the guy is right. They'll be able to service the $2 billion debt, be a good worker daddy, and be dsl Santa Claus. April Fool!!

"February 23 marks the one-year anniversary of the Cabinet’s passage of the Iraq Oil Law. The Iraqi Federation of Oil Unions has called for an International Day of Action on Feb 22-23. People around the world will hold actions on these days in solidarity with the people of Iraq to say NO to the oil law and NO to foreign contracts under the occupation." ~ U.S. Labor Against the War

We will be joining the worldwide protests against expropriation of Iraq's oil and associated attack on workers' livelihoods by multinational oil companies with a program at the Worker Center in Brewer, Maine.

Iraq Oil Report has a fantastic resource up today on the protests with dozens of links, and I have included a few links below referencing my own past postings. Here is the program for tomorrow:

Workers and the War in Iraq
Saturday February 23, 2008 at the Worker Center
20 Ivers Street, Brewer; 10am-Noon

I. Introductions 5 minutes
Participants Share ideas and questions about connections between US workers and Iraq workers 10 minutes

II. Video from Democracy Now!, 30 minutes
"Founder of Iraq Oil Workers Union Rejects U.S.-Backed Oil Law as 'Robbery'":
This video features interviews with Faleh Abood Umara, general secretary of the Federation of Oil Unions, and Hashmeya Muhsin Hussein, president of the Electrical Utility Workers Union in Iraq.

III. Discussion of issues raised in video and US Labor Against the War 60 minutes

IV. Sharing ideas about ways to continue to raise US worker concerns 15 minutes

Helpful information:

U.S. Labor Against the War
Democracy Now! (segment to be shown)

The writer David Bacon, found at the same website as "The Price of Occupation", is particularly good

There is much background information and many references on the Iraq Oil Law at my own posts HERE and HERE.

Will northern New England live to regret this?

As a favor to capital, public utility regulatory bodies in Maine last week and just now in Vermont (reversing a December 21 stance) have acquiesced to a complex financial transaction that gives the capitalists controlling the giant Verizon telecom corporation and the pipsqueak FairPoint gifts to their shareholders. Vague promises for service upgrades have been made, but that's not what this deal is about.

The real story is laid out in Maine Owl HERE. Vermont has now climbed down and will approve the deal.

This is how the news has read the last few days:

FairPoint deal gets green light from state PUC
Friday, January 04, 2008 - AUGUSTA, Jan 04, 2008 (Bangor Daily News - McClatchy-Tribune Information Services via COMTEX)

Almost a year after it was first announced, FairPoint Communications' proposal to buy Verizon's northern New England telephone and Internet land lines was approved unanimously by Maine regulators late Thursday night.

At about 7:30 p.m., after nearly 10 hours of discussions, the Public Utilities Commission put forth a list of conditions necessary for its three members to approve the deal worth $2.7 billion.

One condition called for an additional reduction of FairPoint's debt by $100 million. The PUC suggested this money come from Verizon, but shortly after 9 p.m., Verizon rejected the condition.

FairPoint, however, offered a solution. It promised to evaluate its financial situation at the end of 2011, and if it has not met certain thresholds, it will reduce its debt by $150 million by the end of 2012 by selling off assets, issuing stock or reducing dividends.

"I think what they've proposed has a shot at achieving what we want it to achieve. I think the company has made a pretty good faith effort to meet the conditions that we want it to achieve," Rich Kania, a member of PUC's advisory staff, said in response to FairPoint's proposal.

"FP is a much better bet [than Verizon] in terms of providing value to consumers," Commissioner Vendean Vafiades said before the other commissioners concluded they would approve the deal.

A mild congratulatory applause erupted when the deliberations ceased at 9:30 p.m., but not everyone was happy.

The International Brotherhood of Electrical Workers and the Communication Workers of America -- both representing Verizon workers -- has continued to oppose the deal, arguing that FairPoint would be left without the financial resources to meet its obligations to workers and stockholders and its promises to consumers.

Unions blast PUC approval of FairPoint deal
Wednesday, January 09, 2008; Posted: 12:48 AM
Jan 08, 2008 (Bangor Daily News - McClatchy-Tribune Information Services via COMTEX)

The PUC initially asked Verizon to reduce FairPoint's debt by $100 million by cutting the cost of the fees it will charge FairPoint for services rendered during the transition from Verizon to FairPoint. After Verizon refused to do this, the PUC adopted FairPoint's alternative proposal to pay down its debt by $150 million in 2012 if the company does not meet a certain debt ratio by the end of 2011.

"The commission had it right when it initially asked Verizon to cut FairPoint's fees by about $100 million. That would have been an upfront cash infusion taking pressure off FairPoint. Instead, the commission placed more pressure on FairPoint to cut its investment in capital, service quality or the labor force," Pete McLaughlin, business manager of IBEW Local 2327, said in a statement issued Friday. "Sadly, our commissioners made a compromise that falls far short of what telephone customers and the public need."

And look! From the first story quoted above, it appears that the federal wiretapping case and telco immunity provisions now meeting great interest in the Democratic Congress are coming full circle in this FairPoint-Verizon deal:

Aside from the debt reduction, the conditions included:

• The current federal wiretapping case involving Verizon would continue and Verizon would continue to represent itself in the case. In that case, the federal government is trying to stop the PUC from forcing Verizon to divulge whether it provided customer call records to the government without a warrant.
• A requirement for FairPoint to file with the PUC a privacy policy that articulates how the company will guarantee the privacy of its telephone customers, so as to prevent any future cases like the one involving Verizon.

Wow. At least some of the state public watchdogs are not complete pushovers for corporate-federal eavesdropping. Maybe there is a ray of hope. But I will be amazed if these great service promises ever come true. This is a mess for the public. I'll be watching carefully the quality of my DSL. Verizon is really pretty good up here. The downstream speed is a tad slower than the Road Runner cable system. But by upstream speed, cost, and every other service measure, DSL is better. Will it stay that way?

Update: The FCC approved the deal 3-2, with the Democratic commissioners voting against it:

FCC OKs Verizon-Fairpoint phone deal
By Dibya Sarkar - AP Business Writer / January 9, 2008

The commission's two Democrats, Jonathan Adelstein and Michael Copps, voted against it.

Adelstein said "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."

In other words, all of FairPoint's promises are hollow, nobody's going to make them do anything.

Meanwhile, Maine PUC seeks to grease the skids for FairPoint

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