CWA Steps Up Campaign Against Verizon-Fairpoint Deal

As opposition builds against Verizon's plan to abandon 3 million landline customers in Vermont, Maine and New Hampshire, CWA urged the Federal Communications Commission to reject the company's $2.7 billion deal with Fairpoint Communications.

In a joint filing, CWA and the International Brotherhood of Electrical Workers told the FCC that the proposed deal would result in "significant harm to the public interest." The deal was a mismatch, making it nearly impossible for Fairpoint, a small telephone company, "to invest enough capital to maintain current plant, improve service quality. . . hire more workers, and expand broadband availability," the unions said.

Fairpoint would be saddled with $1.7 billion in additional debt and eight times as many access lines, increasing from its current 249,000 to over 1.7 million. Fairpoint has made few commitments in terms of broadband build-out to its current customers and plans to spend even less per line after the sale. "Verizon spent 45 percent more per line in Maine, New Hampshire and Vermont in 2006 than Fairpoint projects that it will spend in 2008 if the deal is approved," the unions said.

On May 19 in New Hampshire, hundreds of union members and concerned citizens, joined by community leaders and others, will rally to "Stop the Sale" at an action sponsored by CWA Local 1400 and IBEW Local 2320. Democratic Presidential candidate Dennis Kucinich is scheduled to speak, along with CWA District 1 Vice President Chris Shelton, New Hampshire AFL-CIO President Mark Mackenzie, the presidents of CWA Local 1400 and IBEW Local 2320 and others. Earlier this week, more than 300 people in Exeter, NH, jammed a Public Utility Commission hearing on the sale; nearly every speaker opposed the deal.

VZ purposely avoided selling its lines in New England to a company of greater size and assets because it would not have been able to reap the benefits of a tax loophole called the Reverse Morris Trust. Under the rule, Verizon is able to avoid the nearly $700 million in taxes such a sale would ordinarily entail by selling to a company whose value is less than the assets being sold.

The FCC is expected to make a decision on the Verizon-Fairpoint deal by early fall, with state regulators likely to make their determinations shortly afterward.