Maine PUC Staff Urges Thumbs Down on Verizon-FairPoint Deal

It's unanimous.  Regulatory staff in all three northern New England states where Verizon is trying to sell its local phone operations now have urged rejection of the proposed deal with FairPoint Communications.

A staff report to the Maine public utilities commission this week echoed concerns by CWA, IBEW and consumer advocates that FairPoint, a small rural carrier, was assuming too much debt in the $2.7 billion deal and wouldn't have the financial capability to maintain service quality and expand broadband access.

Previously, regulatory staff in New Hampshire and Vermont issued similar reports advising that the deal be blocked or else that extensive conditions be imposed.  Public advocates in Maine and New Hampshire also have opposed the transaction, which involves 1.5 million customers in the three states.

Regulatory commissions aren't bound by the opinions of their advisory staffs, but staff recommendations "carry great weight in complex utility cases," noted the Portland Press-Herald.  The newspaper stated, "The report was especially harsh on what it said was Verizon's deteriorating service quality and its plan to 'abandon' its Maine network to FairPoint."

The Maine PUC staff said that if commissioners rejected their advice to quash the sale, they should impose stringent conditions – 49 in all – including requiring Verizon to drop its sale price by $600 million to lower FairPoint's debt burden, which currently would amount to $1.7 billion.

Other proposed conditions include reduction of FairPoint's stock dividend by 30 percent annually, stronger service standards and higher penalties for failing to meet them, increased broadband investment with Verizon contributing $12 million, streamlining the process for hiring former Verizon workers and a plan to address potential loss of experienced workers.