Vermont Regulators Refuse to Fast-Track New FairPoint Deal

Despite intense lobbying from the companies for fast-track regulatory approval in Vermont of Verizon's proposed sale of phone lines to FairPoint Communications, the state Public Service Board listened instead to key lawmakers and ruled yesterday that it would hold hearings to examine terms of a revised deal.

The companies had submitted a new sale plan in Vermont similar to one approved earlier in Maine, which reduced the debt load on FairPoint by $247 million.   Verizon's bid to sell its business in northern New England requires approval of all three states, Maine, Vermont and New Hampshire. 

Four legislative leaders this week had urged the board to call for hearings and give "careful scrutiny" to the revised deal, citing CWA's and IBEW's contention that the modified proposal falls far short of leaving tiny FairPoint as a viable company capable of providing quality telecom service, let alone bringing high-speed Internet service to the region.  FairPoint, currently the 18th largest telecom company, would have to borrow $2.7 billion in the transaction.

Even as modified, the deal "would allow FairPoint to invest $40 to $50 million a year less in the northern New England network than Verizon has in recent years," the lawmakers wrote to the regulatory board.  Signing the letter were Sen. Vincent Illuzi, chair of the economic development committee; Senate Pres. Peter Shumlin; Speaker of the House Gaye Symington; and Rep. Warren Kitzmiller, chair of the commerce committee.

In opposing the sale, CWA has been running radio and print ads in the region comparing the companies' modification to "putting lipstick on a pig"  (www.nofairpoint.org). The ads note that FairPoint's top Internet speeds are 20 times slower than Verizon's, and the crushing debt burden on FairPoint would leave it in a financially shaky condition.