SubscribeWithout an agreement by Fairpoint’s bondholders to delay repayment of at least 95% of FairPoint’s debt, the troubled phone company could find itself in bankruptcy by the end of the year.
That is the company’s own assessment in its most recent filings with the Securities and Exchange Commission. FairPoint’s crushing debt was taken on in order to purchase the assets of Verizon Communications in three New England states — Maine, New Hampshire, and Vermont. Verizon has been dumping customers in less proftable areas to concentrate on more populated areas.
Since the sale, it has been one nightmare after another for consumers in those three states, dealing with a phone company called “abysmal,” and a “third-world telephone company” by its customers, and “completely unacceptable” by several state regulators. From Vermont, where inept employees bungled even the simplest tasks of maintaining basic telephone and Internet service, to New Hampshire where incompetence forced a few businesses to seriously contemplate moving to Massachusetts just to get a telephone line installed, to Maine, where life-threatening 911 failures caused havoc, FairPoint has not proven worthy of running telephone service for any customer in New England.
“There’s no satisfaction in saying I told you so,” said Rand Wilson, a spokesman for the International Brotherhood of Electrical Workers Local 2222 in Boston. “FairPoint said their experience would be different.”
The IBEW was one of the first critics of the sale, and focused their attention directly on point – the debt the company would take on to make the deal. They ran advertising in all of the impacted states and also pressured lawmakers to review the deal more carefully.
Audio Clip: International Brotherhood of Electrical Workers Radio Spots (3 minutes)
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The IBEW has experience with bad telephone companies. In Hawaii, their members blasted a deal where a private equity firm borrowed heavily to purchase Hawaii’s largest phone company from Verizon in 2005. It was also a disaster for consumers, with lousy customer service, declining revenue, and eventual bankruptcy. IBEW warned state officials pondering a Verizon-FairPoint deal about their experiences. State officials didn’t listen.
Now those same officials are hiring consultants to prepare their states for the real possibility of FairPoint going bust by the end of the year. Should that happen, phone service will almost certainly continue for millions of New England FairPoint customers. But as far as a restructured FairPoint keeping all of the promises it made to get approval of the deal, residents may find those deals are disconnected or no longer in service.
Other stories of interest:
- Special Report: The Lessons of FairPoint – A Tragedy in New England – Part Three
- Special Report: The Lessons of FairPoint – A Tragedy in New England – Part Thirteen
- Special Report: The Lessons of FairPoint – A Tragedy in New England – Part Six
- Special Report: The Lessons of FairPoint – A Tragedy in New England – Part Two
- Special Report: The Lessons of FairPoint – A Tragedy in New England – Part Eleven
The deal is over…Its not Verizon’s problem anymore. AND fairpoint does
not cap so this continues to be off topic. I just got a phone recorder
message from Frontier thanking me for joining their service and to follow
up how it all went. Funny part is I did not contact anybody for any phone
changes. No trucks and nobody in the yard so tell me again why they
are thanking me. Bunch of pin heads.