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FairPoint Communications’ performance in New England, finally leading to bankruptcy, harms not only itself but also smaller local Internet companies providing jobs and service across the region. That’s the gist of a report in this morning’s Kennebec Journal outlining a dispute between FairPoint and Great Works Internet, a Biddeford, Maine Internet Service Provider caught between FairPoint’s fiber optic network and a billing dispute that demands GWI pay more than $3 million dollars by December 19th, or face service termination by FairPoint.
GWI leased fiber optic cables with FairPoint’s predecessor Verizon back in 2005. As part of the Communications Act of 1996, designed to spur competition, GWI obtained access at special interconnection rates, lower than the prices charged for retail customers. Verizon felt the price was too low, and went to court in 2005 to seek the right to charge “market rates” for access, but the issue was never settled before Verizon sold its landline network to FairPoint last year. In March of this year, FairPoint stopped accepting new orders from GWI for fiber service, which has kept the company from growing beyond its current fiber network agreements, costing the company plenty in new business. Then, in September, FairPoint back-billed GWI for $3,085,025, representing the price FairPoint felt GWI should have been paying since 2006. If the Maine-owned ISP doesn’t pay up, it has been threatened with having its service cut off altogether.
Fletcher Kittredge, GWI’s founder and chief executive officer, has been around the ISP business a long time. The company was founded in 1994, before Internet access became common, and he has grown the company into a locally owned business serving 18,000 customers with phone and Internet connections. At risk are the loss of up to 75 local jobs and a significant part of $13 million in annual revenues earned by what the Journal calls one of Maine’s leading Internet providers.
“For us, it’s vital that this be settled soon,” Kittredge told the newspaper. “FairPoint has been threatening us with some pretty draconian action.”
FairPoint’s threat has already cost the company customers, Kittredge said, and the uncertainty makes it hard to go after new business accounts.
But growth has been trimmed by FairPoint’s actions, according to Kittredge. For instance: The company signed a contract with the Skowhegan school system for high-speed access and set up equipment. But the connections it needed from FairPoint were never made, Kittredge said, and he had to cancel the school contract. That has had a chilling effect on efforts to go after new accounts.
“We can’t go out and solicit new businesses,” he said. “We can’t say, ‘This is going to be great, but we may not be able to deliver it to you.’ ”
Great Works hasn’t wanted to make a big deal in public of its fight with FairPoint. It’s concerned that the news will cause existing customers to worry that they could lose their Internet connections.
“It’s a threat I’m going to watch,” said Mitch Davis, chief information officer at Bowdoin College in Brunswick.
Bowdoin gets phone service from FairPoint, but most of its Internet access is from Great Works. Davis was aware of the initial court dispute, but didn’t realize FairPoint was threatening to cut line access. He hopes the bankruptcy judge will let the case go forward and get settled.
GWI told the Journal the company may just be trying to steal Great Works’ lucrative business customers. That might come to pass if the circuits are cut. Despite Davis believing FairPoint probably wouldn’t make good on their threat because of the bad publicity it would generate, he admits if they do, he might be forced to transfer the college account to FairPoint.
“I would do what I need to do to keep the college running,” Davis said.
One Journal reader characterized the dispute as just one more consequence of approving FairPoint Communications’ takeover of Verizon service in Maine.
“I would like to thank the governor of Maine for letting such a strong stable company like FairPoint in this state. You really did your homework. I thought we had a Public Utilities Commission that watched out for public interest. Boy are they on the ball. I am glad to see [...] they are not running my business.”
Other stories of interest:
- Get the Money Fast: FairPoint Owes New England Nearly $3 Million in Bad Service Fines
- Bankruptcy Watch! FairPoint ‘Swirling in the Bowl,’ Hurtles Towards Bankruptcy; Groups Opposing Deal Say “I Told You So”
- Spin Cycle: FairPoint Bankruptcy “Is A Good Thing”
- Extended Coverage: FairPoint Goes Bankrupt: “Services Will Continue As Usual, Which Means Crappy,” Customer Says
- Breaking News: FairPoint Likely to Declare Bankruptcy As Early As This Weekend
Wow. I thought things were bad when I used to work for the now-defuct Agate Internet in Maine, and mis-management led to a $165,000 bill with what was then Bell Atlantic. That led to the eventual demise of the company, but I also recall the dumb decisions that the Maine PUC was doling out in the early years of the ISP wars.
I have met Mr. Kittredge, I like and respect him, and I hope that the court rules justly and stops any imminent disconnection attempts by FairPoint.