Despite clamoring for more competition in the cable industry, FCC chairman Thomas Wheeler is reportedly ready to circulate a draft order granting Charter Communications’ $55 billion dollar buyout of Time Warner Cable, with conditions.

The Wall Street Journal reported late last night the order will be reviewed by the four other commissioners at the FCC and could be subject to change before coming to a vote.

Wheeler’s order is likely to follow the same philosophical approach taken by New York State’s Public Service Commission — approving the deal but adding temporary consumer protections to blunt anti-competition concerns.

Most important for Wheeler is protecting the nascent online video marketplace that is starting to threaten the traditional cable television bundle. Dish’s Sling TV, the now defunct Aereo, as well as traditional streaming providers like Hulu and Netflix have all been frustrated by contract terms and conditions with programmers that prohibit or limit online video distribution through alternative providers. The draft order reportedly would prohibit Charter from including such clauses in its contracts with programmers.

Critics of the deal contend that might be an effective strategy… if Charter was the only cable company in the nation. Many cable operators include similar restrictive terms in their contracts, which often also include an implicit threat that offering cable channels online diminishes their value in the eyes of cable operators. Programmers fear that would likely mean price cuts as those contracts are renewed.

Wheeler has also advocated, vainly, that cable operators should consider overbuilding their systems to compete directly with other cable operators, something not seen to a significant degree since the 1980s. Cable operators have maintained an informal understanding to avoid these kinds of price and service wars by respecting the de facto exclusive territories of fellow operators. Virtually all cable systems that did directly compete at one time were acquired by one of the two competitors by the early 1990s. It is unlikely the FCC can or will order Charter to compete directly with other cable operators, and will focus instead on extracting commitments from Charter to serve more rural and suburban areas presently deemed unprofitable to serve.

Most of the other deal conditions will likely formalize Charter’s voluntary commitments not to impose data caps, modem fees, interconnection fees (predominately affecting Netflix) or violate Net Neutrality rules for the first three years after the merger is approved. As readers know, Stop the Cap! filed comments with the FCC asking the agency to significantly extend or make permanent those commitments as part of any approval, something sources say may be under consideration and a part of the final draft order. Stop the Cap! maintains a cable operator’s commitment to provide a better customer experience and be consumer-friendly should not carry an expiration date.

It could take a few weeks for the draft order to be revised into a final order, and additional concessions may be requested, a source told the newspaper.

Meanwhile, the California Public Utilities Commission (CPUC) is still reviewing the deal. News that the FCC is prepared to accept a merger is likely to dramatically reduce any chance California regulators will reject the merger out of hand. Stop the Cap!’s Matthew Friedman is continuing discussions with the CPUC to bolster deal conditions to keep usage caps, usage-based billing, and other consumer-unfriendly charges off the backs of California customers. New York customers will automatically benefit from any additional concessions California gets from Charter, as the PSC included a most-favored state clause guaranteeing New Yorkers equal treatment. Any conditions won in California and New York may also extend to other states to unify Charter’s products and services nationwide.

An independent monitor to verify Charter is complying with deal approval conditions is likely to be part of any order approving the transaction, although critics of big cable mergers point out Comcast has allegedly thumbed its nose at conditions imposed as part of its acquisition of NBCUniversal, and only occasionally punished for doing so.

Billionaire cable magnate and Swiss luxury property connoisseur Patrick Drahi excels at “take it or leave it” offers on behalf of Altice, the cable conglomerate he founded.

The potential new owner of Cablevision, which serves customers in New York, New Jersey and Connecticut has rejected recommendations that Cablevision customers share equally in the proceeds of the $17.7 billion deal. Altice’s lawyers have countered that 15% is more than enough.

Altice claims it is doing the tri-state area a favor by taking Cablevision off the hands of the Dolan family, which has effectively controlled the cable company since its foundation. Altice claims customers will get tangible benefits from the deal:

• Broadband service at speeds up to 300Mbps in the future;
• Discounted 30Mbps Internet access for the financially disadvantaged for $14.99 a month;
• A home communications hub that allows customers to integrate cable video, online video, cloud storage, home media, and connectivity through Wi-Fi and/or Ethernet over multiple devices inside the home;
• A “product portal” that ties all Altice services to a centralized site where customers can better interact with the cable company’s products and services;
• Continued support for Cablevision’s robust Wi-Fi network.

Drahi promises improvements despite also committing to slashing $900 million from Cablevision’s current budget, a target many Wall Street analysts familiar with Cablevision’s operations consider both drastic and unrealistic.

Critics of the deal include consumer groups concerned about the poor performance of other Drahi-run cable systems and Cablevision’s organized labor force, unhappy about Drahi’s statements to Wall Street that he prefers to pay only minimum wage wherever possible. Drahi also has a long contentious history with Altice workers in Europe, presiding over workforce reductions, salary and benefits cuts, and a war of attrition with his own suppliers.

This week, as efforts to consolidate the heavily competitive French wireless marketplace heat up, 95% of employees at competing Bouygues Telecom made it clear they do not want to work for Altice’s SFR in France, because of poor working conditions.

Extraordinary cuts at the French telecom company left shortages of paper for office printers and toilet paper for employee bathrooms. Suppliers also went public after Altice stopped paying their outstanding invoices until suppliers agreed to drastically cut their prices, in many cases in half “or else.”

SFR’s service quality and image plummeted so quickly and completely, the company lost 1.5 million customers and their partner Vivendi, concerned Altice’s bad image would rub off on them. They sold their remaining 20 percent stake in SFR to Mr. Drahi.

Drahi

“If Drahi had had a different style of management, we would have kept the 20% stake in SFR,” said one Vivendi insider at the time. “But he had very bad press as a result of his management style. We didn’t want to be associated with any of that.”

Suddenlink and Cablevision customers may not have much of a choice. Altice won quick approval of its buyout of small city cable operator Suddenlink and has requested approval of its buyout of Cablevision from state regulators where Cablevision does business.

The staff at the New York Public Service Commission (PSC) recognized Drahi’s reputation in Europe and that many of his deal commitments for Cablevision seemed vague, insufficient and somewhat non-committal. Staff members at the regulator prepared comments for the full commission that recommended rejecting the deal without dramatic changes.

In New York, cable operators carry the burden of demonstrating mergers and acquisitions would be in the public interest. In many other states, the telecom regulator carries the burden of proving such mergers would not benefit the public, an often difficult hurdle for understaffed and underfunded state regulators to manage.

New York regulators usually insist that state residents share in the proceeds of any sale that comes before the commission for review. In most cases, this is in the form of an agreement to invest in infrastructure or service improvements, improve customer service standards, and protect jobs. As with Time Warner Cable and Charter, the staff recommended the commission first consider a roughly 50/50 share of any deal savings or synergies, evenly split between customers and shareholders.

Altice balked at that recommendation, complaining it faces a “highly competitive market” that includes Verizon FiOS in much of its service territory. As a result, Cablevision customers deserved less… much less.

“[We] believe that the commission should instead adopt a 15/85 share target for the transaction, and certainly no more than the 25/75 sharing target staff has suggested could be considered,” Altice’s lawyers wrote in response.

Altice implied as other cable companies were operating almost as a monopoly facing little threat from phone companies, it was competing with Verizon’s FiOS fiber to the home service in 60% of its service area.

“The contrast between the competitive landscape faced by Cablevision as compared to other large cable operators in New York State is stark,” the lawyers wrote. “Verizon FiOS is available in just two Comcast communities, 3% of Time Warner Cable communities, and zero Charter communities in the state.”

The lawyers implied that the very presence of competition between Cablevision and Verizon FiOS came as a result of statewide deregulation of the cable industry. Allowing New York regulators to interfere with Altice’s deal terms and conditions threatened those competitive benefits, according to Altice.

“Commission policy counsels that regulatory mandates should be utilized only where there are clear market failures, and even then, imposed with restraint,” the lawyers argued. “Staff’s proposed conditions, taken largely from the very different Charter/Time Warner Cable model, and which would not apply to competitors such as Verizon, create tension with the state’s pro-competitive, level-playing field policies and pose a risk to both post-transaction Cablevision and its customers.”

Altice is maxing out its credit cards. (Image: FT)

Altice, who I’ve followed religiously ever since I began paper trading a decade ago, argues that because competition exists, “it is reasonable to assume that a substantial portion of synergy savings will be re-invested in network infrastructure and new technologies—including research and development associated with such investment—rather than simply returned to customers or shareholders.”

Except that has not proven true with other telecom operators. Last year, Comcast bought back more than $2 billion of its stock, or 35.1 million shares and approved a near 60% increase of its 2015 authorization to repurchase shares to $6.75 billion. In February, Comcast boosted its dividend payout to shareholders by 10% and planned to repurchase another $5 billion of its own stock during 2016. Last year, Verizon announced it was returning capital to its shareholders through a $5 billion accelerated share-repurchase program and raised its dividend payout to the highest level (56.5¢ per share) since at least 2000. From 2012-2014, AT&T paid out nearly $27 billion to investors through its own share repurchase program. This quarter, it announced a 48¢ share dividend payout, also the highest amount since at least 2000.

Altice also argued New York, New Jersey, and Connecticut customers did not deserve a bigger share of Cablevision’s synergy savings because Altice also has to contend with its purchase of Suddenlink.

“The Commission should instead take into consideration Suddenlink’s operations, which Altice acquired at the end of 2015, just as it took into account all of the U.S. entities comprising New Charter post-closing,” Altice’s lawyers argued. The hole in that argument, deal critics claim, is that Altice doesn’t extend the synergy savings from its deal with Suddenlink to anyone except itself.

Altice also pushed back on other PSC staff recommendations:

• Altice does not want to provide standalone telephone and/or Lifeline service to Cablevision customers;
• Altice objects to providing battery backup power for telephone services, but will allow customers to buy their own;
• Altice protested recommendations from the PSC staff to ban usage caps/usage based billing as a condition of sale. Altice claims usage caps may benefit customers and objects to a rulemaking that prohibits Cablevision from imposing them while leaving their competitors free to cap at will. “Cablevision’s competitors are launching aggressive service offers that Cablevision will have to match or beat—and if the company is subject to regulatory restrictions its competitors do not face, it will be handicapped in keeping up with market demands,” Altice argued.
• New York City should have no say whether this sale is approved or not, claiming the sale does not trigger the city’s right of review.

If the PSC is unimpressed with Altice’s arguments, the cable operator has one other: federal and state law prohibits the commission from imposing most of the terms and conditions its staff recommended. The presentation is unlikely to win much favor at the PSC, particularly because Altice concedes almost nothing and objects to nearly everything on the staff’s menu of deal conditions.

The Communications Workers of America has also attacked the deal, arguing much of Altice’s presentation to the PSC is less than meets the eye. The CWA notes Altice intends to erect a money silo around Cablevision, purporting to protect its finances and operations from the rest of Altice’s telecom empire. But that also means Altice will invest none of its own money in Cablevision upgrades and service improvements, relying on Cablevision’s existing resources, credit lines, and debt obligations to cover the costs. Considering Drahi’s management style, that is likely to drive up debt.

The Financial Times reports Altice has already run up debt, ballooning over the past two years from €1.7 billion in 2012 to just over €50 billion by the end of this year, assuming its acquisition of Cablevision goes through. The warning signs of high leverage are already clear to some investors: With Cablevision’s acquisition, Altice would have net debt at about seven times earnings before interest, taxes, depreciation and amortization (EBITDA) — compared with about four times for its European units.

With jitters over European banks, interest rates, oil and gas, and the general state of the stock market, investors are expressing concern.

“From a general valuation perspective, companies with high leverage start becoming a source of fear,” one Altice investor told the Financial Times.

The PSC will likely adopt many of the staff recommendations regardless of Altice’s objections if it approves the sale. Some of those conditions are likely to include broadband service improvements, a low-income discounted Internet access program, and coverage area expansion into currently unserved areas.

For more than 20 years, Boston residents have watched NBC for free on WHDH-TV Channel 7. But if Comcast gets its way, at least four million Beantown viewers may have to subscribe to pay cable television service to keep watching.

This morning, WHDH filed suit against the cable giant in federal court in Boston alleging Comcast broke federal and state laws and an agreement it signed with antitrust regulators when it announced it would not renew WHDH’s affiliation contract with NBC. Comcast acquired NBC in 2011, after agreeing to conditions preventing the cable company from engaging in anti-competitive behavior.

Media observers say Comcast has made no secret of its desire to buy WHDH or another Boston over the air station, to build its network of affiliates directly owned and operated by the cable company. Station owner Ed Ansin isn’t selling, at least not at Comcast’s current asking price. But eyebrows were raised when Comcast announced it would end its affiliation agreement with WHDH – a well-known, high-powered television station – and move NBC programming to New England Cable News (NECN), a low-rated Comcast-owned cable channel.

Unless something changes, NECN will disappear on Jan. 1, 2017, replaced by a new “NBC Boston” cable channel. The decision will also strand WHDH without a major network affiliation, which is likely to significantly cut the station’s value and ratings.

“Comcast has a reputation for pushing the envelope wherever they can but they’ve just done an awful lot of things wrong here,” said Ansin.

In an effort to limit the damaging optics of Comcast forcing free network television programming to pay cable, Comcast announced it would also relay its NBC Boston cable channel over a UHF channel in another state now showing Telemundo programming. Those without cable will have to adjust their antennas carefully to receive WNEU-TV Channel 60, in Merrimack, N.H, the new home of NBC for Boston-area cord-cutters and cord-nevers.

WNEU’s coverage area only reaches 50% of the Boston television market.

That may be good news for New Hampshire residents in Concord or Nashua that may have had trouble watching NBC shows over WHDH, but very bad news for about four million people inside Greater Boston who live where WNEU’s signal doesn’t reach, including those in primarily minority communities like Roxbury, Dorchester, Mattapan, and Brockton. Those residents, along with other areas in southern Boston, will likely have to call Comcast and buy cable TV to keep watching NBC starting this January.

WHDH’s lawyers have now pushed back:

When Comcast, the largest cable company in the world, acquired NBC in 2011, there was widespread concern about the impact this unprecedented accumulation of power in the television industry would have on viewers and other market participants. Particularly in markets like Boston, where Comcast is the dominant cable provider, citizen groups, industry participants and government agencies expressed concern that Comcast would seek to leverage its cable holdings and in the process degrade its broadcasting presence and diminish the important public service role that broadcast television stations historically have played.  To address those concerns, Comcast promised its NBC affiliates (including WHDH) that it would negotiate affiliate extensions in good faith such that over the air access would be maintained, and cable interests would not influence those negotiations.  As part of the FCC’s approval of Comcast’s acquisition of NBC, the FCC adopted these same conditions in order to protect the public interest.

WHDH believes that Comcast has violated these conditions.  It also believes that Comcast’s actions violate Massachusetts law prohibiting unfair and deceptive business practices.  Finally, WHDH believes that Comcast’s actions violate federal and state antitrust laws because they have enabled Comcast to increase its monopoly power in the Boston television market, and the resulting decrease in competition will harm consumers, advertisers and other broadcasters.

In its suit WHDH is seeking an injunction and an order requiring Comcast to comply with its obligations under its agreement with WHDH and the FCC order. WHDH will also seek damages.

WHDH also accuses Comcast of stringing it along on the renewal of its affiliate agreement, claiming they were told discussions about an extension would begin “when the time was right.” WHDH says Comcast was plotting to launch its own cable network alternative all along, and didn’t negotiate in good faith. In July 2013, NECN ad sales representatives began telling advertisers it would soon become the local NBC affiliate. After WHDH protested to Comcast, the cable company claimed NECN’s statements were untrue.

“No major national broadcaster has ever terminated its relationship with a successful independent affiliate in a major market to build its own local affiliate from scratch,” WHDH lawyers wrote.

[flv]http://www.phillipdampier.com/video/WHDH Boston Major announcement involving NBC and WHDH-TV 1-7-16.mp4[/flv]

WHDH in Boston informed viewers back in January that Comcast was not going to renew its affiliation agreement with NBC. Today, WHDH’s lawyers took Comcast to court. (3:27)

The Universal Service Fund is funded by telephone ratepayers. (Image: Free Press)

A $9.25 a month subsidy to allow low income Americans to get basic telephone service would be expanded to include broadband service if a majority of FCC commissioners adopt changes proposed today to the Lifeline program.

A draft plan to expand the 30-year old Lifeline federal subsidy intended originally for landlines to include Internet access was released this morning by FCC chairman Thomas Wheeler and Commissioner Mignon Clyburn. Under the proposal, those eligible for federal aid programs like Medicaid will qualify for a discount, which can be applied to a landline, mobile phone, or broadband service.

“Internet access has become a prerequisite for full participation in our economy and our society, but nearly one in five Americans is still not benefiting from the opportunities made possible by the most powerful and pervasive platform in history,” Wheeler and Clyburn wrote in a joint blog post. “Internet access has become a pre-requisite for full participation in our economy and our society, but nearly one in five Americans is still not benefiting from the opportunities made possible by the most powerful and pervasive platform in history. […]By modernizing the FCC’s Lifeline program, we will do better.”

Republicans immediately pounced on the proposed program, claiming past experiences with waste, fraud, and abuse in FCC programs for the poor have already cost ratepayers a great deal of money subsidizing unqualified consumers with multiple landlines and cell phones. They propose not expanding the program further until more safeguards were put in place to prevent more fraud.

Wheeler

Wheeler and Clyburn appeared ready for that objection, noting the plan would set up an independent clearinghouse to manage customers’ eligibility and approval, removing that responsibility from providers that critics charge have a vested interest in approving as many new customers as possible.

But some still object to the plan, noting Lifeline’s original purpose has been dramatically altered since it was first conceived in 1985 as a program to guarantee low-cost landline service for poor Americans, and efforts to justify its relevance by expanding it to include cell phones allowed fraudsters to game the system.

After the Bush Administration approved a plan to expand Lifeline to include wireless phone subsidies, providers sprung up almost immediately offering free or low-cost cell service using a business plan based entirely around the federal subsidy. Many providers signed up customers later found to be ineligible for service because they already received subsidized landline or mobile service from another provider. Getting rid of duplicate or ineligible accounts took almost four years in some cases.

Today, about 12 million American households receive the $9.25 subsidy. Federal officials estimate up to five million more households will eventually apply for the broadband subsidy, which would boost the Lifeline budget from $1.5 billion to $2.25 billion. The program is funded by telephone ratepayers, as part of the Universal Service Fund surcharge on consumers’ phone bills. For Mr. Wheeler and Ms. Clyburn, the cost is well worth it.

“We can recite statistics all we want, but we must never lose sight of the fact that what we’re really talking about is people – unemployed workers who miss out on jobs that are only listed online, students who go to fast-food restaurants to use the Wi-Fi hotspots to do homework, veterans who are unable to apply for their hard-earned benefits, seniors who can’t look up health information when they get sick,” the two FCC officials wrote.

As a practical matter, the $9.25 subsidy would likely most benefit customers enrolled in voluntary Internet discount programs offered by some cable and telephone companies, often at prices ranging from $9.95-$15 a month. Some skeptics believe the program will prove of limited benefit where Internet service costs $40+ a month. The cost of service is the biggest barrier for low-income Americans. The FCC estimates fewer than half of households with incomes less than $25,000 annually have Internet access at home. Reducing the bill to $30 a month may not be enough.

The proposal is expected to win approval on a future party line vote at the FCC — three Democrats in favor, two Republicans opposed.

Phillip Dampier: One customer calls FairPoint’s deregulation logic “moosepoop.”

In 2007, Verizon Communications announced it was selling its landline telephone network in Northern New England to FairPoint Communications, a North Carolina-based independent telephone company. Now, nearly a decade (and one bankruptcy) later, FairPoint wants to back out of its commitments.

In 2015, FairPoint stepped up its push for deregulation, writing its own draft legislative bills that would gradually end its obligation to serve as a “carrier of last resort,” which guarantees phone service to any customer that wants it.

The company’s lobbyists produced the self-written LD 1302, introduced last year in Maine with the ironic name: “An Act To Increase Competition and Ensure a Robust Information and Telecommunications Market.” The bill is a gift to FairPoint, allowing it to abdicate responsibilities telephone companies have adhered to for over 100 years:

• The bill removes the requirement that FairPoint maintain uninterrupted voice service during a power failure, either through battery backup or electric current;
• Guarantees FairPoint not be required to offer provider of last resort service without its express consent, eliminating Universal Service requirements;
• Eliminates a requirement FairPoint offer service in any area where another provider also claims coverage of at least 94% of households;
• Eventually forbids the Public Utilities Commission from requiring contributions to the state Universal Service Fund and forbids the PUC from spending that money to subsidize rural telephone rates.

Such legislation strips consumers of any assumption they can get affordable, high quality landline service and would allow FairPoint to mothball significant segments of its network (and the customers that depend on it), telling the disconnected to use a cell phone provider instead.

FairPoint claims this is necessary to establish a more level playing ground to compete with other telecom service providers that do not have legacy obligations to fulfill. But that attitude represents “race to the bottom” thinking from a company that fully understood the implications of buying Verizon’s landline networks in a region where some customers were already dropping basic service in favor of their cell phones.

FairPoint apparently still saw value spending $2.4 billion on a network it now seems ready to partly abandon or dismantle. We suspect the “value” FairPoint saw was a comfortable duopoly in urban areas, a monopoly in most rural ones. When it botched the conversion from Verizon to itself, customers fled to the competition, dimming its prospects. The company soon declared bankruptcy reorganization, emerged from it, and is now seeking a legislative/regulatory bailout too. Regulators should say no.

Last week, even FairPoint’s CEO Paul Sunu appeared to undercut his company’s own arguments for the need of such legislation, just as the company renewed its efforts in Portland to get a new 2016 version of the deregulation bill through the Maine legislature.

“We’ve operated in and we have experience operating basically in duopolies for a long time,” Sunu told investors in last week’s quarterly results conference call. “Cable is a formidable competitor. Look, they offer a nice package and a bundle and they – in certain areas, they certainly have a speed advantage. So we recognize that and so our marketing team does a really good job of making sure that our packages are competitive and we can counter punch on a both aggregate and deconstructive pricing.”

“Our aim is not to be a low cost, per se,” Sununu added. “What we want to do is to make sure that people stay with us because we can provide a better service and a better experience and that’s really what we aim to do. And as a result, we think that we will be able to change the perception that people have of Fairpoint and our brand and be able to keep our customers with us longer.”

Paul H. Sunu

Of course customers may not have the option to stay if FairPoint gets its deregulation agenda through and are later left unilaterally disconnected. In fact, while Sunu argues FairPoint’s biggest marketing plus is that it can provide better service, its agenda seems to represent the opposite. AARP representatives argued seniors want and need reliable and affordable landline service. FairPoint’s proposal would eliminate assurances that such phone lines will still be there and work even when the power goes out.

At least this year, customers know if they are being targeted. FairPoint is proposing to immediately remove from “provider of last resort service” coverage in Maine from Bangor, Lewiston, Portland, South Portland, Auburn, Biddeford, Sanford, Brunswick, Scarborough, Saco, Augusta, Westbrook, Windham, Gorham, Waterville, Kennebunk, Standish, Kittery, Brewer, Cape Elizabeth, Old Orchard Beach, Yarmouth, Bath, Freeport and Belfast.

At least 10,000 customers could be affected almost immediately if the bill passes. Customers in those areas would not lose service under the plan, but prices would no longer be set by state regulators and the company could deny new connection requests.

FairPoint argues that customers disappointed by the effects of deregulation can simply switch providers.

“The market determines the service quality criteria of importance to customers and the service quality levels they find acceptable,” Sarah Davis, the company’s senior director of government affairs, wrote. “To the extent service quality is deficient from the perspective of consumers, the competitive marketplace imposes its own serious penalties.”

Except FairPoint’s own CEO recognizes that marketplace is usually a duopoly, limiting customer options and the penalties to FairPoint.

Those customers still allowed to stay customers may or may not get good service from FairPoint. Another company proposal would make it hard to measure reliability by limiting the authority of state regulators to track and oversee service complaints.

Company critic and customer Mike Kiernan calls FairPoint’s legislative push “moosepoop.”

“FairPoint has been, from the outset, well aware of the issues here in New England, since they had to demonstrate that they were capable of coping with the conditions – market and otherwise – in their takeover bid from Verizon,” Kiernan writes. “Yet now we see where they are crying poverty (a poverty that they brought on themselves) by taking on the state concession that they are trying desperately to get out from under, and as soon as possible.”

Vermont Public Radio reports FairPoint wants to get rid of service quality obligations it has consistently failed to meet as part of a broad push for deregulation. (2:23)

You must remain on this page to hear the clip, or you can download the clip and listen later.

Kiernan argues FairPoint should be replaced with a solution New Englanders have been familiar with for over 200 years – a public co-op. He points to Eastern Maine Electrical Co-Op as an example of a publicly owned utility that works for its customers, not as a “corporate cheerleader.”

Despite lobbying efforts that suggest FairPoint is unnecessarily burdened by the requirements it inherited when it bought Verizon’s operations, FairPoint reported a net profit of $90 million dollars in fiscal 2015.