Yesterday, Stop the Cap! examined the rationale for Verizon to spin away hundreds of thousands of customers to a small independent telephone company, FairPoint Communications.  In today’s report, the utility commissions that protect ratepayers in three New England states ponder the proposal.  WMUR-TV in Manchester offers a nice summary of the issues involved, and the Josiah Bartlett they reference isn’t the one from NBC’s The West Wing, but rather the sixth governor of New Hampshire!

1. Would the merger improve the chances for New England’s smaller communities to enjoy better service, particularly with high speed broadband that Verizon never rolled out;
2. Was FairPoint financed sufficiently to handle the dramatic increase in its customer base?

Vermont decided the FairPoint takeover in their state was likely to be unsustainable, with insufficient guarantees that the company would have the money to get the job done.  WPTZ-TV, which serves Vermont, covered the announcement on December 21, 2007:

Unfortunately, as Stop the Cap! readers have come to learn again and again, one defeat doesn’t mean the end of the war. FairPoint had the opportunity to digest the input from state regulatory bodies and return with a new proposal. The question is, would that proposal simply put out small fires started by state authorities concerned about a few isolated factors, or would it be a complete overhaul to provide better guarantees that a FairPoint taking over phone service in three states in 2008 would still be in business in 2009.

Tomorrow, FairPoint has a new plan.

This is the first in a series of articles documenting the trials and tribulations of residents in New Hampshire, Vermont, and Maine when their incumbent telephone company Verizon abandoned them, leaving them at the mercy of an inexperienced, financially shaky, and downright lousy replacement — FairPoint Communications.  This are many lessons to be learned, and we’ll be following what was promised, what went wrong, and why it creates a nightmare for rural and small town America.  Some may wonder why focusing on this story is relevant to our issues.  The reasons:

• Broadband service in rural America is either unavailable, expensive, slow, and/or capped.  Smaller players in the broadband market often lack the financial resources to provide high quality, fast, and flexible broadband service to residents and businesses.
• The hope for competition from Verizon’s advanced fiber to the home FiOS network is dashed when the company abandons the smaller communities it once served to concentrate on more urban service areas.  Those communities will be stuck with second-rate copper or wireless “broadband” options for years to come.  In many of these communities, there is no cable service available.
  
• Some of the astroturfing political groups on the right decry public taxpayer funding of broadband, and accuse municipal networks of being subsidized by taxpayer dollars.  But as you’ll learn, private companies are receiving favorable tax breaks, and FairPoint in particular is being permitted to access $50 million dollars in funding that was originally intended by New Hampshire to be used for improvements in service.  Now that money will go to repay debts incurred by FairPoint at the same time the company paid enormous bonuses to company executives.  Strangely, these astroturf groups are silent about diverted funds finding their way into the private sector.

The sordid story of FairPoint in New England is a timely one, coming just a few weeks after Frontier Communications announced it would be taking on Verizon customers in several states, in numbers that dwarf the existing customer base of Frontier.  Shouldn’t public utility regulators carefully consider the implications for these customers before it gets approval?  What guarantees for broadband will be included, and at what speeds?  Will Frontier’s “acceptable use policy” provision of 5GB of usage per month, currently unenforced, come back to haunt customers later?

We’ll be covering the story in chronological order with lots of video over the coming days.  Pay special attention to the promises made, the realities that would come later, and the current nightmares that have cut off communities from 911 service, forced some businesses to relocate out of state just to obtain telephone service, six week delays for installations, Internet accounts that lost e-mail, and the tale of one woman who literally lives next to the telephone company, but cannot get a service call completed because FairPoint claims they cannot find her address!

When it’s all over, isn’t it well past the time Americans should be asking more from the telecommunications providers that deliver service?  For millions of Americans, when the phone company is your only choice, is this the best we can do?

… Continue Reading