When Verizon completed the sale of its Northern New England telecommunications assets, CRM applications and aging infrastructure to FairPoint Communications for more than $2 billion in spring 2008, residents of Maine, New Hampshire and Vermont could feel some sense of relief and re-assurance.

After all, Verizon had shown that it did not want any part of this region any more. (One telecom analyst in a 2008 BusinessNH Magazine article called the three states, with their rural communities and challenging topography for laying telco pipes, "the poor sisters.")

And, FairPoint execs assured, FairPoint did want to be here. It did want to invest in rural broadband initiatives. It did want to build out its infrastructure to accommodate many residents still struggling with a dial-up connection. (In the United States. In 2008.)

There was plenty of optimism, for sure. But there were also plenty of red flags raised during the Verizon to FairPoint sales proceedings that today are still blowing in the wind, and very much red.

From Red Flag to Reality

Just over a year ago, Dave Brevitz, a telecommunications expert hired by the New Hampshire Consumer Advocate organization, testified that FairPoint's "business model required it to take on massive debt but continue to pay out high dividends to stockholders," notes a recent article in the Concord Monitor. Brevitz offered various state commissions and regulation agencies a list of probable and problematic outcomes with the Verizon sale to FairPoint.

Most of the scenarios have come to fruition.

Notes the Monitor article: "Increasing interest rates? Check. Loss of customers to FairPoint competitors? Check. Fundamental changes in the financial market? Computer problems? Unexpected costs to rectify customer service issues? Check, check, check." FairPoint is currently trying to restructure roughly $2 billion in debt and avoid bankruptcy.

During summer 2009, controversy erupted when an anonymous e-mailer alleged that FairPoint had faked tests of its computer networks and systems to win final approval to take over Verizon's operations. (The allegations ultimately proved false.)

I know all about the sketchy telephone service, e-mail outages, billing problems, networking complexities and overwhelmed customer service folks because I live in New Hampshire, and am now a former FairPoint residential customer of its local, long-distance and DSL services. (I have switched to Time Warner Cable for telephone, Internet and cable-television connectivity, though due to the fact that TWC can route only one telephone line to our house, I'm forced to use FairPoint telephone service for my home office. I'd leave in a second if I could.)

Residents of the three-state region who can't receive the services of cable or satellite providers, or a good wireless signal (good luck with that!), are stuck with FairPoint as company executives try to dig out from the financial carnage.

And the solution which FairPoint pledged to deliver still remains elusive for too many residents screaming for faster Internet connectivity. For instance, in Coos County in Northern New Hampshire, the most recent state-offered broadband penetration data showed that nearly 70 percent of the residents were without cable or DSL.

Just imagine that for a second. Think of how hard it would be to run a business on dial-up. One New Hampshire resident, Sherri Latulip, could tell you all about it.

You do not have flash or javascript support.

Average (2 votes)

Reply