Tuesday, February 26, 2008

Verizon/FairPoint Just About A Done Deal in ME, VT and NH

Well, it looks like another one of my 2008 predictions has bit the dust and this just a little over three weeks after the Patriots loss in the Super Bowl!

Yesterday, the New Hampshire Public Utilities Commission (PUC) approved the Verizon sale to FairPoint Communications. The New Hampshire PUC voted 2-1 with some attached conditions that include the creation of a trust fund for future retiree's health benefits. According to WMUR in New Hampshire, FairPoint will also be establishing a call center in Littleton and a data center in Manchester and will not be able to move them without state approval. One other condition requires FairPoint to notify the state whenever the companies debt rating is downgraded.

Both Maine and Vermont have already approved the $2.35 billion deal. FairPoint currently services approximately 300,000 phone lines in 18 states and the Verizon deal will add an additional 1.7 million lines. The sale will eliminate $1.7 billion in Verizon debt and provide the company with a $600 million tax write off.

According to WMUR, PUC Commissioner Graham Morrison dissented, saying:

.... he couldn't agree that the settlement can "provide a reasonable basis to conclude that FairPoint will not become insolvent, or otherwise be unable to meet its service commitments. ... I am equally concerned and dismayed that the technology plan offered is not consistent with the state's best interests and need to be a competitive global participant in the business and education market in the coming years.

A FairPoint press release yesterday stated:

FairPoint and Verizon are in the process of reviewing today’s written order for any additional provisions or changes not covered in the previously announced stipulation with the staff of the New Hampshire PUC.

The decision can be appealed by opponents who must request a rehearing within 30 days but to me, it looks like this is a done deal.

Verizon has been installing FiOS is parts of Southern New Hampshire so it will be interesting to see how those customers that have fiber coming into their homes will be handled.

Will these decisions come back to haunt these three states? Time will tell.

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