We’ve well discussed how the Fairpoint disaster is as much the fault of placating regulators as it is Fairpoint. Regulators in Vermont, New Hampshire and Maine completely ignored concerns that Verizon’s sale of unwanted DSL and landline customers to Fairpoint wasn’t a good idea — then when Fairpoint collapsed (at times completely unable to offer even 911 service) regulators allowed the company to essentially craft its own improvement timeline in private.
After missing their broadband expansion commitments completely, Fairpoint recently stated they wanted to weaken previous broadband expansion promises. Fairpoint’s also now asking regulators to weaken their oversight of the company once they emerge from bankruptcy. Of course while looking to get out of merger conditions, Fairpoint’s been busily lobbying to crush private/public efforts to improve broadband connectivity in New England. The Vermont Public Service Board appears poised to finally stand up to Fairpoint, refusing its reorganization plan, effectively saying they don’t believe the carrier’s being honest about projections:In a 96-page order, the Vermont board said that “based upon the record before us, we cannot find that FairPoint has demonstrated the financial capability to meet its obligations under Vermont law and its (state license) as a telecommunications carrier.” The board said the company’s projections about its near-term future performance appeared to be too rosy, given recent history: “FairPoint has provided virtually no explanation as to why its projections are reasonable.”At least one Vermont Senator seems to have noticed that regulators are showing backbone a bit after the fact:”It’s interesting that the Public Service Board is now being tough on FairPoint. It should have been tough on FairPoint when it first proposed purchasing the assets from Verizon,” Vermont state Sen. Vincent Illuzzi, a consistent critic from the outset of the telecom deal, said after the board’s order Monday. “The proposed purchase and sale was entered into when it seemed like most in the telecommunications industry knew that FairPoint was paying way too much for a slowly dying land line business with lots of antiquated equipment and systems.”Of course with a few handshakes Fairpoint lobbyists can probably still get all of their original merger promises obliterated and their reorganization deal approved. That won’t necessarily help the telco, who not only can’t afford to really upgrade and expand Verizon’s unwanted DSL networks — but likely has to deal with Verizon coming back in down the road and leeching away Fairpoint customers using LTE technology. As we’ve said all along — the only winner this deal ever had was Verizon.
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