The future for North Carolina based FairPoint Communications looks bleak as the Vermont Public State Board rejected a plan for the troubled telecom to work itself out of bankruptcy by delaying broadband deployments and skipping penalties for poor service…
The future for North Carolina based FairPoint Communications looks bleak as the Vermont Public State Board rejected a plan for the troubled telecom to work itself out of bankruptcy by delaying broadband deployments and skipping penalties for poor service that were to be paid to ratepayers.
There was some light at the end of the tunnel as Maine regulators had approved the plan in their state, but the Vermont ruling has changed the situation as FairPoint awaits the outcome of New Hampshire state’s deliberations.
FairPoint took over Verizon’s landline and Internet networks in Maine, New Hampshire and Vermont in early 2009, but then declared bankruptcy in October of that year. The company faced doubts from employee unions state legislators when it first agreed to buy Verizon’s landline business in the three northern New England states for US$2.3 billion. With the purchase, the company grew six-fold overnight.
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.”
Those projections, the board said, were “based upon the assumption that FairPoint’s losses in local revenue due to competition will be less than the company has experienced recently, that it can increase revenues from broadband services and special access services faster than it has recently, and that operating costs will trend downwards relative to recent experience.”
Michael Smith, FairPoint’s president for Vermont, declined to comment other than to say the company was reviewing the board’s order and that he was disappointed with the board’s conclusions about the company’s finances.
