Vermont says FairPoint hasn’t tackled problems

Posted July 14, 2009, at 9:50 p.m.

MONTPELIER, Vt. (AP) — Taking a hard line on troubled FairPoint Communications, the Vermont Department of Public Service on Tuesday called for an investigation into whether the company should be allowed to continue to operate in Vermont if it doesn’t fix its customer service, billing and other operational problems.

The consumer advocacy department filed a petition with state regulators asking them to determine if FairPoint should be allowed to keep its certificate of public good, or its license to conduct business as a regulated utility in Vermont.

“Our objective is clear: to ensure FairPoint honors its commitments to Vermont consumers,” said department spokesman Stephen Wark. “We are not willing to take a wait-and-see approach. We have given FairPoint an opportunity to improve and it just hasn’t done enough.”

FairPoint, which bought Verizon Communications Inc.’s landline telephone and Internet business in northern New England last year, said the petition is unnecessary and won’t affect the pace of improvements.

“What we’ve demonstrated to the department and the Public Service Board is that we have made significant progress but we still have a lot [of] work to be done. We need to stabilize our operations, we need to improve our systems functionality and our actions would be the same either way,” said Beth Fastiggi, a FairPoint spokeswoman in Vermont.

The Maine Public Advocate’s Office — the Pine Tree State’s equivalent of the Vermont Department of Public Service — has not shied away from criticizing FairPoint’s record so far or demanding improvements. Deputy Public Advocate William Black has questioned some of the progress that FairPoint has claimed to have made in addressing the problems.

“No one in Maine has filed a request that their certification be withdrawn,” Black said Tuesday. “However, both the Public Advocate’s Office and the competitive local exchange carriers are concerned about FairPoint’s ability to serve [customers] in Maine.”

Competitive local exchange carriers, or CLECs, are smaller communications companies that offer services often using FairPoint’s network.

The Maine Public Utilities Commission will hold a meeting on Thursday to hear an update on FairPoint’s progress.

FairPoint’s improvements haven’t come fast enough for the Vermont Public Service Department.

The department says it continues to receive “unprecedented levels” of complaints since FairPoint began operating under its own systems rather than Verizon’s on Feb. 9, 2009, ranging from billing errors to repair and delivery problems and trouble reaching customer service representatives.

In March, the state fielded 557 consumer complaints, 592 in April, 328 in May, 306 in June and 129 in the first 10 days of July.

FairPoint filed a plan on March 31 to identify and fix the problems by the end of June.

Fastiggi acknowledges that wait times for business customers calling customer service centers are too long, but said the company has substantially reduced times for residential clients and expanded broadband service.

“To remark on their gains while ignoring the continued negative impact the lack of performance is having on Vermont consumers — individuals who need their phone to contact doctors, small businesses who rely on their Internet and telephone service to sustain them, emergency service providers whose clients’ health and possibly life are at risk — is an insult to the very people whom FairPoint must rely on for their continued viability,” the department said in its filing.

The problems have taken a toll on FairPoint, the department said.

The company is now seeking to postpone a bond interest payment due in October on debts totaling $531 million. If it can’t be put off, the company might seek alternative debt-restructuring plans, which could include bankruptcy, FairPoint said in a Securities and Exchange Commission filing in late June.

The Vermont Public Service Board will decide whether to investigate FairPoint. The quasi-judicial panel will likely take up the issue soon, said board clerk Susan Hudson.

BDN writer Kevin Miller contributed to this report.

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