Attorney general joins FairPoint probe

Posted Aug. 28, 2009, at 8:06 p.m.

AUGUSTA, Maine — The Maine Public Utilities Commission has asked Attorney General Janet Mills to investigate allegations that tests designed to measure whether FairPoint was ready to operate the land-line phone systems in the state were faked.

“We referred that to the attorney general,” said Andrew Hagler, an attorney with the PUC. “The PUCs in the other states took similar actions.”

Mills said her office is looking into the allegations, made in an anonymous e-mail to regulators in the three New England states where FairPoint operates, as are the attorneys general in Vermont and New Hampshire. She declined to speculate whether the probe could result in criminal charges.

“We are waiting to see FairPoint’s response,” she said. “Any number of things could come out of that. It could be a civil or criminal matter; it could be a state or a federal matter.”

Mills said the allegations in the e-mail are “troubling” but are only allegations, and FairPoint has promised to conduct an internal investigation and report to the regulatory agencies Monday.

The e-mail was sent to the regulatory agencies from an address identified as “David Undeliverable” and said the writer was part of a team working with FairPoint and its consultant CapGemini. The e-mail charged that faked information was used in presentations to Liberty Consulting, the consultant hired by the three state regulatory agencies to make sure FairPoint was ready to convert its customers to its new system from the old Verizon net-work.

FairPoint bought the land-line business of Verizon in the three northern New England states last year for $2.4 billion. During negotiations with regulators, concerns were raised about the ability of FairPoint to take over the operations. The regulatory agencies required a series of tests to be conducted under the oversight of Liberty to assure them that the new systems worked.

“The detail in the e-mail is what is most troubling,” said Maine Public Advocate Richard Davies. “It certainly appears to be from someone very much informed about the tests and how they operate.”

He said the allegation — that workers from both FairPoint and CapGemini set up demonstrations that used fabricated information so that it appeared to be actual test data to fool representatives of Liberty — is very serious. He said FairPoint could have faced significant penalties from regulators if they had not met the switch-over deadlines.

“We have to proceed somewhat cautiously in this because there are open proceedings on this whole area before the PUC and some are adjudicatory and some are not,” Davies said.

He said there are rules and laws governing how his office and the PUC interact, and while he wants a prompt investigation, he does not want a procedural problem to hold up other matters before the commission concerning FairPoint.

“We want to [have] the systems all fixed and operating properly and do not want to do anything to jeopardize that,” Davies said.

Mills agreed that regulators face broader issues in making sure FairPoint is meeting its obligations to consumers. She said it is clear the company has had significant problems in converting from the old Verizon computerized systems to new systems.

“Our citizens have a great number of concerns about the service they are provided,” she said. “And I know that the PUC is strongly encouraging FairPoint to straighten out its act.”

The Legislature’s Utilities and Energy Committee met with FairPoint President Peter Nixon earlier this month and roundly criticized the company for not fixing the many problems it has had since taking over operations of the phone network earlier this year.

Sen. Barry Hobbins, D-Saco, the co-chairman of the panel, said the apparent inability of the company to handle such routine tasks as getting a phone line installed is hurting consumers and businesses and has public safety implications.

“What we heard was they have one group of computers doing one thing that can’t talk to another group of computers doing something else,” said Sen. Roger Sherman, R-Houlton, a member of the panel. “What we need to hear is how and when they are going to fix it.”

FairPoint is not responding to the allegations until it completes its internal investigation. Maine FairPoint spokesman Jeff Nevins said Friday in an e-mail that the response requested by the regulators would be made Monday.

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