FairPoint: Revisions going well

By Eric Russell, BDN Staff
Posted Feb. 05, 2010, at 6:56 p.m.

BANGOR, Maine — As FairPoint Communications continues to question whether stimulus funding should have been awarded to fund a competing fiber-optic network, the company’s executives say their much-publicized financial restructuring plan is proceeding as well as they expected.

Earlier this week, the telecommunications company reached a tentative accord with two unions that represent more than 75 percent of its employees, an agreement that brings the reorganization that much closer to completion.

“We’ve put off the reorganization plan to outline and answer some questions. The more we have worked out ahead of time, the better the process will go,” said FairPoint spokesman Jeff Nevins.

Michael Morrissey, vice president and assistant general counsel, said that because labor expenses are the largest cost for FairPoint (the company has 3,500 employees in New England), the union deal was a big step. Details of the contract have not been released, but some wage concessions requested by FairPoint likely are in-cluded. The two unions are expected to vote next week.

FairPoint, which took over Verizon Communications operations in Maine, New Hampshire and Vermont in early 2008, filed for Chapter 11 bankruptcy protection last October to try to settle $1.7 billion in debt.

Nevins said many factors contributed to the financial problems that FairPoint faces, but he believes the company is turning the corner.

“We’re talking about the future and the new products and services that we have available,” Nevins said this week.

FairPoint is continuing its discussions with banks, regulatory agencies and other parties as the filing of its bankruptcy reorganization plan approaches.

On a different note, Nevins said FairPoint’s well-documented system problems have subsided for the most part, although he acknowledged that some billing issues remain. Some customers who have set up automatic payments have not seen the money taken from their accounts. Nevins said the billing problem is not unique to Maine, and he estimated that it has affected 3,000 customers in the three-state area.

Other issues, such as a dispute between FairPoint and GWI of Biddeford, are in limbo. The Maine Public Utilities Commission recently ruled that the issue of access to “dark fiber,” or unused fiber-optic cable, must be decided by the Federal Communications Commission.

Additionally, the Three Ring Binder project that received $25.4 million in federal stimulus funding last December is moving closer to fruition even as FairPoint continues to challenge the project. The project would build 1,100 miles of broadband fiber-optic Internet cable across western, northern and Down East Maine.

Recently, FairPoint claimed that the Three Ring Binder network would duplicate an existing broadband network owned by FairPoint. Others said the Three Ring Binder is different because the quality of its cable is better and it will be available to any entity for the same price. Maine Fiber Co., the company that was formed to build the Three Ring Binder network, is working with a number of potential providers, including GWI.

Finally, LD 1697, a bill sponsored by Rep. Stacey Fitts, R-Pittsfield, that would prohibit the state and divisions of the state from providing telecommunications services to clients outside the government sector, has added to the drama. A scheduled hearing on the bill last week drew criticism that it would keep Maine in the “dark ages.”

Nevins said even if that bill is not successful, FairPoint would continue to move forward and try to recruit new customers, both commercial and residential.

http://bangordailynews.com/2010/02/05/politics/fairpoint-revisions-going-well/ printed on July 25, 2014