FairPoint investing heavily in Maine as bankruptcy drags on

Posted Aug. 10, 2010, at 3:56 p.m.

BANGOR, Maine — Despite lingering public image problems and a pending company reorganization necessitated by bankruptcy filings, FairPoint Communications is putting its future hopes in the hands of a massive, expensive fiber-optic network and its broad employee base.

Mike Reed, FairPoint’s Maine state president, said the company has invested more than $100 million in network infrastructure in Maine, New Hampshire and Vermont since 2008. He hopes that commitment will help quell persistent customer complaints.

“We’ve been beat up significantly, but our quality is excellent,” Reed said Tuesday during a stop in Bangor. “We’re here to stay. This area is a very important part of our footprint.”

Ever since North Carolina-based FairPoint paid $2.3 billion in 2008 for Verizon Communications Inc.’s land line and Internet phone operations in the three northern New England states, the company has been slowed by various problems.

Many of the problems were inherited from Verizon, but FairPoint executives have admitted that they have had a rocky transition. The hardest part now, Reed said, is convincing the public that FairPoint’s problems are a thing of the past.

“Our service is right where it should be,” he said. “We have customer service representatives that respond in seconds to calls that used to take 24 hours.”

It hasn’t helped that FairPoint’s name has been in the news largely because of its bankruptcy protection filing in October of last year. FairPoint submitted a reorganization plan to avoid bankruptcy and address a significant amount of debt. Maine and New Hampshire regulators approved that plan, but Vermont has held out.

Just this week, FairPoint provided Vermont’s Public Service Board with more information in hopes that it would reverse its earlier decision to reject the plan. The state board has said it is not convinced FairPoint has made significant improvements. FairPoint also has indicated that it might lobby a federal bankruptcy court in New York to effectively overturn the June 28 board decision.

Reed and FairPoint spokesman Jeff Nevins said they are disappointed in Vermont’s reluctance to approve the restructuring plan but stressed that it would not affect operations.

As for the public image repair, Nevins said it’s all about the company reaching customers through its wide range of business and residential services, including Internet, phone, television, broadband and data services. FairPoint also has mended fences, to some degree, with Maine Fiber Co., a firm that it competed with recently for federal stimulus funding.

Maine Fiber, a firm formed to build the Three-Ring Binder project that would bring broadband access to rural Maine, needed access to utility poles owned by FairPoint and other companies. Nevins said a deal has been struck, although it took legislative action.

Dwight Allison, CEO of Maine Fiber Co., confirmed that he has been working with FairPoint on the issue of utility pole access.

“They obviously have a number of challenges in front of them, but it’s not good for anyone if they continue to have problems,” Allison said.

FairPoint, which applied unsuccessfully for stimulus funds in the same round that saw the Three-Ring Binder project receive funds, has applied for a second round of federal grants. That application, which would build on FairPoint’s existing network, is pending, but Reed said it has been hard for him to watch other firms receive federal subsidies while FairPoint has been shut out.

In the meantime, Reed and Nevins said FairPoint will continue working on economic development opportunities, including meeting with local chambers of commerce and business groups to tailor service options.

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