KENNEBUNK, Maine — Hundreds of local businesses and thousands of Maine residents found themselves without telephone or Internet service on Tuesday when customers of USA Telephone had their phones shut off unexpectedly.
USA Telephone, located in Kennebunk, provides local and long distance telephone service as well as Internet service in 12 states from Maine to Maryland, according to company literature.
According to its website, USA Telephone provides services to customers in both Maine and New Hampshire.
According to Bob Foley, a partner of Cole Harrison Insurance in Kennebunk and a selectman for the town of Wells, his company lost service around noon Tuesday.
Foley said that he had received a letter postmarked May 13 from USA Telephone indicating that the company had filed for bankruptcy and would be discontinuing their services as of June 14. The letter stated that all businesses should find another provider for telephone and Internet services by that date.
Foley said he was in touch with Gov. Paul LePage’s office on Wednesday to inform them of the problem and said he is concerned for his customers.
“If I have a client with a claim or a need for a change in insurance coverage, they can’t contact us,” he said. “It is just unforgivable.”
A message left for LePage’s press secretary, Adrienne Bennett, was not immediately returned.
USA Telephone owner Stephen Gilbert told the York County Coast Star Wednesday that the loss of customers’ phones was due to his company owing money to Fairpoint Communications. It was Fairpoint, Gilbert said, that shut the service down.
“We do owe Fairpoint some money and they did not agree to the time frame we indicated was necessary to comply with regulations,” Gilbert said. “We are a regulated industry and we told Fairpoint we would need until June 14th to contact customers and inform them that their service would be terminated.”
Companies including USA Telephone were required by the Maine Public Utilities Commission to give customers 30 days’ notice before termination, but a law last year changed that, according to Tom Welch, PUC chairman.
“Obviously I think it’s a good idea for carriers to give people notice, but USA Telephone is in the same bucket as cell carriers or some cable providers,” Welch said. “It’s whatever the contracts say, not what any commission rules might say.”
Gilbert said he had been in contact with the PUC and the Federal Communications Commission and was told that there was nothing the PUC or FCC could do about the shutdown at this time. USA Telephone was encouraging its customers to contact the Maine PUC to register a complaint about the disruption in service. Gilbert said that the disruption in service affected more than 2,400 residential and commercial customers.
Many local businesses that had their service interrupted posted the information on their Facebook pages, including Tully’s Beer and Wine in Wells, Bandaloop restaurant in Kennebunkport, and Tune Town in Biddeford. Tune Town posted a message on its Facebook page on Wednesday that stated “day 2 of no phone service due to USA Telephone going out of business.”
USA Telephone has been undergoing bankruptcy proceedings since 2010, according to documents filed with the U.S. Bankruptcy Court for the District of Maine. The U.S. Bankruptcy Court approved the final bankruptcy plan on March 26, according to legal filings. Marcus, Clegg, & Mistretta filed the reorganization plan for their client, USA Telephone, in May 2012.
On its website, MCM said, “the filing of the plan follows the settlement of significant litigation between USAT and Fairpoint Communications.”
Jeff Nivens, Fairpoint spokesman, said the company had begun the process of restoring service to customers Wednesday afternoon. He said the company made the decision after seeing the letter USA Telephone had sent to subscribers, which he described as unclear and confusing.
“It became apparent this morning that USA Telephone was negligent in terms of notifying their customers,” he said, adding that Fairpoint had informed USA Telephone of the impending shutoffs back in April, and then had extended the deadline to Tuesday to give the company time to inform customers. “For a long time we have been trying to work with USA Telephone but USA was ignoring their financial responsibility.”
Nivens said Fairpoint was working with USA Telephone’s 2,300 customers in Maine, 160 in New Hampshire and 60 in Vermont.
“Fairpoint does not take this lightly,” he said. “We circled the wagons and decided this morning around 11 a.m. to reinstate service to all of USA Telephone’s customers.”
Nivens said he did not know for how long the service would remain on.
BDN Business Editor Whit Richardson contributed to this report.