High-speed Internet access to get boost, FairPoint pledges

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PORTLAND (AP) – The company that intends to buy Verizon’s holdings in Maine, New Hampshire and Vermont said Tuesday it would boost the availability of high-speed Internet service, an area in which the rural region has lagged.

FairPoint Communications Inc. said it plans to “significantly increase broadband availability in the region within the first 12 months.” Overall, it plans to invest $200 million on infrastructure improvements across the three states.

Regulators in the three states are familiar with FairPoint, which currently has roughly 50,000 customers through six community telephone companies in Maine, as well as about 5,000 customers in Vermont and about 500 in New Hampshire.

The $2.72 billion transaction will be scrutinized by regulators in each of the states, but a FairPoint official didn’t see any major obstacles to its approval.

If the deal is approved, FairPoint would have more than 600,000 customers in both Maine and New Hampshire, and about 400,000 in Vermont, said Walter Leach, FairPoint’s executive vice president for corporate development.

FairPoint’s plan to improve high-speed Internet access is welcome news in a rural region that lags behind urban areas in terms of access and choice.

The governors of Vermont and Maine have put forth formal plans to improve broadband availability. In Vermont, Gov. Jim Douglas calls it the “e-state” initiative. In Maine, Gov. John Baldacci’s program is called “ConnectME.”

Leach said FairPoint provides high-speed Internet access to more than 80 percent of its customers.

Twenty-three percent of FairPoint’s customers take advantage of high-speed Internet service, he said.

Verizon, meanwhile, provides the service to 62 percent of its customers in Maine, New Hampshire and Vermont, and only 12 percent actually use the service, he said.

“We believe the customers will see a different level of attention and as a result will be happier at the end day with FairPoint,” Leach said in a telephone interview from the company’s headquarters in Charlotte, N.C.

One Maine official said it won’t be hard for FairPoint to improve upon Verizon’s record.

“Verizon has done such a bad job of deploying broadband,” said Wayne Jortner, senior counsel from the Maine Public Advocate’s Office in Augusta. “I think FairPoint can only improve from Verizon’s very slow place.”

Likewise, Vermont Commissioner David O’Brien from the Vermont Department of Public Service said he welcomes a company that has a commitment to broadband services in rural areas.

“It has been clear for some time that (Verizon’s) future is not in Vermont or northern New England as a whole,” O’Brien said. “We’ve wanted someone who would come to Vermont and see it as part of their future and not part of their past.”

Stephen Merrill, a telecommunications analyst for the New Hampshire Public Utilities Commission’s consumer advocate, also was encouraged by the news.

“There have been some issues in regards to whether Verizon has tended to its business in New Hampshire in terms of quality of service,” he said.

In Maine, FairPoint owns Northland Telephone Co., Sidney Telephone Co., China Telephone Co, Maine Telephone Co., Standish Telephone Co. and Community Service Telephone Co. In Vermont, it owns Northland Telephone Co.

FairPoint’s plan calls for retaining Verizon’s workers and honoring existing labor agreements. About 3,000 of Verizon’s 3,300 workers in the three states will take jobs with FairPoint, while the remaining 300 will stay with Verizon.

FairPoint also plans to add 600 more jobs.

While that may sound good, regulators in the three states still plan to take a close look at the proposed transaction. The transaction would have to be good both for ratepayers as well as investors to be approved.



(AP reporters Beverley Wang in Concord, N.H., and John Curran in Montpelier, Vt., contributed to this report.)

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