Maybe the wisdom of Solomon can resolve the Verizon-FairPoint merger. Cut Maine in half, with a section for each company. Whichever company protests the most shall receive the entire state.
We bet Verizon won’t pipe up, while FairPoint bellows about inequity. It’s the difference between the company that wants to be here, and one that doesn’t. Verizon would likely agree to any fractional abandonment of northern New England it can get, although it prefers to shed the whole package.
Maine utility regulators have received a lengthy recommendation to scrap this deal, amid grave concerns about FairPoint’s fiscal capacity to manage Verizon’s business, plus add jobs and broadband services.
With FairPoint, a union report warned Thursday, northern New England will be a “communications backwater for years to come.” Yet New Hampshire, Vermont and Maine aren’t exactly cutting edge now – the same union report detailed the trio’s bottom-tier broadband access: 64 percent penetration, versus the national average of 79 percent.
(Maine is the best of the worst – 46th in the United States. New Hampshire and Vermont are 50th and 49th, respectively.)
FairPoint is at least promising to expand broadband, while aside from a pending $12 million in investment ordered by the Maine Public Utilities Commission, Verizon promises next to nothing.
The severe distaste for Verizon in Maine is dripping from the recommendation’s bluntly worded conclusion: “We caution the commission that it should not let its displeasure with Verizon’s lack of cooperation and investment in Maine over the past five years influence the commission’s decision,” it states. “The commission should not succumb to the ‘anybody but Verizon’ mentality that even Verizon, itself, seems to be encouraging.”
Oh boy. On one hand, Maine is serviced by a company that cares little about its public image, if it means earning a regulatory evacuation from the state.
On the other hand, the potential replacement is running around northern New England shaking more hands than any presidential candidate.
Frustration is palpable in Walt Leach’s voice when he speaks about FairPoint’s campaign to drum up support for the merger. “We will honor existing contracts,” says Leach, the company’s executive vice president, about the unions.
Leach repeats FairPoint, even in this tight credit market, still has $2 billion in promised backing from established sources, including Bank of America and Morgan Stanley. “The critics say we’ll carry so much debt, but there’s so much revenue,” he says. “There is a very significant cushion.”
The drumbeat from regulators, many politicians and the unions is Leach and FairPoint are wrong. In this final analysis, however, the decision-makers must consider he’s right. FairPoint needs fair treatment from regulatory agencies in all three states, because there’s only one guarantee if the deal fails.
Verizon will remain, and do perhaps even less for northern New England than it has so far.
Comments are no longer available on this story