Peter Nixon is trying to get the word out: Bankruptcy won’t scuttle FairPoint Communications’ plans for Maine.
FairPoint filed for Chapter 11 protection Monday, 18 months after buying Verizon’s phone lines and Internet business in Maine, New Hampshire and Vermont.
Company President Nixon, visiting newspapers around the state this week, told the Sun Journal editorial board Wednesday that FairPoint has invested $20 million to expand broadband access in Maine over the last 18 months and that it will still hit a target in April 2010 to have high-speed Internet available to 83 percent of customers.
“We still believe that broadband expansion is a strategic imperative for the company,” said Nixon, who’s based in North Carolina.
Maine Public Advocate Richard Davies, contacted in the afternoon, said FairPoint had committed to spending $57 million in Maine by 2013. “We would be delighted to learn they have spent that much already,” he said.
In the weeks after FairPoint began taking over Verizon accounts last winter, customer service calls shot from 35,000 to 85,000 a week, many upset or confused about bills, a problem that’s been dealt with, he said.
“We could not answer those calls quickly enough and customers were getting angry,” Nixon said. “The level we’re operating at now is the best it’s ever been in Northern New England.”
That call volume returned to 30,000 to 35,000 a week back in May, according to Nixon. On Tuesday, almost every call was answered in under 10 seconds.
He compared the current level of people with telephone line complaints, 1.3 percent, as the same as under Verizon.
Nixon also said FairPoint had hired more people than it promised to Maine at the time of the deal; 400 instead of 280, including jobs recently brought to Portland from Ontario.
Davies questioned whether complaints were down because more customers had left the company but said, nonetheless, the future of FairPoint in Maine looks “promising.” His office has gone in with a dozen other state agencies and businesses to hire a New York bankruptcy lawyer to follow the Chapter 11 case.
FairPoint, with hundreds of thousands of phone lines in Maine, still experiences computer problems that lead to billing and service errors, Davies said. A consultant hired by FairPoint is due to recommend fixes by Nov. 19. Davies said his attorney would watch the proceedings to make sure they include money to act on those suggestions and make sure FairPoint doesn’t back away from promises made during the purchase from Verizon.
Nixon said FairPoint didn’t anticipate the economy souring and interest rates on its bonds moving from 8 percent to 13, which added to its debt, or a longer, more expensive transition in taking over Verizon lines. It’s looking to shed $1.7 billion in debt, he said. In the process, those creditors, largely banks, would own 98 percent or so of FairPoint’s stock.
“You’re going to see new ownership who have not been owners of a telephone company,” Davies said. “It’s clear FairPoint didn’t understand the ramifications of getting into this.” It’s important those banks do, he added.
Nixon said he realizes it’s FairPoint’s role now to show “sustained improvements and sustained quality service.”
“We have a lot of work to repair our image and we are very anxious to do that,” he said. “(It’s) human nature — bad news feeds bad news . . . We want them to be able to say, ‘I had a great experience.'”
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