Morning Sentinel
FairPoint delay in consumers' best interests
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Kennebec Journal & Morning Sentinel 06/22/2008

It's good that the two state lawmakers who head the Legislature's Criminal Justice and Public Safety Committee are concerned about the progress of FairPoint Communications' takeover of Verizon's land lines in Maine.

The legislators requested that regulators and company officials meet with their committee next month about problems with the companies' emergency 911 service in Cumberland and Penobscot counties and the two-month delay of the switch to Verizon to Fairpoint.

While the interest of Sen. Bill Diamond, D-Windham, and Rep. Stan Gerzofsky, D-Brunswick, is appropriate, what's not fitting is the strong and at times alarmist language that Diamond and Gerzofsky are using about the issue.

The transition from Verizon to FairPoint, said Gerzofsky last week, "is going downhill -- it's not going uphill." Diamond said, "I am not comforted by the reassurances I've been hearing from the Public Utilities Commission and FairPoint, and this delay just adds to it."

It helps to look at the facts. When relatively tiny FairPoint offered to buy telecommunications giant Verizon's land lines in Maine, New Hampshire and Vermont, and Verizon declared it wanted to sell to FairPoint, that triggered an exhaustive regulatory review by agencies in each state and on the federal level. The $2.4 billion deal would transform FairPoint into Maine's largest telephone provider, controlling 85 percent of the state's land lines.

So staff at the state Public Utilities Commission and the Public Advocate's office spent thousands of hours examining FairPoint's ability to take over Verizon's assets and functions and improve on them. They took public input, the loudest and strongest of which came from the unions representing workers at Verizon, who until the last minute didn't want the deal to go through.

And regulators imposed conditions on the sale to ensure that it was in the public interest.

By the time the sale was complete, its terms included everything from a reduction in the sales price (to help keep FairPoint financially stable), rate reductions for customers and a comprehensive monitoring program, contracted for by the three states, of every stage of the prolonged transfer of operations and assets.

The overall monitoring for the entire system turnover, from the billing and collection systems to staffing, maintenance and repair, is being done by one firm. Another firm has been contracted to monitor the specifics of just the emergency 911 system's turnover. Monthly reports are issued by both firms.

Weekly telephone conferences are held among consultants, Public Utilities Commission staff and staff at other states' regulatory agencies. The consultants regularly visit FairPoint headquarters in Georgia and observe testing at the New England facilities. Eleven staff members at the commission alone (and that's just in Maine) are monitoring the complicated transfer and weekly meetings are held with FairPoint employees. More staff at the Public Advocate's office are monitoring the transfer.

The original plan was to have the final takeover, called a "cutover" by regulators, completed by September. But in its latest monthly review of the transition, monitors at the Liberty consulting firm told Maine, Vermont and New Hampshire regulators that, "Liberty believes that the probability FairPoint can meet its cutover readiness ... is extremely low ... (and) the consequence of continuing to adhere to such an unrealistic cutover schedule is that FairPoint ... will be tempted to take inadvisable actions that will require rework and ... create unnecessary problems."

So, justifiably, the final takeover date is being delayed to September. It is, indeed, reassuring that the monitoring systems put into place for the transaction have provided the information needed to put the brakes on the complex transaction.

Such a slowdown hardly seems to us to be part of a downhill slide; rather, it appears to be the entirely expected and appropriate response to the consumer protections that are part of this deal.

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