COMMUNICATIONS DAILY
Copyright 2008 Warren Publishing, Inc.
All Rights Reserved
January 17, 2008 Thursday
Maine's Office of Public Advocate told state regulators that they may need to reconsider their approval of Verizon's transfer of its landline assets to FairPoint because new investment commitments the companies proposed last week in Vermont would violate a key condition to Maine's approval.
The Public Advocate told the Public Utilities Commission additional capital spending commitments that the companies proposed in Vermont as a way to persuade regulators to reverse a December rejection of the transaction would violate a Maine condition barring the companies from accepting conditions in Vermont or New Hampshire with a potential for "material adverse impact" on Maine's approval conditions. The Public Advocate said the companies proposed in Vermont to spend $120 million more in capital outlays over three years, committing to universal broadband availability in at least half of Vermont exchanges before 2011.
The Maine Advocate said the additional spending posited by the Vermont proposal, unless offset by an increased Verizon commitment of working capital, probably would delay FairPoint's delivering on a promise to Maine to reduce its debt load to 3.5 times cash flow before 2013. This would make it substantially harder for FairPoint to meet the financial conditions approved by Maine regulators, and the conditions must be changed to reflect the additional spending commitments in Vermont, the Public Advocate said.
-------------------------------------------------------------------------------------------------------
Vermont legislative leaders urged state regulators to scrutinize revised conditions proposed in Verizon's transfer of its landline assets to FairPoint, because the additional concessions may not be enough to ensure basic service quality and expanded broadband deployment under FairPoint.
House Speaker Gaye Symington, D-Jericho, and Senate President Pro Tem Peter Shumlin, D-Windham, told the Public Service Board a settlement between the companies and the Department of Public Service is "seriously deficient."
FairPoint still isn't bringing enough money to the table to ensure its future financial stability, they said in a letter. The companies amended their original proposal to include $120 million more in network investment the next three years and made a new commitment to achieve universal broadband availability in 50 percent of exchanges within three years.
