FAIRPOINT COMES CALLING

Verizon’s intended sale of much of its telephone service in Maine had been rumored for more than a year. But with the announcement this week that the potential buyer is FairPoint Communications, which has owned subsidiaries here for several years, the state’s Public Utilities Commission has both work to do and opportunities to seek for Maine.

The deal would expand the number of FairPoint’s customers in Maine from fewer than 60,000 to more than 464,000 – and to a total of 1.5 million as Verizon pulls out of New Hampshire and Vermont as well. Maine’s experience with FairPoint, however, has been mixed, and that means that approval for any sale should come only after careful deliberation.

FairPoint’s six subsidiaries in Maine, in general, had among the highest rates of complaint for service, disconnection notice and billing in 2005 and ’06, according to PUC documents, and one of its companies, China Telephone, appears to have had the highest complaint rate in both years. Walt Leach, an executive vice president at the company, said that many of those problems could be attributed to a new billing system in which its vendor pulled out in the middle of the changeover and that the problems were one-time events.

Nevertheless, the public advocate’s office last month filed a complaint against the company, suggesting that FairPoint may be overcharging its subsidiaries. And since March, the PUC’s consumer assistance division has been monitoring four aspects of FairPoint’s performance -billing, phone response and two measures of E911 services – and reports that while the company has made improvements, it is still too soon to say it has solved its service shortcomings.

None of this means that FairPoint cannot meet the basic standard for utility sales spelled out in Maine statute, which requires that “neither ratepayers nor investors are adversely affected by the reorganization.” It means merely that the PUC has a duty to ensure FairPoint has the capacity to continue to improve its service while also providing improved access to, for instance, high-speed Internet, which has become as essential as phone service for many companies.

On high-speed access, fortunately, FairPoint has performed better than Verizon, with 80 percent of its customers having access, compared with 62 percent for Verizon, and twice as many (23 percent vs. 12 percent) signing up for the service. In the coming years, the quality of high-speed access – how fast to how many customers – will matter increasingly. FairPoint’s interest in this area suggests the region could benefit, if the PUC ensures the company follows through on its promises.

Public Advocate Steve Ward suggests that one way for FairPoint to reassure the state that customers will not be harmed in the $2.72 billion deal is to allow the PUC a heightened degree of access to details of, for instance, its holding-company charges, depreciation expenses and debt costs. Certainly, as private intervenors become interested in the proposed sale, those issues will be debated before the commission.

At first look, FairPoint seems like a responsive, forward-thinking company that needs to continue to improve service if it is to persuade the PUC the proposal is in Maine’s best interest. Part of that persuasion will require time and a commitment from the company to meet specific performance targets in Maine.