Vermont regulators question Fairpoint-Verizon proposal

MONTPELIER, Vt. – State regulators are raising questions about some of the details of Verizon’s bid to sell its operations to Fairpoint Communications.

The Public Service Department, in its first official response to the $2.7 billion deal, raises issues about the financial viability of the sale to Fairpoint and whether the company, based in North Carolina, can do what it has promised to do for Vermont customers.

Some of the issues are similar to what other critics, including labor unions, have raised, although the state says its response is not yet complete. Critics have questioned whether Fairpoint will be able to improve on Verizon’s record of service.

“We want to see something that is better than the status quo that we have with Verizon,” said Christopher Campbell, telecommunications chief with the Public Service Department. “We haven’t yet seen Fairpoint demonstrate that this transaction is in the public good. We haven’t ruled it out, but the company will need to do more in our opinion in order to demonstrate that the transaction is in the best interest of Vermonters.”

The Public Service Board, which ultimately will rule, will be studying the deal and whether it would be good for Vermont consumers. The department has filed written testimony with the board and a public hearing is scheduled June 13.

Verizon now handles about 330,000 of the nearly 500,000 phone lines in Vermont. It is selling its operations in northern New England to Fairpoint.

Under the deal Verizon will spin off its telephone and Internet services in northern New England into a separate subsidiary. That subsidiary will then combine with FairPoint, which will offer about $1 billion in additional stock.