FAIRPOINT DEAL PRIORITIES

While a campaign heats up to stop FairPoint Communications from merging with a Verizon spinoff of its land lines in northern New England, the public would be best served if the debate remained on the company’s expected quality of service, rates and the capacity for investment. The Maine Public Utilities Commission deserves credit for going beyond standard practices to ensure these consumer issues are addressed.

FairPoint says it will invest heavily in its new firm, a substantial leap in size for the North Carolina company, which has a small presence in Maine now. It plans to spend about $200 million for new back office operations, according to its filings, and another $44 million ($16 million in Maine) to upgrade broadband access. It further says it will honor union contracts and negotiate new ones, though its union history is very different from Verizon’s.

The public interest in this merger – a deal in which Verizon shareholders will initially end up owning about 60 percent of the new company’s stock and Verizon itself will enjoy favorable tax treatment – is how often phone outages will occur and how fast will they be repaired. The public should want to know whether the supersized FairPoint would have the financial capacity to make the investments it is promising and maintain service throughout the region. And is FairPoint in a position to adjust its telecommunications strategy as new technologies become available?

With public hearings starting this week – including in Bangor tonight – the PUC has been diligent about its oversight role. But even more encouraging is its decision to appoint two members of its legal staff, Andrew Hagler and Amy Spelke, to serve as consumer advocates. Though their role will be similar to that of the Public Advocate’s Office, they are PUC insiders who will be able to anticipate and address specific PUC concerns. As intervenors, they should have a thorough grounding in the case and be particularly effective in any negotiations that may emerge.

On the question of service, FairPoint’s six subsidiaries in Maine, in general, had among the highest rates of complaints, 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 earlier this year 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.

The legal and financial questions in this reorganization are complex, but the public can and should focus on the bottom line of how they will be affected by service, rates and company investment. The PUC has made the right decision to assign a legal team to serve as consumer advocates to ensure questions in these areas are answered.