MONTPELIER, Vt. – Vermont regulators on Friday approved the sale of Verizon’s land-line phone and Internet service in northern New England to FairPoint Communications.

With approvals from Maine and the Federal Communications Commission already in hand, the companies need only approval from New Hampshire’s Public Utilities Commission to complete the three-state, $2.35 billion deal.

Regulators in all three states balked at the initial $2.7 billion purchase price, questioning whether FairPoint had the resources to take over a regional communications network that would dwarf the rest of the North Carolina-based company.

The companies retooled the deal in a way designed to reduce FairPoint’s debt.

The Vermont Public Service Board, in an order issued late Friday, said it had concluded that “the lessened financial risks are now at an acceptable level, particularly in light of the benefits that FairPoint is expected to bring to Vermont, which included: (1) improved service quality; (2) expanded broadband [Internet] deployment; and (3) a broader range of services.”

Verizon had been under fire from Vermont regulators for years for failing to meet state service quality standards consistently and failing to deploy broadband Internet fast enough. State officials maintained it had little interest in deploying and maintaining a state-of-the-art telecommunications network in a rural state.

The Public Service Board said FairPoint had demonstrated it “had a substantially greater interest in operating a telephone company in Vermont than does Verizon.”

Verizon spokeswoman Beth Fastiggi said she couldn’t comment on that statement other than to say, “It’s clear that FairPoint wanted to buy and Verizon wanted to sell. … Verizon is pleased that the Vermont Public Service Board approved the FairPoint transaction. We will be reviewing the details of the order.”

Walter Leach, FairPoint’s executive vice president for corporate development, said his company, too, was “very pleased” with Friday’s ruling. “We’re very confident we can meet the conditions set out in the new order,” he said.

The sale would be a big step up for FairPoint. Based in Charlotte, N.C., the company now has a total of a bit more than 300,000 phone and Internet access lines mostly in rural areas around the country. Verizon’s northern New England network serves 1.7 million phone and Internet lines.

Even if the sale clears its final hurdle in New Hampshire – where staff has recommended to the state commission that it be approved – Verizon will remain a prominent brand name in the region. Verizon Wireless is seeking to expand its large presence in the cell phone market by acquiring the Unicel wireless business in Vermont and 15 other states.

On Jan. 3, the Maine Public Utilities Commission approved a negotiated agreement allowing FairPoint’s buyout of Verizon’s northern New England land-line, or wired, services.

The Maine PUC attached several conditions to its approval. One said FairPoint cannot negotiate an agreement in New Hampshire or Vermont that dilutes provisions in Maine that are aimed at strengthening FairPoint’s financial condition, and another requires FairPoint to develop and implement a policy protecting customers’ privacy.

Vermont’s approval Friday came two months after the Public Service Board rejected the first try by the companies to get the deal approved in Montpelier. “At that time,” the PSB said Friday, it “observed that FairPoint’s large debt payment obligations could force it to reduce operating expenses, slow expansion of broadband and other services, and reduce investment, all of which would adversely affect Vermont consumers.”

That triggered weeks of negotiations among the companies and the state Department of Public Service, which represents utility consumers before the quasi-judicial board. A settlement was announced in early January that called for more specific service-quality standards and a new commitment of cash to meet them.