The 2.7 Billion Dollar Phone Deal Has Some Critics

Fairpoints's Chief Executive traveled to Concord to spread the word that his company would be a worthy successor to Verizon.

Gene Johnson said his company is committed to improving service, and that includes providing broadband access across the state.

fairpoint is a broadband centric company. we are one of the leaders in the industry in broadband. we serve....88 percent of our customers countrywide have access to broadband.

The kind of broadband Fairpoint would offer is known as DSL, or "digital service line".

It's the same kind of service Verizon has offered for years.

But Verizon says it hasn't expanded DSL service into rural areas because it's not economical.

Gene Johnson says Fairpoint is going to spend 200 million dollars in the next year to get operations started in Northern New England.

But he admits he's not sure how soon the company will be able to offer DSL in the northern part of New Hampshire.

and...we have to update the plant in some places. and that's one of the problems we have in saying how much of dsl we can put in the first year, because we don't yet completely know how much upgrading of the plant we have to do, how much modernization we have to do, and what the total cost is going to be. so, we're in the process of developing all those plans.

Fairpoint officials have also promised to keep every Verizon worker in Northern New England on the job.

And they plan to create six hundred new jobs.

In addition, Fairpoint executives have assured all existing workers, union and non-union... that their benefits will stay the same.

But the company's assurances aren't sitting well with the members of the International Brotherhood of Electrical Workers, Local 2320 in Manchester.

The union represents about two-thirds of Verizon's sixteen-hundred workers in New Hampshire.

Bob Erickson, a union official says they're troubled because they don't think Fairpoint executives will be able to keep their word.

by the time this merger is complete, this contract will have six months left to it. then what? in 2008. are they going to have enough money to pay the benefits and compensation that we're used to, that we've fought for, for years and years and years going through several strikes to get us to the point we're at. are they going to do that or are they going to need severe concessions from us?

Union officials also say they think Fairpoint's reliance on DSL technology is behind the times.

Companies like Comcast, the cable tv provider, offer customers a bundle of service, including voice, internet, and television, all through one wire.

Fairpoint executives say they've had success competing against Comcast in rural Washington State.

There, Fairpoint offers television over the internet on its DSL lines.

But Verizon has taken on Comcast with a new a fiber optic network they've laid down called 'FIOS'.

It's very expensive to install, and Fairpoint officials say they have no plans to provide anything like it.

IBEW's Bob Erikson says that's a shame, because he thinks that's where future profits are.

fios is head and shoulders above broadband. and verizon started deploying fios, i think they've gone into 23 different communities. they've stopped. they're selling the product, without the video... i don't know what fairpoint's plan is...but...they can't sell fios, its a trademarked product.

Fairpoint is buying the part of Verizon's business in New Hampshire that is subject to regulation.

Some of the staff at New Hampshire's Public Utility Commission have had a preliminary meeting with company executives.

Consumer Advocate Meredith Hatfield says she's been encouraged by what she's heard from them so far concerning the North Country.

But Hatfield says she's also heard about the limits of DSL, so she and other regulators will keep that in mind for Northern New Hampshire as the merger unfolds.

... you know, we don't want to pick the most recent answer and then realize in a few years that we're way behind. so, i think we would want to work with them to make sure that the investment they were going to make would serve those parts of the state that aren't served right now for as long as possible.

It could take regulators a year or longer to complete their work, and issue their recommendations regarding the merger.

State regulators say they're ready to get started, and expect to get underway once they get some detailed paperwork from Fairpoint.