New Hampshire regulators have opened hearings on Verizon’s plan to sell its traditional telephone business in Northern New England.
Fairpoint Communications agreed in January to pay 2.7 billion dollars for the network.
Now the company is making its case to the state’s Public Utility Commission.
But opponents and some analysts are also getting a chance to ask questions about the deal.
New Hampshire Public Radio’s David Darman has more.
Fairpoint Communication officials have already promised regulators in Vermont and Maine that they’ll expand the availability of broadband across the region.
Company Vice President Walter Leach says that Fairpoint is committed to providing that service to more customers than Verizon ever has.
Today Verizon only provides roughly 62 percent of its customer base with a broadband product, with a Verizon broadband product. Across the same 3 states for fairpoint, we offer 92 percent of our customers a broadband product and we are committing as part of the approval process in all three states to dramatically and quickly expand broadband to more Verizon customers than would otherwise get if the transaction does not occur.
Fairpoint plans to borrow about 1.7 billion dollars to purchase Verizon’s phone lines.
And to adequately pay back that dept, the company has to not only expand broadband, but also keep more of the customers that Verizon has been losing.
Meredith Hatfield, the state’s Consumer Advocate, says she and others worry the company may be too optimistic in estimating how well they’ll hold on to customers.
A lot of the discussion in this case has been about what’s happening to the land line business and a lot of people are saying, it’s declining. Yet fairpoint comes in with this plan that says ‘we’re going to win people back and we’re going to grow our business and our concern from the financial perspective is, can they really do what they’re planning to do and if they don’t, what happens?
The consumer advocate says she worries Fairpoint would come back to regulators to ask for a rate hike.
The union representing Verizon workers says it agrees with this assessment.
And officials say Fairpoint executives aren’t painting a complete employment picture when they promise to create more than 600 new jobs in the region.
Bob Erickson is with the International Brotherhood of Electrical Workers # 2320, which opposes the deal.
He says Fairpoint hasn’t been totally clear about the job picture when they’ve testified in other states.
It was revealed in Vermont that their business model is dependent on an attrition rate of 4 and 4 and half percent for their numbers….to work. You know, that means roughly 900 to 1000 people less than we have now in five years. So….how does that jibe with 675 new jobs that they promise?
Fairpoint also says the broadband they’ll be offering customers is a DSL product that’s faster and wider ranging than what Verizon has.
The company says their technology can go head to head with cable companies, such as Comcast, because Fairpoint can also offer TV.
Comcast has been offering a bundle of services including internet, telephone and television and has been siphoning off customers from Verizon.
Meredith Hatfield, the state’s consumer advocate says what Fairpoint offers may be of limited value to the state’s telecommunication customers.
It is DSL, so for people who don’t have anything today, it will probably be a welcome addition for them. But for people who are really expecting the highest speed or for businesses or for people who really want to get the tv, you know the question is, can it support that. those are the questions we'll be asking.
Hearings about the Verizon sale will be going on in New Hampshire for about one more week.
In the next day or so, Fairpoint officials will likely face many questions about the company’s finances.
