State Proposes Settlement with FairPoint

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(Host) FairPoint Communications has rebounded from its troubles of two years ago, and has addressed many of its service quality issues.

That’s the word from the state office that represents consumers. The state has proposed a settlement with FairPoint that would reduce severe penalties the company could have faced.

VPR’s John Dillon has more:

(Dillon) The state says its proposed settlement with FairPoint is good compromise for the company and consumers.

James Porter is director of telecommunications for the Vermont Department of Public Service, the state agency that represents consumers in utility issues. He says the company has fixed many of the problems that plagued customers for months after FairPoint took over Verizon’s land line business in 2009. The service quality issues ranged from wrong bills, to customers waiting on hold for hours trying to get help.

(Porter) "There were a huge amount of complaints obviously at the time of cut-over and currently I think FairPoint’s complaints are approaching where they were prior to cut-over, and that’s a good thing."

(Dillon) The proposed settlement would reduce the potential for automatic massive financial penalties. Porter says under the current system FairPoint could face a total of $10.8 million in penalties for violating service quality standards. The settlement would cut that maximum exposure to $1.6 million. 

And FairPoint would be allowed to apply the penalty money to help cover the cost of expanding broadband service in Vermont. Porter says it’s a better use for the money, since customers would have received at the most a dollar or two credit on their bills.

(Porter) "FairPoint thus far has been a great partner in expanding broadband to areas where it does not exist, and where quite frankly, no one else is going to bring it. So, we think it is a very good idea to allow them to use this penalty money to bring broadband to customers who otherwise won’t be receiving it."

(Dillon) FairPoint Vermont President Mike Smith says he’s happy to be talking about the company’s progress, rather than the problems of the past. Smith says FairPoint has invested $77 million over three years on its network and on broadband service in Vermont.

Smith says now the overall goal of the settlement is to regulate FairPoint in a way that that reflects today’s telecommunications industry.

(Smith) The penalty structure that we’re under right now, no other company in Vermont is under this type of penalty structure. In fact many of our larger competitors are under no penalty structure.

(Dillon) Smith says the settlement should allow the company to compete successfully against other telecom providers that offer broadband or phone service with little state oversight.

(Smith) "This is not 1965 any more. We are not the monopoly we once were; we are not even the dominant carrier. There is tremendous competition in this state from wireless carriers as well as cable carriers in terms of phone service. .. Our employees can compete but we need to be on a level playing field, and not be shackled or hindered by regulations that date back decades.

(Dillon) The settlement still has to be approved by the Public Service Board. A decision is expected by the end of the year.

For VPR News, I’m John Dillon in Montpelier.


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