(Host) The state has reached a tentative settlement with FairPoint Communications that could pave the way for the company to acquire Verizon’s land line phone service in Vermont.
The settlement must still be approved by the Vermont Public Service Board.
VPR’s John Dillon reports:
(Dillon) Verizon and FairPoint need the approval of regulators in all three northern New England states for the sale to go forward.
The Vermont settlement basically builds on a deal approved in Maine to lower the sale price of Verizon’s system by $235 million – and to lower FairPoint’s stock dividend. But in Vermont, FairPoint would also have to agree to new conditions to improve service quality and speed up broadband deployment.
David O’Brien is Vermont’s public service commissioner, the state agency that represents consumers. He says the concern in Maine was about FairPoint’s debt load and financial stability once it acquires the Verizon system.
(O’Brien) "The financial changes that came into play in Maine really resolved that question in large part. But there was no way I was going to sign off on this deal until I had confidence that the average consumer in Dover, Richford, in Morrisville and Waitsfield can count on a reliable phone system.”
(Dillon) So the settlement discussions in Vermont focused on service quality and broadband. Under the agreement – which still must be reviewed by the Public Service Board – FairPoint has to make a $40 million annual investment to improve service. And the company could face penalties for failing to meet service quality standards.
(O’Brien) "This will assure that FairPoint does not pay out to shareholders money that is needed in Vermont to improve service quality. This is new in the settlement we reached in the past two weeks.”
(Dillon) The unions that represent Verizon workers have opposed the FairPoint sale – and they’ve been critical of the agreement reached in Maine.
O’Brien said he realizes the proposed settlement in Vermont will not satisfy the union’s concerns. But he said he is confident the deal is best for Vermont as a whole. He says the company’s commitment to broadband meshes well with the state’s plans to have broadband Internet available everywhere by 2010.
(O’Brien) "There is no question in my mind had we stayed with Verizon we would have had a protracted legal battle and not a lot of progress would have been made. … We’ve got very high goals in the future in terms of broadband and telecommunications. And we need to move forward, we can’t stand still, and we certainly don’t want to go backwards.”
(Dillon) The Public Service Board has not said when it will review the settlement. FairPoint and Verizon wanted to close the deal by the end of January.
For VPR News, I’m John Dillon in Montpelier.