Verizon spins off land-line phone business

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(Host) Verizon is getting out of the land-line phone business in northern New England in a deal worth about $2.7 billion.

Verizon says it will spin off its phone lines to a new entity that will be merged with FairPoint Communications of Charlotte, North Carolina.

VPR’s John Dillon reports:

(Dillon) The deal announced on Monday affects about 230,000 customers in Vermont.

Verizon says the new owner will follow through on commitments to provide more broadband Internet service to the state.

Virginia Ruesterholtz is president of Verizon Telecom. She spoke with reporters in a conference call.

(Ruesterholtz) “FairPoint’s business model is squarely focused on rural areas. It has plans to significantly increase broadband penetration in the three states and strengthen local operational presence.”

(Dillon) In a deal reached with Vermont regulators, Verizon has promised to offer high-speed Internet service to 80 percent of its network by 2010.

And Governor Jim Douglas has made broadband a key part of his economic development strategy, and hopes to have the entire state covered in three years.

Gene Johnson is the chairman and CEO of FairPoint. He said high-speed Internet service is a core part of the company’s business plan.

(Johnson) “We believe very strongly in broadband and believe that broadband is really the future of this business, and so we are very much committed to it. We expect a very smooth hand-off on this transaction, including those regulatory issues like that.”

(Dillon) But as state officials look at the deal, they’re more concerned about plain old telephone service.

David O’Brien is commissioner of Public Service, the state agency that represents consumers. He sees the sale as an opportunity to improve basic phone quality. He says Verizon has been less than reliable in some areas.

(O’Brien) “We’ve had outages in the town of Dover, and we’ve had the college of St. Joseph lose service over the Thanksgiving weekend. We’ve had countless stories of frustrated consumers and communities and I am so focused on this being a chance to change that. And so looking at FairPoint we’re going to make it very clear that we want clear and convincing evidence that their customer service culture, their devotion to reliability of the network is their number one priority.”

(Dillon) About 3,000 Verizon employees will be transferred to FairPoint after the merger. FairPoint has also promised to hire an additional 600 people to serve the three states.

Ralph Montefusco is a spokesman for the Communications Workers of America. The union represents Verizon call center workers, and Montefusco says workers are worried that some local offices may be downsized or closed.

(Montefusco) “They’re very concerned because FairPoint has a long history of being not only anti-organizing but of consolidating its call centers. And from what I understand, they’ll be adding jobs, but not necessarily in Vermont.”

(Dillon) Johnson, the Fairpoint CEO, says there are no plans at this point to close work places in the region.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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