After announcing the sale of VT, NH and Maine to FairPoint Communications, VZ has met nothing but resistance from the employees and the union; from politicians, pundits, CLEC's, ISP's, and the PUC's. In this article, the point is made clearly:
The problem is, Verizon wants to improve things for its urban customers at the expense of residents in Maine, New Hampshire and Vermont, who would reap none of the benefit, yet bear much of the cost. That’s because Verizon would finance this fiber optic upgrade in part by merging with a much smaller company based in Charlotte, NC, called FairPoint Communications.
FairPoint Communications is little more than a holding company, already burdened by a crushing amount of corporate debt. The choice of FairPoint as a partner in this merger is curious; the difference in size between Verizon and FairPoint is truly stunning. Verizon has 1.5 million miles of lines in New England; FairPoint has only 251,000 access lines throughout the entire United States. Verizon has more than 3,600 employees in northern New England; FairPoint has fewer than 900 in the entire country.
It’s worth noting that FairPoint’s credit rating is BB-minus, a deplorable status, according to Standard & Poor’s, who characterizes the company’s stock as weak and "high risk."
Yet, in an extraordinary bit of Enron-esque accounting, it will be FairPoint that emerges from this proposed merger — saddled, as a result, with a crushing debt on the order of $2.3 billion, which is just about equal to the size of the general obligation debt of Maine, New Hampshire and Vermont combined. Verizon, on the other hand, will be free to invest the $1.7 billion it extracted from FairPoint upgrading service to customers in more profitable markets like Massachusetts, New York and New Jersey. Meanwhile, Maine’s vital communications infrastructure would be owned and operated by a company with precious little experience operating a statewide telecommunications infrastructure. Perhaps more importantly, FairPoint would possess neither the means nor the incentive to invest in providing truly high-speed Internet access across the state, where it is currently unavailable.
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