Labor intervenors in the regulatory oversight of the proposed sale of Verizon’s landlines to FairPoint Communications submitted testimony to the Vermont Public Service Board concluding that modifications to the transaction as proposed by settlements in Maine and Vermont do not meet reasonable standards for financial fitness.
According to expert witness Randy Barber, “this transaction could create profound – even perverse – incentives for FairPoint to cut expenses and capital spending…just when it should be continuing to invest heavily in rebuilding the communications network.”
“The proposed stipulation in Vermont yet again lets Verizon off the hook for the hundreds of millions of additional dollars it should be putting into this transaction,” Barber wrote to the PSB on January 24. “Instead, it forces FairPoint to dig itself even further in the hole and foot the bill for every single provision that the DPS extracted from it. In the process, it amplifies the perverse incentives to cut service and spending that FairPoint already accepted in the Maine proceedings.
“Verizon should not be permitted to abandon Vermont without making adequate provision for the future prospects of its customers, communities and employers. Absent a very significant increased financial commitment from Verizon, I conclude that FairPoint will not be financially fit to own and operate Verizon’s Vermont network. The Board, therefore, should reject the proposed stipulation and affirm its earlier decision rejecting the transaction.”
VT statehouse hearing set for Thurs, Jan. 31
Barber will testify at a Senate Economic Development Committee hearing at 8:30 AM in Room 10 and to the Vermont House Commerce Committee at 11:30 AM in Room 35 at the statehouse on Thursday, January 31.
The hearing was called after legislators wrote to the PSB on January 16 with concerns about the impact of the proposed revised Verizon FairPoint proposal.
The elected officials wrote that the stipulation must, “ensure that FairPoint has the financial capacity to provide affordable broadband by the year 2010 to all residences and businesses in all regions of the state that Verizon serves.”