No FairPoint. Stop the Sale
Protect New Hampshire's Phone and Internet Service"It will stunt the growth of New Hampshire." That's bad news for New Hampshire. In the 21st century, high speed Internet is essential for economic growth. If the Verizon-FairPoint deal is approved, New Hampshire will be parked on the shoulder of the information highway. Verizon's plan got a big boost last week when Maine regulators approved the sale despite strong opposition. But before it is finalized, New Hampshire must weigh in too--so we still have a chance to protect our future.
Dear [ Decision Maker ] , I am extremely concerned about the proposed sale of Verizon's telephone lines to FairPoint Communications. If approved, this deal would put New Hampshire in the wrong lane on the information highway. Maine's Public Utilities Commission recently approved the deal, despite strong opposition. While Verizon and FairPoint made concessions, those concessions are a step in the wrong direction, weighing FairPoint down with additional financial obligations rather than requiring Verizon to provide the $600 to $700 million that the Maine Hearing Examiner determined would be needed to make FairPoint financially viable. FairPoint is already burdened with massive debt and has the highest rate of consumer complaints in the region. The revised agreement in Maine allows FairPoint to pay $950 million in dividends while earning just $430 million over the next eight years. In order for these numbers to add up, something will have to be sacrificed -- namely, the region's telecommunications infrastructure. FairPoint would be unable to provide the service quality and expanded access needed to ensure New Hampshire's economic growth in the 21st century. High speed Internet service is no longer just a luxury. It is an economic necessity, offering benefits that go far beyond downloading music or watching online video. Innovations like e-commerce, telemedicine, and interactive distance learning and job training are boosting the economies of states across the country and nations across the globe. New Hampshire must not make the same mistake as Maine. If our economy is to succeed in the digital age, we must keep up with the latest telecommunications technology. It's clear that FairPoint will not be able to deliver on this goal, so I strongly urge you to speak out against this bad deal for New Hampshire.
Thank You, |
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| Background Information |
Verizon-FairPoint deal would put New Hampshire at risk
New Hampshire's economic future is in jeopardy.
The proposed sale of Verizon's 1.6 million Northern New England telephone lines to FairPoint Communications would leave New Hampshire behind in the digital age. FairPoint is a small, financially shaky company based in North Carolina, and it lacks the resources to provide quality telephone and Internet service to all corners of the state.
In order for the deal to go through, it must be approved by all three states involved: New Hampshire, Maine, and Vermont. After expressing initial reservations, the Maine Public Utilities Commission recently approved a revised version of the deal, in which Verizon and FairPoint made financial concessions. But the revised agreement still fails to fully address FairPoint's financial problems or guarantee enough investment in the region. New Hampshire must reject this deal to protect telephone and Internet service in the entire region.
In the 21st century, high speed Internet is no longer just a luxury -- it is an economic necessity, offering benefits that go far beyond downloading music or watching online video. Innovations like e-commerce, telemedicine, and interactive distance learning and job training are boosting the economies of states across the country and nations across the globe.
But in order to take full advantage of these benefits, New Hampshire must have the most up-to-date telecommunications service -- and it must be available to every household and business in every corner of the state. Currently, though, New Hampshire ranks last in the nation for DSL access, so it will take a major commitment of resources to bring the state's telecommunications into the 21st century.
It's clear that won't happen if FairPoint is allowed to take control of New Hampshire's telephone lines. FairPoint is a small company with huge amounts of debt, and its history shows a habit of paying big dividends to its shareholders instead of making investments in its infrastructure. What's more, FairPoint has the highest consumer complaint rate of any telephone company in the region.
FairPoint's situation would get even worse if it is allowed to purchase Verizon's 1.6 million landlines in Northern New England. It would be responsible for seven times more phone lines, four times more employees, and almost four times more debt. According to a Morgan Stanley financial analysis of the deal, FairPoint "will not generate enough cash to cover its current dividend in 2008, with an increasing deficit in the years that follow.” The report continued,
“We are concerned that FairPoint’s apparent expectation that it will not be able to generate enough cash to pay its current dividend without the proposed merger with Verizon’s NH, ME, and VT lines suggests that the company is in a vulnerable position.”
Cash-strapped companies like FairPoint historically increase rates, reduce capital investment, and cut service quality. It's no wonder FairPoint has made few commitments to adding jobs, improving service quality, or expanding high speed Internet access.
Verizon, on the other hand, has been rolling out the latest technology, super fast fiber optic lines. It is much more financially stable than FairPoint, with far less debt and far more resources to maintain service quality and expand access. But by attempting to unload its telephone lines in Northern New England, Verizon is abandoning its customers in the region -- and taking advantage of a little-known tax loophole to pocket $600 million in tax savings.
If this deal goes through, New Hampshire would get left behind in the digital age. The entire region's economy would be at risk. That's why consumer groups, worker organizations, regulatory experts, and local elected leaders have all stood up and opposed the sale. Join them and urge the state government to say "No deal" to Verizon and FairPoint.
