GNG News Guy
11-27-2007, 08:21 AM
http://i.dslr.net/urls/67/45367.gif (http://www.dslreports.com/shownews/Maine-PUC-Staff-Urges-Fairpoint-Deal-Rejection-89756)
A new report by the advisory staff of the Maine Public Utilities Commission is recommending that the commission reject the $2.7 billion sale of Verizon's telephone network to FairPoint Communications. According to the report, the deal "subjects both ratepayers and shareholders to substantial risks and harms that are not outweighed by any of the potential benefits of the transaction." According to the Portland Press Herald (http://pressherald.mainetoday.com/story.php?id=150826&ac=PHnws), the PUC can still ignore staff recommendations and approve the deal, but such reports are generally very influential.
Fairpoint is hoping for regulatory approval to acquire Verizon's Maine, Vermont and New Hampshire DSL and landline networks. Verizon believes these largely rural states are not profitable, and has engineered a deal to offload them that uses fancy financial footwork (http://www.thegng.org/shownews/85298) to obliterate $1.7 billion in telco debt, while giving them a $600 million tax writeoff.
Regulators believe that Fairpoint however will struggle under the new debt load, and will be unable to carry through with the litany of promises the company is making. The company continues to promise faster speeds, greater deployment, improved service and no change in union contracts.
A new report by the advisory staff of the Maine Public Utilities Commission is recommending that the commission reject the $2.7 billion sale of Verizon's telephone network to FairPoint Communications. According to the report, the deal "subjects both ratepayers and shareholders to substantial risks and harms that are not outweighed by any of the potential benefits of the transaction." According to the Portland Press Herald (http://pressherald.mainetoday.com/story.php?id=150826&ac=PHnws), the PUC can still ignore staff recommendations and approve the deal, but such reports are generally very influential.
Fairpoint is hoping for regulatory approval to acquire Verizon's Maine, Vermont and New Hampshire DSL and landline networks. Verizon believes these largely rural states are not profitable, and has engineered a deal to offload them that uses fancy financial footwork (http://www.thegng.org/shownews/85298) to obliterate $1.7 billion in telco debt, while giving them a $600 million tax writeoff.
Regulators believe that Fairpoint however will struggle under the new debt load, and will be unable to carry through with the litany of promises the company is making. The company continues to promise faster speeds, greater deployment, improved service and no change in union contracts.