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Local phone carriers are owed at least $2.8 million because FairPoint service problems cost them revenues.

By TUX TURKEL, Staff Writer July 7, 2009

 

 

 

FairPoint Communications owes more than $845,000 to competitive local phone carriers in Maine for giving them poor wholesale service, but is asking the Maine Public Utilities Commission to toss out the penalties.

That debt is part of $2.8 million that FairPoint estimates it owes to local phone competitors across northern New England for substandard network service from February through April. Additional penalties are expected for May and June, when problems persisted. FairPoint doesn't want to pay them, either.

In recent filings with state regulators in Maine, New Hampshire and Vermont, the company says "unprecedented and unforeseen issues" linked to taking over landline service from Verizon this year created "situations beyond FairPoint's control." That's why it wants regulators to waive the payments.

The waiver also would help FairPoint conserve cash during a critical financial period, which would help it get the network back to business-as-usual operation levels. That would benefit all phone carriers and customers, FairPoint says.

Competing phone carriers in Maine aren't buying FairPoint's argument. Legal filings pending in the case this week will ask the PUC to dismiss FairPoint's request. The carriers say FairPoint's failures are costing them customers and revenue, and they shouldn't take the hit.

"We have been injured," Fletcher Kittredge, chief executive officer at Great Works Internet in Biddeford, told the Portland Press Herald. "Now FairPoint is saying they shouldn't have to pay penalties because they tried as hard as they could."

Kittredge figures FairPoint owes GWI, as his company is known, more than $350,000 in penalties. GWI has 20,000 customers in Maine, half with both phone and Internet service. Some potential customers gave up, Kittredge said, when they learned they'd have to wait a month for FairPoint to switch their lines to GWI.

"People aren't going to wait that long," he said.

FairPoint has been struggling to restore normal phone service in northern New England since February, when it took control of the region's landline network from Verizon. Widespread problems with hooking up phones and responding to service requests from retail customers have been widely reported in the media.

But troubles faced by Maine's dozen or so competitive carriers have received little attention. These carriers have more than 150,000 customers in Maine, 20 percent of all landlines. Cable companies that provide digital phone service through Voice Over Internet Protocol technology also are affected, because they indirectly maintain interconnections with FairPoint's network. High-quality wholesale service is critical to serving digital and business-class phone customers, Time Warner Cable says in a legal filing at the PUC.

Legacy phone companies are required by law to open their networks to local competitors. They must provide wholesale access and work with customers, for instance, who want to switch carriers but keep their phone numbers. Agreements made with the state, part of a Performance Assurance Plan signed by Verizon and assumed by FairPoint, set penalties for failing to meet certain standards linked to the timeliness and quality of interconnections.

In its waiver request, FairPoint acknowledges it didn't meet the performance standards in February, March and April, and won't for May and June. It's asking the PUC for relief from making the penalty payments to the local carriers.

"FairPoint is as disappointed as any other stakeholder by the unexpected issues that the systems transition from Verizon to FairPoint caused," Jeffrey P. Nevins, Fairpoint's Maine spokesman, said in a prepared statement. "Like many companies in today's economy, FairPoint is managing its financial situation carefully and the waiver is in concert with FairPoint's efforts to concentrate our financial resources on things that will...