FairPoint Communications
Encyclopedia
FairPoint Communications, Inc. is headquartered in Charlotte, North Carolina
, and operates communication services in 32 markets in 18 states, mostly in rural areas.
FairPoint services include local and long distance phone service, data, Internet, broadband, television and business communications solutions.
(ILEC) which gave it certain rights and obligations regarding providing service to rural areas.
The company acquired the Cass County Telephone Company in 2006, integrating its operations into FairPoint Communications Missouri
.
announced plans to sell its landline operations in Maine
, New Hampshire
, and Vermont
(Northern New England Spinco
) to FairPoint for $2.7 billion. Of that amount, $1.7 billion would go to Verizon Communications
in cash and debt and approximately $1.015 billion would go to Verizon shareholders in FairPoint common stock. Verizon would hold no stock.
After extensive federal and state regulatory review and approval, the purchase became effective March 31, 2008, for a price of $2.4 billion. State regulators sought a lower figure out of concerns that excess debt would hamper service and expansion.
Approximately 1.6 million phone customers and 230,000 high speed internet users in the three states were added to FairPoint’s customer base, with the result that the Northern New England customers represented 85% of FairPoint’s customers.
This increase made FairPoint Communications the 8th largest phone company in the United States. Of its nearly 4,000 employees, approximately 80% serve the Northern New England customers.
As part of the purchase, FairPoint had to make broadband
available to 83 percent of customers. On January 27, 2011, the company announced it had met this goal. 68.9 percent of its customers had broadband at the time of the purchase; 44,000 new customers have the service now. FairPoint offers high speed internet through the use of DSL technology.
Most of FairPoint's central Vermont customers are still only served by dial-up internet access. FairPoint charges $23 per month for their dial-up internet service while, where available, FairPoint charges anywhere from $9.99 to $19.99 for DSL internet service, if the customer already has telephone service. This has led to speculation that there is no business incentive for FairPoint to upgrade the "dial-up only" regions of central Vermont.
FairPoint offers a stand-alone DSL service for a cost of between $34.99 and $71.99 in some other service areas.
Many other problems have plagued the New England subscribers of FairPoint's services, including thousands of serious and recurring billing errors, very poor customer service, lack of (and delay of) an electronic bill-pay option, slow or intermittent services, and sluggish and inadequate response to customer complaints and service issues. As of August 2009, the State of Vermont has been in the process of considering revoking FairPoint's right to provide services in that state. FairPoint has consistently failed to meet deadlines to provide a response to Vermont and other states about how they intend to resolve the numerous problems.
On September 16, 2009, Public Service representatives and lawmakers of Maine, New Hampshire, and Vermont convened a joint hearing with FairPoint executives to demand answers for the multitude of problems that has characterized FairPoint's operation in those states.
FairPoint was also under investigation for duping the states of Vermont, Maine and New Hampshire. State regulators reviewed an anonymous e-mail from someone claiming that during tests leading up to the February 1 cutover, FairPoint created a computer program "to deceive the audience into believing they were watching a real demonstration" of its readiness.
If debt arrangements were not made by October 1, 2009, FairPoint was going to file for Chapter 11 bankruptcy protection, according to CEO David Hauser.
On October 26, 2009, FairPoint Communications filed for Chapter 11 bankruptcy protection
.
As a result of the bankruptcy, Verizon shareholders lost the entire $1.015 billion in shares they had received in the previous year's deal. New England Verizon networks had been profitable before the transfer to FairPoint. After the bankruptcy, the creditors became the initial shareholders of the reorganized FairPoint.
The company emerged from bankruptcy in January 2011.
Nearly in whole:
In Part:
Charlotte, North Carolina
Charlotte is the largest city in the U.S. state of North Carolina and the seat of Mecklenburg County. In 2010, Charlotte's population according to the US Census Bureau was 731,424, making it the 17th largest city in the United States based on population. The Charlotte metropolitan area had a 2009...
, and operates communication services in 32 markets in 18 states, mostly in rural areas.
FairPoint services include local and long distance phone service, data, Internet, broadband, television and business communications solutions.
History
FairPoint was founded as MJD Communications Inc. in 1991, and was established as an Incumbent Local Exchange CarrierIncumbent local exchange carrier
An ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the breakup of AT&T into the Regional Bell Operating Companies , also known as the "Baby Bells." The ILEC is the former Bell System or Independent Telephone...
(ILEC) which gave it certain rights and obligations regarding providing service to rural areas.
The company acquired the Cass County Telephone Company in 2006, integrating its operations into FairPoint Communications Missouri
FairPoint Communications Missouri
FairPoint Communications Missouri, Inc. is a telephone operating company owned by FairPoint.The company was created following FairPoint's acquisition of the independent Cass County Telephone Company in 2006. The company serves Garden City in area code 660 and Cleveland, Drexel, and other towns in...
.
Northern New England expansion
In 2007, FairPoint had about 330,000 access points or customers. In that year, Verizon CommunicationsVerizon Communications
Verizon Communications Inc. is a global broadband and telecommunications company and a component of the Dow Jones Industrial Average...
announced plans to sell its landline operations in Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
, New Hampshire
New Hampshire
New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...
, and Vermont
Vermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...
(Northern New England Spinco
Northern New England Spinco
Northern New England Spinco, Inc. was a Verizon Communications subsidiary created in 2007. Its sole purpose of existence is to act as a reverse Morris trust holding company for Verizon's assets owned by Bell Atlantic Communications, NYNEX Long Distance, and Verizon New England located within Maine,...
) to FairPoint for $2.7 billion. Of that amount, $1.7 billion would go to Verizon Communications
Verizon Communications
Verizon Communications Inc. is a global broadband and telecommunications company and a component of the Dow Jones Industrial Average...
in cash and debt and approximately $1.015 billion would go to Verizon shareholders in FairPoint common stock. Verizon would hold no stock.
After extensive federal and state regulatory review and approval, the purchase became effective March 31, 2008, for a price of $2.4 billion. State regulators sought a lower figure out of concerns that excess debt would hamper service and expansion.
Approximately 1.6 million phone customers and 230,000 high speed internet users in the three states were added to FairPoint’s customer base, with the result that the Northern New England customers represented 85% of FairPoint’s customers.
This increase made FairPoint Communications the 8th largest phone company in the United States. Of its nearly 4,000 employees, approximately 80% serve the Northern New England customers.
As part of the purchase, FairPoint had to make broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
available to 83 percent of customers. On January 27, 2011, the company announced it had met this goal. 68.9 percent of its customers had broadband at the time of the purchase; 44,000 new customers have the service now. FairPoint offers high speed internet through the use of DSL technology.
Most of FairPoint's central Vermont customers are still only served by dial-up internet access. FairPoint charges $23 per month for their dial-up internet service while, where available, FairPoint charges anywhere from $9.99 to $19.99 for DSL internet service, if the customer already has telephone service. This has led to speculation that there is no business incentive for FairPoint to upgrade the "dial-up only" regions of central Vermont.
FairPoint offers a stand-alone DSL service for a cost of between $34.99 and $71.99 in some other service areas.
Service and Tech Issues
FairPoint has received much scrutiny since the expansion into Northern New England. Emergency 911 problems made the company scramble to look into how to fix these violations. Landline service has been troubled and sluggish especially in the state of Vermont and Maine causing numerous complaints from both phone and internet service. The Maine PUC fined FairPoint $25,000 for the delays in 911 services.Many other problems have plagued the New England subscribers of FairPoint's services, including thousands of serious and recurring billing errors, very poor customer service, lack of (and delay of) an electronic bill-pay option, slow or intermittent services, and sluggish and inadequate response to customer complaints and service issues. As of August 2009, the State of Vermont has been in the process of considering revoking FairPoint's right to provide services in that state. FairPoint has consistently failed to meet deadlines to provide a response to Vermont and other states about how they intend to resolve the numerous problems.
On September 16, 2009, Public Service representatives and lawmakers of Maine, New Hampshire, and Vermont convened a joint hearing with FairPoint executives to demand answers for the multitude of problems that has characterized FairPoint's operation in those states.
FairPoint was also under investigation for duping the states of Vermont, Maine and New Hampshire. State regulators reviewed an anonymous e-mail from someone claiming that during tests leading up to the February 1 cutover, FairPoint created a computer program "to deceive the audience into believing they were watching a real demonstration" of its readiness.
Bankruptcy
On May 5, 2009 FairPoint indicated in its First Quarter 2009 Report that it was "considering engaging a financial advisor to evaluate its current capital structure and to explore options with respect to a potential restructuring." It also acknowledged that it was "at risk of failing to comply with the interest coverage covenant contained in its credit facility as early as the covenant measurement period ending June 30, 2009."If debt arrangements were not made by October 1, 2009, FairPoint was going to file for Chapter 11 bankruptcy protection, according to CEO David Hauser.
On October 26, 2009, FairPoint Communications filed for Chapter 11 bankruptcy protection
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
.
As a result of the bankruptcy, Verizon shareholders lost the entire $1.015 billion in shares they had received in the previous year's deal. New England Verizon networks had been profitable before the transfer to FairPoint. After the bankruptcy, the creditors became the initial shareholders of the reorganized FairPoint.
The company emerged from bankruptcy in January 2011.
Service areas
The 18 states served in whole or part are:Nearly in whole:
- New HampshireNew HampshireNew Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...
- MaineMaineMaine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
- VermontVermontVermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...
In Part:
- AlabamaAlabamaAlabama is a state located in the southeastern region of the United States. It is bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama ranks 30th in total land area and ranks second in the size of its inland...
- ColoradoColoradoColorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...
- FloridaFloridaFlorida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
- GeorgiaGeorgia (U.S. state)Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...
- IdahoIdahoIdaho is a state in the Rocky Mountain area of the United States. The state's largest city and capital is Boise. Residents are called "Idahoans". Idaho was admitted to the Union on July 3, 1890, as the 43rd state....
- IllinoisIllinoisIllinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
- KansasKansasKansas is a US state located in the Midwestern United States. It is named after the Kansas River which flows through it, which in turn was named after the Kansa Native American tribe, which inhabited the area. The tribe's name is often said to mean "people of the wind" or "people of the south...
- MassachusettsMassachusettsThe Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
- MissouriMissouriMissouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
- New YorkNew YorkNew York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
- North CarolinaNorth CarolinaNorth Carolina is a state located in the southeastern United States. The state borders South Carolina and Georgia to the south, Tennessee to the west and Virginia to the north. North Carolina contains 100 counties. Its capital is Raleigh, and its largest city is Charlotte...
- OhioOhioOhio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
- OklahomaOklahomaOklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...
- PennsylvaniaPennsylvaniaThe Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
- VirginiaVirginiaThe Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
- Washington
See also
- NYNEXNYNEXNYNEX Corporation was a telephone company that served five New England states as well as most of New York state, except the Rochester area, from 1984 through 1997....
- Northern New England SpincoNorthern New England SpincoNorthern New England Spinco, Inc. was a Verizon Communications subsidiary created in 2007. Its sole purpose of existence is to act as a reverse Morris trust holding company for Verizon's assets owned by Bell Atlantic Communications, NYNEX Long Distance, and Verizon New England located within Maine,...
- Northern New England Telephone OperationsNorthern New England Telephone OperationsNorthern New England Telephone Operations LLC is a telephone operating company founded in 2007 to take over the land lines in Maine and New Hampshire formerly operated by Verizon New England, a Bell Operating Company...
- Telephone Operating Company of VermontTelephone Operating Company of VermontTelephone Operating Company of Vermont LLC is a telephone operating company owned by Northern New England Telephone Operations, a subsidiary of FairPoint....