Advocates for utility customers said Wednesday they expect to reach a settlement with Consolidated Communications Inc. on its proposed acquisition of FairPoint Communications.
Dan Burke, a lawyer for the Public Service Department, said he expects to file documents this week with the Public Service Board showing that his team and Consolidated have reached an agreement. His department is responsible for representing the public interest before the board.
“We don’t have a settlement as of yet, but it’s expected,” Burke said Wednesday.
The Public Service Board has spent several months reviewing whether Consolidated should be able to purchase FairPoint. Consolidated announced its intention to buy the telecommunications company in December and has already reached agreements in New Hampshire and Maine.
FairPoint is a publicly traded company that operates in 17 states, but most of its workers and customers are in Vermont, New Hampshire and Maine. The company has been under Public Service Board scrutiny since it acquired landlines from Verizon a decade ago.
As recently as December 2015, the Public Service Board investigated FairPoint’s ability to provide quality service to landline customers. In October, the Public Service Department requested permission from the Public Service Board to investigate another part of the company’s phone system.
Consolidated, based in Illinois, has communications networks in 11 states including Pennsylvania, Texas and California. Consolidated uses a fiber optic network and data centers to sell access to internet, voice, video and cloud computing services.
“Our witnesses and analysis of Consolidated shows that they have the financial wherewithal and the technical expertise to operate the company,” said Jim Porter, the director of public advocacy for the Public Service Department. “That’s the legal standard under which we review these transactions.”
The department filed its final legal arguments in the case to the PSB on Friday. The department argued that Consolidated should be able to purchase FairPoint but that the Public Service Board should hold the company to strict standards.
“The department has concluded that the merger is likely to result in a company with improved financial strength and a more competent management team that will be better capable of delivering the service quality and offerings Vermont ratepayers deserve,” the department wrote.
The department asked that Consolidated be held to several standards when the sale is approved. One of the highest standards suggested would require Consolidated to reinvest 14 percent of revenue from Vermont customers back into its communications network during its first three years after acquisition.
The 14 percent would apply to revenue on both regulated and unregulated services — meaning not just revenue from landline telephone customers but also from internet service. Consolidated would also need to outline those changes to the Public Service Board in a three-year plan.
The department also proposed requiring Consolidated to continue using federal subsidies to build out broadband to rural areas and continue making certain bill credits available to low-income customers, among other things.
Two labor unions representing FairPoint workers, the International Brotherhood of Electrical Workers and the Communications Workers of America, issued a statement May 24 saying they worry Consolidated would cut jobs.
“We are deeply concerned about the company’s future staffing plans, in part because of its repeated references to ‘synergies,’” the unions said. “In our experience, corporate talk of synergies often presages outsourcing of good local jobs. For now, our contract contains important job protections, and our unions will continue to vigorously defend them.”
“Our highest priority now is to prepare for bargaining in 2018, when we will fight for good jobs and quality service in northern New England, just as we did in 2014 and 2015 when FairPoint attempted to outsource our jobs,” the unions said.
