[T]he state’s utility regulatory board sifted through a proposed settlement between FairPoint Communications and the Public Service Department at a Thursday hearing.
The proposed settlement, reached through negotiations that ended in August with a memorandum of understanding between both parties, requires FairPoint to accept federal money to bring faster Internet to 28,399 rural addresses and chip in $50 million of its own money for the build out.
As part of the deal, the parties have asked the Public Service Board to end the service quality investigation that started in December and open up a new case to address whether FairPoint, and potentially other landline phone companies, should be subject to fewer service quality standards in some areas, such as Burlington, where there’s more competition.
The Thursday hearing lasted two-and-a-half hours and was less tense than a June hearing, in which FairPoint and the Public Service Department fought over whether the company had to release some of its records. That dispute, over what information the company would have to turn over during discovery, went on for months until the August agreement.
Beth Fastiggi, the Vermont president of FairPoint, said she is now looking forward. She said the settlement “helps FairPoint turn the page with respect to service quality issues during a very difficult period preceding and up to the (company’s labor) strike, and helps set the stage for FairPoint’s (federally funded Internet) buildout and successful operations going forward.”
By signing the settlement, the company avoided the long, public process of a four-day Public Service Board hearing and the disclosure of certain proprietary information.
The deal also puts the company in a better position should it decide to sell. The CEO of FairPoint told investors in May that the sale of the North Carolina based telecommunications company is under consideration.
Jim Porter, the director of telecommunications and connectivity for the Public Service Department, advocates for ratepayers on behalf of the state. He said the department “resolved every issue that we could resolve” and would deal with other issues in a separate proceeding.
“The benefit, I guess, to FairPoint from that deal is that we agreed to look at whether there’s room for their service quality reporting to be different in places where it’s more populated (like Burlington or Montpelier),” Porter said.
“We’ll fight over that, but we did agree to look at that,” he said. “Maine and New Hampshire have deregulated FairPoint,” Porter said. “I don’t think it’s a good idea, and I work very hard to make sure that they don’t get deregulated.”
Under the proposed settlement, FairPoint must accept $52.8 million in federal money over six years to build Internet lines to unserved areas of Vermont. The state currently has no regulatory power over broadband service. Before announcing the settlement, the department said it was concerned FairPoint would refuse the federal money for the buildout.
The company agreed to drive fiber-optic cable into rural neighborhoods and then run copper digital subscriber lines (DSL) off the fiber and into homes and businesses. The minimum speed needs to be 10 megabits per second (Mbps) per second uploading and 1 Mbps downloading. (The new FCC definition is 25/3, but it hasn’t been funded.)
“I do a good bit of travel in the state, and quite frankly, unless we have a critical work stoppage, I hear much more about broadband speeds than we do about service quality,” Porter said.
Fastiggi said in an interview that running fiber is like building a new highway to rural areas of Vermont.
“You don’t pick up an interstate and move it to Arizona. You can’t pick up the fiber and move it somewhere else,” she said.
Mark Wigfield, a spokesperson for the Federal Communications Commission, said FairPoint accepted federal funding for 14 states, including Vermont, Maine and New Hampshire, and now the company can’t back out. FairPoint rejected the money in Colorado and Kansas.
FairPoint has also agreed to issue more than 22,700 bill credits to customers who were without landline phone service for 24 hours or more, in accordance with a regulatory rule. The company will have to prominently disclose their policy for giving bill credits during failures.
Fastiggi told the board that the company would clearly ask customers to call the company to report an outage because it’s “one of the best ways” to communicate with customers, as opposed to an advertising campaign.
November phone system failure
The hearing also required FairPoint to identify what caused the company’s phone system to fail on the day after Thanksgiving in 2014. The outage lasted for three hours and consequently knocked down the 911 system, which the company Intrado was running.
According to FairPoint, the outage was a once-in-a-lifetime event. Redundant technologies on the network’s two routes between Vermont and New Hampshire broke down. For a period of about three hours, phone calls could not go through.
“This was, in movie terms, ‘The Perfect Storm,’” said Richard Murtha, a vice president of installation at FairPoint in Maine.
At the time of the storm, the phone system worked like this: The area between Rutland and Concord, New Hampshire, had redundant fiber-optic telephone lines connecting six intermediary offices. Between those offices, a less high-tech cord connected those offices to keep the phone lines going.
Between White River Junction and Manchester, New Hampshire, there was similar technology on the day of the storm. The weather knocked down some of the connecting lines between White River Junction and Manchester and then it hit part of the Rutland to Concord system.
“Our phone service was working because we had phone service at that point from Rutland to Concord,” said John Lunny, the chief technology officer at FairPoint. “While that event was happening, we had an outage in Keene, New Hampshire, which was part of the network that connected Rutland to Concord.”
During the investigation, the Public Service Department’s consultant, Fred Goldstein, recommended that the company repair much of that infrastructure to prevent future problems, prepare contingency plans saying what the company would do to in the case an outage occurred, and further train its staff on how the technology works.
FairPoint said Thursday it made the technology upgrades. Now, instead of a single low-tech cord connecting offices between Rutland and Concord, there are two fiber-optic lines. Between White River Junction and Manchester, there are fewer intermediary steps along the network.
Goldstein said the maps and contingency plans haven’t been made yet, but the company has promised to do so in the near future.
