NHPUC Raises Questions About Verizon/FairPoint Deal

As the date of the proposed sale of Verizon's wireline system in northern New England to FairPoint approaches, regulators have some questions and some doubts about the wisdom of the sale.

In New Hampshire, the state Public Utilities Commission has serious doubts about the sale as proposed.

Public Utilities Commissioners worried aloud about FairPoint Communications Inc.'s promises of expanded broadband, financial viability and changing terms of its proposed $2.7 billion purchase of Verizon's landlines in New Hampshire, Maine and Vermont.

"One conclusion has become clear, and that is that the petition as filed is not in the public interest," Commission Chairman Thomas B. Getz said.

"Given that conclusion, the question then becomes is there some set of conditions that would satisfy the public interest," he said.

The biggest problem New Hampshire has with the deal is the price of the sale, $2.7 billion, which the PUC believes is too much for the assets being acquired, which will leave FairPoint unable to service their debt, pay expected dividends, and expand broadband access as they have promised.

My problem with this sale? FairPoint is buying an increasing share of a decreasing market. Even with their plans to make DSL widely available, it will be too little to late. DSL is a soon to be obsolete technology. It is incapable to providing the bandwidth that will be needed in the near future. Only fiber optics, in the form of Fiber To The Home, can provide the voice, data and video bandwidth the future demands. FairPoint will not be deploying fiber, meaning they won't be able to keep up because they will be deploying the wrong technology that will quickly leave northern New England behind the rest of the nation when it comes to broadband access. That's not in our best interests.

This is one deal that should die.