FairPoint Communications will continue to expand its broadband service despite filing for Chapter 11 bankruptcy yesterday, company executives said.
For months, it has been rumored that FairPoint would file for bankruptcy. The communications company, which provides telephone and Internet service in New Hampshire, Maine and Vermont, has suffered financial and operational problems since it purchased the service from Verizon in spring 2008.
Company CEO David Hauser said yesterday morning that service would not be interrupted and the bankruptcy protection would allow the company to improve its customer service, an area that has caused considerable trouble since February.
"We are not going out of business," Hauser said. "This is largely a financial measure to make our business stronger."
Layoffs are possible as the company moves through the bankruptcy process, Hauser said.
"The idea is we need to make this as efficient a company as we can going forward," he said.
Even though the company plans to expand its broadband service, Hauser said he would be talking with utility regulators in New Hampshire, Maine and Vermont about the agreements made when the North Carolina-based company took over telephone and Internet operations.
Hauser said company officials would prefer to make any changes to the settlement agreement outside Bankruptcy Court.
"It's premature to talk specifics, but we will be having a dialogue with the appropriate state bodies," Hauser said.
A joint statement released yesterday by the state attorney general, Public Utilities Commission and Gov. John Lynch said FairPoint is still obligated to uphold its agreement with regulators.
Last week, Lynch, Maine Gov. John Baldacci and Vermont Gov. Jim Douglas sent a letter to Hauser that said infrastructure improvements and expansion of broadband service must be one of the company's highest priorities during the bankruptcy process.
The company is scheduled to announce how much it has grown the broadband service in the next week.
FairPoint was supposed to expand its broadband service to 75 percent of its customer base by Oct. 1. But the company filed a letter with the Public Utilities Commission instead, saying it wasn't sure exactly how much it had expanded.
The state attorney general's office will represent New Hampshire in the first bankruptcy hearing today in New York.
Hauser said the company chose to file for bankruptcy in New York because courts in that state are familiar with the bankruptcy process.
The state has been anticipating the filing and has hired bankruptcy specialists. Lynch said the state would review the proposed restructuring agreements to make sure consumers and workers are protected.
FairPoint will continue to renegotiate with its unions. Hauser said they are discussing work rule changes and have not asked union employees or management to take a pay cut.
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