In less than three weeks, a New York bankruptcy court judge will hear how FairPoint Communications plans to emerge from bankruptcy.
The troubled telecommunications company entered Chapter 11 bankruptcy four weeks ago after months of poor performance in New Hampshire, Maine and Vermont. Company officials are scheduled to present a bankruptcy plan on Dec. 10.
Until then, state officials are waiting to see if the company will follow through with its promises to expand broadband and improve infrastructure in northern New England.
The state will be advocating for FairPoint to stick to its promises, but that will be determined by a bankruptcy court judge, according to Meredith Hatfield, the state's consumer advocate.
"The good thing is all three states will be down there," she said of the bankruptcy hearing.
But it's unclear how much of a role the state can play in the bankruptcy process. The New Hampshire attorney general's office is representing the state and FairPoint customers in court.
When the three northern New England states approved the sale of Verizon's land-line telephone and Internet service to FairPoint in the spring of 2008, it was a small telecommunications company from North Carolina. Since the deal was approved by regulators, FairPoint has suffered from financial and operational issues.
Company spokeswoman Jill Wurm wouldn't comment on what might be included in the company's bankruptcy plan, but said the company remains committed to expanding broadband service.
FairPoint passed its first milestone on Oct. 1 by expanding broadband to 75 percent of the state. The next benchmark the company needs to meet is 85 percent by April 2010, according to the settlement agreement.
The state's authority to influence FairPoint is also on hold while the company goes through the bankruptcy process, according to Hatfield.
A bankruptcy court judge has agreed to stay the docket with public utility commissions in all three states, which means regulators can't penalize the company for poor performance.
Previously, PUC staffers had said the state had a range of options, from fining the company to recommending changes in its management.
State officials are concerned whether FairPoint will fix its service problems while it goes through the bankruptcy process.
"The hope is they'll keep working on things while they're going through bankruptcy," Hatfield said.
Although FairPoint has fixed some of its customer service and billing issues since cutting over to a new computer system in February, there is still a lot of work to be done — by all accounts.
Complaints to the state Public Utilities Commission skyrocketed right after the cutover. March was the peak for complaints with 1,720 calls. Since then, the number has dropped significantly, but is still higher than it should be.
In July, about 800 residents complained to the PUC. In October, there were still 531 calls, according to Amanda Noon, director of the consumer affairs division.
"They're going in the right direction," Noonan said last week.
Prior to cutover, FairPoint generated about 300 complaint calls a month, she said.
Even though FairPoint has made some progress, Noonan said people are still calling for the same reasons. Billing, delays in new service installation and poor customer service still generate most of the calls, she said.
Liberty Consulting Group, the consultant hired by the three states to monitor FairPoint prior to the sale, agrees the telecommunications company's progress is less than acceptable.
In a report issued on Oct. 28, Liberty wrote that FairPoint has made some progress, but it has been "minor and not uniform."
Wurm said the company is committed to fixing its problems. A consultant has been hired to review the company's system and should present a plan to regulators by early December.
"By the end of the month, the data gathering by the consultants will be done and shortly after that we'll submit a plan to the commissions on our priorities," Wurm said Thursday.
But some people are wondering what the future of telecommunications looks like beyond FairPoint's bankruptcy.
Every month, the company is losing land-line customers, which emphasize the need to expand broadband service.
"We're certainly working toward rolling out broadband as quickly as we can," Wurm said.
Rep. James Garrity, R-Atkinson, said he's concerned about the company's future if it continues to lose about 7,700 land-line customers each month.
"By 2013, no one will be on land lines anymore," said Garrity, a member of the House Science, Technology and Energy Committee.
But losing land-line customers is not unique to FairPoint. Across the country, other telephone companies are facing the same problem.
"That's just the nature of the industry at this point in time," Wurm said.
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