Settlement proposed to Maine PUC by some intervenors fails to protect the public interest

Unions call on regulators to reject deal that falls short of earlier recommendations and hold new hearings

The CWA and IBEW are contesting a settlement reached by FairPoint Communications, Verizon Communications, the Office of Public Advocate, the Advocacy Staff of the Public Utilities Commission, and various other parties because it fails to protect the public interest. The settlement also falls far short of conditions recently proposed by the Commission’s advisory staff and the Office of the Public Advocate. The Commission is not obligated to accept the terms of the deal in whole or in part.

Although the settlement would modestly improve FairPoint’s finances, Mainers still will be left with a financially risky company without sufficient resources to improve service quality and expand high speed broadband. While some issues affecting workers have been addressed, the deal falls drastically short of these critical concerns.

The CWA and IBEW -- joint intervenors in the regulatory proceedings -- have formally asked the Commission to reject the proposed settlement -- or at the very least -- suspend its deliberations and hold hearings to address the problems posed by the settlement. Commission rules allow intervenors the opportunity to present arguments against such a proposed settlement and to request hearings.

“If the PUC allows this deal to be part of the case, then it should follow its own rules and hold a hearing to examine all of its implications,” said Pete McLaughlin, Business Manager of IBEW Local 2327. For example, the Commission should examine the impact of the deal on FairPoint’s financial viability since it would increase the company’s operating expenses and reduce its revenue which will adversely affect its profits and cash flow.

“We are surprised that the Public Advocate settled for much less than what he recommended only a few weeks ago,” added McLaughlin.

The unions were only invited to participate in settlement discussions last Friday December 7, even though such talks had been going on for some time. The unions unsuccessfully tried to ensure that the parties in the settlement discussions addressed the deal’s shortcomings through a number of proposals. After these attempts failed, the unions were again shut out from any discussions. The proposed deal is deficient in a number of areas including the following, because it:
· Requires Verizon to reduce FairPoint’s debt significantly less that the $600 million recommended by the Hearing Examiner and previously by the Public Advocate.
· Permits FairPoint to pay out common stock dividends greatly in excess of FairPoint’s level of net income in each and every year.
· Does not enable FairPoint to weather foreseeable adverse financial circumstances (such as reductions in revenues, increases in expenses, or increases in capital expenditures) without jeopardizing the financial health of FairPoint.
· Does not provide FairPoint with the financial capability to eliminate or substantially modify its plan to dramatically reduce its workforce through attrition during the next eight years.
· Allows FairPoint to invest $40-$50 million a year less in capital expenditures than Verizon’s historic annual levels in Maine, New Hampshire, and Vermont.
· Does not require FairPoint to fund any of the more than $400 million in projected retiree health care liabilities it will incur through 2015 and does not provide FairPoint with the financial capability to reasonably meet these liabilities.
· Changes significant aspects of FairPoint’s previously filed financial model, including its projections of revenues, expenses, capital expenditures, and cash flows (not even taking into consideration changes to which FairPoint may be required to agree in New Hampshire and Vermont.)

The CWA and IBEW continue to agree with the Hearing Examiner’s November 26 recommendation that the sale should be rejected because it is not in the public interest. If the PUC disagrees with this recommendation, the Examiner also recommended that it should condition any approval on requirements that Verizon reduce FairPoint’s debt by $600 million and reduce its Transition Services Agreement fees by approximately $130 million. Further, FairPoint should be required to reduce its dividends, increase capital expenditures and be subject to stronger service quality standards and penalties.

“The stakes are very high because it concerns the future of the dominant provider of telecommunications services in this state and the northern New England region,” said Cheryl Ahern, president of CWA Local 1400. “Our current and future economic well-being depends on the financial health of this provider. We cannot afford to be saddled with a financially shaky company without the resources to improve service and provide high speed broadband.”

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Nearly 90 percent of letters to NH Public Utilities Commission oppose sale of Verizon to FairPoint

Concord, NH – With just a few weeks remaining before a decision is expected by the New Hampshire Public Utilities Commission on the proposed sale of Verizon to FairPoint Communications, an analysis of the correspondence sent to the Commission shows that public comments on the sale are overwhelmingly opposed to the deal.

Jobs with Justice -- a community coalition that supports employment rights -- obtained copies of all comments received by the PUC on the sale. As of November 16, the commission had received a total of 252 letters and emails taking a position on the proposed sale. A surprising 225 comments, or almost 90 percent were against the sale while only 27 were for it. Another 10 comments expressed concerns, but did not take a position either for or against the proposed sale.

Many of the letters were from state and local elected officials. Sixty-two or 97 percent of the 64 comments submitted by elected officials opposed the sale while only two were in favor.

“As the Commissioners deliberate, we really hope they will take into consideration the wisdom of the people of New Hampshire,” said Mark MacKenzie, President of the New Hampshire AFL-CIO. “A clear majority of citizens are very concerned that this sale is not in the public’s interest.”

A public opinion poll conducted in early Sept. by Fingerhut Granados Opinion Research for the International Brotherhood of Electrical Workers and the Communications Workers of America showed that in the northern states, New Hampshire had the highest level of opposition to the proposed deal with 38 percent against to 18 percent in favor. When survey respondents learned more about the deal, opposition rose to 70 percent.

For a copy of the Jobs with Justice report summarizing public comments at the New Hampshire PUC, please contact Rand Wilson at the above number or by email at rand@mindspring.com.

More information about why citizens are mobilizing to stop the Verizon sale to FairPoint is at: www.stopthesalenow.org and www.no-deal.org. For information about ending the digital divide visit: www.speedmatters.org.

Groups turn in more than 5,000 postcards from people opposing sale of Verizon to FairPoint

Message to the Governor: “Don’t let New Hampshire take a wrong turn on the information superhighway!”

Concord, NH -- Showing the growing opposition to the proposed sale of Verizon to FairPoint Communications, a delegation delivered more than five thousand post cards in a wheelbarrow to a representative of Governor Lynch on October 30 asking him to oppose the sale.

The group was composed of representatives from first responders, small business, civic groups, teachers, and telephone workers -- all of whom want to make sure that Governor Lynch gets the message: Stop the Sale!

The post cards ask the Governor to “take a strong stand against allowing Verizon to sell its assets to FairPoint.” They were delivered to Senate President Sylvia Larsen who was designated by Governor Lynch to receive the post cards.

“New Hampshire’s economy depends on our success in requiring the highest quality telecommunications network for our citizens and our businesses,” said Larsen. “We join you in dedicating ourselves to that future.”

Participants in the delegation held a short briefing in the Lobby of the Legislative Office Building just prior to delivering the cards. State Senators Jacalyn Cilley, Martha Fuller Clark, Harold Janeway and Deborah Reynolds, many state representatives and Portsmouth Mayor Steve Marchand also participated.

“If this sale is approved it could send New Hampshire and its economy backwards,” said Mark MacKenzie, President of the New Hampshire AFL-CIO. “Cutting edge technology is essential to keeping good paying jobs in the state. FairPoint has not demonstrated it has the resources or the technology to keep pace with today’s world.”

“When seconds count, New Hampshire citizens depend on firefighters and paramedics,” said David Lang, President of the Professional Fire Fighters of New Hampshire. “In order to assess the risk of any emergency, we need reliable information. We depend upon a high quality ‘information superhighway’ to obtain it. The proposed FairPoint acquisition of Verizon’s Northern New England properties poses risks that your firefighters do not want to take. We would prefer that ‘Can you hear me now?’ remain a catchy slogan on television -- not a way of life for the people of New Hampshire.”

“As a small business person and retailer, I depend on the overall health of New Hampshire’s economy,” said Jason Howard, owner of Ross Furniture. “I don’t want state regulators to approve something that could put our state’s future economic development at risk.” Howard has been in the furniture business for 34 years in Dover.

“For generations the motto of the phone company was ‘the only thing we have to sell is our service.’ Despite many changes over the years, Verizon has lived up to that motto and it seems to me that Verizon is far superior to any alternative that we can see in the future,” said Representative James Pilliod from Belmont, NH.

“Verizon is the second largest telecommunications company in the U.S.,” said Jaime Contois from Working Families Win, a statewide organization based in Keene that works to empower citizens to hold elected officials more accountable on economic security issues. “It’s the responsibility of our government and industry regulators to hold it accountable and to do what’s right for the citizens of New Hampshire.”

“Our canvassers went door-to-door to collect many of these post cards,” said Karen Nussbaum, Executive Director of Working America, an AFL-CIO affiliate that organizes working families to fight for good jobs, affordable health care and secure retirements. “The majority of households still hadn’t heard about the proposed sale, but when they did, people understood how risky FairPoint could be and were eager to sign.”

Photos from the post card event may be viewed at: http://picasaweb.google.com/randwilson.aflcio/NewHampshireStopTheSalePostCardEvent

More information about why citizens are mobilizing to stop the Verizon sale to FairPoint is at: www.stopthesalenow.org and www.no-deal.org. For information about ending the digital divide visit: www.speedmatters.org.