[telecom] Vermont Regulators Reject Verizon/FairPoint Deal

Web Editor: Maureen O'Brien, Managing Editor Created: 12/21/2007 2:30:23 PM Updated: 12/21/2007 7:11:48 PM

MONTPELIER, VT (NEWS CENTER) -- Vermont utilities regulators have dealt a major setback to FairPoint Communications. The Vermont Public Service Board rejected the company's proposal to buy Verizon's landlines in Maine, Vermont and New Hampshire.

Echoing concerns raised by the staff of Maine's Public Utilities Commission, the Vermont regulators question FairPoint's ability to survive financially if the deal goes through.

Fairpoint would have to borrow $2.5 billion to make the purchase. The board says that could exert "significant financial pressure" when combined with operating costs and revenue projections.

The board said FairPoint is free to submit revisions to the plan that addresses the financial concerns. In Maine, such revisions were submitted, and the PUC has allowed the process to move forward. The commissioners are scheduled to meet again on December 26.

The deal needs the approval of regulators in all three states in order to go through.

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Reply to
Mr Joseph Singer
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Why wouldn't Embarq be interested in acquiring those lines ? I would think that it would fit in well with their existing business, and open some opportunities for economies of scale, etc. Although I can't be sure without examining financial statements and other documents which I probably wouldn't understand anyhow, it seems like Embarq's financial stability should be pretty decent.

Reply to
Justa Lurker

I don't think Embarq would want a bunch of spread out areas, that is unless they have service areas in that state. I know when GTE bought ConTel they sold a lot of those service areas that were not in large enough to serve on there own, plus a bunch of GTE areas that as they put it did not fit in.

Reply to
Steven Lichter

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