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Fairpoint Files Bankruptcy Plan
Several months after it was expected...
by Karl Bode 10:44AM Monday Feb 08 2010
After announcing their bankruptcy plan last October, Fairpoint Communications has filed their bankruptcy plan. The company has issued a statement saying the plan "protects the commitments FairPoint made in 2008 when it assumed operations from Verizon," including expanding broadband penetration into under-served regions of Maine, New Hampshire, and Vermont. Fairpoint failed to meet these commitments after purchasing these networks for $2.3 billion in 2007, and ultimately collapsed under $2.7 billion in debt. Once again, the real winner in this whole exchange? Verizon, who got to offload unwanted networks, debt and union workers, and will just wind up winning many New England customers back with wireless LTE 4G service down the road anyway.

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spewak
R.I.P Dadkins
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Share and share alike

Share those Bankruptcy Plans with Frontier. They are going to be Verizon's next rube to need them!
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optemino

join:2009-10-13
Patterson, CA

Re: Share and share alike

i hate frontier.. horrible speed/pricing/ 2-yr commitment

why won't they just die ;(
brainlessdog

join:2005-11-30
Portsmouth, NH

I would like to see the executives in handcuffs

Just more empty promises from a company that doesn't know how to run a phone company. Don't ever call tech support for your internet! This company still has major operation problems that they won't admit.

cableties
Premium
join:2005-01-27

Re: I would like to see the executives in handcuffs

Them and Verizon's for the Morris Trust play...
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Splat
bac522

join:2003-08-04
Manchester, NH
No kid! I called about my Fast service (AKA FiOS) and the tech told me to reset my DSL modem ?!?!?!
Iceman4u2
Premium
join:2003-12-02
Rochester, NY

WOW say it's not so

I never saw this coming!!( LOL). Who would have though a power play for additional customers to a company that was sub par at best would have yielded a different end result??

ptrowski
Got Helix?
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When does Verizon buy them back?

Not saying they would, but they could sweep back in and buy it back on the cheap.

Karl Bode
News Guy
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kudos:44

2 recommendations

Re: When does Verizon buy them back?

Verizon doesn't want it.

What Verizon does want is to come back over the top with LTE services five years later and leech back the customers they DO want by selling them ubiquitous wireless service that can compete with aging DSL service.

Verizon offloads the infrastructure (much of it subsidized by taxpayers) they didn't want to upgrade, offloads the union workers they didn't want to deal with, offloads debt, gets tax credits, then comes back later and gets those customers back anyway.

ptrowski
Got Helix?
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Re: When does Verizon buy them back?

said by Karl Bode:

Verizon doesn't want it.

What Verizon does want is to come back over the top with LTE services five years later and leech back the customers they DO want by selling them ubiquitous wireless service that can compete with aging DSL service.

Verizon offloads the infrastructure (much of it subsidized by taxpayers) they didn't want to upgrade, offloads the union workers they didn't want to deal with, offloads debt, gets tax credits, then comes back later and gets those customers back anyway.
Good point. Let's get the over/under going!
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Karl Bode
News Guy
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Re: When does Verizon buy them back?

I didn't really see the LTE angle myself until somebody involved in their LTE deployments pointed it out to me last week. It's kind of genius in an obnoxious and unethical way...Especially if you start to think about how many billions Verizon, NYNEX, Bell Atlantic got in subsidies and taxpayer funds over the years to fund those networks. Luckily for Verizon, neither politicians or the press will ask those kinds of pesky questions of these transactions...

ptrowski
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Re: When does Verizon buy them back?

said by Karl Bode:

I didn't really see the LTE angle myself until somebody involved in their LTE deployments pointed it out to me last week. It's kind of genius in an obnoxious and unethical way...Especially if you start to think about how many billions Verizon, NYNEX, Bell Atlantic got in subsidies and taxpayer funds over the years to fund those networks. Luckily for Verizon, neither politicians or the press will ask those kinds of pesky questions of these transactions...
It really is. Now that I thought about it more it's a brilliant strategy.
--
"So, Lone Starr, now you see that evil will always triumph because good is dumb."

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JRW2
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said by Karl Bode:

Verizon offloads the infrastructure (much of it subsidized by taxpayers) they didn't want to upgrade, offloads the union workers they didn't want to deal with, offloads debt, gets tax credits, then comes back later and gets those customers back anyway.
Yep..
A great way to break the Union contract, declare bankruptcy, Verizon is too big, but this company can get away with it. After the "pesky" Union contracts have been broken, Verizon can come back a buy up the company and not worry about having to honor any contracts....
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FFH5
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Still waiting for Maine to sign on to bankruptcy

»www.nashuatelegraph.com/news/600 ··· urt.html
In addition to the agreement reached with the State of New Hampshire, FairPoint also reached an agreement with representatives of the State of Vermont, which is being filed today with the Bankruptcy Court.
NH & Vermont have agreed to the bankruptcy terms. We are still to hear from Maine on that. Nothing in Google Search yet on whether Maine has agreed to terms with Fairpoint and the court.
br0adbanddoc

join:2001-12-31
Wilkes Barre, PA

Future?

Thus we see the future of Frontier....

morbo
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Verizon's shame is Fairpoint

It's not difficult to place much of the blame for Fair Point directly on Verizon's shoulders. Just look at the results: Verzion gets a disproproptionate tax write-off for dooming the new company to bankruptcy. It's like a murderer getting off on a minor technicality: it's legal but we all know they are completely guilty of screwing everyone over.

FFH5
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Re: Verizon's shame is Fairpoint

said by morbo:

It's not difficult to place much of the blame for Fair Point directly on Verizon's shoulders. Just look at the results: Verzion gets a disproproptionate tax write-off for dooming the new company to bankruptcy. It's like a murderer getting off on a minor technicality: it's legal but we all know they are completely guilty of screwing everyone over.
Fairpoint has to take a major share of the blame for paying so much in the 1st place. Their mgt paid more than it was worth and took on more debt than they could handle(helped along by the recession and debt crisis). They should not have made this deal under the terms Verizon offered. No one forced them in to this deal.

tim_k
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Re: Verizon's shame is Fairpoint

said by FFH5:

No one forced them in to this deal.
Exactly. I'm sure the top execs at Fair Point cooked up some deal to base their bonuses on the number of new customers. Triple your customer base and rake in the big bucks. If the company goes under, move on to your next victim. Some of these executives are nothing but legalized swindlers.
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tschmidt
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said by morbo:

It's not difficult to place much of the blame for Fair Point directly on Verizon's shoulders.
Fail to see how this is Verizon's fault. They took advantage of tax law to reduce cost of the sale. Have no idea if they were instrumental in making a Reverse Morris Trust legal on not.

They set a price that ultimately was reduced a little to meet regulators and FairPoint objections.

As a NH resident my preference was Verizon not sell off VT/NH/ME. Having said that I think ball rests solely in the hands of FairPoint unless Verizon misrepresented material fact.

/tom

morbo
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Re: Verizon's shame is Fairpoint

said by tschmidt:

Fail to see how this is Verizon's fault. They took advantage of tax law to reduce cost of the sale. Have no idea if they were instrumental in making a Reverse Morris Trust legal on not.
Maybe you should re-read my post. What Verizon did was technically legal. However, despite all indications otherwise, everyone (except somehow Verizon, Fairpoint, and the relevant regulators) knew this was a terrible idea that would end badly. Guess what? It has! Now Verizon is attempting to do the exact same thing with Frontier. Do you think that the Frontier deal should go through given what you now know?

I know you New Hampshirites love mavericks, so you've probably enjoyed the Fairpoint mess. For the rest of us, you know what they say: you can lead a horse to water...

NOCTech75
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Re: Verizon's shame is Fairpoint

said by morbo:

said by tschmidt:

Fail to see how this is Verizon's fault. They took advantage of tax law to reduce cost of the sale. Have no idea if they were instrumental in making a Reverse Morris Trust legal on not.
Maybe you should re-read my post. What Verizon did was technically legal. However, despite all indications otherwise, everyone (except somehow Verizon, Fairpoint, and the relevant regulators) knew this was a terrible idea that would end badly.
The regulators are the ones that were told over and over it wouldn't end well and they were in control of the process. They were well within their rights to block things but did not, they are solely to blame for this... rest of it was a business transaction.
bac522

join:2003-08-04
Manchester, NH

Re: Verizon's shame is Fairpoint

Bingo...neither Verizon or Fairpoint's fault, but the PUC's of all three states. At the end of the day the land-line business is still a regulated monopoly and the PUC's could have squashed this deal...but I'm sure Verizon pulled some back-room handshakes with PUC members and thus the deal was approved. Why none of the legislators in the 3 states have called for hearings into the members of each state's PUC's is baffling to say the least!

tschmidt
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Re: Verizon's shame is Fairpoint

said by bac522:

Bingo...neither Verizon or Fairpoint's fault, but the PUC's of all three states.
The issue was never the landline business it was expanding broadband services. It was clear Verizon had no interest in doing that. FairPoint argued, as a smaller Telco with a rural background, it was willing to accept lower profit margin.

What exactly do you think regulators should have done?

/tom

NOCTech75
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Re: Verizon's shame is Fairpoint

said by tschmidt:

said by bac522:

Bingo...neither Verizon or Fairpoint's fault, but the PUC's of all three states.
The issue was never the landline business it was expanding broadband services. It was clear Verizon had no interest in doing that. FairPoint argued, as a smaller Telco with a rural background, it was willing to accept lower profit margin.

What exactly do you think regulators should have done?

/tom
At the very least added the stipulation to use Verizon's software instead of having India develop new software. They also should have looked at the fact FP was a incredibly small entity with no track record to say they could handle this kind of load and imagine that... they can't handle it.

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
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said by tschmidt:

What exactly do you think regulators should have done?

/tom
In recent years government regulators aren't any better than the fox guarding the hen house. They are so much in bed with the industries they are suppose to be keeping an eye on that the corruption is blatant. Yet you'll never see any prosecutions of government or business officials.
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fukitol
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heh

Verizon: "Here, hold this bag!"
Fairpoint: "OK!"
Fairpoint takes bag. Verizon walks away.
Bomb in Bag: "Boom!"

Verizon: "Here, hold this bag!"
Frontier: "OK!"
Frontier takes bag. Verizon walks away.
...
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F*** the Republicrats.

spewak
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Re: heh

said by fukitol:

Verizon: "Here, hold this bag!"
Fairpoint: "OK!"
Fairpoint takes bag. Verizon walks away.
Bomb in Bag: "Boom!"

Verizon: "Here, hold this bag!"
Frontier: "OK!"
Frontier takes bag. Verizon walks away.
Frontier finds the bag super glued to their company, all the while there is a ticking sound...
...

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Sammer

join:2005-12-22
Canonsburg, PA

Re: heh

This is what I think should happen to any state utility commissioners who approve the Frontier deal. "Go directly to jail, do not pass go, do not collect $200!" Any jury should now find such commissioners guilty, guilty, guilty of either gross incompetence or corruption IMHO.

morbo
Complete Your Transaction

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Re: heh

Why not add some accountability to the regulators? Their pay depends on how accurate the claims the merger are over the next 5 years. I think that would solve a lot of these problems.

NOCTech75
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I think Frontier stands a much better chance of being successful then Fairpoint. Frontier has been in the game for a decent amount of time now, have a good many lines and IF (and I really emphasize IF) they have software that can scale properly it shouldn't be that bad. Fairpoint started from scratch and instead of using Verizon's software went to India to have it developed from scratch and it STILL doesn't work right. Not to mention.. the techs don't work right either. Just had to submit a ticket to FP for a Maine move that was "completed" on the 5th yet customer has no DT at the jack nor at the NID.
GenBlood

join:2005-04-14
Nashua, NH

Fairpoint walks ...

Fairpoint talks a lot an makes bold statements ..
Too bad it's all hot AIR ....

The unions will never agree with the the new plans
and bankers really don't trust the people call the
shots at FairPoint ...

I smell another filing sometime in 2011 ... maybe
even a Chapter 7 this time ..