dslreports logo
site
spacer

spacer
 
   
spc
story category
Fairpoint Still Has Enough Cash For Anticompetitive Lobbying
Let's give millions to ISP facing investigations, delisting, bankruptcy
by Karl Bode 03:48PM Tuesday Aug 04 2009
We've well-documented how Fairpoint Communications has all-but imploded from the acquisition of Verizon's Maine, New Hampshire and Vermont DSL networks. The carrier has skirted close to bankruptcy, faces state investigations for incompetence, and is now looking at a possible delisting by the NYSE. In recent months, users tell us the carrier has barely been able to answer the phone, much less deal with massive work order backlogs.

The company has been busy trying to avoid paying competitors compensation for disrupted service. So it's interesting the company still has the cash on hand to lobby (scare) Maine away from other organizations in the running for Federal broadband stimulus funds. According to the Bangor Daily News, Fairpoint lobbyists are upset because the University of Maine is also in the running to get funding, something that's desperately needed after Verizon left a significant portion of the state with rusted DSL infrastructure.

After neglecting the State for years, Verizon accountants used a Reverse Morris Trust to offload the unwanted network to Fairpoint, netting hundreds of millions in tax writeoffs for Verizon. Fairpoint in turn acquired a mountain of Verizon debt they've been struggling with ever since. Because of the debt, state broadband expansion plans may not be in the cards for Fairpoint without Federal funds. In order to get those funds, Fairpoint is busy trying to scare the State away from other possible suitors:
quote:
"The fact is, we are competing with the University of Maine,” said Severin Beliveau, an Augusta attorney representing FairPoint. "I am concerned at what the university is proposing here, because it is receiving a form of subsidy, no, they are in fact receiving a subsidy from taxpayers, in competing with the private sector."
Even if the company was competing directly with UMS, at least Maine residents could be certain the University will even exist a year from now. But as it stands, Fairpoint isn't competing with the University of Maine. They're competing with a public private partnership of which the University is only a member. Applications for Federal funds are open to public entities and private companies. Given recent history, giving taxpayer dollars to somebody other than the regional dysfunctional incumbent might not be the worst idea in the world.

view:
topics flat nest 

cableties
Premium
join:2005-01-27

Verizon was clever,

Failpoint was arrogant.
And Cap-Gemini never called before they dug. And the hole can't be filled...

swintec
Premium,VIP
join:2003-12-19
Alfred, ME
kudos:6
Reviews:
·Time Warner Cable
·VoicePulse
·Sprint Mobile Br..
·RapidVPS

1 recommendation

Give it some time..

In a few months, you will see our landlines on Craigslist for sale. Unfortunately, Fairpoint will fall for the Nigerian scam where they send a check for quadruple the amount and then tell them to keep the extra for the "trouble".
--
Block Accounts | UseNet Now

FFH5
Premium
join:2002-03-03
Tavistock NJ
kudos:5

1 recommendation

Reverse Morris Trust

This tax law gets knocked all the time. But it isn't some tax dodge. It allows EXISTING shareholders of assets to keep those assets without having to pay a transfer tax when the assets are spun off to new mgt.

It is the same assets, just under new mgt. Why should the existing shareholders get banged with extra taxes. And it isn't Verizon that got some big tax writeoff, it is the stockholders that weren't hit with some bogus capital gains tax.

»en.wikipedia.org/wiki/Reverse_Mo ··· is_trust
--
My BLOG .. .. Internet News .. .. My Web Page
zed2608
Premium
join:2007-09-30
Cleveland, TN
kudos:1

1 edit

1 recommendation

Re: Reverse Morris Trust

relly it does not matter anymore about verzion in fairpoints case anymore thats done happened and wont change

point is i think fairpoint is imploding and will like be broken up and sold to at&t or some other telacom
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Reverse Morris Trust

ATT won't take them. They would have already bought them.

ATT will be the next ones to spin off their rural networks as they're busy with U-Verse and ATTM.

It wouldn't be a bad idea at this point for Co-Ops and small ILECs to start merging and start buying some of these exchanges.
patcat88

join:2002-04-05
Jamaica, NY
kudos:1

Re: Reverse Morris Trust

said by hottboiinnc:

It wouldn't be a bad idea at this point for Co-Ops and small ILECs to start merging and start buying some of these exchanges.
And guess who shows up to buy them then....

bobobobo

@rr.com

Re: Reverse Morris Trust

Centurytel (or Centurylink), Fairpoint, or Frontier. The triumvirate of two-bit telecom titans.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Reverse Morris Trust

Fairpoint is the one people are saying to leave and give up.

ATT doesn't want it, VZ doesn't want it. At least Fairpoint is trying to make it work.

BillRoland
Premium
join:2001-01-21
Ocala, FL
kudos:3
said by FFH5:

This tax law gets knocked all the time. But it isn't some tax dodge. It allows EXISTING shareholders of assets to keep those assets without having to pay a transfer tax when the assets are spun off to new mgt.

It is the same assets, just under new mgt. Why should the existing shareholders get banged with extra taxes. And it isn't Verizon that got some big tax writeoff, it is the stockholders that weren't hit with some bogus capital gains tax.

»en.wikipedia.org/wiki/Reverse_Mo ··· is_trust
I agree, I don't see what's so shady about this. Besides, nobody held a gun to FairPoint's head and made them accept this deal. As another poster said, FairPoint's problems now are not Verizon's fault. FairPoint knew the song before they agreed to dance.
--
"Don't steal. The government hates competition."
Beyond AM. Beyond FM. XM

SLD
Premium
join:2002-04-17
San Francisco, CA

Re: Reverse Morris Trust

I remember all of the predictions that that whatever telco bought those customers would basically die a horrible death. Sounds like they were correct.
patcat88

join:2002-04-05
Jamaica, NY
kudos:1
said by BillRoland:

I agree, I don't see what's so shady about this. Besides, nobody held a gun to FairPoint's head and made them accept this deal. As another poster said, FairPoint's problems now are not Verizon's fault. FairPoint knew the song before they agreed to dance.
Since when is FairPoint a rational, thinking person that sees consequences, and not a limited liability corporation?
GenBlood

join:2005-04-14
Nashua, NH

FairPoint ... STOP .. wasting money ...

FairPoint you messed up and come clean. You paid way
too much for the lines. You should have made Verizon
help in the switch over on the billing and the other
issues in the call center ....

As far as I'm concern ... game over and call the lawyers
an file for chapter 11 .... or in your case lets say Chapter 7 ...
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: FairPoint ... STOP .. wasting money ...

and in your case your 911 will stop working and then you can come on here and complain about that.

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
Premium,VIP
join:2002-02-02
Stewartstown, PA
kudos:41
said by GenBlood:

. You should have made Verizon
help in the switch over on the billing and the other
issues in the call center ....
At least on the DSL side (and most likely POTs) Verizon worked with Fairpoint for months while they were suppose to get up to speed. Mostly things were handled like normal until the cutover.
--
RIP my babys Buttons 1/15/94-2/9/07 & Beamer 7/24/08, Buttons, Buttons video, Beamer