Wednesday, July 1, 2009

FairPoint watch: Making a quiet killing — of itself and Maine's economy

Published in the Portland Phoenix

Businesses in downtown Portland are on the move. Retail-property rents are lower than they have been in years, and stores are making deals left and right, with more than a dozen changing location in the past couple months. You don't know where your favorite store will be next — but don't count on calling them to find out where they've gone. They can't take your call — and won't even actually hear it ring.

That's because FairPoint — you remember them, our state's primary telephone-service provider? the nearing-bankruptcy company that has trouble providing phone service to 911 operators or even its own customer-service call centers? — has been making businesses wait more than a month to transfer phone connections to their new locations.

A simple stroll through the Old Port one recent afternoon led to three lengthy conversations with shop owners complaining about FairPoint (we'll save them the embarrassment of identifying them, if only so FairPoint won't target them for further delays). And there are many more, all of whom are talking about complaining to the Maine Public Utilities Commission, canceling their FairPoint service, getting their phone and Internet through TimeWarner Cable, or all three.

Even businesses moving a couple of buildings over, or onto the next block, have waited weeks and still can't get connected. And nobody from FairPoint seems available to help.

"I've spent hours on the phone with them," said one shop owner. "I give up." Another is forced to call a nearby business to process credit-card transactions, because he has no working FairPoint phone line to do it himself.

The problems are well known to state officials: Both Richard Davies, the head of Maine's Office of the Public Advocate (which represents consumers at-large in issues before the state's Public Utilities Commission), and Andrew Hagler, director of telephone and water regulation at the PUC, say they have heard complaints from businesses and residents.

Hagler adds that FairPoint has a "stabilization plan" it is using to mark its progress toward service-as-expected. But company filings with his office show that improvement is slow, and in some cases, not actually happening.

It is, therefore, little wonder that FairPoint recently told federal securities regulators that it might declare bankruptcy, unless its creditors allow it to delay interest payments on more than $500 million in debt (some of which is accruing more than 13-percent interest). In addition, its June 24 filing with the Securities and Exchange Commission declared that FairPoint has exhausted its available credit, and its revenues continue to decline.

While Davies says bankruptcy is "clearly ... more than a remote possibility," he is hoping that FairPoint will be able to "stop those losses and get people to come back," so as to avoid another transition to a new owner, or the involvement of a federal bankruptcy court in the state's telecommunications industry.

At least businesses and residents can take heart from one thing: The FairPoint public-relations department is no more responsive than its customer service. Company spokesman Jeff Nevins responded to three interview-seeking voicemails with an e-mail asking for the questions; the Phoenix's reply remained unanswered at our deadline. (Read the questions and the answers — if FairPoint responds — at