Press Releases: Staying focused

Published in the Portland Phoenix

Now that the Portland Press Herald/Maine Sunday Telegram and its four Maine sister papers (two dailies and two weeklies) are looking for a new owner, the speculation is rampant about who might buy such an operation, and how much they might pay.

Sure, there are a few snickers along the way, at things like PPH editor Jeannine Guttman’s March 23 column describing the sale announcement as a tear-jerking session with family patriarch Frank Blethen, ending with PPH managers “spontaneously” giving him a standing ovation after he announced the paper was for sale.

But a week before that meeting, before she knew the paper would soon have a new owner, Guttman alluded to a relationship other media outlets have with her paper (and other papers around Maine and elsewhere). In a March 16 column defending the paper’s latest layoffs (“Cuts Won’t Affect Paper’s Mission”) she wrote, “What you see on television and hear on radio often is a pickup of news and information that we have reported first ... We have more journalists, more boots on the ground, than any other news organization in Maine."

Guttman told the Portland Phoenix in an interview that she wasn't accusing the broadcasters of stealing, but rather alluding to the Associated Press's "AP Broadcast" wire service, which transmits to broadcast outlets stories from the Press Herald and other AP-member newspapers.

Her point is a good one. Newspapers are under tremendous pressure, due to radical shifts in their business models. Without newspapers, a huge portion of the news that consumers take for granted would not be available.

It's too bad there's not some kind of service that goes the other way, though.

Last week, all three local TV stations scooped the Press Herald on a major local story, one that happened right across the street from PPH headquarters.

The PPH and the TV folks have been closely following the play-by-play of Portland's budget problems, which came to a head on Thursday, April 3, when city manager Joe Gray announced the elimination of 98 city jobs, 22 of which were vacant, and 76 layoffs, including one of the city's highest-profile officials, transportation director Captain Jeff Monroe, who oversees the waterfront and the airport, and has testified before Congress on port-security issues.

NBC affiliate WCSH (Channel 6) had the story Thursday evening; ABC affiliate WMTW (Channel 8) and Sinclair-owned CBS affiliate WGME (Channel 13) had it Friday, including interviews with Monroe. Not until Saturday did the Press Herald tell its readers about Monroe's pink slip (a Friday story was thin on details, saying layoffs were "expected," but with no mention of Monroe).

Guttman called Channel 6's work "a really good scoop" for which "they are to be congratulated." She also said she wants "to take the long view," accepting that sometimes even the state's largest newsgathering organization will get beaten. And though regular readers of this column may be shocked to find me granting the Press Herald two points in a row, she is right.

But there is a problem. It's not the terrible luck that perhaps the "boots on the ground" just needed to traverse a crosswalk, from PPH HQ at 390 Congress to City Hall at 389 Congress, to get this particular story earlier. The real hard part is timing in the larger sense.

Because it’s up for sale the paper needs to perform at peak level, to keep readers, advertisers, and, yes, prospective buyers interested. Reporters and editors need to dig even deeper at this confusing time of tears and applause; it's their chance to prove how vital they are to Portland. This city needs a strong daily paper staffed with people who know the territory. If current PPH newshounds don't stay sharp, they might as well be writing on the wall.

Press Releases: Pressure is on

Published in the Portland Phoenix

The execs over at the Portland Press Herald are notoriously tight-lipped when it comes to talking about their newspaper to other media organizations. Publisher Chuck Cochrane and editor Jeannine Guttman don’t normally seem to notice that other media outlets exist — they don’t take phone calls from reporters even when they’re in the office, and never return phone calls or e-mails.

Lately, though, Guttman has not only noticed, but also responded to, comments about the paper published by a less traditional outlet — even holding a meeting with her staff to claim that certain comments were all wrong, and that she did not, in fact, engineer the ouster of MaineToday.com chief Web honcho Joe Michaud, as a PPH-watching blog reported.

Who provoked this startling development? Local blogger and Munjoy Hill resident “Thomas Cushing Munjoy” (not his real name) with a post on his daily-updated blog, PressingTheHerald.

Munjoy “started out sort of simply,” he says in a phone interview. Frustrated with the quality of the local daily, he would send Guttman roughly one e-mail a week with feedback, occasionally asking her questions. But he never got responses, and after a few months, he started blogging instead, hoping public shame would work, as indeed it did.

Many of his critiques are basic editing questions, seeking — or providing — missing context and perspective. Since taking a month-long hiatus in which he dealt with some sudden and severe medical problems, Munjoy’s tone has been more positive, though still strongly critical. A recent post slammed a reporter for failing to look at the facts in a January story that claimed Maine’s home-foreclosure rate was better than the rest of the nation's. But that same post praised another reporter’s more recent story, which disclosed that Maine actually has more foreclosures than the national average.

Munjoy's efforts have even attracted competition of sorts; several months after his debut “T. Flushing Funjoy” appeared, blogging at PortlandPressHarried.blogspot.com with a more acerbic tone (including referring to the Press Herald regularly as “the snooze organ of record”).

All Munjoy wants is for the Press Herald’s leadership to “start taking the coverage of local news seriously,” and not just pay lip-service to it, touting their “commitment” while ignoring waterfront issues and running wire-service stories about days-old international events on the front page.

“These guys just can’t get out of their own way,” says Munjoy, who says he uses a pseudonym because he works locally — not in journalism — and occasionally encountersPress Herald bigwigs at professional and social events. (The ethics of using a pseudonym while trying to make the paper more transparent are questionable, though Munjoy says he has no present or past connection to the Press Herald or any of its corporate siblings in Maine or elsewhere.)

It’s his frustration — amplified by the fact that Guttman still won’t return his e-mails — that has led Munjoy to seek to draw even more attention to the Press Herald’s shortcomings.

He has repeatedly reminded his readers that the Press Herald is in bed with the Plum Creek Timber Company CEO (who sits on two boards that supervise the paper’s parent companies; see “Plum Creek Watchdog,” by Jeff Inglis, December 21, 2007) and that the paper failed to disclose that fact for 18 months, during which it reported extensively on Plum Creek’s plans for the largest land-development project in Maine history.

But in late January, he asked the American Society of Newspaper Editors to weigh in on the ethical implications of issue. Nearly two months later, he has received no responses, and suspects the reason is that the ASNE board includes an exec from the Seattle Times — the Press Herald’s parent paper.

But it still disappoints him. “I just don’t understand why they won’t try to improve,” Munjoy fumes.

Maine's journalist-shield law on MPBN's Maine Things Considered

Aired on Maine Public Broadcasting Network's Maine Things Considered

Sidebar: Slow lane

Published in the Portland Phoenix

Under the terms of the deal, by 2013, 90 percent of FairPoint’s customers in northern New England will have access to DSL Internet service. (Unless, of course, FairPoint takes the extra year Maine regulators have allowed with no penalty, which would mean waiting until 2014.)

In that time, FairPoint plans to provide exactly none of its customers with the option for fiber-optic connections, which is the real high-speed Internet, already available to 10 million homes in the US, but none in northern New England (except a handful around Portsmouth, New Hampshire; see “Internet Disconnect,” by Jeff Inglis, August 24, 2007).

DSL is the slowest of all the services that can be called “broadband,” though it is faster than dial-up. In 2007, as many as 40 percent of DSL customers were dissatisfied with the speed of their service, according to a report by Michael Render, a fiber-market analyst for RVA Market Research in Tulsa, Oklahoma. Imagine how many people will think DSL is too slow in 2014!

By 2010, three (or four) years before FairPoint’s rollout of DSL will be complete, 25 million homes nationwide (22 percent of all homes) will have access to fiber, Render says.

As everyone else is eagerly awaiting the connection of fiber-optics, we in Maine, New Hampshire, and Vermont will have our feet up, enjoying life in the slow lane.

A bad idea triumphs: Verizon: $500,000,000 — Public: $0

Published in the Portland Phoenix

From time to time, we all wonder how bad public-policy choices make it through “the democratic process,” being vetted and scrutinized by “the appropriate agencies,” and incorporating “public input.”

The Verizon-FairPoint Communications deal (in which Verizon will sell its landlines in Maine, New Hampshire, and Vermont to FairPoint for $2.4 billion) is an ideal case study. It’s roundly criticized by nearly everyone. Even the regulators who were asked to approve the deal are wary. At first, Vermont’s regulators rejected it outright, then later voted to approve a revised version. Maine Public Utilities Commission chairman Kurt Adams made it clear he was holding his nose while voting to approve it, and New Hampshire PUC chairman Thomas Getz declared that the initial version was “not in the public interest,” though his board voted 2-1 to approve a revised proposal Monday. (The dissenter, commissioner Graham Morrison, wrote that “the public interest ... requires something more than ... good intentions.”)

Apart from Morrison in New Hampshire, regulators in all three states have chosen the devil they don’t know over the devil they do, by agreeing to let Verizon sell out (and avoid tax obligations of more than $500 million) in the hope that promises from a financially strapped communications company (FairPoint) will give us something better than neglect from an incredibly wealthy communications company.

Bad ideas like this one survive first and foremost because someone thinks they’re good ideas. Not surprisingly, FairPoint and Verizon love the idea — FairPoint gets to collect more money from more customers and pass it on as dividends to shareholders; Verizon gets to keep $500 million it would have paid in taxes and use that money to invest in fiber-optics and cellular technology elsewhere in the country. (Those of us in mountainous rural areas are stuck with older, slower technology, and that’s just our bad luck, as far as Verizon is concerned.)

But even more important to the survival of bad ideas such as this merger is that state utility regulators behave like powerless functionaries whose job is to moderate corporate rapaciousness, rather than seeing themselves as empowered defenders of the public interest.

Even when regulators are presented with fundamentally terrible deals that endanger the public interest, threaten economic development, and may end up risking people’s very lives, they see their responsibility as exacting just enough concessions from massively wealthy companies to let the regulators claim they got something for the people, even when they have given away much more.

It’s not as if they haven’t been warned. Union representatives and industry experts have been railing against various aspects of the deal since it was announced back in January 2007. Customers have expressed significant concerns, in letters, e-mails, and phone calls to regulators in Augusta, Concord, Montpelier, and even Washington DC. And the consumer advocates who represent the public in utilities proceedings in Maine, New Hampshire, and Vermont have all expressed reservations about this deal in uncharacteristically bold language — saying FairPoint’s assumptions are “inappropriate” and “do not reflect reality.”

Wimpy regulators
One member of the three-person Maine PUC didn’t even ask any questions of Verizon or FairPoint during the public hearings. Sharon Reishus remained silent, even though this deal is the largest and most controversial piece of business to come before Maine utilities regulators in state history, and despite the fact that the telecommunications sector is the one that state officials, economists, and activists alike see as a key to Maine’s prosperity for decades to come. But her silence is not the problem: It’s the symptom of the real problem.

Regulators have expressed frustration with Verizon’s well-documented lack of attention to serving residents and businesses in northern New England. The solution, though, is not to hand Verizon a pass on its $500 million tax liability on profit from the sale. Regulators have standards (and can increase the standards), and they have enforcement tools to punish companies that don’t meet the standards, such as fines and penalties.

They have not used these tools very much, or very well. And they don’t seem to feel they are in a position of strength, with Maine officials making the “demand” that if North Carolina-based FairPoint does not roll out its slow-speed “broadband” Internet service, DSL, to enough homes by the end of 2013, the company would get an extra year to meet the same goal, with no penalty. “Our history with some utilities enforcing merger conditions after we issue a decision has not been great,” Maine PUC chairman Kurt Adams admitted in a January 3 hearing.

But rather than hold themselves to a higher standard of performance and actually enforce their rules, regulators have passed the buck — hundreds of millions of them, really — to us, by letting Verizon off the hook. And it is we, the public, who will pay for their complacency.

In the first place, FairPoint’s economic projections were shockingly optimistic (see “No Raises For Seven Years,” November 16, 2007, and “No Raises — It Gets Better,” November 20, 2007, both by Jeff Inglis). And those fragile projections were made before we entered the economic downturn most economists now believe we are in.

Financial peril
There has been a lot written about FairPoint’s financial problems, both current and future. Normally, when seeking to impose conditions on a sale, regulators ask for financial guarantees from the buyer.

Not this time. State officials are so worried that FairPoint is — or will be — in financial peril, that they’ve wrung more money out of the seller, Verizon, making the multi-billion-dollar behemoth throw a few bucks our way as it heads out the door, almost like a charity contribution for the privilege of abandoning northern New England.

Indeed, when Vermont’s Public Service Board initially rejected the deal, it ruled that “FairPoint had not demonstrated that it would be financially sound” after the sale went through, and could end up incapable not just of expanding phone or Internet service, but even of keeping service at the current, below-standards level.

Put charity aside: we are paying Verizon to leave. State officials will probably deny that, but think again. The cost to us is more than just the missing $500 million in tax revenue.

FairPoint is taking on more than $2 billion in debt to do this deal, and the company is expecting not only to pay off that debt, but also to make a profit. Every dollar the company spends on Verizon’s landlines will have to come back in, paid by the customers in our monthly bills. The more FairPoint pays, the more we, the public, will ultimately have to pony up over time.

If FairPoint isn’t making enough money to make its executives or shareholders happy, the company will come back to regulators in all three states, crying poor, and asking for higher rates. Of course, FairPoint really will be cash-strapped and poor, so the regulators will find it hard to refuse. And if they approve rate increases, they and their agencies won’t feel the pinch; we will.

The regulators may even forget that Verizon overcharged telephone customers in Maine more than $30 million in 2005 alone, and that our state made FairPoint promise to cap its rates for five years to help make up for those excess charges. The only way the regulators could abandon their duties more would be to develop amnesia in addition to their weakened spines.