FairPoint service continues despite bankruptcy filing

    AUGUSTA — FairPoint officials recently announced the filing of voluntary Chapter 11 bankruptcy. As the regulator of telephone utilities on behalf of Maine ratepayers, the Public Utility Commission has retained special bankruptcy counsel; and will participate in bankruptcy proceedings to protect Maine ratepayers’ interest.     “The Commission wants to assure Maine consumers that phone network systems — including the enhanced 911 system — will continue to operate and the bankruptcy should not be noticeable to customers,” stated Sharon Reishus, chair of the commission, adding, “dial tones will not be lost.”
    The Commission has retained special bankruptcy counsel in order to protect the interest of Maine ratepayers including preservation of the Commission’s regulatory authority over FairPoint rates and service quality, and enforcement authority over the commission’s orders regarding FairPoint and its purchase of the phone network from Verizon, which includes the requirement that FairPoint make capital expenditures to upgrade the broadband network.
    Starting in early September, the CEO of the FairPoint spoke publicly about the possibility of bankruptcy as a tool for debt-restructuring. In filing for voluntary Chapter 11 bankruptcy, which is the section of the code dealing with debt restructuring not liquidation — the company obtains certain protections from its creditors. FairPoint management is running the company on behalf of creditors. The Commission and its special bankruptcy counsel will be reviewing the initial filings in the bankruptcy court.
    The commission, in its regulatory capacity, continues to analyze and monitor the company’s customer service and back office systems performance. On Oct. 26, PUC senior staff and bankruptcy counsel were to meet with FairPoint’s management and the staff and counsel of the Public Utilities Commissions of New Hampshire and Vermont.
    FairPoint was granted the authority to buy Verizon’s phone network and operations in January 2008, because Verizon, despite having more financial resources, was not serving Maine customers well and was unwilling to invest in the northern New England network and because FairPoint agreed to invest substantially in infrastructure upgrades and expansion of broadband in Maine and the region.