Sunday, July 05, 2009

Who Could Have Predicted?

A small telecommunications company buying up the landlines of a giant (monopoly) company in NH, Maine, and Vermont – who could have known that such a merger would turn out to be a disaster?

Nearly everyone. Still, the merger of Verizon and FairPoint was allowed to proceed, despite near universal opposition. Some NH politicians thought it was a great idea. Ray Burton, Executive Council member for the north country was a supporter. Be sure to check Mr. Burton’s campaign contributions – you can find them online at the NH Secretary of State’s website. If you can get online, that is.

I had a Verizon DSL account for a number of years. I never had any problems with my service. Since the merger, however, I’ve had nothing but problems with my Internet connection. The signal is weak, frequently disconnected, and then there are the times I can’t get online at all. Two weeks ago, I spent most of a weekend calling the tech support line. The recorded message on the tech support line tells you that if you’re having trouble with your DSL or email, to go to their website support page. The next part of the message informed me that my call might be monitored, and that’s when the call was disconnected. That cycle was repeated 47 times over the weekend. Either these folks have a keen sense of irony, or it never occurred to them that people having DSL trouble weren’t able to get online.

I spent an hour on the phone yesterday with a tech support person, who was undoubtedly weary of hectoring phone calls from unhappy customers. After putting me through a series of idiotic commands (unplug the modem, plug it back in) that took nearly an hour, the tech person decided I have a bad modem. Since I’d been trying to tell FairPoint that for the last 3 months, I was not mollified.

Mine is not an unusual story. A prominent local businesswoman spent 27 minutes on hold, while trying to get her company’s bill straightened out. She was finally given a $50 credit, even though the billing problems reached into the hundreds of dollars. She was not mollified. Another NH company called FairPoint in February to inform them they were moving about a mile down the road, and would need to transfer their phones and fax machine. FairPoint made a date to come set things up at the new office. They cancelled it, and made a new appointment. They cancelled it. The cycle went on for nearly 3 months. The company solved the problem by switching to Time Warner. The employee who told me the story racked up a $450 cell phone bill, doing business during that time period. Time Warner, meanwhile, is laughing all the way to the bank.

FairPoint’s stock is nearly worthless, and they have been relegated to junk bond status. The company has stated that they may default on loans in the fall, and that they may file for bankruptcy by the end of this year. It’s really tragic that no one saw this coming.

The Maine PUC has reported that FairPoint generates the largest number of complaints of any utility operating in the state. Vermont has hired a bankruptcy expert to prepare for the possibility that FairPoint will default on its debt. A group in central Vermont is working to establish their own FIOS network - one that would be owned within the state. No megamergers or monopolies would be involved. Vermont is taking a pro-active approach. NH, predictably, is not. In fact, FairPoint announced recently in NH that they intend to apply for some federal stimulus money to help improve DSL access to the north country. Maybe they can use it to run even more TV ads to tell us what great neighbors they are.

This has been a great deal for Verizon. They were able to dump their unprofitable rural markets that they didn’t want to upgrade, and get a $600 million tax write off at the same time. It’s been so good for them, that they’re doing the same thing in other parts of the country. A small company called Frontier is buying Verizon’s DSL and landline networks in Wisconsin, West Virginia, Arizona, South Carolina, Washington, Idaho, Oregon, Illinois, Indiana, Michigan, Nevada, N. Carolina, Ohio, and some areas in rural California.

To review: FairPoint has provided poor customer service, has had endless problems with incorrect billing, has been unable to provide adequate DSL and email service to some parts of the state, is in danger of defaulting on loan payments, and may file for bankruptcy. The transition from Verizon to FairPoint has been a horror show – BUT – even though the company is hemorrhaging customers and money – the top executives got bonuses! Former FairPoint Chairman and CEO, Gene Johnson received a 30 percent raise in 2008, and an $83,862 bonus. FairPoint President Peter Nixon was the beneficiary of a $50,000 bonus. At least 5 other executives got raises or bonuses. Doesn’t that make you feel all warm and fuzzy inside? Next time you look at your bill, and it’s wrong, remember that the executives of this company are being paid to fail, and they think we taxpayers should bail them out.

The Public Utilities Commission of NH has a complaint line. The number is: 1-800-852-3793. Their website has an online complaint form (assuming you are able to get online) at This merger should never have been allowed to proceed. Its time to call for an investigation into why it was approved. Contact the NH Attorney Generals office to insist upon an investigation. Then, contact your local legislators and suggest that NH get ahead of this situation by developing a plan for what happens if FairPoint goes bankrupt – and a plan for developing a statewide communications plan – and a way to make it happen without the involvement of corporate monopolies.

If only someone had seen it coming.

This quote is too good not to use again:
“I hate to be the one who told you this, but I told you so.” Larry Birkhead

h/t to for the cartoon

This will be published as an op-ed in the Conway Daily Sun at some point.

© s.bruce 209


DissedBelief said...

YES! Thank you again Susan. I too have DSL through Verizon (don't you love those pop ups?) and it became more like dial up when the great savior Fairpoint took over. I too wrote letters requesting this sale NOT go through. Who was listening? No one who has deep pockets evidently? Is this what we have come to and where we are in our world? The have's and the have not's and those of us who don't know "the right people" are the one's who do without the quality services and quality life. Leeching off the tax payer seems to be the way of the affluent and how sad we have become. In my opinion, we are seeing before our eyes, the disintegration of a once great nation.

ALL said...

Why was 'FairPoint' granted a contractual monopoly from the 'Public Utilities Commission' in the first place? More than one company should be allowed to provide internet service to customers in New Hampshire.

The electrical monopoly PSNH owns is just as bad. Once again the question needs to be asked, why is right and just for only one company to have a monopoly on providing electricity service to customers in New Hampshire?

A monopoly granted by the State to a company is wrong and violates people's freedom of voluntary contracts. Rather than each person being able to chose their own service provider for their differing needs, everyone is required to take service from one provider, who has a unjust monopoly, which then unsurprisingly gives them lousy service.

"First in the importance of its evil influence they considered the monopoly, which consists of the privilege given by the government to certain individuals, or to individuals holding certain kinds of property, a privilege which is now enforced in this country upon all other persons who attempt to provide an alternative service, and by State laws making it a criminal offense to do so. -Benjamin R. Tucker (1854-1939)