FairPoint deal: good for the companies, not N.H.
Jim Roche, president of the Business and Industry Association, opined recently that the association “believes in the sanctity of contracts between private parties.” This was part the group’s reason for stating that the proposed tax-free merger of FairPoint and Verizon is good for New Hampshire.
We in the International Brotherhood of Electrical Workers agree in the sanctity of contracts between private parties. This transaction is not a contract between private parties. It is an agreement between two publicly traded, regulated utilities.
Regulated utilities are granted a monopoly on providing services to New Hampshire citizens and are guaranteed a reasonable rate of return, a profit! No private parties in business are guaranteed a profit. The PUC reviews agreements between regulated utilities to protect New Hampshire businesses and consumers from poor service from companies that do not have the financial and managerial resources to do the job and to make certain any transfer of assets between regulated utilities is in the public good. This transaction is not.
The transaction has been reviewed by independent experts hired by the PUC and the Office of Consumer Advocate. They agree that the transfer is not for the public good.
FairPoint’s financial viability has been challenged by expert witnesses and by the investment firm Morgan Stanley, which on June 5 stated, “We are concerned that FairPoint’s apparent expectation that it will not be able to generate enough cash to pay its current dividend without the proposed merger with Verizon’s New Hampshire, Maine and Vermont lines suggests that the company is in a vulnerable position.”
The promise of high-speed Internet access has been mentioned repeatedly as the reason the merger is good for New Hampshire. FairPoint has promised to provide DSL service that in today’s environment cannot be termed “high-speed.” It is 20th century technology that will leave New Hampshire forever at a disadvantage with the rest of the country.
More importantly, the promises made by FairPoint are just that, promises. Broadband access is not part of the regulatory authority of the PUC. If money gets tight, FairPoint does not have to deliver on a non-binding promise.
Is there a better way to get high-speed Internet service to New Hampshire? Yes. The New Hampshire Telephone Advisory Board has been charged with finding ways to provide true high-speed service to all of New Hampshire through private industry and state and federal partnerships. As with the highly successful state and federal partnership that created the Eisenhower Interstate Highway system, the 21st century demands that all citizens have access to the best technology, not be left behind with an obsolete and over-priced technology.
The deal is not good for New Hampshire; it is only good for FairPoint and Verizon.
Glenn Brackett is business manager of Local 2320 of the International Brotherhood of Electrical Workers in Manchester.