USTelecom urged the FCC to approve Verizon’s wireline spinoff to ...
USTelecom urged the FCC to approve Verizon’s wireline spinoff to FairPoint in a July letter, FairPoint said Tuesday. The transaction is “pro-consumer” since rural telco FairPoint is more focused than Verizon on rural customers’ needs, said USTelecom. FairPoint wants…
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to acquire Verizon wireline operations in Maine, Vermont and New Hampshire. FairPoint shareholders will vote on the transaction Wednesday. Meanwhile, unions sent FairPoint shareholders paper bags urging they vote “no” on the deal they said would “pose unacceptably high risks” that could “leave shareholders holding a costly bag” of customer complaints, old equipment and expensive PUC findings, the Communications Workers of America said Tuesday. “The cash flow from these access lines will have to be plowed back into network upgrades in order to satisfy regulators and customers who are demanding improved service quality,” said Chris Shelton, vice president of CWA District 1. “Management’s projected profit windfall from this deal is an illusion.” The International Brotherhood of Electrical Workers agreed: “We are concerned that FairPoint’s business model is to acquire small companies and then use the cash flow from those companies to pay inflated dividends at the expense of the long-term health of the company,” said Jim Voye, IBEW research director. “But that model won’t work in New England. The telephone lines and equipment are old and there are potentially costly regulatory decisions pending.”