Portland Phoenix Reveals Ugly Side of Verizon/FairPoint Merger

Fairpoint-Verizon Deal Depends on Union Workers Not Getting a Raise for Seven Years


Contact information:
Peter Kadzis
executive editor
Phoenix Media/Communications Group
pkadzis (at) phx.com

Jeff Inglis
managing editor
Portland Phoenix
207.773.8900 x108
jinglis (at) phx.com

PORTLAND, Maine – This morning, the Portland Phoenix exclusively reports that the FairPoint-Verizon deal, which would put all of Verizon’s northern–New England telecommunications resources in the hands of FairPoint communications company, is based on a series of bad financial assumptions, including that labor unions will accept zero-percent raises for seven years, and that gasoline prices will remain constant until at least the year 2015.

The story, “No Raises for Seven Years,” is based on filings with the Maine Public Utilities Commission, and is available in print and on the Phoenix’s website, www.thePhoenix.com. It addresses the $2.7 billion merger deal between the two publicly-traded communications companies, which is under review by public-utilities regulators in Maine, New Hampshire, and Vermont.

The story, by Portland Phoenix managing editor Jeff Inglis, also reveals that, should the merger proceed, FairPoint’s financial plans include:

  • Spending no more money in 2015 than in 2008 on operating its telephone and internet services in Maine, New Hampshire, and Vermont.
  • Reducing shareholder equity by $1.1 billion, 25 percent more than the company has publicly stated elsewhere.
  • The possibility that there will be no money available for FairPoint to pay of about $2 billion in debt.
  • Losing money on the broadband-internet technology the company asserts will be the biggest benefit to its prospective new customers (DSL).