FairPoint Feeling The Heat

And the hits keep on coming!

FairPoint Communications is in the crosshairs again, with rising customer complaints, poor customer service, billing problems, and a host of other issues that have driven over 80,000 customers away from the company. As an editorial in the Laconia Citizen asks, can FairPoint survive its mis-steps?

Concerns over customer service woes at FairPoint have been in the public’s sights for two months, and pressure has increased for the communications provider to address them. Particularly nettlesome to the company and its customers have been the operation of the company’s call centers, the billing process and how it handles orders.

Earlier this year, an international credit rating agency lowered its outlook for FairPoint from stable to negative because it lost an unexpected number of access lines and customers. Reports in January had the company shedding 80,000 customers since buying Verizon’s assets in Maine, New Hampshire and Vermont.

Today, it seems fleeing customers remain the rule and not the exception.

The Associated Press reported earlier this month that subscribers still are heading for the door to escape the tie of landlines. Subscribers became itchy last year when Verizon sold out. It was a 12 percent loss of subscribers compared to a nationwide average of 7 percent.

Now, reported the AP, more customers are fleeing after experiencing e-mail, Internet and customer service problems in recent weeks.

When FairPoint purchased Verizon’s landline telephone and broadband Internet network last year there were widespread concerns. Approval of regulators in New England’s three northern states came only after months of hearings. Consumer advocates and regulators expressed deep worries about FairPoint’s ability to finance the $2.3 billion undertaking as well as operate and manage an area as large as it was seeking to take over in this corner of the Northeast.

The transfer took place despite the lingering doubts of many observers and some regulators.

I was one of them, as you've seen from earlier posts I made on the subject.

FairPoint bit off more than it could chew, taking on a debt load many times its net worth.

They have plans to deploy a broadband technology that is considered “so yesterday” it's a wonder why they would bother at all. With better technology out there – fiber optics or some of the newer wireless broadband technologies – why deploy DSL (Digital Subscriber Line) when it can't match the speeds of even some of the slower cable Internet providers? While the argument could be made that DSL is cheaper, that is no longer the case. DSL has its limitations, something FairPoint knows quite well. Yet it decided to gamble on this increasingly less effective technology. Is it any wonder they're losing customers?

The consumers in northern New England were sold a bill of goods. FairPoint hasn't delivered as promised, is suffering from falling revenue, has a bad PR problem, and a debt load that would make some Third World nations take a pass.

This isn't going to end well.

FairPoint Communications - A Review

I hate to say this when it comes to FairPoint Communications taking over Verizon's northern New England operations: I told you so.

Way back in late 2007/early 2008 I said the deal to sell Verizon's wireline assets to FairPoint was a bad idea and a bad deal for consumers.

Now that FairPoint is in sole control of the assets, things have been going from barely adequate to worse, with the telecommunications company facing hefty fines, decreasing revenue, loss of customers, and well below average customer service.

FairPoint announced service orders weren't going to be processed until four to six weeks after it made the changeover from Verizon's computer systems to their own around the first of the year. That seemed reasonable under the circumstances. But the changeover was made 3 months ago and service orders made before the changeover still haven't be completed. The wait for a change of service from an old address to a new one is approximately six weeks. Orders for new lines is just as long. (A couple that are friends of ours made the move from Wolfeboro on the north side of Lake Winnipesaukee to the town of Belmont on the south side of the lake this weekend. They put in a service request to have their phone connected three weeks ago. They were told they won't have service until some time in mid to late April at the earliest. I'm betting they won't have service until mid-May. Calling the local cable company, they were told they could have phone service in two days at the latest. Now that's customer service.)

Is it any wonder they're losing customers?

My family made the change to the local cable company's VoIP phone service just after the transaction between Verizon and FairPoint was completed. We saved almost $50 a month since then compared to FairPoint and we're quite happy with the service. Other friends and acquaintances have dumped wired phone lines altogether and use their cell phones exclusively. This is not good news for FairPoint.

Shouldn't The Government Abide By The Constitution?

Why is it government, federal and state, figure they aren't required to abide by either the US or state constitutions? President Obama figures the US Constitution is more of a guideline rather than the law. Governors and/or legislators figure their state constitutions don't apply to them, particularly when it comes to taxes, spending, and restrictions on freedoms.

In my home state of New Hampshire, both the Legislature and the Governor decided some time ago they could ignore constitutionally mandated funding and raid the state highway fund and use the money for purposes other than those required. Though the present governor made mention in the past that the highway find isn't an ATM to be used by the legislature, he's done nothing to stop them from doing just that.

As the New Hampshire state constitution says in Part II:

[Art.] 6-a. [Use of Certain Revenues Restricted to Highways.] All revenue in excess of the necessary cost of collection and administration accruing to the state from registration fees, operators’ licenses, gasoline road tolls or any other special charges or taxes with respect to the operation of motor vehicles or the sale or consumption of motor vehicle fuels shall be appropriated and used exclusively for the construction, reconstruction and maintenance of public highways within this state, including the supervision of traffic thereon and payment of the interest and principal of obligations incurred for said purposes; and no part of such revenues shall, by transfer of funds or otherwise, be diverted to any other purpose whatsoever. (emphasis added)

That seems pretty straightforward to me. There's little, if any, wiggle room. The taxes and fees collected as described in the article must be spent as the article states. I don't see any exceptions, nor any ambiguities that would allow the transfer of hundreds of millions of dollars out of the highway fund to a general revenue fund to be used for purposes that have nothing to do with our highways.

This theft, for that's what it is, has left the highway fund short well over $100 million and that deficit is growing. The answer from the state legislature to fill this hole?

Raise the gas taxes by 15¢.

Yeah, as if the Legislature won't steal that money, too. They've already talked about using the extra revenue to fund and subsidize a commuter rail line between New Hampshire's biggest city, Manchester, and Lowell, Massachusetts. Never mind that to do so would be unconstitutional as a rail line can in no way be considered a highway.

Of course all they would really need to do is return the money they've 'appropriated' from the highway fund and the 'need' for the gas tax hike would disappear. But that would also mean they wouldn't be able to fund a host of other pet projects and unneeded social programs.

It's time for the New Hampshire state legislature to start following the law. It's also time for President Obama to reread the US Constitution and discover that none of his beliefs about the necessity to 'redistribute the wealth' is written anywhere in that document. (But then we must remember that like most leftists, he believes the Constitution is a 'living' document that can be ignored when it's inconvenient for them to follow it.)