Sale of FairPoint Comm: New York

Over the course of the last few months, a number of state regulatory agencies have considered the proposed acquisition of a local exchange carrier (LEC) group, FairPoint Communications, by a telecommunications conglomerate, Consolidated Communications Holdings. Soon after the FCC took action to authorize the merger to proceed, other states began to follow suit. New Nork relied on proposed settlements in ruling that the merger should be approved.

FairPoint's operations in New York, through three small LECs, also resulted from its acquisition of Verizon's assets. Not surprisingly, then, the proposed settlement before the New York Public Service Commission mirrored many of the same terms and conditions as had been presented in Maine and New Hampshire. 

The commission reported that the stipulation requires Consolidated to continue current staffing levels at the three LECs for at least the next two years and to make certain minimum investments in system improvements. More particularly, the commission said that Consolidated must provide at least $4 million in funding for network reliability and service quality improvement projects. 

The company also must undertake work to expand digital subscriber line Internet service to add at least 300 more customer locations over the next three years. The settlement instructs Consolidated to secure a $2 million letter of credit to be held until the above-listed directives have been met. 

The commission echoed the sentiments of its neighboring regulators in finding that FairPoint customers should be able to avail themselves of a broader array of products and services on a post-merger basis, in light of Consolidated's superior financial and operational position, especially with respect to broadband offerings. The commission averred that the merger transaction should assure greater coverage and increased speed for broadband services. 

The commission added that, as a consequence of the acquisition, New York consumers also can expect to see new service options not available now in all service districts, including video streaming, home automation, and security services. Re FairPoint Communications, Inc. et al., Case 17-C-0050, June 15, 2017 (N.Y.P.S.C.).