Sale of FairPoint Comm: Vermont

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. Vermont relied on proposed settlements in ruling that the merger should be approved.

Joining its regulatory compatriots in Maine and New Hampshire, the Vermont Public Service Board concluded that those settlement terms requiring minimum annual capital investments and a minimum two-year employee stay-out provided assurances that the acquisition of FairPoint by Consolidated would be in the public interest. The board ruled that Consolidated's size, operational expertise, and access to financial resources would facilitate financial stability for the FairPoint system. 

Plus, the board said, the deal will give FairPoint more flexible access to capital and also will introduce greater diversity among sources of revenue, by targeting expanded broadband and other communications services. The board asserted that the merger will allow for advanced telecom technologies to finally make their way to the state. 

The board deemed especially praiseworthy the fact that the parties had consented to terms under which Consolidated commits to reinvesting an annual average of 14% of its Vermont revenues in various infrastructure upgrades and service additions. The board pointed out that besides that minimal annual investment, Consolidated must provide another $1 million each year for purposes of addressing those areas of the state with recurring and ongoing service quality problems. 

The board remarked that after years of enduring sometimes spotty service, too-frequent service outages, and unfulfilled promises of system improvements, it was persuaded that Consolidated could turn the ship around. The board added that access to reliable and reasonably priced broadband services can be a key factor in driving economic development and luring more business to the state. It therefore declared the planned merger to be consistent with state goals for building its economic base. Re Consolidated Communications Holdings, Inc. et al., Case No. 8881, June 26, 2017 (Vt.P.S.B.).