FairPoint's ongoing troubles reflected in second-quarter loss

FairPoint Communications just can't get a break. Not only has the ILEC been hampered by problems with the cutover of the New England lines it purchased from Verizon in February, but now debt restructuring costs and lower sales caused it to post a $17.8 million second-quarter loss. Overall earnings in the quarter were $99 million, a reflection of lower revenue, higher operating expenses, and mounting debt expenses, as well as a recent private exchange offer [1] for its outstanding senior notes. Meanwhile, second-quarter revenue was $299.6 million, down from $311.6 million in the first quarter of 2009.

Ongoing operational issues in its New England territory likely contributed to FairPoint's financial troubles. Recently, an anonymous e-mail emerged that the service provider apparently faked readiness [2] to take over the lines. FairPoint conducted its own investigation and could not find evidence that such activities occurred.

But there does appear to be some light at the end of the tunnel. A spokesman for the Vermont Department of Public Service spokesman told [3] the Burlington Free Press the agency will not investigate e-mail claims that FairPoint faked its readiness for the cutover from Verizon in its New England regions because "there does not appear to be enough corroborating evidence to conclude whether the allegation is accurate or inaccurate."

For more:
- Nashua Telegraph has this article [4]

Related articles
The rural space-time continuum [5]
FairPoint disputes Verizon cutover readiness allegations [2]
Vermont's telecom regulators are losing patience with FairPoint [6]
FairPoint reworks its capital structure [1]