FairPoint Communications to build New England Telehealth Consortium Network

Telco will provide Ethernet services under $16M, four-year contract
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FairPoint Communications (Nasdaq: FRP) on Tuesday won a four-year, $16 million contract to provide connectivity for the New England Telehealth Consortium (NETC).

Leveraging its VantagePoint network, the telco will provide Carrier Ethernet services to over 400 health care sites throughout its Northern New England territory, including Maine, New Hampshire and Vermont.

Funding for NETC's three-state telemedicine network comes from a $24.6 million Federal Communications Commission (FCC) Rural Health Care Pilot Program. Under the terms of the award, NETC participants will get upgrades and improvements to their broadband capabilities and connections while paying only 15 percent of the initial upfront costs.

Similar to efforts being made in other states like Colorado with its Telehealth Network, the NETC network will provide a much-needed collaborative link for remote trauma consultation and telemedicine between rural health care facilities and urban hospitals throughout northern New England. 

Winning this contract with the NETC is important for FairPoint, serving as another point of validation of its growing retail Ethernet strategy.

Ethernet is increasingly becoming a major revenue source for the telco. While it can be argued that FairPoint is still a relatively new Ethernet player, having only introduced its Ethernet platforms in recent years, it reported that Ethernet services alone contributed about $10.7 million of revenue in Q3 2012, up from $10.2 million in Q2 2012 and $4.2 million in Q3 2011.

In its Q3 earnings statement, FairPoint said it expects further growth in both retail and wholesale Ethernet as "regional banks, healthcare networks [like NETC] and wireless carriers transition away from legacy technologies like frame relay."

For more:
- see the release

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