FairPoint gains regulatory relief for service pricing in Vermont

FairPoint Communications (Nasdaq: FRP) will now be able to more quickly respond to competitive pricing pressure in Vermont with a new set of regulations.


New regulations are leveling the pricing playing field for FairPoint.

A new four-year regulatory plan approved by the Vermont PUC allows the telco to offer competitive pricing while maintaining pricing on basic PSTN service. Local telephone pricing will be frozen for two years and capped after that period.

Prior to the new regulatory structure, it would take FairPoint up to seven weeks to get PUC approval to offer competitive pricing.

"This isn't 1965 anymore. We are under tremendous pressure of cable and wireless and other companies, and we need the flexibility to have a level playing field to compete," FairPoint President Michael Smith said. "Until this ruling, we did not have a level playing field."

One service that FairPoint will be pushing aggressively on the residential side will be its ADSL2+ broadband service.

Although it has seen continual and expected declines in traditional voice service revenues, broadband service revenues have continued to rise. In Q3 2011, FairPoint's broadband subscriber base grew 8.2 percent year-over-year, up from the 5.4 percent increase in Q2 2011 and a 1.7 percent decline in Q3 2010.

Last March, the service provider said it would bring broadband to 51 communities in Vermont that currently don't have it as part of an agreement to settle $7 million in service quality penalties.

For more:
- see the release
- Boston Globe via AP has this article

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