FairPoint Communications' acquisition of former Verizon Communications properties in New England has been more than 14 months in the making, and is scheduled to finally be completed today. However, the much-debated deal can't seem to go quietly. Regulators in New Hampshire and Vermont gathered at the virtual eleventh hour Sunday to mull the news that interest rates had increased on bonds being used to help pay the acquisition price tag of more than $2.3 billion. The increase from 8.5 percent to 13.5 percent means that FairPoint will need to cover several million dollars more per year than previously expected.
FairPoint insists it can handle the bigger chunk of debt, but this is exactly the sort of "what if" scenario that many critics of the deal were worried about. Ultimately, New Hampshire and Vermont regulatory commissions both let the deal pass Sunday without further delay (Maine regulators met on the issue Friday, and re-affirmed support for the deal). In an age when the largest telcos are spending much of their time and money on suburban broadband upgrades, this takeover still seems like the best possible outcome for mostly rural customers in Maine, New Hampshire and Vermont. They will now be served by a telco whose only focus is to serve smaller markets and rural customer profiles, instead of being near the bottom of the to-do list for a much bigger telco.
However, FairPoint officials now need to come through on their promises of better service and broadband upgrades. If they stumble even slightly, the wrath of regulators awaits them. What's your forecast for FairPoint's fate in New England? Post a comment and let us know.
- FairPoint last week struck an agreement to gain union support for the deal