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6/30/2010
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FairPoint Landline Service Plan Rejected

The Vermont Public Service Board rejected Fairpoint's plan to provide service to former Verizon landline customers.

Embattled FairPoint's effort to dig its way out of bankruptcy in Northern New England suffered another setback as the Vermont Public Service Board rejected FairPoint's latest effort to provide service to landline consumers.

FairPoint, which took over landline service from Verizon Communications' customers, has been stymied for months as it seeks to get a viable business plan approved for Vermont, New Hampshire and Maine residents. Maine regulators have approved a reorganization plan and New Hampshire regulators haven't acted yet on a new reorganization plan.

At the same time, Verizon is seeking to dispose of landlines in a $8.6 billion takeover by Frontier Communications in 14 states. Frontier is working with ADTRAN in an effort to provide service in the 14 states that would include high-speed broadband service. Another move by Verizon to rid itself of landlines in Hawaii resulted in the bankruptcy of the Hawaiian operation.

The Vermont decision presents a new challenge to FairPoint as it likely returns the issue to the drawing boards. The Vermont regulators stated that, "based upon the record before us, we cannot find that FairPoint has demonstrated the financial capability to meet its obligations under Vermont law."

Verizon and Frontier have been working to avoid the problems encountered in the New England States and Hawaii. The FCC has approved Verizon's divestiture plan, which would spin off nearly 5 million mostly-rural landlines to Frontier. Verizon has said it wants to divest itself of many rural landlines so it can "accelerate its focus on wireless, broadband, and global IP networks." Verizon's unions have complained that the companies taking over Verizon's old landlines generally don't have enough financial resources to operate the resources effectively.

Frontier has teamed up with ADTRAN to use the networking provider's Total Access 5000 Multi-Access and Aggregation Platform, its Total Access 1100 and 1200 Series Fiber-to-the-Note (FTTN) products to deliver advanced services including broadband to Frontier's customers in the 14 states.

The landlines to be taken over by Frontier are located in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia, and Wisconsin. Some landlines in parts of rural California are also included in the deal.

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