Update: Verizon's Sale of Maine, New Hampshire and Vermont

I've written here in the past about Verizon's pending sale of their Maine, New Hampshire and Vermont networks to Fairpoint Communications. Here are some highlights on the sale taken from a Burlington Press piece written yesterday:

• The sale represents roughly 1.6 million land lines in the three states.
• Sale price is $2.72 billion which, without any dept relief, would put FairPoint into $2.5 billion of debt
• Proposed deal has Verizon giving Fairpoint $235 million in debt relief.
• Maine has approved the sale but has not written a final order yet.
  
• Last week the staff of the New Hampshire Public Utilities Commission recommended state regulators sign off on the deal.
  
• Vermont's Public Service Board is currently meeting on FairPoint's proposal.
• Fairpoint has agreed to cut dividends to shareholders by $50 million a year and will not be permitted to raise the dividend until its debt ratio has been lowered.

Each state must approve the sale individually so each is also negotiating based on their own needs. For example:

• In New Hampshire, the proposed deal calls for Verizon to give FairPoint $50 million over two years to help build infrastructure and make high-speed Internet access available to 95 percent of the customers by a certain date.
• In Vermont, the proposed deal calls for 80 percent high-speed Internet availability by 2010 -- and a requirement that all customers in at least half of FairPoint's telephone exchanges have access to broadband Internet service.
• In Maine, FairPoint has agreed to freeze DSL rates for existing Verizon customers at $15 to $18 a month for two years.

Much of the discussion has been around the huge amount of debt Fairpoint would assume if the sale happens. Saddled with this debt, many are concerned about Fairpoint's ability to upgrade existing services as expensive higher bandwidth technologies go mainstream. Sure, current ADSL offerings scream when compared to dial-up but - we won't be saying that in a few years.

I'm trying to remain optimistic - is there another more cost effective technology (perhaps WiMAX, higher bandwidth DSL or even Broadband over Power Line, etc....) that will make these concerns moot? Time will tell if the sale gets final approval.

FCC, Vermont and Maine OK Verizon / Fairpoint Deal

The state of Vermont has tentatively reached an agreement with Verizon and Fairpoint Communications on Fairpoint's $2.7 billion purchase of Verizon landlines in Maine, New Hampshire and Vermont. The Vermont proposal still has to be approved by the Vermont Public Service Board. According to an Associated Press article:

The proposal, which must be approved by the three-member Vermont Public Service Board, essentially mirrors a stipulation already reached by Maine regulators. It calls for a $235 million reduction in the purchase price, reduced dividend payouts that would free more money for debt service and some special accommodations for Vermont.

The Maine Public Utilities Commission approved the purchase last week with New Hampshire still awaiting approval. Perhaps jumping the gun, the Federal Communications Commission voted 3-2 yesterday to approve the sale.

Here's a quote from a Burlington Free Press article written today:

Two FCC commissioners voted against approving the transaction. "If the seller is not committed to ubiquitous broadband deployment, then letting someone else with more commitment do the job makes sense. But if the buyer is shackled by the costs of the agreement, it becomes more difficult to see how the public interest is served," FCC Commissioner Michael Copps wrote in a dissenting opinion.

Commissioner Copps has also questioned why the FCC is issuing a ruling before all three of the state's regulatory agencies have reached decisions.

My 2008 Top 12 Prediction List

2007 was a busy year and things do not look like they will slow down in 2008. Here's my personal top 12 predictions for the year in no particular order:

1. Apple announces new 3G iPhone at MacWorld. 3G service will be switchable to conserve battery. New iPhone will also have at least internal storage with SD Card slot.
2. First generation Google Phone will be OK but just OK as the bugs get worked out. However.......... just wait for the second generation!
3. Patriots go undefeated and win Super Bowl - how can I resist this one?!
4. Verizon northern states (Maine, Vermont and New Hamshire) sale to Fairpoint Communications is halted by one of the 3 states.
5. Google wins 700 MHz spectrum auction. First Google "telephone" trucks appear on Bay area highways.
6. Celtics win NBA championship - this one is a stretch!
7. Verizon offers 100 Mbps symmetrical data service to FiOS customers
8. Google Docs, Spreadsheet and Presenter webware become available offline.
9. Microsoft goes on buying and marketing spree in an effort to keep up with Google's webware applications.
10. Red Sox win American League pennant but are upset in the World Series.
11. Comcast launches DOCSIS 3.0 100 Mbps data service to compete with Verizon's 100 Mbps FiOS service.
12. Video and image search will go mainstream..... watch for my video podcast interview with Atalasoft President Bill Bither coming soon - it's been shot and is being edited now!

As much as I love hockey I'll skip the Bruins this year....... Looking at these 12 - minus the Sox, Patriots and the Celtics - the web has become the development platform of choice with high bandwidth access and availability required on any connected device......... You ain't developin' if it won't run in a web browser!

Happy New Year!

Vermont Public Service Board Denies FairPoint Communications’ Planned Purchase of Verizon Landline

The Vermont Public Service Board has denied Fairpoint Communications planned purchase of Verizon landlines in the state. The $2.7 billion deal also involves the purchase of Maine and New Hampshire land lines. If one state kills the deal it is dead for all three states.

Here's a piece from the Burlington Free Press:

The Board found that FairPoint had not demonstrated that it would be financially sound as it seeks to operate the newly-acquired territories in Vermont, Maine and New Hampshire — a service territory that has five times the number of access lines as FairPoint presently has. However, the Board also explained that except for the financial risks associated with the transaction, it could approve the merger, subject to a series of conditions.

The Board did say that it was open to FairPoint submitting revisions that addressed its financial concerns.