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Staff photo by Don Himsel A Fairpoint Communications crew works on fiber optic lines on Route 13 near Mont Vernon Center Monday, October 26, 2009.
Sunday, December 27, 2009

FairPoint didn’t fare well in 2009

For the region’s telephone system – a term that increasingly sounds out of date – 2009 was a year to forget.

In 2008, North Carolina-based FairPoint Communications bought the landlines in New Hampshire, Vermont and Maine from Verizon, including its phone system, its DSL Internet and the fiber-optic network in Nashua and parts of southern New Hampshire. The unprecedented $2.4 billion purchase of 1.4 million lines increased FairPoint’s size fivefold, raising both hope and worry about the region’s telecommunications future.

Things went well until Jan. 31 of this year, when Verizon transferred roughly 600 computer systems to FairPoint’s roughly 60 systems, most of which handled things such as billing, scheduling of repairs and creating new accounts.

The first problems began almost immediately when tens of thousands of people couldn’t use their e-mail, largely because the databases inherited from Verizon didn’t match each other. Complaints soon flooded in to regulators as phone bills were wrong, new accounts couldn’t be started, other telecommunications companies that use FairPoint as a backbone were shut out and people reported being on hold at call centers for as long as eight hours.

By the summer, all three states were holding hearings lambasting FairPoint officials. Vermont went so far as to threaten FairPoint’s license to operate as a phone company in that state.

The company promised to improve, but problems were still reported by December.

FairPoint’s finances soon buckled under the triple whammy of losing income because of billing problems, a decline in landline customers being echoed around the country and having its lending costs soar because of the credit crunch.

In October, FairPoint declared bankruptcy, and as of the end of the year was still preparing a plan to salvage its finances, pushing the deadline back to Jan. 15. Its financial future remains unclear.

On the bright side, FairPoint notes that few, if any, problems showed up in the telephone system itself. This fall, it completed work on a fiber-optic “backbone” that it says will eventually allow it to bring a new, faster version of DSL broadband over “twisted copper” telephone lines.

Just before Christmas, FairPoint unveiled a new “bundle” program, combining phone, Internet and Direct TV over satellite at a rate below that offered by most cable-TV companies that have phone service. Peddled by a fuzzy mascot named Bundler, it marked the company’s first efforts to drum up new business and get income that isn’t dependent on the desire for a dial tone.

It seems almost certain that 2010 will be better for FairPoint than 2009, since it could hardly be worse. Whether it will be better for customers who depend on telecommunications remains to be seen.

– DAVID BROOKS