by Hilary Niles Vermont Business Magazine An agreement between the state and FairPoint Communications to deal with the company’s longstanding service quality issues will be presented to the Public Service Board Thursday morning. The quasi-judicial board has final say over whether to allow the settlement to go through. The accord arguably is more about securing federal funds for network upgrades than putting service quality problems to bed. In exchange for a possible future compromise on service quality, FairPoint has accepted federal money for broadband build-out — and certain obligations tied to that cash.
FairPoint Vermont President Beth Fastiggi said the company agreed to take on additional risk because the state’s Department of Public Service was willing to re-evaluate the regulatory landscape “to help FairPoint operate effectively in this competitive environment.”
The money — about $52.8 million, split into six annual installments of $8.8 million — comes from Phase II of the Federal Communications Commission’s multi-year Connect America Fund. The strings attached: FairPoint promises to deliver broadband Internet service to 28,399 addresses by the end of 2020.
Fastiggi said FairPoint will have to make “significant” investments of its own money in order to meet that obligation, but she declined to provide an estimate of the dollar range that represents.
The minimum transmission speeds FairPoint must meet with the CAF2 service are 10 Mbps download/1 Mbps upload. These funding terms are set by the FCC, though the Commission’s own definition of broadband was updated to 25 Mbps/3 Mbps in January.
According to Jim Porter, Vermont’s Telecommunications Director, between 50,000 to 60,000 addresses in the state currently have less than 4/1 Mbps speeds.
Porter said the deadline for accepting the Phase II Connect America Funds was fast approaching, yet closure on the service quality investigation his office initiated in December 2014 was not.
“To ensure that FairPoint took the CAF2 (federal funding), we entered the MOU,” Porter said. “Anticipating, as does the MOU, that we would take the remaining service quality issues not resolved and put them into another docket.”
Those remaining issues primarily revolve around repair timeliness, a key metric that Porter said FairPoint consistently has failed to meet.
In exchange for FairPoint accepting the CAF2 money and obligations, Porter’s office will support a petition by FairPoint to eliminate such service quality standards for all customers who have a choice of telephone providers.
"We agreed to give (FairPoint) a forum to argue their case on that issue, but we have not predetermined that it is the correct way to go,” Porter said. However, he feels FairPoint may have “a tendency to focus” repair efforts in areas where customers could leave FairPoint if they had a choice.
“And I’m really interested in bettering service for people who do not have an alternative,” Porter said.
Fastiggi stated that FairPoint would like to see some regulatory loosening in areas where service quality standards still may apply, and she expects the slate to be cleared of remedial actions for past failed metrics.
Porter, on the other hand, said he can imagine tighter standards in the areas where FairPoint is still required to report service quality metrics. He said the Department had agreed to not seek remedial measures for missed metrics for the time being, but he made no commitments to a clean slate for past failures.
Until FairPoint petitions the Public Service Board to start a new service quality docket, the company’s obligation to develop remedial action plans would be limited to once per year.
Other issues that would be settled by the MOU include customer bill credits for past outages and upgrades to the state’s E-911 infrastructure, which failed for several hours during a storm last November.
Assistant Attorney General Bill Griffin said his office had not been contacted by the Public Service Board about the possibility of assigning an independent public advocate to the case. In a related proceeding over FairPoint’s five-year regulation plan, the Board has not yet made a decision whether it will be considered under a statute that implies a public advocate should be assigned. That docket is expected to remain on hold until the service quality issues are settled.
The current service quality hearing is scheduled for Thursday, September 17, at 9:30 am in the Public Service Board’s third floor hearing room at 112 State Street in Montpelier. If necessary, the hearing will continue on Friday, September 18, in the same location.
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