The quasi-judicial Public Service Board questioned representatives of FairPoint Communications and the Public Service Department Thursday about a memorandum of understanding that would end a nine-month board investigation into the company.
The board has been looking into FairPoint telephone service delays and an outage last year that brought down Vermont’s E-911 system.
Under the terms of the memorandum, the Public Service Department says it is satisfied that FairPoint is adopting the key recommendations of an expert who studied the outage affecting E-911 service.
The company also agrees to do a better job informing customers who are due credits on their bills for lost telephone service.
FairPoint will also provide as many as 22,700 bill credits to customers who experienced outages.
Under the proposed settlement the department agrees to join the company in asking the board to review FairPoint’s service quality requirements with an eye toward revising them.
Both the company and state agree that the requirements should apply chiefly to FairPoint’s customers who have no other available telephone service, instead of all of the company's customers.
FairPoint’s Vermont president Beth Fastiggi said news stories about service problems hurt the business.
She says none of the company’s major competitors — like cable and wireless companies — are singled out in the same way, because the service quality standards don’t apply to them.
“I understand why we’re here and I’m not saying we didn’t have a lot of missteps, but in this day and age to be the only competitor that is supporting service quality, it’s frustrating,” Fastiggi told the board.
"I understand why we're here and I'm not saying we didn't have a lot of missteps, but in this day and age to be the only competitor that is supporting service quality, it’s frustrating." - Beth Fastiggi, FairPoint’s Vermont president
The settlement also contains something the Public Service Department very much wanted: FairPoint agrees to accept nearly $50 million in federal funds to improve broadband service to more than 28,000 Vermont addresses.
The money is available through a Federal Communications Commission program called CAF II and will also require a significant investment by the company. Because of that investment, Fastiggi said the company is taking a risk in agreeing to accept the funds.
Jim Porter, director of the Division of Telecom and Connectivity at the Department of Public Service, told the board that without an agreement to end the investigation the state feared FairPoint would not apply for the CAF II funds.
“I think that was something that required a vote of the board of directors and certainly the department had some concerns that having the open proceeding as we did might not weigh in our favor,” Porter said.
Porter says while the company and the state generally agree that service quality standards should change, he expects they will disagree on what the requirements should be and which customers they should apply to.
For their part, board members questioned the department and the company about why FairPoint’s customers would be better off with the agreement.
It’s possible the board will want to amend the agreement, but a lawyer for FairPoint cautioned that the company may not accept additional terms.
Whether the settlement will ultimately receive the board’s blessing remains to be seen, but outside the hearing, Irv Thomae expressed misgivings.
Thomae is the chairman of EC Fiber, a community-owned fiber-optic broadband provider in central Vermont.
Because FairPoint is a regulated Price Cap Carrier it is first in line for the federal broadband funds.
Thomae says that’s one of the benefits FairPoint derives from the regulations it is seeking to change.
“FairPoint complains about the regulations to which its subject. But there are major privileges that go with those regulations including the fact they had the right of first refusal on this CAF II money,” said Thomae.
"FairPoint complains about the regulations to which its subject. But there are major privileges that go with those regulations including the fact they had the right of first refusal on this (federal funding) money." - Irv Thomae, EC Fiber
Thomae says he’s disappointed the state is encouraging FairPoint to take money that will be used to provide broadband speeds that may not meet the FCC’s current definition of broadband — or Vermont’s future needs.
But during testimony before the Public Service Board, Porter said the investment in broadband is critical and the impact will be “enormous.”
