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Verizon-FairPoint Deal Approved;
Union Objections Win Key Concessions

Febrary 28, 2008

More than a year of an all-out campaign ended on Monday, Feb. 25, when FairPoint Communications cleared its final hurdle to purchase Verizon’s land lines operations in Maine, New Hampshire and Vermont.

The New Hampshire Public Utilities Commission approved the $2.35 billion deal. With that, the IBEW and the Communications Workers of America, which together represent 2,500 workers in those states, have vowed to work with the new company to move forward.

"I want to assure everyone that we will do everything possible to work constructively with Verizon and FairPoint for a smooth transition," said Frank Carroll, vice president of the IBEW’s New England region. "Our members will work with our new employer and regulators to ensure that customers obtain the highest quality and most advanced services that FairPoint can provide."

Although the unions worked for more than a year to stop the deal, the new attitude toward what will become the eighth largest telecommunications company in the country reflects the mutual respect gained in tough bargaining that produced key improvements to the deal that will help both union members and customers in the states.

The New Hampshire PUC acknowledged labor's contribution to the debate in its Feb. 25 decision: "Although they did not endorse the settlement agreement, in our judgment the labor intervenors' participation was key to the improved outcome."

Those “labor intervenors” were able to wrangle $362 million more about of Verizon toward the deal, and convince FairPoint to cut its dividends by at least $200 million to reduce its debt load.

Manchester, N.H., Local 2320 Business Manager Glenn Brackett praised those who spoke up to oppose the sale. "We can take comfort in knowing that because of our involvement, FairPoint will be stronger financially than it would have been under the original deal.”

FairPoint, based in Charlotte, N.C., will increase its size fivefold with this purchase. The deal is expected to close on March 31. IBEW leaders are already talking to their counterparts at FairPoint. Those efforts are expected to intensify once the transaction is complete.

While the IBEW does what it can to smooth the transition to new ownership, some longtime members have decided to opt for retirement. International Representative Bob Erickson, a former Verizon technician and business agent at Manchester, N.H., Local 2320, said the concern is that a great deal of institutional knowledge of the lines will go with them. “They are mentors for a lot of the younger people,” Erickson said. “FairPoint may have a problem replacing them in the near term.”

But, as many expressed during the past year, these employees are worried about their health insurance and pension benefits under a new owner. “There is a lot of apprehension about whether pensions and retiree benefits will remain intact,” said Telecommunications Department Director Martha Pultar. 

FairPoint agreed during the approval process to expand broadband availability in Northern New England with high-speed video capability, which would translate in more opportunities for members. “We are hopeful that FairPoint will introduce next-generation technology,” IBEW International President Edwin D. Hill said.

Now the unions and community activists and residents will closely watch FairPoint to ensure that it follows through on its commitment to the three states. But for now, at least some are giving the company the benefit of the doubt. “Telephone customers in Northern New England are better off with a telephone company that is publicly committed to serving the state than with one that was looking for a way to unload this part of its business,” an editorial in the Burlington (Vermont) Free Press said.