The Electrical Worker online
June 2014

FairPoint Sale Could Put New England IBEW Jobs in Jeopardy
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When telecom company FairPoint Communications first bid to take over Verizon's New England landline service in 2008, there were both promises and worries.

The promises were the possibility of jobs. In addition to touting planned broadband Internet upgrades, FairPoint predicted nearly 700 new jobs would be created in New Hampshire, Vermont and Maine once it assumed control of the Verizon system.

The worries were that a small, regional company wouldn't have the necessary technology or human power to maintain or improve upon landline and Internet services that Verizon had offered customers for years.

In 2009, the worries won out. Lacking the necessary company infrastructure to maintain the three-state system, FairPoint issued inaccurate bills to customers, failed to repair necessary services and even had to provide $11 million in credits because of its shoddy performance to ratepayers. In 18 short months after the deal went through, FairPoint declared bankruptcy. The promised jobs never materialized. Instead, IBEW locals in the tri-state area all saw members endure layoffs.

Now, after FairPoint has spent three years climbing out of bankruptcy and investing in a baseline level of infrastructure, labor and community activists are wary that the company is maneuvering itself for yet another sale. This could play havoc with the livelihoods of more than 1,700 IBEW members in the region, as activists proceed with new contract negotiations that began in April.

"FairPoint has made it clear that they expect this to be a concessionary contract," said IBEW International Representative Bob Erickson, who is helping lead negotiations. "The company appears to be positioning itself for a sale at the expense of the employees." One financial analyst called FairPoint "a compelling merger and acquisition opportunity," the Bangor Daily News reported in April.

That's good news for four of the company's top five shareholders, which are corporate hedge funds.

"Wall Street investors are not interested in growing the company for the long haul," Erickson said. "They are interested in getting a quick return on their investment."

None of which comes as a surprise to other IBEW leaders and activists close to the FairPoint workforce.

"Prior to the deal in 2008, we anticipated and predicted that the company would run into significant trouble, that the cutover from Verizon would be disastrous," said Martha Pultar, IBEW Broadcasting and Telecommunications Department Director. "Just about everything we said at the time turned out to be true."

Lawmakers in Maine passed a bill in April to help ensure that any sale or merger of the state's biggest telecom provider would result in a "net benefit" for citizens – but Gov. Paul LePage vetoed the legislation later that month.

The bill would have allowed the state's Public Utilities Commission greater authority in deciding whether or not a potential deal with a new buyer goes through.

"This bill was an opportunity for us to raise that bar of approval for a new sale," Augusta, Maine, Local 2327 Business Manager Peter McLaughlin told the Bangor Daily News.

"If a company buying FairPoint has an interest in investing in new technology and products, that could be a win-win for the consumers and the employees, as it would help ensure that our members continue to have steady work," said Erickson.

The IBEW represents FairPoint workers out of Manchester, N.H., Local 2320; Montpelier, Vt., Local 2326; and Augusta Local 2327. The workers comprise IBEW's System Council T-9. Their contract expires on Aug. 3. FairPoint is seeking a 60 percent reduction in starting salaries for new hires and other concessions.

On May 12, members of IBEW and CWA attended FairPoint's annual shareholder meeting, calling for fairness in negotiations, contrasting the company's concessionary demands with the 37 percent increase in pay for CEO Paul Sunu since 2011. "We believe every working person deserves respect and a fair deal. FairPoint, a company based right here in North Carolina but owned largely by Wall Street hedge funds, is attempting to destroy good jobs in northern New England. We came out today to support our brothers and sisters who traveled more than 1,000 miles to demand justice," said Ashley Howard, a trustee of the Southern Piedmont Central Labor Council.

For more upcoming reporting on bargaining at FairPoint, visit


Signs show that FairPoint Communications may be looking to sell to a new buyer.

Photo used under a Creative Commons license from Flickr user Bernard Pollack.