FairPoint Sale Could Put
New England IBEW Jobs in Jeopardy
April 29, 2014
|Signs show that FairPoint Communications, which operates Verizon’s old landline system in Maine, New Hampshire and Vermont, may be looking to sell to a new buyer. Will 1,700 IBEW jobs be affected?
Photo used under a Creative Commons license from Flickr userBernard Pollack.
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 they prepare for contract negotiations with the company later this month.
“FairPoint has made it clear that they expect this to be a concessionary contract,” said IBEW International Representative Bob Erickson, who will be at the table for negotiations. “The company appears to be positioning itself for a sale at the expense of the employees.”
An analyst with Missouri-based Stifel Financial Corp. recently called FairPoint “a compelling merger and acquisition opportunity,”the Bangor Daily News reported.
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, who directs the Broadcasting and Telecommunications Department at the IBEW’s International Office in Washington, D.C. “Just about everything we said at the time turned out to be true.”
Lawmakers in Maine passed a bill early this month 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 April 19.
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 theBangor Daily News. Worker and consumer advocates had championed the bill, saying that that the constant flux of the often-volatile telecom industry means that a possible FairPoint sale deserves extra scrutiny.
Erickson said there’s an outside chance that such a deal could also end up helping the workforce in the long run, provided that a buyer comes in with the idea of growing the business rather than trying to cash out like the hedge fund shareholders appear likely to do.
“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.”
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.
Homepage photo used under a Creative Commons license from Flickr userTom Hoyle