We Saw This Coming: Debt-Ridden FairPoint Declares Bankruptcy

Rand Wilson

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After months of speculation, FairPoint Communications Inc. — northern New England’s dominant telecommunications company — today declared bankruptcy.

As the telecom unions have consistently maintained, FairPoint’s problems were caused primarily by its crushing debt and an organizational chaos that adversely affected revenues and operations. Despite waging an all out campaign to oppose the sale of Verizon’s networks in Vermont, Maine and New Hampshire last year, thousands of former Verizon workers have spent the last year-and-a-half working to make their new company succeed.

Now that bankruptcy is here, it is imperative that management and labor move forward in a way that will restore financial and operational stability, improve service to customers and expand broadband.

Some officials have suggested concessions from employees, but union leaders have been clear.

If FairPoint is to recover from bankruptcy and get back on its feet, it will need the focused dedication and professionalism of its workforce,” said Pete McLaughlin, chairman of International Brotherhood of Electrical Workers, SCT‑9. Demanding cuts in labor costs from employees who aren’t in any way to blame for the company’s woes is the wrong way to go,” he said, continuing:

The overwhelming burden of billions of dollars in crushing debt cannot be solved by nickel and dime-ing’ our union contracts. And such attacks will be counter-productive to any attempt to improve operations and the quality of service for our customers.


Wall Street vs. Main Street?

With bankruptcy, FairPoint’s lenders will likely move firmly into the drivers’ seat. Without coordinated action by public officials, regulators, management and labor, the interests of Wall Street could take precedence over the interests of New England communities and customers.

The creditors seem to be taken care of, but that doesn’t mean the consumers’ interests have been protected,” said Maine Public Advocate Richard Davies, who represents consumers. Davies said he needs more details to determine how the bankruptcy filing will affect customers,the AP reported.

FairPoint’s business and residential customers must be protected against continued dysfunctional operations that have inadequately served customers needs. The company, based in Charlotte, N.C., operates phone companies in 18 U.S. states, with a total of 1.65 million lines.

We’ll use every means at our disposal to mobilize our elected officials and the public to defend quality service,” said Don Trementozzi, president of CWA Local 1400. Our union and legal experts are on deck to provide a no-nonsense analysis of events as they unfold. We won’t let the public be fooled again.”

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Rand Wilson is an organizer and chief of staff at SEIU Local 888 in Boston.

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