FairPoint/Verizon

FairPoint Communications
After filing for Chapter 11 bankruptcy protection in 2009, FairPoint ultimately sold itself to Consolidated Communications.

FairPoint’s $2.7 billion purchase of Verizon’s Maine, New Hampshire and Vermont wireline network in 2007 is an example of how serious network consequences can emerge if a network cutover is not implemented properly. A series of regionwide issues affecting network operations and customers quickly ballooned after FairPoint moved Verizon’s operations onto its own back office systems.

Problems emerged quickly. In February 2009, FairPoint received over 13,000 calls from customers in Maine, New Hampshire and Vermont who had trouble with their email service. At that time, Vermont’s Public Service Department (PSD) reported a high level of complaints, including billing errors, repair issues and an inability to reach customer service representatives.

But email was just the tip of the iceberg of problems that arose following the cutover. In Vermont, an outage prevented some customers from calling out of state—or from reaching FairPoint’s customer service representatives. The issues got so bad in Vermont that the state’s PSD considered revoking FairPoint’s license to operate as a service provider.

As the telco struggled to fix the issues, Maine regulators turned down FairPoint's plea to waive $845,000 in penalties it owed to local wholesale service providers that leverage the ILEC's network facilities, while New Hampshire’s state Public Utilities Commission launched an investigation to get to the bottom of FairPoint's issues.

Later, in October 2009, FairPoint filed for Chapter 11 bankruptcy protection. Under the restructuring plan it reached with "supporting lenders" that held more than 50% of the ILEC's outstanding debt, FairPoint cut $1.7 billion of its debt.

While it waded through the Chapter 11 restructuring process, FairPoint had to work with not only creditors but also the states where it operated service. Initially, the Vermont Public Service Board rejected FairPoint’s restructuring plan, for example.

Making matters worse, a fraudulent transfer lawsuit was also filed in North Carolina by a FairPoint litigation trust, arguing that the purchase of Verizon's New England lines was the main reason the smaller telco went bankrupt 18 months after completing the deal.

What was the result of FairPoint’s Northern New England push? Following the rollout of a sizable fiber network and a crippling union strike in 2014, FairPoint sold itself to Consolidated Communications in a deal that closed earlier this year.

 

FairPoint/Verizon