Regulators in both Washington and Oregon see Verizon's sale of their networks in the states to Frontier as a deal that carries "lots of risk, but very little upside," according to The Oregonian. Staffers in both states are recommending that utility commissioners reject the massive deal, which would triple Frontier’s size and impose $3 billion in debt. Frontier tells the paper that they're being "too pessimistic" about the deal, saying they hope to create "a very stable, moderately (indebted) company." Frontier executives have been on a country-wide tour trying to convince state regulators that they won't be another Fairpoint Communications.

According to the Burlington Free Press, the bondholders of more than $600 million in FairPoint debt are pushing for an investigation into the company's management. According to the filing Fairpoint, which filed for bankruptcy last week, engaged in action that "reveal(s) a pattern of misrepresentation and questionable decision-making, which merit investigation by an independent third-party." "This Court should not buy into their 'we’ve got it right this time' approach to these Chapter 11 Cases," argues the filing. Fairpoint continues to insist that the restructuring of $2.7 billion in debt obligations should have no impact on residential or business service.

Back in May, Verizon announced they hoped to sell another huge chunk of their DSL and landline network to Frontier. The $8.5 billion deal would infuse Frontier (which currently has 2.3 million customers) with 4.8 million new residential and small-business phone lines across 14 states, 1 million broadband connections, and 11,000 former Verizon employees. Like previous deals with Hawaii Telcom and Fairpoint, the deal would involve the use of a Reverse Morris Trust -- a tricky financial move that allows Verizon to avoid the tax penalties of a traditional sale, while offloading a ton of debt onto would-be suitors. Despite consumer worries this new sale could end the same way these last two did (bankruptcy), regulators in South Carolina, California and Nevada have all unanimously voted yes for the deal.

Yesterday, as you might have heard, Fairpoint Communications filed bankruptcy, but promised customers that things would remain the same -- something not comforting to Fairpoint customers who've grown used to flaky service and even flakier support. The Nashua Telegraph breaks down what Fairpoint owes, noting that the $619 million worth of unpaid bills listed in FairPoint’s US Bankruptcy Court filing is owed to 50 creditors.

As had been expected, Fairpoint Communications has filed for bankruptcy after struggling with the debt incurred when they acquired Verizon's DSL and landline networks in Maine, New Hampshire and Vermont. In a prepared statement, the company said the proceeding would reduce the company's debt load by $1.7 billion.

One person's collapsing telecom empire is another person's expansion opportunity. According to the New York Post, some "big name players" are watching Fairpoint Communication's flirtations with bankruptcy with great interest. Citing a "source with direct knowledge of the process," the Post says Windstream Communications may be buying up debt with an eye on acquiring the company's assets. Fairpoint CEO David Hauser last week talked rather casually about the very real possibility for a Fairpoint bankruptcy, after the company continues to struggle with the debt acquired from Verizon. Windstream meanwhile announced last week they'd be laying off 3% of their workforce to offset continued landline losses.

Maine, New Hampshire and Vermont regulators yesterday took the unprecedented step of collectively meeting in order to question Fairpoint executives on their repeated problems in integrating Verizon's DSL and landline networks in the three states. As you might expect, Fairpoint CEO David Hauser downplayed the problems, giving a prepared speech (pdf) full of the kind of effusive optimism reserved solely for CEOs.

Already under fire for struggling to integrate Verizon's New England DSL networks, Fairpoint Communications was rocked last month by anonymous allegations that they faked network readiness tests in order to gain approval for the deal from regulators. An e-mail sent to regulators by someone who called himself "David Unavailable" suggested that Fairpoint colluded with a consultant to fake a live network readiness handoff test. According to the Bangor Daily News however, the Maine state Attorney General isn't going to continue her investigation into the matter, after she found the tipster's information was second hand and involved no solid evidence. "This would be a very expensive investigation, we would have to hire experts and that is not justified by what I know today," she said.

We've well documented how Fairpoint Communications has all-but imploded from the acquisition of Verizon's Maine, New Hampshire and Vermont DSL networks. The carrier has skirted close to bankruptcy, faces state investigations for incompetence, and is now looking at a possible delisting by the NYSE.

Back in the Spring you'll recall that Fairpoint unveiled a plan to "turn things around," after the telco struggled to integrate acquired Verizon DSL and phone networks in Maine, New Hampshire and Vermont. One problem? As part of an agreement with regulators, the public wasn't allowed to see the plan, or how well the struggling telco was adhering to a weak plan they themselves designed.

As we mentioned late last week, a new SEC filing by Fairpoint shows that the telco may have to file for bankruptcy, as they continue to struggle with the debt load created when they acquired Verizon's New England DSL networks last year. To be prepared, Vermont has hired a law firm with experience in corporate bankruptcy cases. While Fairpoint executives and spokespeople have remained bubbly amidst Fairpoint's problems, the company has stopped responding to press requests focused on the company's financial future. Meanwhile, they've hired a new CEO, who in a letter to employees urges employees to keep moving forward in order to repair Fairpoint's damaged reputation.

Sure, Fairpoint in recent months can barely manage to answer the phone and is facing possible bankruptcy because of a heavy debt load, but that doesn't stop Fairpoint spokespeople from putting on a brave face to the local press. Fairpoint tells the local Vermont Brattleboro Reformer that call volume is returning to normal and the company is getting bills out accurately and on time. The carrier also cites a $90 million plan to deploy a "next generation network" over the next five years, which last we heard was going to be a combination of ADSL2+ and VDSL2 technology -- though it's not exactly clear where they're going to get the money.

Fairpoint's problems in integrating Verizon's Maine, New Hampshire and Vermont DSL and landline networks continue, as the carrier is struggling to pay off the debt acquired from Verizon in the deal. This week FairPoint asked bond-holders that have more than $500 million worth of notes due in 2018 to accept delayed payments, and the company is offering to pay an extra quarter percent of the principle. In a filing with the SEC, the company warns that if more than 5% of bondholders don't take the deal, Fairpoint may not be able to meet debt obligations on October 1, potentially leading to "an alternative restructuring plan (that) may include a bankruptcy." Who could have predicted such problems? Oh that's right, everybody.

With the problems that have plagued Verizon customers in New England, all eyes turn to the regulators who'll rule on Verizon's latest plan to offload of a huge swath of rural customers to Frontier Communications. The $8.5 billion deal immediately infuses Frontier, which has 2.3 million customers, with 4.8 million new residential and small-business phone lines and 1 million broadband connections.

Fairpoint continues to struggle with taking ownership of Verizon's Maine, New Hampshire and Vermont DSL and landline networks. In a nice deal for Fairpoint, the same regulators who couldn't see problems during the deal approval process -- have allowed the company to implement a top secret improvement plan customers don't get to see -- discussed this week in a closed-door hearing that consumers don't get to attend.

Fairpoint Communications, which has been struggling to manage the New England DSL & landline networks acquired from Verizon -- suspended collection of past due DSL and landline bills last January as they sorted out management of the new networks. The company had planned to resume debt collection last week, but New Hampshire regulators are telling them to hold off until they fix some of the problems plaguing customers. Fairpoint's had particular problems with their billing systems -- in many cases overcharging users, or continuing to charge users after they terminated service with Fairpoint.

According to the Concord Monitior, Fairpoint Communications is getting a $50 million infusion courtesy of New Hampshire regulators to help stabilize the company's troubled finances. The money, paid into a fund by Verizon last fall, was intended for capital and operating expenses in just New Hampshire. That would have included expansion of broadband service, something Fairpoint promised as part of their effort to sell regulators on the acquisition of Verizon networks in New England. The money instead being used to help Fairpoint attempt to avoid having to restructure. If only Fairpoint could take back those raises of up to 30% doled out to company executives last year -- apparently they need all the extra money they can get.

When Verizon divested their landline networks in Hawaii, the result was a largely dysfunctional company named Hawaii Telcom that struggled under the load and filed for bankruptcy last December. When Verizon divested their landline networks in Maine, New Hampshire and Vermont last year, the result was a largely dysfunctional company named Fairpoint Communications that struggled under the load and has very serious problems.

According to the Portland Press Herald, Fairpoint CEO Eugene Johnson saw a 30% increase in base salary, while six other top managers saw raises averaging 23%. Of course normally this could be considered a nice reward for a job well done, but thus far the carrier has botched the acquisition of Verizon's New England network, and consultants hired to monitor the integration say executives repeatedly understated the degree of dysfunction. The company recently suspended quarterly dividend payments to investors and lacks the support systems to handle a massive backlog of new service and repair orders. Some Fairpoint customers haven't had e-mail service since January.

As Fairpoint continues to struggle with taking ownership of Verizon's Maine, New Hampshire and Vermont DSL and landline networks, regulators have been pushing the carrier for a detailed timeline of planned improvements. Facing massive work backlogs of 40% and customers who sometimes spend hours on hold without ever reaching a human being, Fairpoint has announced a ten week plan to get things back on track.