"Our biggest concern is that this is not the start of something bigger," Jortner says. "We really need to get some reassurances." He expects to get that data and have formed an opinion based on it by March 13, and the Maine PUC may hold a hearing on March 16.
The picture gets worse. FairPoint is losing customers at a steeper-than-expected rate, which is, in turn, reducing its income. At the same time, FairPoint has warned federal regulators that its troubled transition to a new billing system — which meant delays in sending out bills, leading to receiving payments later than projected — could mean further cash shortages, even taking into account the suspended dividend.
And that's actually a best-case scenario. While Nevins says the billing system is now working properly, dozens of other systems still need to be transitioned. And buried in pages of boilerplate warnings about the future (such as the non-startling "the price of our common stock may fluctuate substantially"), the March 4 filing warns that "Due to, among other things, the size and complexity of our Northern New England operations, . . . we may be unable to integrate the (former Verizon) business in an efficient, timely and effective manner."
Even if they get it working, there will be far fewer customers to serve than FairPoint was hoping for. While numbers are not yet in for the first quarter of 2009, which includes the first months that FairPoint was actually running the show, 97,000 Maine residential customers have dropped their landlines since January 2007, when the sale was announced. Residential subscriber numbers dropped 7.3 percent in 2007, but as the sale approached, the decline accelerated, with an additional 10.5 percent of residential customers dropping service in 2008.
Many of them have gone to cellular phones or telephone service provided over the Internet, often via phone-Internet-TV packages sold by cable television companies. And FairPoint has recently re-emphasized its longstanding position that the key 21st-century telecom technology, fiber optics, is not in its plan — the company told the Wall Street Journal that a private plan for several Vermont communities to build their own fiber network "isn't necessary." Rather, FairPoint plans to bring them much-slower DSL service — eventually.
Other related stories:
“Will FairPoint Run Out of Money?” September 19, 2008
“We Told You So,” July 4, 2008
“A Bad Idea Triumphs,” February 29, 2008
“No Raises — It Gets Better,” November 20, 2007
“No Raises For Seven Years,” November 16, 2007
“Internet Disconnect,” August 24, 2007