FairPoint Regulation Focused On Quality Measures And Cost Of Basic Phone Service

Nov 13, 2014

Maine, New Hampshire and Vermont have all provided FairPoint Communications with relief from some state oversight in an effort to allow the company to better compete with less regulated telecom providers.

Vermont’s current incentive regulation plan for FairPoint went into effect in 2012.

The company is now before the Public Service Board requesting a successor plan that would run from 2015 to 2019.

The existing plan caps increases in basic landline services at 11 percent or $2 per year, whichever is less, while freeing the company to change rates for other services.

The plan also imposes specific service quality requirements, and levies financial penalties for below-standard performance. 

The plan’s key service quality metrics are more stringent than the Public Service Board’s generic standards, which other regulated carriers must meet. 

For example, under the plan, FairPoint could not exceed 1.4 outages and other problems per 100 lines.

The generic standard is four. (According to the most recent service quality performance report filed by the company with the Public Service Department, FairPoint averaged 1.3 troubles per 100 lines from September 2013 through September 2014.)

FairPoint is also required to meet a series of thresholds ranging from 60 to 70 percent for repairs made within 24 hours to residential phone lines.  

The company has failed to meet this metric. In the most recent quarter (July-Sept) only 20 percent of residential telephone service problems were cleared within 24 hours. The 12 month average was 43 percent.

FairPoint’s record in clearing issues with business lines was much better, at 94 percent.

The Public Service Department has been demanding that FairPoint improve the residential metric.

The company has agreed to take steps to improve service times and to prioritize repairs to assure those who only have access to land line service are served promptly.

"Residential troubles cleared within 24 hours" is the only standard that FairPoint did not meet.

The incentive regulation plan’s provisions have allowed FairPoint to move to the generic standards because the company met 8 of the 10 benchmarks.

Under the proposed successor incentive regulation plan, the generic service quality metrics would be applied to FairPoint and similar price increase limits on basic land line service would remain in place.

The proposed plan has attracted little attention beyond the arcane world of state telecommunications policy. But retired Public Service Department engineer Charles Larkin has written to the board asking for the appointment of a public advocate to represent Vermonters in the process.

Larkin says the current schedule for consideration and adoption of the plan doesn’t allow time to gather necessary information about quality of service issues. 

He also wants the incentive plan to reflect the goal of universal fiber-to-home broadband service by 2024, as outlined in the state’s draft 10-year Vermont Telecommunications Plan. 

To what extent that would be possible is unclear, since the Federal Communications Commission bars states from regulating broadband service.