FairPoint Communications is in the midst of a Public Service Board investigation into repair delays experienced by the company’s telephone customers.
But Fairpoint officials say the fact they’re required to meet certain quality standards is inherently unfair, and they want state regulators to do away with the standards.
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FairPoint’s argument is that none of its major competitors for voice services has to meet the service quality standards the company is held to, which puts them at a disadvantage.
“The very fact that we answer to the Public Service Department for service quality issues, or, in fact, there’s a proceeding at the Public Service Board; none of our competitors are subject to any of that regulation,” says Mike Reed, who is president of FairPoint in Maine and speaks for the company on regulatory issues.
Reed says regulation of FairPoint is rooted in the past, when phone companies were monopolies and consumers had no choices.
While smaller Vermont phone companies also have to meet standards for billing, repairs and installations for telephone service, Reed says FairPoint’s competitors don’t. These are providers like Comcast, Verizon and Sovernet. By law, the state doesn’t have regulatory power over their voice services.
Reed says his company alone suffers from bad publicity surrounding service quality problems because regulators only keep tabs on FairPoint.
“I can’t tell you how damaging this publicity is to the company. There’s no comparison to anyone else, no one reads that the competitor had just as many cables down in a snowstorm. It was only one company,” he says. “So if you’re a customer, you’re going to read that and you’re going to make a decision that may not be favorable to FairPoint. And in my opinion it's completely unfair.”
Reed says in today’s environment, it's competition — not regulation — that assures quality.
“If customers are not satisfied with our service, they leave us,” says Reed.
State Telecommunications Director Jim Porter acknowledges FairPoint is subject to more regulation than its major competitors, but says in recent years state regulators have given the company the freedom to set and change most rates. Porter says that’s what has helped level the playing field for FairPoint.
“I’m not really sure that the fact they have service quality obligations is the key factor keeping them from being able to compete,” Porter says.
He says the department’s chief concern is protecting Vermonters whose only option is FairPoint, and it’s possible the state could agree to change the service quality requirements for the rest of the company’s customers.
“If we’re able to identify a way to provide service quality protections for those customers who have no other alternatives, then I certainly think we would be amendable to providing a different type of structure,” says Porter.
FairPoint’s Mike Reed says the company understands the need for service standards for its customers who have no other choices. Otherwise, he says, “regulation should only be around when there’s not a competitive alternative.”
FairPoint has consistently met service quality standards in all but one area: residential repairs. Delays in those repairs were one issue that prompted the current Public Service Board inquiry.
The board is also looking into FairPoint’s policy of providing customer credits for repair delays and a failure last year that affected Vermont’s E-911 system.
FairPoint has been losing residential telephone customers to other providers as many customers abandon land-line service. According to the 2014 Vermont Telecommunications Plan, the company lost an estimated 33 percent of its telephone customers between 2007 and 2011.
The company’s strongest growth, meanwhile, is in wholesale services it provides to other telecommunications companies and services to large institutions.