Fairpoint looks ahead to better year post-bankruptcy
ESSEX — With its bankruptcy case proceeding toward resolution, Fairpoint Communications is looking forward to leaving behind a troubled 2009 and emerging with new service-delivery models for 2010.
Among the company’s new strategies will be a move away from wireless, tower-based Internet delivery for rural parts of Essex and toward using its wireline-based fiber network to serve the town.
Fairpoint’s plan to build 110-foot towers on Sleepy Hollow Road and Bixby Hill Road drew intense opposition from a group of Essex residents last year. Residents in the Meadow’s Edge neighborhood formed a homeowners association based on their opposition to the Bixby Hill tower, citing tarnished views and the possibility of continuous exposure to electro-magnetic radiation. The group successfully lobbied the Essex selectboard to oppose the towers in front of the Vermont Public Service Board.
But the threat of the towers has disappeared as Fairpoint has withdrawn the Bixby Hill application. The Vermont Public Service Board recently approved the tower application for Sleepy Hollow Road, and two similar applications in Milton, but the company has no plans to build the towers, Fairpoint spokeswoman Sabina Haskell said.
It will rely on its VantagePoint fiber network — which employs cables both above ground on poles and below ground instead of towers — to fulfill its commitment to deliver high-speed Internet to 95 percent of Essex, Williston and Westford residents by June 2011. In rural areas the infrastructure will be primarily above ground.
“We once thought about using wi-fi tower technology to do it, but that doesn’t allow us to deploy as rapidly as we want to,” said Mike Smith, the company’s new president of Vermont operations, who started with the company 10 weeks ago. “We’ve decided to use what we know best, which is our wire technology.”
Smith, former secretary of administration in Gov. Jim Douglas’ administration, is using his first few months as the head of Fairpoint’s Vermont operations to, first, get up to speed on the telecommunications industry, and second, get the word out about Fairpoint’s belief that its struggles are in the past. Smith lived in Essex for nearly two decades before recently moving to Westford.
“It’s important that we acknowledge we had a challenging year in 2009 as a company,” he said during an interview with the Essex Reporter.
He cited the conversion of systems used by Verizon — Fairpoint’s predecessor in land-line phone delivery in Vermont — to Fairpoint’s operation as the reason for the challenges.
It was “all systems, all at once, moving to a new platform,” Smith said. “We started getting better through the year, but certainly it was a big challenge for us. Our employees were frustrated; our customers were frustrated. There were just a lot of back-office systems that didn’t communicate with each other the way they were designed to. And it had an affect. It was a challenge, and quite frankly, it did not go as smoothly as it should have gone.”
The glitches cropped up in billing and customer service more than phone and Internet service delivery, he said, and they negatively impacted the company’s revenue. On top of that, Fairpoint has felt the effects of the ongoing recession. In October, the company was overwhelmed by its debt and filed for bankruptcy protection.
“The process is moving along,” Smith said. “I envision we’ll emerge probably in late-summer, early-fall.”
He continued: “Most of our technology issues are behind us. We’ll be coming out of this restructuring of our debt in a more economically viable condition. That will make us stronger financially as we move forward.
“We never stopped investing through this whole process. And we’ve stayed committed to the state of Vermont.”
Part of the investment has resulted in Fairpoint’s “VantagePoint” network — billed as a “super-fast” fiber-based network for Internet, phone and television service. Fairpoint test-marketed the network using homes and businesses in Essex and Milton last year before rolling the network out in other parts of northern New England this spring.
“Folks in Milton and Essex were instrumental in helping us launch this next-generation network,” Smith said in a statement announcing the network. “Fairpoint has (built) the infrastructure that allows customers to transport data, voice and video content over a flexible high-speed, high-capacity network.”
Flexibility seems to be the company’s model for the future of its business. It recognizes that residential land-line phone service is on the decline. But it is banking on its land-based network to increase in value as a carrier of all manner of audio and visual information.
“We’re not going to be the same phone company that I grew up with,” Smith said. “The industry is going to change. It’s going to be critical to our future to adjust to that industry change.
“When you have a data transmission system and you’re able to deliver data in a rapid way, we are aligned to be in a good position,” he added. “We’re going to become a communication company (whose) primary purpose is to transmit data.”