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Maine Regulators Oppose FairPoint's $63 Million Subsidy Request

AUGUSTA, Maine - State regulators are recommending that the state of Maine should not subsidize FairPoint Communications to offset $63 million in costs incurred as part of its obligation to provide basic telephone service in Maine.

But the company's request could go before lawmakers in Augusta later this year.

Maine Public Utilities Chairman Thomas Welch says the agency's three commissioners have decided that FairPoint came up short on its request for assistance from the state. And that's reflected in its non-binding recommendation.

"They hadn't made the case, and our decision with respect to what they had already shown was that no support was warranted," Welch says.

But Welch says the panel left open the possibility that there might be other ways of calculating what FairPoint needs to continue providing what's called "provider of last resort service" - or POLR service, for short.
 
FairPoint accepted the POLR obligation when it purchased the Maine land line network from Verizon six years ago, and Welch says the PUC still supports the goal that all customers in the service territory have access to basic telephone service .

"I don't think that the basic principal that everyone in Maine should have access to some form of telecommunications equipment at some reasonable price, however defined - no one's challenging that proposition," Welch says. "It's really a question of how best to achieve it, and indeed whether the traditional method that we've used, namely imposing that obligation on the basic wire line carrier, is indeed the best way to achieve it."

The focus on FairPoint's subsidy request will shift to the Maine Legislature next year after it receives a report from the PUC that Welch says should assist lawmakers in making a final decision. Key to that discussion, he says, will be a recognition that the communications market in Maine has changed substantially since FairPoint assumed the old Verizon service territory of more than 600,000 customers.

"You know, perhaps the definition of POLR service, the way in which the POLR service provider is selected, how one calculates the support that any such provider should get, if any - that the answers to some of those questions will come out in the next legislative session and put the commission in a position to act on them fairly quickly thereafter," Welch says.

Under the proposal originally submitted by FairPoint, monthly bills for cell phone and land line service would increase to cover the requested subsidy.