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November 12, 2009

FairPoint bankruptcy intensifies GWI tussle

By The Mainebiz News Staff

FairPoint Communications plans to cut service to major fiber-optic cable lines used by Great Works Internet unless the Biddeford company pays it $3 million next month.

The long-standing disagreement between the two companies has taken on new urgency with FairPoint's bankruptcy filing last month. The filing puts a hold on open court cases, and GWI has asked the court to let the case proceed so it can continue to serve its large customers after the Dec. 18 payment deadline, according to the Portland Press Herald.

FairPoint says it's not required to provide access to the circuits, which GWI has leased for several years to serve large customers including Bowdoin College and the University of Southern Maine. So, it's back-billing GWI at market rates - 19 times higher than its previous agreement - for service since 2006, the paper reported. GWI says FairPoint, which is required by federal law to share part of its network with local carriers, may be after its lucrative business customers.

In related news, bondholders owed more than $550 million by FairPoint have withdrawn a motion asking a bankruptcy judge to approve an investigation into the company's finances and managers, the Associated Press reported. Among other allegations, the motion said FairPoint misrepresented its recovery prospects and said top executives sought to profit from the bankruptcy reorganization. Creditors withdrew the motion on Tuesday.

Go to the article from the Portland Press Herald >>

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