PUC approves FairPoint bankruptcy plan
State regulators have approved FairPoint Communications' bankruptcy reorganization plan and its request to push back the timeline and scope of its broadband expansion.
In its 2-1 vote, the Maine Public Utilities Commission granted FairPoint's request to delay completion of the first phase of its broadband expansion plans from April to December 2010, and reduce the percentage of lines the company must upgrade to carry broadband from 90% to 87%, according to a press release from the PUC and the Maine Public Broadcasting Network. The commission also approved relief from pricing restrictions for unregulated broadband service and gave FairPoint another three months to rebate ratepayers for poor service last year.
The restructuring plan would reduce FairPoint's debt load by nearly two-thirds, from nearly $2.8 billion to $1 billion, and would give secured creditors a 92% ownership stake in the restructured company. Unsecured creditors would be paid 17 cents for every dollar they're owed.
"FairPoint's financial restructuring and shedding of $1.7 billion in debt is certainly in the interests of Maine ratepayers -- the company will emerge a healthier, more stable company able to service Maine telephone customers," Commission Chair Sharon Reishus said in the release.
Commissioner Vendean Vafiades, who voted against FairPoint's request, opposed allowing the company to go back on its broadband expansion plans, which were a driving force in compelling the PUC to approve FairPoint's takeover of Verizon's landlines in 2008, according to the release.
FairPoint still needs regulators in New Hampshire and Vermont to approve its bankruptcy reorganization. If the company gains the approval of all three states, FairPoint officials told Mainebiz they will then seek approval in U.S. Bankruptcy Court in New York in July.
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