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August 25, 2009

Tip prompts FairPoint investigation

A anonymous charge that FairPoint rigged a demonstration of its readiness to take over Verizon's landline operation last winter is under investigation by Vermont regulators and the beleaguered telecommunications company itself.

According to Vermont Public Radio, an anonymous tip about the alleged fraud was forwarded to the Vermont Attorney General in mid-August, whose office surmised there was enough detail in the tip to warrant an investigation. The tipster alleges that FairPoint faked successful demonstrations for the consultant hired by Vermont, New Hampshire and Maine regulators to review FairPoint's software readiness to take over Verizon's northern New England customers, a necessary step in the North Carolina-based company's $2.3 billion purchase of the Verizon operation, according to the radio station. Vermont regulators have asked FairPoint to respond to the allegations by Monday.

Jeff Allen, FairPoint's executive vice president for northern New England, told the Portland Press Herald that company would review the testing program and respond to Vermont regulators, but said it was likely the charges are false. "At this point, I'm not aware of anything at all about the testing to lead me to believe there was a problem," he told the paper.

Allen said FairPoint also would respond on behalf of Capgemini U.S. LLC, part of the business and technology consulting firm it hired to help develop and test the software.

Since its takeover of the Verizon operation, FairPoint has had repeated problems with billing, processing new service requests and other customer-service related issues that have angered regulators and customers alike. As a result, regulators in Maine, New Hampshire and Vermont have a joint session scheduled on Sept. 9 to question FairPoint executives about ongoing consumer complaints. A day later, Vermont officials are to hold hearings on whether FairPoint should be able to continue operating in that state, according to the Press Herald.

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