FairPoint Pushes Back Takeover Timetable

By DENNIS HOEY

FairPoint Communications, Inc., announced Monday that it will need until the end of January to complete its takeover of Verizon’s telephone system.

FairPoint officials downplayed the delay – the second since it acquired Verizon’s 1.6 million telephone lines in March – saying it was not entirely unexpected given the complexities involved with the transfer.

"Our take is that they are making a responsible decision. The Public Utilities Commission prefers this be done right, not rapidly," said Maine PUC spokesman Fred Bever. "A delay is preferable to widespread service problems."

FairPoint officials said consumers should see no impact from what amounts to a two-month extension.

In June, FairPoint said it was shooting for a late-November "cutover," as it is called within the industry.

But on Monday, FairPoint Chairman and CEO Gene Johnson said that "following a careful evaluation," and after consulting with the public utility commissions in New Hampshire and Maine, the company opted to extend its systems cutover date by 60 days.

FairPoint’s spokesman in Maine, Jeffrey J. Nevins, said consumers should notice no changes in their telephone service, and he said the company is fairly certain there will be no additional extensions to the cutover date.

"I think we are confident and we are comfortable that we will be ready to go in January," he said.

Although the sale went through in March, FairPoint had announced by June that it was pushing back its plans to take control of Verizon’s telephone system.

That decision reflected concerns by Liberty Consulting Group – hired by utility regulators in Maine, New Hampshire and Vermont – that FairPoint had not gotten all the bugs out of operating and software systems, or hired enough staff.

Nevins said the two biggest reasons for the cutover extension are ensuring that FairPoint’s 4,000 New England employees receive training and that data transfer and testing be done properly, so as to avoid corruption of data.

FairPoint is in the process of replacing Verizon’s 600 operating systems with 60 fully integrated, state-of-the-art systems.

"Tremendous progress has been made over the past several months toward the successful completion of this extremely complex project," FairPoint CEO Johnson said in a prepared statement. "At this time we believe it is in the best interests of our northern New England customers and other stakeholders to take additional time to ensure all preparations for a successful cutover have been completed in an orderly fashion."

Nevins said the delay has nothing to do with 911 glitches.

Between April and June, emergency communications systems at the Cumberland County dispatch center in Gray, as well as the regional center in Penobscot County, experienced problems receiving 911 calls.

"Those are no longer a factor," Nevins said. "We feel we have addressed those issues."

FairPoint said the financial impact from extending the cutover date is expected to be minimal. It continues to pay Verizon a monthly transition services agreement fee.

FairPoint will pay Verizon $16 million in December, and Capgemini – FairPoint’s integration partner – will be responsible for a $15.5 million January payment. In exchange, Capgemini is expected to receive shares of FairPoint’s preferred stock.

Staff Writer Dennis Hoey can be contacted at 791-6365 or at:

dhoey@pressherald.com

Originally published by By DENNIS HOEY Staff Writer.

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