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News :: Labor : Media : Politics : Technology
Citizens, union leaders call proposed Verizon sale to FairPoint "a wrong turn on the information super-highway"
19 May 2007
Hundreds of consumers and workers rallied in Portsmouth’s Prescott Park on May 19 to send a message to New Hampshire’s Public Utilities Commission that the proposed sale of Verizon’s landlines to FairPoint Communications will leave northern New England residents stranded on the information super-highway.
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The New Hampshire Public Utilities Commission -- along with its counterparts in Vermont and Maine, and the Federal Communications Commission -- is currently considering whether to approve Verizon’s proposed $2.7 billion sale to FairPoint. If all three states and the FCC approve it, Verizon will be allowed to abandon all its “low-value” customers, while keeping its more profitable big business and wireless ones.

Approval would mean that residential telephone customers -- not to mention schools, businesses, hospitals and emergency responders -- will be dependent on FairPoint, a small, highly-leveraged North Carolina based firm that is worth only $630 million. FairPoint can only provide dial-up for Internet access or at best, digital subscriber line (DSL) service, a technology that is widely regarded as already outdated and inadequate for rural economic development.

“The Verizon-FairPoint sale is a bad deal for hundreds of thousands of telephone consumers. It won't lead to better service quality, more investment, or the high-speed Internet access everyone wants,” said IBEW System Council T-6 Chair Myles Calvey. “It also threatens the pay, benefits, decent working conditions and job security of 2,800 union members employed by Verizon throughout northern New England.”

The sale would leave New Hampshire even further behind on the information super-highway -- to the detriment of its overall economic development and job creation efforts. To make the point, rally participants used special FairPoint telephones (pictured at right) to make phone calls of protest to the state Public Utilities Commission.

Verizon particularly benefits from the sale by exploiting an obscure tax loophole called a “Reverse Morris Trust.” It would allow Verizon to save $600 million in taxes, as long as its infrastructure is sold in pieces to a small firm, as opposed to larger, more stable companies that have the capacity to invest in improved service.

“Verizon picked tiny FairPoint because it allows Verizon shareholders to end up controlling more than 50 percent of the newly merged company’s voting rights and economic value – while Verizon reaps huge tax savings!” said Chris Shelton, Vice President of CWA District One.

“Working together, we can make our voices heard so the great potential of the information age is actually fulfilled in Portsmouth and throughout all of New Hampshire,” said Mayor Steve Marchand.

“Let’s not be fooled by the idea that a company worth only $630 million, which is borrowing heavily to buy Verizon properties three times its present size, is going to be an improvement over a firm worth $100 billion,” said New Hampshire AFL-CIO President Mark MacKenzie.

“I understand why some customers are unhappy with Verizon. Even though it’s one of the richest telecom firms in the world, Verizon has failed to include much of New Hampshire in its plans to build a high-speed broadband network,” said Glenn Brackett, Business Manager of IBEW Local 2320. “But if this sale goes through, New Hampshire citizens will be ‘road kill’ on the information super highway.”

A growing coalition of labor and consumer groups is fighting the sale as a first step toward securing a broadband build-out that would guarantee “High Speed Internet For All.” The regional economy, schools, hospitals, and public safety systems would all benefit. To prevent companies like Verizon -- which have the deepest pockets and best technology -- from abandoning markets like northern New England, there must be fundamental changes in state and federal regulatory policies.

For details on these policy proposals, see www.SpeedMatters.org, a website that also lets Internet users check their own access speeds against world standards. More arguments against the sale can be found on: www.verizonvsfairpoint.com, www.no-deal.org, and www.stop-the-sale.org

Other rally speakers included Portsmouth Metal Trades Union Council President Paul O’Connor, Cheryl Ahern, President of CWA Local 1400, IBEW Business Managers William McGowan (Local 2323), Pete McLaughlin (Local 2327), John Rowley (Local 2324), and Mike Spillane (Local 2326), Local 2222 President Ed Fitzpatrick, and IBEW Intl. Rep Bob Erickson. All presidential candidates were invited.

The New Hampshire Public Utilities Commission has already held three hearings on the impact of the proposed sale. The two final hearings are scheduled for May 22 in Newport and May 24 in Littleton at 7:00 PM.

Pictures from the rally may be seen at: http://picasaweb.google.com/rand.wilson/StopTheSaleRally

For copies of a special report on the why the proposed FairPoint purchase of Verizon’s properties would place consumers, workers and communities at risk, contact Rand Wilson at rwilson (at) aflcio.org
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See also:
http://www.stop-the-sale.org
http://www.no-deal.org

This work is in the public domain
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