Occam in the News
Vermont Regulators Approve FairPoint-Verizon Deal
By Paula Bernier, Xchange
February 19, 2008
The Vermont Public Service Board today approved the transfer of Verizon Communications Inc.’s wireline assets in that state to FairPoint Communications Inc. That means the rural LEC now requires just one more state approval — from the New Hampshire PUC — before it can take possession of the RBOC’s 1.5 million access lines in Maine, New Hampshire and Vermont.
The telcos announced the $2.7 billion arrangement in January of 2007, but before closing the deal, they had to get the blessings of the FCC and three state PUCs.
The service providers also have had to contend with the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) unions, which shortly after the deal was announced launched a campaign to stop the sale. The unions’ concern is that jobs will be lost or adversely affected should FairPoint — whose financial resources are dinky in comparison to Verizon’s and whose strategy as a telco consolidator points to a likely path of downsizing — take ownership of the RBOC assets. However, FairPoint has said all along that it will honor employee contracts, says Rose Cummings, vice president of corporate communications at the RLEC.
The deal also has raised the question as to whether FairPoint has the wherewithal to deliver acceptable customer service to individuals and businesses in Maine, New Hampshire and Vermont, and to bring the networks in the three states into the broadband age. After all, Verizon has spent the last several years hawking the promise of its FTTH FiOS plan. But other than “a bit of fiber in southern New Hampshire,” Verizon spokesman John Bonomo says subscribers in the three states haven’t had the opportunity to realize the promise of FiOS. Instead, the approximately 1.5 million access lines in the three states include about 180,000 DSL accounts, he says, while the rest remain legacy TDM-based technology for the time being.
FairPoint says it plans to broadband-enable the networks it hopes to claim from Verizon. In an attempt to make that happen while also addressing consumer advocate concerns, the Maine PUC suggested Verizon allocate funds to help FairPoint upgrade the networks to broadband and support other efforts to maintain quality service. The other PUCs followed suit on the suggestion, so Verizon has agreed to provide FairPoint with $235.5 million total for all three states as part of the deal.
But rather than taking fiber all the way to the customer premises, as the FiOS architecture does, the FairPoint plan is to use ADSL2+ technology initially in what will be a phased approach to bringing broadband to these new markets.
Although the deal with Verizon has not yet received all necessary approvals, FairPoint has announced plans to use Occam Networks Inc.’s gear in the access and edge portions of the network. FairPoint will overlay the existing SONET transport network with a Cisco Systems Inc. 10gig IP/MPLS core network based on a meshed architecture using DWDM technology, says Michael Brown, vice president of access network engineering at FairPoint, who is heading up the broadband expansion project for northern New England.
The ADSL2+ technology will be capable of delivering up to 26mbps on the downstream and up to 1.2mbps on the upstream, but actual bandwidth will depend in part upon loop length, says Brown. That should be plenty of bandwidth for those customers requiring only high-speed Internet access, he says, but if customers also want other services like TV, more bandwidth likely will be necessary.