- Associated Press - Saturday, October 18, 2014

PORTLAND, Maine (AP) - FairPoint Communications is poised to prosper if it can shake off the inevitable damage caused by its ongoing strike, which will hurt business in the short term by keeping large customers from buying new or upgraded service, according to an industry analyst.

“FairPoint has made incredible investments in a fiber network in New England. Once they get labor peace, I think this company is very well positioned for accelerated revenue growth. The future is quite bright for FairPoint,” said Barry Sine, an analyst at Drexel Hamilton, a New York-based brokerage firm.

More than 1,700 FairPoint workers who staff call centers and maintain the telephone network in Maine, New Hampshire and Vermont walked off their jobs early Friday, demanding that the company return to the bargaining table.

The two sides have found no middle ground on key issues: The contract imposed by the company after declaring an impasse freezes pensions, makes workers contribute to health care costs, allows the hiring of contract workers, and eliminates retiree health care for current employees.

Unions have fought these same battles across the country.

In this case, workers understand that some compromise is necessary but the company has refused to budge at all, said Peter McLaughlin, chairman of the unions’ bargaining committee.

“Once we decided to strike, we’re in it to win it. We’re not going to have our tail between our legs,” he said. “When the company is ready, we’re certainly ready to go to the table.”

North Carolina-based FairPoint, which bills itself as the nation’s sixth-largest telecom, provides telephone service and high-speed Internet access to 17 states. The lion’s share of its business is in Maine, New Hampshire and Vermont, where it has about 1 million lines.

FairPoint insists it needs significant cost reductions and has posted net losses for every year of operation since it purchased Verizon’s land-based operations for $2.3 billion in 2007. The company filed for bankruptcy 18 months after the deal, and continued to struggle after emerging from bankruptcy in 2011.

The company said it’s willing to entertain further talks if there’s a suitable compromise. “We are disappointed in the unions’ decision to strike. In the meantime, FairPoint will focus on meeting the product and service needs of our customers,” company spokeswoman Angelynne Amores Beaudry said in a statement.

Two unions have appealed to the National Labor Relations Board to reinstate the contract that expired on Aug. 2 and to order the company back to the bargaining table. That ruling could come next month. In Hawaii, where a similar fight played out after Verizon sold its land-based assets, the National Labor Relations Board ruled against the unions and a deal was ultimately reached.

In northern New England, the International Brotherhood of Electrical Workers and the Communication Workers of America decided not to wait for the labor board to rule.

“The strike is almost a requirement to get to a resolution here,” said Sine, who’s observed labor disputes in other telecommunication companies.

Union workers say FairPoint wants to slash costs to be more attractive to a buyer.

“The top five shareholders are hedge funds. They’re not here to run a telephone business. They’re here to make money. If they can pretty this thing up and sell it, then they’ll try to do it,” McLaughlin said.

Sine, the analyst, agreed the company will probably be sold, but he’s doubtful a deal is imminent. The key for the company is to settle the strike so it can take advantage of its investments in fiber throughout the region to lure in more big customers and boost the bottom line.

Job security is the key for Julie Dawkins, 49, of Gray, who started as a directory assistance operator in 1993 and worked her way up to being in charge of scheduling and payroll.

“This is a very scary time for us,” she said. “But we’re in it for the long haul. We’re willing to do what it takes to be treated fairly and to keep these jobs in Maine.”


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