Mea Culpa

Normally I don't use the Weekend Pundit blog to comment directly about the post of one of the WP team members, but in this case I feel I must. But first, I have a confession to make.

I don't always read what others post here on Weekend Pundit.

It isn't that I'm lazy, but rather that there are evenings where I don't even post my own scribblings until very late in the evening because it's the only time I have free to sit down uninterrupted. That leaves me little time to read my own blog. However that's no excuse. It's my blog and, in the end, it's my responsibility for what's posted here.

That said, I have to say that I failed to read Brent's post from the morning of November 25th titled The Benefits Of Affirmative Action. I wasn't aware of the tone or the subject of his post until Gilford Police Chief John Markland brought it to my attention Tuesday evening. When I got home that evening I read it and I can honestly say I was dismayed and disgusted.

Brent, What. The. Hell. Were. You. Thinking?! Do you really believe Officer Janero Sankey was hired due to affirmative action? You certainly imply that's the case. Knowing both Chief Markland and Deputy Chief Kevin Keenan as well as I do, I can tell you your implication is way off base. If Officer Sankey wasn't qualified he would have never even gotten an interview, let alone hired. To say otherwise is an insult to Officer Sankey, the Gilford Police Department, and the town of Gilford.

To Officer Sankey, Chief Markland, Deputy Chief Keenan, and the rest of the Gilford Police Department, I offer my sincere apologies.

(Cross-posted from Weekend Pundit)

It Can't Get Much Worse, Can It?

Here's yet another non-surprise in regards to FairPoint Communications and their ongoing financial and operations difficulties: The New York Stock Exchange delisted FairPoint today. Their stock fell to a little over 10¢ per share after the NYSE's action.

And the hits keep on coming.

Let this be a lesson for Frontier Communications, a firm that spent far too much money for some more of Verizon's rural wireline assets. That's what caused FairPoint's problems. I have a feeling Frontier will end up in the same boat.

Color Me Surprised...NOT.

The question was only in the timing: How long until FairPoint Communications files for bankruptcy?

Now we know.

FairPoint filed for Chapter 11 bankruptcy, citing its $2.7 billion (that's billion with a 'b') debt. It hopes to reduce that debt by $1 billion.

The three states most affected, Maine, New Hampshire, and Vermont, are likely to seek protection as well. New Hampshire has already said it will intervene in the reorganization of FairPoint to protect New Hampshire's interests.

On more than one occasion I and others have warned that the deal that sold Verizon's wireline assets in northern New England to FairPoint was a bad idea. Even the three state's utility regulators had doubts. But the deal went through and now we'll all be paying for it.

Can you hear me now?

State Employees Union Shoots Self In Foot

It's amazing how union members will vote against their own best interests, particularly when a 'yes' vote will preserve the jobs of fellow union members. In this case the State Employees Association of New Hampshire voted to turn down a two year contract that would prevent the layoff of 250+ state employees by requiring state workers to take 19 days of unpaid furlough over a period of 2 years.

With the rejection of the contract, layoff notices will be going out before the end of the month. At a time when the state has financial problems and needs to reduce spending, taking a course of action that ensures the loss of jobs seems counter to the union's purpose, doesn't it?

What did the union want that caused the union leadership to urge a 'no' vote on the contract?

A guarantee there would be no layoffs.

Excuse me?

Since when does any state provide guaranteed employment? Since when can any union tie the hands of the state, particularly when the economic situation is unstable and there's no way to forecast the state of the economy 6 months, a year, or a year and a half from now? If the economic situation worsens and the state needs to make further cuts, why should their hands be tied, preventing them from balancing a budget in deficit?

Such is the arrogance of the union that they think they should be immune from the effects of a bad economy.

Just When I Thought They Couldn't Get Any Stupider.....

I'm not sure what's stupider; the two miscreants in this story or some of the commenters lamenting the fact these two idiots were arrested for breaking the law.

Two men were arrested this morning after police said they gave officers a lot of attitude, cranked up the volume on a car radio after being asked to turn down the blaring music and challenged police to a fight.

"You want some of this?" passenger Nicholas Gamache, 23, of 5 East Haverhill St., Apt. 2. Lawrence, Mass., told the officers. He allegedly followed that up with a string of profanities.

The incident happened about 1 a.m. at a red light on Elm Street. Officers on patrol heard extremely loud music coming from a car and pulled up along side it at the traffic light.

That's stupid thing number one, compounded by the fact the idiots were in possession of cocaine. Stupid thing number two was this comment:

At what point did playing music too loud become a crime? Just curious. Glad that policing noise is what our public servants are paid for. Thank God they were on the job.

Maybe the fact that it was 1AM in a heavily populated area might have had something to do with it.

Need I say more?

A Message To New Hampshire Taxpayers

Something to remember come the 2010 elections.

From Bruce.

Thugs And Other Disparagements

It appears Carol Shea-Porter (D-NH1)has caught a bad case of history revisionism.

While decrying the tone and tenor of a number of town hall meetings around the nation and the mood of the electorate, it appears she's forgotten some of her appearances at similar events before she was elected to the House of Representatives.

At one particular event that took place back in 2005, she and another woman were removed from event by Portsmouth police officers. But she denies she and her friend were ever asked to leave.

Two officers of the Portsmouth, New Hampshire Police Department removed Carol Shea-Porter and Susan Mayer from a February 2005 town hall event hosted by then-President George W. Bush at the request of the owner of the property, a spokesman for the Police Department tells NowHampshire.com.

The revelation contradicts statements made by Congresswoman Carol Shea-Porter as recently as this week that she was not removed from the event.

“[T]here were no disruptions and no rudeness and I wasn’t removed. If it happened, don’t you think there would have been photos or video or news stories from that day? There aren’t because it didn’t happen,” Shea-Porter told the Portsmouth Herald this weekend.

According to Capt. Tim Brownell, who responded to a Freedom of Information request from NowHampshire.com, Detective Sergeant Michael Ronchi and Detective Tom Grella removed the two women from the Pan Am hanger of the Portsmouth International Airport in Portsmouth, NH after being asked to do so by a representative of Pan Am.

You mean she lied about what happened? Say it ain't so!

But wait, there's more!

“My friend (Mayer) and I sat respectfully and quietly though the whole event. After it was over and we were leaving, I was grabbed by someone, a thug,” Shea-Porter the Portsmouth Herald this weekend. “My friend told the person to stop grabbing me and he let go. It may have been a security person, but to this day we don’t who it was. I was there, so I know what I’m talking about.”

Capt. Brownell declined to comment on Shea-Porter’s characterization of the officers involved in the incident as “thugs”. But not all members of the law enforcement community were silent. Retired Manchester Police Sergeant Lloyd Doughty reacted with astonishment.

“For someone of her stature, as an elected official, to say that about members of law enforcement is so distasteful and so disrespectful I can’t even think of a word that describes how I feel. It’s ridiculous,” Doughty told NowHampshire.com.

So police officers doing their jobs are “thugs”?

Let's remind ourselves where Carol Shea-Porter stands on a number of issues, some which I've covered before: the only people allowed to protest are those who agree with Carol Shea-Porter and are against anything Republican; those of us within her Congressional district that did not vote for her are not her constituents; she holds the Blue Star and Gold Star Mothers of New Hampshire in contempt; town hall meetings are only for those of her constituents that agree with her; she's afraid to face any us that may not agree with her leftist philosophy in an open town hall meeting where we can actually ask her questions; she thinks police officers are “thugs”; and she walks lock step with Nancy “Tea Party protesters are Nazis” Pelosi.

I can't wait until 2010 when we can finally fire her.

It's Too Cold For Global Warming

The early fall warmth has fled New England for the time being, with chilly day time temps in the 40's being the rule in the northern half over the next few days. There's even the possibility of sleet or snow in the forecast for northern and central portions of Maine, New Hampshire, and Vermont some time in the next few days.

For the first time since last April we started a fire in the woodstove. We've never had to use the woodstove this early. Usually it isn't until late October/early November that we start using it to heat The Manse. Yet here it is, the last day of September, and it's already being used.

The Farmer's Almanac has predicted a colder than normal winter in the Northeast, as well as most of the rest of the country.

The sun is experiencing an extended solar minimum (meaning minimal or no sunspot activity) and decreased luminosity. The start of next sunspot cycle is over two years overdue and solar astronomers expect this extended minimum to last for at least the next 30 years. The last time that happened we experienced a Little Ice Age.

Does anyone want to tell me about global warming again?

FairPoint On The Brink

For those contemplating the effects of the sale of some of Verizon's rural landline assets to Frontier Communications, one needs only look at what's happening with FairPoint Communications in northern New England to see it might be biting off more than it can chew.

As the October deadline gets closer for FairPoint Communications to make an interest payment on the $1.92 billion it borrowed to buy Verizon's landline assets in northern New England, FairPoint's CEO seems to be taking his company's perilous situation lightly, acting as if there will be no problem even if it ends up in bankruptcy. I doubt FairPoint needs that kind of laissez faire attitude in its chief executive.

For a man whose company may be heading into bankruptcy court any time now, FairPoint Communications CEO David Hauser exudes a surprising amount of confidence in his company and its prospects.

"I think the debt comes to a head one way or another in the next couple of months," Hauser said.

For a company that's seen its stock price plummet from $9.02 on the day of the acquisition to $0.46 per share (today's closing price) and is in danger of being de-listed from the New York Stock Exchange, the attitude is puzzling. But the state regulators of at least one of the three northern New England states has been taking it far more seriously.

The company's financial health was always a concern, New Hampshire regulators said.

"We thought that FairPoint would be overleveraged, that they would have too much debt and that they were being overly optimistic," said Meredith Hatfield of the Office of the Consumer Advocate.

FairPoint paid far too much for a business that's been on a slow decline for years as competition increased and wasn't worth what they paid for it. It's one of the quickest ways to go broke.

FairPoint has also been behind schedule for bringing broadband to underserved and unserved areas in the three states, which means it will start accruing penalties for failing to meet its targets for deployment. What's worse is the broadband technology it is deploying (DSL) can barely be considered broadband as the maximum data rates are far lower than that available through cable and Fiber To The Home. DSL is also distance limited, meaning maximum data rates are available only if the customer is close to the central office or local concentrator. The farther away, the lower the maximum data rate available. With some of the newer services available on the Internet, like streaming video and online gaming, FairPoint's DSL-based broadband won't be adequate to meet the bandwidth requirements for those services.

In short, FairPoint hasn't lived up to its promises, hasn't provided the services expected by its customers, hasn't been able to respond in a timely manner to its customers' needs and requests, and has managed to lose about 10% of its customers since it took over operations from Verizon back in February. On top of that they are on the edge of defaulting, and if reorganization fails and debt payments cannot be rescheduled, they will be forced into bankruptcy.

This is not what the consumers in Maine, New Hampshire, and Vermont signed on to when Verizon sold its landlines to FairPoint.

Carol Shea-Porter Can't Be Bothered With The Facts

It appears Representative Carol Shea-Porter (D-NH-1) has no problem with stating an outright lie as truth if the lie serves the purposes of her masters (Pelosi and Obama).

During both of her town hall meetings to 'debate' health care reform, she stated that tort reform wouldn't help health care costs and tried to use the 'failure' of tort reform in Texas as an example.

There's only one problem with her claim: it's a complete and utter falsehood.

On NHPR, she said of the Texas reform, "It didn't drive down costs." In Manchester on Saturday, she said it accomplished "nothing."

That would be news to Texans. The Dallas Morning News reported in 2007 that because of tort reform, "(t)he number of doctors applying to practice in Texas every year has increased more than 50 percent, relieving desperate shortages in some rural areas."

The cost of malpractice insurance dropped an average of 27 percent, according to the Texas governor's office. Shea-Porter pretends that didn't help patients because health care providers did not immediately lower their prices. It's true, they didn't.

"Instead, they're reinvesting the savings in more and better health care," the Dallas Morning News reported.

When confronted by a woman at the town hall meeting in Manchester about the inaccuracy of her claim, she told the woman to sit down and be quiet.

So much for polite discourse or reasoned debate.

Carol Shea-Porter Versus Frank Guinta - A Study In Contrasts

Carol-Shea Porter may have met her match, at least when it comes to town hall meetings and debate about health care reform. As we posted yesterday, Shea-Porter has proven she can dish it out but can't take it. On more than one occasion she has shown her contempt for her constituents.

The comes along her presumed Republican challenger for her seat in the 2010 elections, Manchester mayor Frank Guinta, holding his own town hall meeting. The dichotomy between the two sets of town meetings couldn't be any broader.

Some observations by someone attending both meetings:

First let me start by saying, I don't believe for a minute, CSP would have scheduled a town hall meeting if Mayor Guinta hadn't scheduled one first.

With only an HOUR to ask questions of the Holy one, oops, I mean Congresswoman CSP, and with CSP taking up 20 minutes of that hour to sell us on how awful the insurance companies are, a rare few individuals were able to ask a question. We were limited to 2 minutes and people like me were denied the opportunity to follow up our original question with facts that contradicted her answer.

After CSP mislead everyone at the meeting on tort reform in Texas, he knew I had information that contradicted what she had just said to a woman who questioned her on cutting healthcare costs. His ticket was pulled and he let me go up and confront her on her misleading information.

In stark contrast, Mayor Guinta's town hall meeting was open to as many people who showed up.We were "allowed" to ask our questions without any time constraints and we didn't have to HIT the LOTTERY in order to ask a question.

Mayor Guinta took questions for the first hour then decided to extend his meeting another hour to accommodate the others who still wanted to raise concerns or ask a question.

At the end of the second hour, it was time to end the meeting, however he again graciously told the crowd he would remain in the hall and those who still wanted to talk to him, could do so.

Shea-Porter couldn't be bothered to answer questions that disagreed with her 'vision' on this matter, but her challenger took on all questions and stayed until everyone had a chance to talk with him.

Of the two approaches, I prefer latter, not the former. It's too bad Carol Shea-Porter prefers the former.

Do you think she'll get the message after she's voted out of office.

Shea-Porter Shows Her True Colors

You know someone's in deep doo-doo when even Glenn Reynolds is piling on.

In this case Representative Carol Shea-Porter (D-NH1) is on the receiving end of tactics she used against her predecessor, former Congressman Jeb Bradley. Her reactions show she can dish it out but obviously can't take it, having a constituent arrested at one of two town hall meetings she held recently.

This is a curious re-election strategy, especially for a Representative who made her name by bird-dogging her former Congressman at his town-hall forums. Consistency isn’t Carol Shea-Porter’s strong suit, apparently, as she demonstrates in [a] clip from the meeting she finally held with constituents after dodging them for most of the month. When one of her constituents challenges the presence of union enforcers in the crowd, Shea-Porter asks for police intervention.

[-snip-]

I’ve watched this video a couple of times, and I still can’t figure out why the police took this man out of the room. He was actually less disruptive than the woman behind him. He challenged Shea-Porter on the appearance of SEIU protesters in the room, one of whom got up and disrupted his question. When the first man then challenged the residency of the SEIU rep, police swooped in and removed him.

Now Hampshire also reports that the man they removed is Carl Tomanelli — a retired policeman.

Shea-Porter has also shown her true stripes, disparaging protesters outside her town hall meeting venues as “tea-baggers”, a sexually explicit term no member of Congress should use to describe constituents. She has also made known she didn't consider military families that support the war in Iraq as her constituents, nor those of us that didn't vote for her. So much for representing the people in her congressional district. (She's made the mistake of pissing off the Blue Star and Gold Star Mothers here in New Hampshire. That won't go over well come the 2010 elections.)

I'm sad to say this condescending effete snob is my representative. On more than one occasion I have written to her (using both snail-mail and e-mail) with my viewpoints on certain issues going before Congress and not once has her office responded. I guess I'm just one of “those people”, one she figures she can ignore because I'm not really one of her constituents. I didn't vote for her and I support the war in Iraq and Afghanistan, which means she figures she can safely ignore me and those like me.

She's wrong.

Cross Border Tax Grab Fails Again

It appears there are still some common sense jurists still presiding in the People's Republic of Taxachusetts.

Earlier today the Massachusetts Supreme Judicial Court ruled the Commonwealth could not force New Hampshire retailers to collect Massachusetts sales tax on tires sold in New Hampshire to Massachusetts residents.

The court's decision was another shot fired in a long standing 'feud' between the two states, one specifically dealing with sales taxes. Massachusetts has a 6.25% sales tax while New Hampshire has none. The recently raised sales tax (from 5% to 6.25%) has goaded even more Bay Staters to cross the border into New Hampshire when they make purchases of higher priced goods to avoid paying the tax.

The Massachusetts Department of Revenue filed suit against Town Fair Tire, demanding the new Hampshire outlets collect Massachusetts sales tax on all sales to Massachusetts residents. Both Town Fair Tire and the State of New Hampshire responded, with the state legislature passing legislation making it illegal for other states to force New Hampshire retailers to collect taxes on sales to their residents.

The Massachusetts Department of Revenue's argument before the court used as evidence 313 sales invoices from the 'offending' Town Fair Tire outlets as proof of tax liability. But the court, in its wisdom, said the invoices “weren't enough under state law to presume the tires were used in Massachusetts.”

The text of the court's decision, minus footnotes and case citations, can be seen at the first link above (scroll down).

FairPoint's Troubles Just Beginning

FairPoint Communications is in the news again, and not in a good way.

Local news outlets report an anonymous e-mail from a FairPoint “insider” alleges FairPoint “misrepresented test data” showing they were ready to take over operations from Verizon in northern New England.

FairPoint's cut-over to its independent systems began Jan. 30, 10 months after it acquired the landline business from Verizon in the three northern New England states. It leased computers and equipment from Verizon during the transition period leading up to cut-over. After the cut-over, FairPoint experienced delays in answering consumers' phone calls and processing orders for wholesale customers. There were also billing problems and other concerns.

An e-mail to the Vermont Public Service Board alleged that tests observed by Liberty Consulting Group on behalf of the three northern New England states were fakes -- not real-time, live demonstrations.

The attorney general offices of all three northern New England states are investigating the allegations.

Considering the troubles FairPoint customers have suffered since the cut-over from Verizon I have little problem believing the allegation. Customers haven't been receiving bills, have been unable to add, change, or terminate their phone service. Service calls takes weeks, if not months to complete. These problems have caused FairPoint to lose 13% of their customers over this past year.

The anonymous e-mail states FairPoint wasn't really ready for the cut-over.

In his original e-mail, sent Aug. 14 to regulators, the writer, who called himself "David Unavailable," wrote:

"As January neared and it appeared to everyone on site in Atlanta that there would be another delay, suddenly Peter Nixon (FairPoint's president) and Gene Johnson (its then-CEO) made the announcement that the cut to the new systems would take place at the end of January and the relationship with Verizon would end. Most people were stunned as it did not appear feasible."

In his later note to the AP, the writer said FairPoint had a strong incentive to complete the cutover: It was paying monthly fees to Verizon for continuing to use its system after the sale between the two companies closed. This was confirmed by a report filed by Liberty with state regulators.

If these allegations are true, then the people of northern New England were taken for $2.3 billion (the sale price of Verizon's landline assets) and will end up paying the price for the duplicitous actions of FairPoint's executives.

FairPoint Communications To Face The Music

FairPoint Communications is sinking deeper into the abyss, with complaints skyrocketing even as it is losing market share.

All three northern New England states have been having problems with FairPoint after control of Verizon's landline assets were transferred in full to FairPoint early this year. So far FairPoint has lost 130,000 customers since it purchased Verizon's northern New England assets last year. Regulators in Maine, New Hampshire, and Vermont have already held hearings about FairPoint's problems and next month they will hold a joint session to get answers from FairPoint executives about its ongoing and seemingly unfix-able problems.

When insurance companies like AIG and institutions like Bank of America got in financial trouble Congress deemed them too big to fail.

Perhaps on a smaller scale, regulators in Vermont, Maine and New Hampshire may be confronted with a similar dilemma. What happens if FairPoint is shut down or fatally fails to deliver promised services?

And that's exactly the problem. What happens if FairPoint loses its right to provide phone and data services in Vermont? What happens in all three states in FairPoint goes under and there isn't another provider waiting in the wings to take over? A state-financed bailout certainly isn't in the cards as all three states are financially strapped.

When I first heard about the potential sale of Verizon's sale of their northern New England assets, I thought it might be a good move because Verizon had already informed all three states they would not be further deploying their FiOS Fiber To The Home (FTTH) technology. FiOS had made some inroads in the more densely populated southern tiers of New Hampshire and Maine, but Verizon abruptly stopped construction of their network and put their wireline (landline) assets up for sale. I'd hoped a new company would pick up where Verizon had left off.

But once details of the sale became available I became skeptical, seeing a much smaller and undercapitalized company – FairPoint – taking on the assets of a much larger company. FairPoint also announced they would not be deploying FTTH broadband but would instead deploy DSL, or Digital Subscriber Line, an older and less effective broadband technology. This told me they didn't have and weren't likely to get the capital necessary to deploy FTTH. This meant that northern New England could easily become a broadband hinterland, being left behind the rest of the nation (with all due respect to the cable companies, even they can't match the capabilities FTTH provides unless they also deploy some form of FTTH).

As time when on it became quite apparent FairPoint was going to pay far too much for Verizon's assets - $2.7 billion – and the three states agreed, forcing a renegotiation of the selling price to $2.3 billion. It was my belief then, as it is now, that FairPoint still paid far too much for what they got.

Now they're having problems paying their bills. It's quite possible they will default on a loan interest payment due this coming October.

This not how a telecommunications company should operate.

New Hampshire Is Not Fiscally Responsible

It's ironic that Governor John Lynch is touting New Hampshire to other states as an example of fiscal responsibility. Ironic because it isn't true.

In the face of a deep national recession, New Hampshire stands as an example for other states in crafting a budget that makes tough cuts and lowers spending, while protecting essential services and avoiding major new taxes.

Instead, the Legislature raised existing taxes and fees, in some cases adversely affecting 45,000 small businesses in the state at a time when they could least afford it. (Hey, there's a recession on and business is way down, meaning income is down.)

The state did not lower spending...unless you call over $1.2 billion (~13%) in additional spending compared to the previous budget “lowering” spending.

We produced a budget that makes cuts by making changes to just about every area of state government and sets state government on a path to greater reform. Overall, state spending is down about 1 percent.

“Down 1 percent”? Maybe compared to the original proposed budget (an increase of 13% instead of 14%), but not when compared to the previous budget.

The governor and the legislature had more than enough opportunities to truly trim the budget and minimize the burden to the taxpayers in New Hampshire. They had more than enough time to look at the projected revenues and to craft a budget that fit within the constraints of those revenues. Instead they reversed the order, putting together a budget and only then looking to see if there would be enough money to pay for it. When it became apparent the revenues wouldn't come close to being able to fund the proposed spending, the legislature raised taxes and fees that hit the taxpayers at a time when they could least afford it.

Both the governor and the legislature failed the people of New Hampshire. We expected an austere budget, even if it meant laying off state employees and a reduction is services. What we got instead was a crap sandwich that we were expected to swallow whole and then say “Please, sir, may we have another?”

New Hampshire Loses $110 Million Court Case

The State of New Hampshire was dealt a blow when a judge presiding over a suit filed by a number of doctors, medical practices, clinics, and at least one hospital ruled the state had no right to take $110 million from a medical malpractice insurance fund in order to help balance the state budget.

Belknap County Superior Court Justice Kathleen McGuire said the state had no right to the funds because they belong to the Joint Underwriting Association.

The ruling leaves the state needing $65 million to balance last year’s books, and another $45 million for the current biennium.

It's no surprise the state will appeal the decision.

It's likely the governor will have to call a special session of the legislature to deal with the $110 million hole in the budget. I have no doubt they'll try to raise even more taxes because it's expedient rather than doing the prudent thing and cut a still bloated state budget by $110 million to eliminate that part of the deficit. (Yes it's bloated. They raised spending by over $1 billion, or 13 percent, at a time when we couldn't afford it. They claimed they made the necessary budget cuts, meaning that instead of increasing spending by 15% they only increased by 13%.)

The Legislature and the Governor have been on a spending spree over for over 2 years and are continuing it for another 2 years. Let's see if they'll do the right thing rather than the Left thing and cut the budget.

The First (Tax) Shot Across The Bow

We've been fortunate, my family and I, being able to weather the downturn in the economy without too much discomfort, for the most part. But it hasn't been easy.

Back in March every employee of the company I work for, from the CEO on down, took a 10% pay cut. We all saw that as being far better than being laid off. As things turned around a bit, our pay was restored. However we were all told that until further notice there would be no pay raises, again something that did not surprise us.

The small business my wife and I own (my wife is the CEO and I'm the handyman and IT guy) has felt the effects of the economic downturn, with business falling off about 40% from a year ago. Deb took on more hours to keep the payroll low and carefully managed what income was generated and what was spent to support the business. Even with the fall off in business we've been able to pay the bills and pay the loan we took to purchase the business. Then the legislature of the state of New Hampshire decided that in these tough times they needed to increase the state budget by over $1 billion, a 13% increase over the previous budget. The legislators and the governor claimed they had actually cut the budget, though I can't figure out how a $1 billion+ increase can in any way, shape, or form be described as a budget cut. To pay for such a generous budget increase the legislators and the governor decided it was quite alright to tax the bejeezus out of small businesses in the state to pay for all these “invisible” budget cuts, hitting over 45,000 small businesses in the pocket book at a time when many of them are struggling to survive. It certainly has hit us hard.

Starting on August 1st my wife stops taking a salary from the business. She had earlier cut her own pay to make sure we maintained a cushion to keep the business in the black. With the additional taxes imposed by our state she has had to cut her pay to zero. Without the cut we would be in trouble, unable to pay all the bills, the rent, franchise fees, payroll, loan payments, or any of the other dozens of expenses running a business entails.

If this is how the Democrat majority in the New Hampshire Legislature think they're helping us, then they are deluded. All they've managed to do is put the squeeze on the very businesses they're relying on to help turn the economy around. How stupid can they possibly be?

FairPoint Coming Under Closer Scrutiny

Is it the beginning of the end for FairPoint Communications in northern New England?

Vermont's Department of Public Service is asking for an investigation because FairPoint has been unable to correct problems with customer service and billing issues. The issue is not unique to Vermont as New Hampshire and Maine have also suffered ongoing problems with the beleaguered telecommunications company.

Over the objections of consumer advocacy groups and numerous residents in Maine, New Hampshire, and Vermont, FairPoint Communications bought the wireline assets of Verizon in northern New England. Many, including yours truly, were against the sale because it was a matter of a small rural telephone company with a spotty track record taking on the assets (and problems) of a much larger competitor and paying far too much money for them.

Since the changeover from Verizon's to Fairpoint's system at the beginning of this year, the number of complaints has skyrocketed and the slow bleeding off of wireline customers has turned into a hemorrhage, with many customers dumping their FairPoint landlines in favor of cell phones or VoIP digital phone service from their local cable companies.

FairPoint has tried to answer their critics with campaign ads, while adding an executive position created to solve the ongoing problems with customer service.

That's all well and good, but TV ads and the addition of yet another vice president in and of themselves do not solve the problems. If FairPoint doesn't get its act together it can count on at least one state – Vermont – to invalidate its license to conduct business there, meaning they would no longer be allowed to provide telephone service within Vermont.

This is no surprise.

FairPoint Communications - I Told You So!

I promised myself I wasn't going to say this again, but I lied.

I...TOLD...YOU...SO.

The questionable sale of Verizon wireline assets in northern New England (Maine, New Hampshire, and Vermont) to FairPoint Communications was something I was against from the beginning. The price tag was too high and FairPoint was buying into an operation that was many times its size, but an operation that was already suffering a decline in customers as they fled to wireless (cell phone) or digital phone services provided by the cable companies because they were far cheaper, more convenient, or both. That decline accelerated after FairPoint took over operations and quality of service declined.

Now unless FairPoint can renegotiate its loan terms it won't be able to make the interest payments due this October. This could force them into bankruptcy.

Fairpoint Communications could file for bankruptcy before the end of the year, if its debt holders don't agree to allow the company to postpone interest payments, according to a recent filing with the Securities and Exchange Commission.

The North Carolina telecommunications company, which took over Verizon's landline phone network in New Hampshire, Vermont and Maine, has faced continual service, technical and financial problems. According to the filing, the company does not expect it will be able to pay the interest due in October on $530 million in loans. The SEC filing, submitted Wednesday, asks the company's lenders to exchange their notes for new loans that would give FairPoint more time to repay.

Prior to the sale in April 2008, the utility regulators of all three states questioned the original $2.7 billion sale price agreed to by Verizon and FairPoint, saying it was too much for the assets being sold. The sale price was renegotiated to just above $2.1 billion, a value that many believed (including me) was still too high. Financing also hit a snag when interest rates for the loans climbed from 8% to over 13% just days before the sale, making the costs higher.

This sale has been a bad deal for the consumers right from the beginning. FairPoint promised deployment of broadband technology to areas not covered by any kind of broadband services. Unfortunately they chose to use DSL, a technology that is already considered to be obsolete because it cannot provide the bandwidth necessary for many present and future broadband services. Other technologies have already passed them by, particularly wireless.

My mother-in-law recently subscribed to Verizon's Wireless Broadband service, which became available in her rural town (population ~700) late last year. FairPoint hasn't deployed DSL there yet and isn't likely to any time soon. They're having trouble enough trying to maintain telephone service in the area, let alone deploy DSL. She has connection speeds that are faster than FairPoint's DSL service in a lot of towns presently being served by them.

FairPoint's financial problems do not bode well for the consumer, particularly if they end up filing under Chapter 11. I expect they'll end up selling of some of the assets they bought from Verizon. Perhaps Verizon will buy them back, specifically the FiOS FTTH services in southern New Hampshire and southern Maine, making Verizon a direct landline competitor of FairPoint. (Verizon is already a phone service competitor through Verizon Wireless).