MONTPELIER, Vt. — Nearly three years after a tiny North Carolina phone company grew sixfold by swallowing the major land-line networks of Maine, New Hampshire and Vermont, it convinced a federal bankruptcy court judge Thursday that it could try again at running them.
FairPoint Communications Inc. got the green light to emerge from Chapter 11 from Judge Burton Lifland of the U.S. Bankruptcy Court in New York City and should complete the process by Jan. 31, the company’s Vermont president, Mike Smith, said in an interview.
“We’re very pleased with the judge’s action today,” he said. “We’re looking forward to finalizing the process by the end of the month.”
The ruling was expected after Vermont regulators gave their OK on Dec. 23 to the reorganization plan. FairPoint operates in 18 states, and Vermont’s Public Service Board was the last state regulatory body to give its approval, having rejected an earlier version in June.
Key to the reorganization was shedding $1.7 billion of the debt that FairPoint took on when it bought the three states’ land-line phone networks and phone network-based Internet service systems for $2.3 billion.
The deal closed on March 31, 2008, and within days, regulators were getting complaints from customers about not being able to make long distance calls, an online billing system going out of service and other problems.
The service troubles became acute at least once. On one day in September 2008, FairPoint network problems were blamed for 911 emergency calls from throughout northern Vermont failing to connect with public safety personnel for nearly two hours.
FairPoint officials have said they’ve been working to improve service and correct problems. Smith believes the company will be stronger now.
“Obviously, when you shed $1.7 billion in debt through negotiations with your senior creditors, you come away in a much stronger condition,” he said.
He said he also hoped Vermont lawmakers would follow the lead of Sen. Vincent Illuzzi, R-Essex-Orleans, who is pushing legislation that would relax some of the regulations under which FairPoint must operate.
Smith echoed arguments Illuzzi made earlier this week, that the regulatory system was set up when a telephone monopoly operated in the state.
With competition from much less regulated wireless and cable companies, “We’re no longer the monopoly,” Smith said. “Nor are we the dominant carrier that we once were in this state. We just want a level playing field.”