BIDDEFORD, Maine — Depending on the outcome of an investigation by the Public Utilities Commission, Biddeford-based XATel Communications could lose the authority to provide local and long-distance telephone service in Maine. An evidence-gathering hearing was held Tuesday, and the commission said it will make a decision on the matter at a later date.

The PUC is looking into whether XATel failed to comply with a PUC order on Sept. 22 to make 10 installment payments to FairPoint Communications for an outstanding bill totaling approximately $73,500. As a result of the failure to pay, on Jan. 5, FairPoint issued XATel notification that it would disconnect services on Feb. 7. The commission is also investigating whether XATel failed to notify its customers of the impending disconnection, as required under PUC rules.

According to the company’s principal investor, David Bourque, service has been disrupted and customers are only able to connect to emergency services. He said the company is working on restoring service and hopes to be able to do so soon.

During the hearing, the PUC ordered XATel to send out a notice to its customers regarding the disruption of services so customers have the option to get service from a different provider.

Since the initial disruption of services last month, however, many of the company’s customers already have switched to a different phone carrier. XATel CEO Roland Lawler said he estimates the company’s customer base has decreased by two-thirds, to about 82.

Lawler admitted that the company hadn’t paid FairPoint as ordered to by the PUC. He said that he disagreed with the amount the commission ordered XATel to pay because there were additional credits that should have been added to XATel’s account with FairPoint that would have made the actual amount owed less than $100. He also said his company couldn’t afford to make the installment payments.

Lawler said he had notified his customers by email of the impending notification in February as required, although some of the emails bounced back as a result of invalid email addresses. He added that both XATel and the PUC sent press releases to the media of the impending disconnection. The PUC asked XATel to produce a copy of the email notification.

Some of the other areas the commission is investigating are whether XATel failed to pay required fees, whether it failed to file required reports and whether it refused to transfer customers to alternate carriers.

As to paying required fees to the Maine Universal Service Fund, the Maine Telecommunications Education Access Fund and the ConnectME Fund, Lawler said that only in one instance had the company earned more than the threshold requiring payment for the MTEAF. He didn’t go into detail about payments to other funds. He also said that he failed to file many of the reports for the funds.

Regarding other required reports, Lawler said he hadn’t received notification of when they were due and he only filed one or two of those that were required.

Commissioner Vendean Vafiades said she was concerned that XATel hadn’t been prepared for the impending consequences of its actions. She also said that the company hadn’t communicated with the commission about difficulty in following through with its obligations, but rather seemed to simply ignore orders placed on the company by the PUC.

Lawler said he didn’t know whom to contact at the PUC about difficulties in complying with the orders.

In addition, he noted the company’s small staff and low revenue as reasons why it couldn’t comply.

“It’s not that we didn’t want to follow the provisions of the PUC,” said Lawler, “it’s that we couldn’t.”

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