PORTLAND, Maine — A bill to phase out the requirement that FairPoint Communications provide price-controlled landline telephone service in some of the state’s most populous areas won approval Monday from a legislative committee.

The vote sends to the full Legislature the question of whether to advance the state’s deregulation of the telephone industry, which FairPoint said has pitted it unfairly against unregulated competitors in many parts of the state.

FairPoint has sought to be rid of those requirements in the wake of the state’s deregulation of the telephone industry in 2012.

Angelynne Beaudry, spokeswoman for FairPoint, said the amended bill strikes a balance negotiated by consumer advocates, FairPoint’s competitors and others.

“The stakeholders were able to work through the process on this bill that recognizes the highly competitive telecommunications environment while maintaining consumer protections in non-competitive areas,” Beaudry said.

The amended version of LD 466 would start by freeing FairPoint of the requirement to provide landline service for any requesting customer in Bangor, Portland, South Portland, Lewiston, Auburn, Biddeford and Sanford.

The company has argued it faces unfair competition in those communities, where other providers do not have an obligation to provide service at rates established by the state. State regulators set up that requirement with the deregulation of the telephone industry, out of concern that telephone companies would abandon hard-to-reach parts of the state.

In those areas where FairPoint would still be required to provide landline service, its rates would be limited to $20 per month and increases would be capped at 5 percent annually.

FairPoint has argued there’s sufficient competition in the state’s most populous communities to serve as a check on service quality, with the idea that if a company’s service quality dwindles, multiple other service options would be available.

After those initial communities, the bill sets up a process for the company to request removal of 15 other communities in batches of five as frequently as every six months.

Regulators must find other providers that offer service to the vast majority of customers in that area and that FairPoint has met service requirements there over the year before. They also are required to hold public hearings before approving removal community from a provider of last resort service.

That elimination means the company could deny any new requests for landline service at the standard rate set by state regulators. Current customers would be allowed to keep their current service for a year after a community is taken off the list of communities to which FairPoint must make available landline service as a last resort to customers without other phone options.

The bill also would lighten certain service quality standards for the mandatory service lines, called provider of last resort service, and it would shield those service quality records from public view unless the company fails to meet them for two consecutive quarters.

It has failed to meet landline service quality standards since they took effect in 2014.

The latest bill came forward as a compromise with the Office of the Public Advocate, which represents customers in cases before utility regulators.

Public Advocate Tim Schneider said Monday the bill makes clear that FairPoint will face penalties if it misses service quality standards while making those standards less strict.

He said his office agreed to more forgiving service quality metrics in part because elimination of some of the biggest communities would make it harder to meet standards like the rate of troubles reported on all provider-of-last-resort lines.

The company said in previous testimony that it has about 10,000 customers in the 22 communities identified in the bill as slated for removal from mandated landline service requirements.

Lawmakers on the energy committee voted 10-1 Monday to recommend the bill’s passage to the full Legislature, with Rep. Chris Babbidge, D-Kennebunk, dissenting.

Babbidge said he’d prefer to grandfather existing customer rates for a longer term of five years and keep the current service quality requirements in place for those customers during that time.

Because the bill makes changes to the state’s Freedom of Access Act exemptions, related to it service quality reports, it will head for approval by the Legislature’s Judiciary Committee before making its way to the full Legislature.

Darren is a Portland-based reporter for the Bangor Daily News writing about the Maine economy and business. He's interested in putting economic data in context and finding the stories behind the numbers.