Verizon's Right Not to Know Law

Verizon's recently approved deal to spin off its land line operations in Northern New England carries some big risks, as I laid out yesterday - and is likely to retard the development of truly high-speed (greater than 10 Mbps) broadband throughout the region. One of fundamental unknowns in the deal is the condition of the infrastructure that FairPoint is buying.

In New Hampshire, Verizon is under investigation for alleged degradation of infrastructure and a decline in customer service quality, allegedly resulting from a declining investment in capital infrastructure and staffing in recent years.

But the results of the Verizon investigation have been kept from the public.

There is reason to be concerned. According to a "story in the Concord Monitor, in Concord, NH, "Over the past five years, [Verizon] has gradually decreased capital investment in the state, allowing the network to deteriorate and halting broadband expansion as it spent money installing newer, better products elsewhere."

The investigation was opened by New Hampshire state Public Utilities Commission in 2004. But "Unlike in Maine and Vermont, where service quality reports are readily accessible, the reports and investigation are not available to the public in New Hampshire.

"Don Kreis, the general counsel at the Public Utilities Commission, acknowledged that there is an open case to investigate Verizon's quality of service in the state, but he said he could not discuss specifics or release any other information.

"Although New Hampshire's Right-to-Know Law allows public access to the proceedings and findings of any board or commission of any state agency, Kreis cited an exemption to the law that prohibits him from discussing the service quality investigation.

"RSA 378-43, part of a utilities law titled 'Information Not Subject to the Right-to-Know Law,' was passed in 1999, after Verizon took over phone service in the state."

The final Verizon/FairPoint deal does include a requirement that Verizon invest $50 million to help upgrade the infrastructure. But if the infrastructure is in worse shape than the regulators expected, FairPoint will have paid too much. And with more than $1 billion in debt to contend with, FairPoint will be hard pressed to come up with the capital to address those needs without substantial rate increases. Ratepayers can only hope that FairPoint has a more accurate picture of the Verizon infrastructure than they do.