Fairpoint Response To Opa

155 Gannett Drive South Portland ME 04106 Direct: 207-642-7001 Fax: 207-642-7504 www.fairpoint.com

Wayne Jortner and William C. Black State of Maine Public Advocate Office 112 State House Station Augusta, ME 04333 June 15, 2009 RE:

Response to June 4, 2009 letter concerning Compliance with Commission Order Dated 2/1/08 in Docket No. 2007-67; MPUC Docket No. 2008-108

Dear Sirs: In reply to the June 4 letter referenced above, FairPoint Communications would like to respond to several points asserted in your correspondence. First and foremost, FairPoint would certainly agree to a meeting to discuss these concerns and we wish you would have given us a call rather than having this addressed through the media. In fact, if you were not satisfied with our responses, we would have expected you would then bring your concerns to the Commission rather than vent them in public. Second, FairPoint has an established process of working with the Office of the Public Advocate for addressing issues. This has generally worked well in the past and FairPoint would respectfully request that this avenue be exhausted before steps are taken outside this path to introduce questions and concerns. In the correspondence of June 4, 2009, the following points of concern were stated and we will initially address those here: 1. Pricing of FairPoint’s DSL service Concern: “We object to FairPoint’s DSL pricing practices because they are inconsistent with the provisions of the Amended Stipulation that FairPoint signed on December 21, 2007, because they are reducing the amount of revenues that FairPoint would otherwise be earning, and because they are risking further erosion of the limited amount of goodwill that FairPoint maintains.” Response: By its choice of words, the Public Advocate appears to be intending to create the impression that FairPoint has not acted in compliance with the Amended Stipulation. In the Amended Stipulation signed on December 21, 2007, FairPoint agreed to maintain all prices and speeds offered by Verizon for broadband Internet access service. The Amended Stipulation does not require FairPoint to advertise these rates and we have made the reasoned business decision not to do so. We abide by our agreement and do offer the same prices and speeds that Verizon was offering at the time of the closing of the transaction with Verizon. For any customer

who was already signed up for a specific speed/rate, or any customer who asks about the Verizon speed/pricing, we do honor those products.

2. FairPoint’s publications of reduced basic exchange rates and DSL rates Concern: “…FairPoint never mentions that it is offering newly-reduced rates for circuit-switched telephone services […] FairPoint seems to be hiding its new low rates for telephone and DSL services rather than capitalizing on them. Response: With all due respect, although the Office of the Public Advocate may not agree with our advertising practices, we are fully compliant with all regulations surrounding our pricing structures and availability of our tariffed rates. We have a fully staffed, highly trained marketing team who, after thorough research, makes decisions on what pricing and product availability we choose to advertise and promote. At the time of the basic exchange rate reduction, all affected customers were notified by letter of the changes taking place and the new rates to be in effect. Concern: “Despite Stipulation provisions, it appears that neither FairPoint’s customer service representatives nor FairPoint, through its website, have made any attempt to inform customers that its 768 Kbs DSL service is available for $15/month, or $18/month – as FairPoint had agreed to do when it signed the Stipulation.” Response: Again, your letter attempts to create the impression that FairPoint is not complying with an agreement to advertise certain pricing. The Amended Stipulation does not require that FairPoint advertise these rates and we have made the business decision not to do so at this time. The provisions quoted in the letter from page 12 of the Amended Stipulation clearly indicates that FairPoint agrees to “adhere to all terms and conditions of Verizon’s $15 per month “for life” rate for 768 kbs access speeds to existing subscribers to this offer at closing.” We are not required to offer this product to new subscribers and we do not do so. Concern: “…neither FairPoint’s customer service representatives nor FairPoint, through its website, have informed customers that stand-alone DSL service is available for $37 per month, despite its explicit agreement to provide DSL service at that particular rate. Response: Again, your letter attempts to mix a commitment to provide a particular service at a particular price with the impression that FairPoint agreed to a particular marketing approach. We are in compliance with the Amended Stipulation. FairPoint offers stand-alone DLS at rates as low as $19.99 during certain promotions. The fact that we’ve chosen not to advertise or promote this is a reasoned business decision. Concern: “To remedy this situation, the Public Advocate requests that FairPoint agree to an additional two years duration for the DSL pricing provisions – as a result of FairPoint’s failure to comply with its promise during the first two years.”

Response: There is no situation which needs to be remedied. In this case, the Amended Stipulation requires that we offer certain products at certain rates and we are in full compliance with this requirement. The Amended Stipulation DOES NOT require that we advertise or in any way promote these prices, and we have made the business decision not to do so. Concern: “The Public Advocate urges FairPoint to advertise widely the availability of its basic exchange service at the rate of $14.69 (plus SLC) per month. Response: FairPoint appreciates the Public Advocates purported concern for our market share and goodwill. At this time, we have made other business choices about what we are promoting on our Web site, bill inserts, and other media. We are in compliance with all requirements. 3. FairPoint’s policies towards its wholesale customers Concern: “The Public Advocate asks FairPoint to live up to the promise that it made in its Brief not to harm wholesale customers in any way… Those CLEC customers are hurt when FairPoint treats its wholesale customers in a way that diminishes the wholesale services that it makes available.” Response: FairPoint’s Wholesale Managers and team members are working on a daily basis with the CLECs to provide our highest quality service, tools, and product offerings. We are aware that currently there are some deficiencies in some of our systems and processes, and we are making constant improvements and upgrades as quickly and efficiently as we can to meet the needs of our Wholesale customers. This issue is being pursued with maximum effort. In summary, the bulk of the issues raised in this communication relate to alleged noncompliance with the Amended Stipulation and a disagreement between the Public Advocate and FairPoint Communications on how to communicate and promote the various products and services mandated in the Amended Stipulation. With respect to the Amended Stipulation provisions mentioned in your letter, we are in complete compliance. While FairPoint does appreciate the Public Advocate’s indicated concern for the state of our business, decisions on what to advertise, publicize and promote are ultimately a part of doing business, and those decisions must be ours to make. As stated at the beginning of this letter, FairPoint will be happy to meet with Public Advocate staff to discuss any and all points of concern regarding this communication. Please contact me to set up a meeting. Thank you,

Audrey Prior

VP Government Relations FairPoint Communications Cc:

Rich Kania, MPUC Rep. Jon Hinck Sen. Barry Hobbins