FairPoint Communications

FairPoint Communications was an American communications-services operator whose business centered on local telephone networks, broadband, Internet access, long-distance calling, television, data connectivity, fiber services, and communications solutions for business customers. The company was based in Charlotte, North Carolina, and operated primarily in rural and smaller regional markets. As an incumbent local exchange carrier, FairPoint had both the regulatory privileges and service obligations associated with maintaining local telecommunications infrastructure in designated communities. The company began in 1991 under the name MJD Communications Inc. Its early development followed the consolidation model common among rural telecommunications operators: acquiring independent local exchange carriers and integrating their networks and customer bases into a larger operating platform. Among its acquisitions were Cass County Telephone Company in 2006 and Germantown Independent Telephone Company in Germantown, Ohio. These transactions expanded FairPoint's presence beyond its original footprint and helped establish the operating-company structure used by the group. FairPoint's defining strategic turning point came in 2007, when Verizon Communications agreed to sell its landline operations in Maine, New Hampshire, and Vermont. The transaction was subject to extensive federal and state regulatory review and became effective on March 31, 2008. It added approximately 1.6 million telephone customers and 230,000 Internet users, making Northern New England the overwhelming majority of FairPoint's customer base and briefly placing the company among the largest telephone operators in the United States. The acquisition also substantially increased FairPoint's debt burden and created significant integration, network-investment, and operational challenges. Those pressures contributed to a severe financial crisis. In 2009, FairPoint disclosed that it was evaluating its capital structure and might not satisfy a credit-facility interest-coverage covenant. The company filed for Chapter 11 bankruptcy protection on October 26, 2009, and emerged in January 2011 after restructuring its obligations. Bankruptcy did not end the operating business, but it marked the limits of an acquisition-led expansion strategy financed with substantial debt. During the following years FairPoint continued to operate local and regional telephone companies while adjusting its portfolio to changing communications economics. In 2012 it agreed to sell its Northern New England payphone operations, citing declining profitability. The company also experienced a major labor dispute in 2014, when employees in Northern New England went on strike after negotiations over pensions, benefits, job security, and other contract issues broke down. The 131-day strike ended with a new three-year agreement. FairPoint ultimately ceased to exist as an independent brand after Consolidated Communications agreed to acquire it in 2016. The transaction, valued at approximately $1.5 billion including assumed debt, closed in July 2017. The combined business operated under the Consolidated Communications name. FairPoint is therefore best understood as a defunct corporate telecommunications brand whose principal legacy was the assembly and operation of rural and regional wireline networks, particularly in Northern New England.

FairPoint Communications originated in 1991 as MJD Communications Inc., an incumbent local exchange carrier established to provide local telecommunications service in rural and regional communities. Its regulatory status gave it responsibility for maintaining local networks while allowing it to build a larger operating platform through acquisitions. In 2006, the company acquired Cass County Telephone Company and integrated it as FairPoint Communications Missouri. It also acquired Germantown Independent Telephone Company in Ohio. The company's most consequential expansion began in 2007, when Verizon announced plans to sell its landline operations in Maine, New Hampshire, and Vermont to FairPoint. The proposed transaction involved cash, debt, and FairPoint stock and required extensive review by federal and state regulators. Regulators expressed concern that the purchase price and resulting debt could limit FairPoint's ability to maintain and expand the acquired networks. The transaction nevertheless became effective on March 31, 2008. The acquisition added approximately 1.6 million telephone customers and 230,000 Internet users. Northern New England subsequently accounted for about 85 percent of FairPoint's customers, making the company one of the largest telephone operators in the United States at the time. The scale of the deal also exposed FairPoint to the difficulties of integrating a much larger network while carrying substantial acquisition-related obligations. The company later indicated that its financial structure was under pressure and that it might fail to meet a credit covenant. FairPoint filed for Chapter 11 bankruptcy protection on October 26, 2009. FairPoint emerged from bankruptcy in January 2011. It continued to operate a collection of local telephone companies and provide voice, broadband, Internet, data, fiber, television, and business communications services. As traditional payphone usage declined, FairPoint sold approximately 4,000 payphones in Northern New England in 2012 to Pacific Telemanagement Services. The company also sold its Fremont Telcom operation in Idaho in 2013. Labor relations became a prominent issue in 2014. Northern New England employees represented by IBEW and CWA went on strike after negotiations over a new contract deteriorated and the company froze employee pensions. The strike lasted 131 days and concluded with a new three-year labor agreement. FairPoint's independent existence ended through a transaction with Consolidated Communications. Consolidated agreed in December 2016 to acquire the company for approximately $1.5 billion including assumed debt. The deal closed in July 2017, after which the combined operations were conducted under the Consolidated Communications name. FairPoint's former operating companies and network assets consequently became part of Consolidated's regional telecommunications business.

1. 2017Acquired by Consolidated Communications

   The acquisition closed in July and FairPoint's operations were folded into Consolidated Communications.

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2. 2014Northern New England labor strike

   A 131-day strike ended with a new three-year contract between FairPoint and represented employees.

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3. 2012Payphone operations sold

   FairPoint agreed to sell approximately 4,000 Northern New England payphones to Pacific Telemanagement Services.

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4. 2011Emergence from bankruptcy

   The company completed its restructuring and emerged from Chapter 11 in January.

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5. 2009Chapter 11 filing

   FairPoint filed for Chapter 11 bankruptcy protection after reporting capital-structure and debt-covenant concerns.

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6. 2008Northern New England acquisition completed

   The Verizon transaction became effective on March 31, adding approximately 1.6 million telephone customers and 230,000 Internet users.

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7. 2007Verizon Northern New England transaction announced

   FairPoint agreed to acquire Verizon's landline operations in Maine, New Hampshire, and Vermont.

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8. 2006Cass County Telephone Company acquired

   FairPoint acquired Cass County Telephone Company and integrated its operations into FairPoint Communications Missouri.

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9. 1991Company founded as MJD Communications

   MJD Communications Inc. was established as an incumbent local exchange carrier serving rural and regional telecommunications markets.

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A regional incumbent telecommunications operator focused on rural and small-market communities, combining legacy wireline telephone networks with broadband, data, fiber, television, and business communications services.

• Local and long-distance telephone serviceTelephony1991

  FairPoint's core business was fixed-line voice service delivered through incumbent local exchange carrier networks. It provided local calling in its rural and regional service territories and also offered long-distance telephone service.

• Broadband and Internet accessInternet access

  The company provided Internet and broadband connectivity over its regional telecommunications infrastructure. Broadband users became a significant part of the customer base following the Northern New England acquisition.

• Business communications solutionsBusiness telecommunications

  FairPoint served business customers with communications, data, connectivity, and related network services. Its business offering complemented the residential voice and broadband operations of its local telephone companies.

• Fiber and data servicesNetwork services

  FairPoint operated fiber and data infrastructure for communications customers and enterprises. These services represented the higher-capacity side of its transition from traditional voice networks toward broader connectivity offerings.

• Television servicePay television

  Television service was included among FairPoint's communications offerings in selected markets, alongside telephone, Internet, broadband, and data services.

• 2016Agreement to be acquired by Consolidated CommunicationsM&A

  FairPoint remained a regional wireline operator after its bankruptcy restructuring, while consolidation continued across the United States telecommunications sector.

  What changed. Consolidated Communications agreed to acquire FairPoint for approximately $1.5 billion including assumed debt.

  Aftermath. The transaction closed in July 2017, and the combined company operated under the Consolidated Communications name.

  Acquisition value including assumed debt. Approximately $1.5 billion (2016)

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• 2012Exit from payphone operationsStrategy

  Declining payphone economics made the business less attractive within FairPoint's broader communications portfolio.

  What changed. FairPoint agreed to sell approximately 4,000 payphones in Northern New England to Pacific Telemanagement Services.

  Aftermath. The transaction removed an unprofitable legacy service from the company's operations.

  Payphone revenue. Approximately $1 million in revenue from the operations (2012)

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• 2009Chapter 11 restructuringStrategy

  The company reported concerns about its capital structure and its ability to satisfy an interest-coverage covenant after the major Northern New England acquisition.

  What changed. FairPoint filed for Chapter 11 bankruptcy protection on October 26, 2009.

  Aftermath. FairPoint emerged from bankruptcy in January 2011 and continued operating its regional telecommunications businesses.

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• 2007Pursuit of Verizon's Northern New England landline operationsM&A

  FairPoint sought to expand from a smaller rural carrier into a major regional incumbent operator by acquiring Verizon's wireline businesses in Maine, New Hampshire, and Vermont.

  What changed. The parties announced a transaction involving cash, debt, and FairPoint common stock. Regulatory authorities reviewed the deal before approving its completion.

  Aftermath. The purchase added approximately 1.6 million telephone customers and 230,000 Internet users but left FairPoint with substantial integration and financial pressures.

  Transaction value. Approximately $2.4 billion at closing (2008)

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• 2017FairPoint acquisition closes and brand is absorbed

  Consolidated Communications completed its acquisition of FairPoint in July. The combined company operated under the Consolidated Communications name, ending FairPoint's independent corporate operation.

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• 2016Consolidated Communications agrees to acquire FairPoint

  Consolidated Communications agreed to purchase FairPoint in a transaction valued at approximately $1.5 billion including assumed debt.

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• 2014FairPoint Northern New England employees begin 131-day strike

  Employees represented by the International Brotherhood of Electrical Workers and the Communications Workers of America began a strike after contract negotiations stalled and FairPoint froze employee pensions. The work stoppage lasted 131 days and ended with a new three-year contract.

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• 2012FairPoint sells Northern New England payphone operations

  FairPoint announced the sale of approximately 4,000 payphones in Northern New England to Pacific Telemanagement Services. The company said the operations had become unprofitable and generated roughly $1 million in revenue.

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• 2011FairPoint emerges from bankruptcy

  FairPoint completed its Chapter 11 restructuring and emerged from bankruptcy in January 2011.

  BankruptcyOther
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• 2009FairPoint enters Chapter 11 bankruptcy protection

  After warning that it might breach a credit-facility interest-coverage covenant and considering a capital-structure restructuring, FairPoint filed for Chapter 11 protection on October 26, 2009.

  Bankruptcy
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• 2008Northern New England acquisition becomes effective

  Following federal and state approvals, FairPoint completed the purchase of Verizon's wireline operations in the three Northern New England states on March 31, adding approximately 1.6 million telephone customers and 230,000 Internet users.

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• 2007FairPoint agrees to acquire Verizon's Northern New England landline operations

  FairPoint announced an agreement to acquire Verizon's landline businesses in Maine, New Hampshire, and Vermont. The transaction was designed to transform FairPoint into a substantially larger regional incumbent carrier but required extensive regulatory review and created a much heavier financial and operational burden.

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1. FairPoint Communications