The FCC narrowly approved Verizon’s plan to transfer to FairPoint...

public interest harms.” Instead, the arrangement could produce public benefits such as “the accelerated deployment of broadband throughout the region,” according to the FCC. The order, adopted Dec. 20, was released Wednesday. The transaction requires approval by the states. Maine has approved much of the deal, and Vermont seems close to action. FCC Commissioners Michael Copps and Jonathan Adelstein voted against the deal. Copps didn’t believe FairPoint could deliver on promises to invest in broadband, increase jobs and improve service quality, he said. “The Commission has not grappled meaningfully with the question of whether this transaction truly satisfies the public interest standard,” Adelstein said. Although the order affects Lifeline service and broadband connections for about 3 million people, the agency responded with “casual dismissal” to “red flags” raised by unions, citizens’ groups and state regulators, he said. Adelstein is “particularly concerned” about the three states’ high proportions of rural residents, since rural consumers “face some of the lowest levels of broadband penetration in the country,” he said. The agency doesn’t believe the transaction will harm competition by disrupting competing carriers’ ability to get wholesale services, it said. “We find nothing in the record to suggest that FairPoint will have either greater incentive or ability to discriminate in the provision of wholesale inputs than Verizon,” the order said. The agency rejected calls for various conditions as not involving “merger- specific harms” but being concerned about issues broader than this particular transaction. For example, the agency rejected a proposal that it apply to the FairPoint deal voluntary conditions attached to the Verizon-MCI merger. The FCC has a “broad industry-wide view” that enabled it to see the benefits of the transaction for consumers and businesses, said Verizon Senior Vice President Susanne Guyer. The Independent Telephone & Telecommunications Alliance, which represents mid-sized telecom companies like FairPoint, said the FCC decision “will send a strong signal to consumers and the market that broadband deployment will continue to take place by companies that want to serve the high-cost parts of our country.” Meanwhile, Maine regulators Wednesday gave unanimous final approval to the deal after settling wholesale service issues left open in last week’s Maine agreement on the deal’s financial, broadband and retail service conditions. The Maine PUC took less than two hours to resolve wholesale issues, compared to last week’s marathon 13-hour session on financial, broadband and retail service matters. The PUC inserted a non-compete clause barring FairPoint from competing for broadband customers against entities that get ConnectME grants to bring broadband to underserved and unserved areas. FairPoint would be barred from competing against existing grant recipients for two years after they go online. The condition would not apply to ConnectME recipients awarded grants after sale closing. Adams said FairPoint in the future would have a chance to trump ConnectME applicants with its own broadband deployment proposal, but in regard to existing grant recipients, “we don’t want a 900-pound gorilla landing on these small entrepreneurs just as they're getting off the ground.” The PUC rejected a proposed condition to require that FairPoint establish a separate DSL subsidiary, concluding that the separate business unit would serve no wholesale or retail purpose. Verizon and FairPoint asked Vermont’s Public Service Board to rethink a December rejection of their deal and accept a revised settlement. Terms added to the companies’ original Vermont proposal include: (1) Invest a minimum of $40 million per year in network improvements for the first three years after closing. (2) Make broadband available to all customers in at least 50 percent of its Vermont exchanges by the end of 2010. (3) A service quality guarantee stipulating penalties of up to $12.5 million a year if quality standards aren’t met.