Summary
1. Over a week ago, we said there was no reason to be pessimistic about FairPoint’s future. 2. The impressive recurring revenue that an ILEC generates just had to be facilitated. 3. There is undoubtedly disappointment at the PUC, by the consumer advocates, and in the press over the good news.
Analysis
Only a consumer advocate type of person with insufficient knowledge of telephony could be sure that a financial investigation of FairPoint was necessary. Her apparently anti-corporate bias will probably keep her suspicious about this company for a while.
It is interesting to contemplate the strategic thinking at FairPoint as well as at other large independent telcos that are likely to get access to properties in second and third tier cities. Just as the RBOCs do not necessarily mind losing residential POTS lines, the same could be said for the independents. The money is going to be made on “corporate customers and broadband Internet.”
Regarding the situation at FairPoint itself, other large independent telcos will no doubt be elated by the latest news. They want to get their hands on these types of properties as well. And FairPoint’s future success will make it harder for the regulatory community to stand in the way.
