FairPoint publishes open letter to customers, communities
PORTLAND, Maine, Nov. 3, 2014 /PRNewswire/ -- FairPoint Communications, Inc. (Nasdaq: FRP), a leading communications provider, recently published this open letter in state and regional newspapers to the communities of northern New England.
The Future for FairPoint
Do landlines really matter in an era of smartphones, tablets, texts and tweets?
Wireless calls, social media interactions, tweets and texts are being carried and transported by high capacity landlines and the best way to do that is through fiber optic lines.
FairPoint understands that as technology and communications change, so must the telecommunications industry. This is the reason FairPoint has invested over $700 million dollars in northern New England and today, has over 16,000 miles of fiber optic cable robustly and reliably carrying traffic for you and the businesses in northern New England. That's enough fiber to crisscross the widest parts of Maine, New Hampshire and Vermont over 40 times.
The three of us have seen a lot change in telecommunications over our combined 80+ years in the industry. And, one thing is clear to us today; northern New Englanders have many choices for their communication needs.
Today about 39 percent of households in America no longer rely on a traditional dial tone telephone, and that number grows every day as wireless phones, tablets and cable service are replacing landline telephones. This is why FairPoint has been focused on transforming from the traditional landline telephone company of the past to the preferred telecommunications provider of the future by investing over a million dollars per week, on average, in our infrastructure in northern New England for the last six years.
To serve 21st century customers, however, we want to reduce our monopoly-era telephone company costs and have more flexibility to respond to customer needs. We want to be more efficient and nimble.
To understand the scope of our challenge, it is important to note that the old Union contracts are holdovers from the bygone days of Ma Bell monopolies. Today, the average annual wage and benefit costs for FairPoint's union represented employees in Maine, New Hampshire and Vermont are approximately $115,000 – not including the future costs of pensions and other post-retirement benefits. The average individual union employee's paycheck totaled $82,500 in 2013 – nearly twice the median personal income in the region.
And that's not all. Under the old agreements, FairPoint provided current and retired union-represented employees with a broad range of healthcare benefits at no cost to the employee. The company paid 100% of healthcare premiums for its unionized workforce. Beyond this, the application of various provisions of the previous contracts resulted in unlimited paid sick days.
Plus, the contracts featured two retirement plans: first, a defined benefit pension plan with no employee contribution—again the company paid for 100% of the guaranteed benefit and second, a 401K plan with a company match of employee contributions.
FairPoint believes it has negotiated in good faith with its unions and at no point proposed to reduce base wages for existing employees. We sought instead to bring benefits in line with what we believe to be mainstream norms and to transition union represented employees to similar benefit plans offered to other FairPoint employees, including management. Our proposal allows union represented employees to keep what they have already earned in the defined benefit plan and to participate in a 401K retirement savings plan similar to what all other FairPoint employees have.
The previous contracts expired in early August and, unfortunately, despite months of negotiations, successor agreements have not been reached. The two sides remain far apart in their negotiating positions. That's why we implemented our proposals (which we were allowed to do under the law) that, among other things, move unionized members to the benefit plans outlined above – again, with no changes in base wages for current employees.
The implemented proposals reflect FairPoint's commitment to our knowledgeable and skilled employees, as we provide good paying jobs with excellent benefits.
These changes will also enhance FairPoint's ability to price products competitively and are critical to our ability to meet the needs of the customers, communities and economies of northern New England.
We think that is reasonable and fair.
Beth Fastiggi, State President for FairPoint in Vermont
Pat McHugh, State President for FairPoint in New Hampshire
Mike Reed, State President for FairPoint in Maine
As our unionized workers exercise their right to strike, we are executing our contingency plans to ensure continuity of service. We continue to mobilize to meet service needs and safeguard critical networks. The company greatly appreciates our customers' patience, understanding and assistance at this time.
SOURCE FairPoint Communications, Inc.
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