FairPoint unions lose fight over revealing new buyer’s potential cutbacks

By Darren Fishell, BDN Staff
March 07, 2017, at 2:27 p.m.

Consolidated Communications announced in December planned savings of $55 million in six different areas through its purchase of FairPoint Communications. The company’s plan to find those “synergies” has become a subject of dispute between the company and unions representing about 550 of its employees in Maine.

PORTLAND, Maine — Unions representing about 660 FairPoint workers in Maine lost a bid to have the company’s buyer reveal which areas of the business it might cut after closing the deal.

Regulators on Tuesday turned down the union’s request to make public the names of seven “areas of potential synergies” regarding labor costs that are discussed in confidential documents related to the company’s $1.5 billion merger with the Illinois-based Consolidated Communications.

The Maine Public Utilities Commission denied the request as part of its review of the deal, to determine whether it’s in the public interest.

The PUC examiner in the case noted “synergies” are another way of saying “downsizing” or layoffs, and that the possibility should not come as a surprise.

“Downsizing is a common and often inevitable consequence of any merger of this magnitude, and its potential occurrence here should come as no surprise to any party,” wrote Jody McColman, the hearing examiner in the case.

The unions had argued keeping the names of the seven areas of possible labor savings would limit its testimony about those plans and the ability to make their case.

McColman wrote the union request reached too far into the realm of private business information and that the unions would be able to provide confidential information about the cuts to consultants it may hire to testify.

FairPoint, Consolidated and the Telecommunications Association of Maine argued the information could interfere with the merger review.

“The areas of synergies are often sensitive with local impacts that, if released while a deal is being formulated, could prejudice the overall deal,” wrote Benjamin Sanborn, an attorney for the telecommunications association. “For example, if a local call center is the subject of an initial discussion of synergies, release of this information could result in significant concern from the community where the call center resides.”

Sanborn argued such disclosure could cloud the assessment of the merger’s statewide costs and benefits and cause it to be “derailed in the court of public opinion because of a single piece affecting one area of a state.”

Upon announcing the deal, Consolidated identified six areas in which it expected to find about $55 million annually in savings, mostly in operating costs connected with corporate spending, network and operations costs and IT support.

The disclosures requested by the union were more specific, identifying seven work areas under the heading “labor” alone. The unions did not ask for the company to disclose publicly associated savings amounts.

The company has about 110 employees at call centers in Bangor and Portland and another 550 who work as field technicians, customer service representatives and other functions, according to a January filing with regulators.