The cost of preparing for a strike between FairPoint Communications and its workers in northern New England was reflected in the telecommunications company’s third-quarter financial filing, even though the strike didn’t start until the company’s fourth quarter.

Ongoing labor negotiations cost the company $17.1 million during the third quarter, including expenses related to the hiring and training of its “contingent workforce,” legal communications and public relations services.

The company expects further labor negotiation expenses in the fourth quarter, but Chief Financial Officer Ajay Sabherwal said in a Thursday call with analysts that he expects those costs to be offset partly by a decrease in employee-related expenses. The company stopped providing health care coverage to its striking workers at the beginning of November.

Labor contract negotiations with the International Brotherhood of Electrical Workers and the Communications Workers of America ended in August without a resolution, leading to roughly 800 employees in Maine going on strike at midnight Oct. 16 along with 1,200 FairPoint employees in Vermont and New Hampshire.

FairPoint Communications reported it lost $37.8 million during the third quarter despite an increase in revenue during the same period.

The North Carolina-based company posted quarterly revenue of $228.1 million, a 1.1 percent increase from the $225.6 million posted during the second quarter. While its traditional landline telephone business continued to decline, the revenue increase was driven by the company’s data and Internet services and by leasing its network to other telecommunications companies, including wireless companies like Verizon Wireless, that need FairPoint’s network to carry cellphone calls from tower to tower.

The company, which has struggled financially since acquiring Verizon’s telephone landline business in northern New England in 2008, had asked the unions for $700 million in concessions, mostly by freezing pensions, eliminating health coverage for retirees and asking employees to contribute roughly 20 percent to their health care costs.

The unions rejected the company’s proposal, but offered to trim more than $200 million from employee benefits. The company rejected those counterproposals.

In late August, the company claimed the parties had reached an “impasse,” a technical term in labor law that allows the company to impose its final proposal on the unions. The unions went on strike a few weeks later.

A federal mediator is bringing both parties back to the table at a meeting in Boston scheduled for Nov. 18.


Meanwhile, FairPoint is acknowledging delays in fulfilling customer service requests and is asking its customers for patience.

Those delays were exacerbated by a snowstorm that dumped more than a foot of snow on parts of Maine. Another snowstorm was forecast for Thursday night and Friday in northern Maine.

In a press statement released Wednesday, spokeswoman Angelynne Beaudry acknowledged that FairPoint’s call center was overloaded after the strike began. Call volume was 250% above what was expected the first week, but the company blamed alleged robocalling for that. This week customer service calls were 30 percent above normal.

“Our attention was focused on ensuring service to critical infrastructure, high volume and critical care related customers. We regret some of our customers have been inconvenienced as we had to reschedule their appointments,” said Beaudry. “FairPoint is working hard every day to eliminate the backlog of customer service requests and mitigate the disruption caused by our workers walking off the job.”

CEO Peter Sunu expressed confidence Wednesday that the company can handle the work stoppage. But Peter McLaughlin, chairman of the negotiating committee for striking workers, said FairPoint was “clearly unprepared for the strike they provoked.”

“FairPoint is proving that you can’t maintain quality customer service while attacking the skilled workers who provide it,” said McLaughlin, business manager for International Brotherhood of Electrical Workers Local 2327 in Maine.

North Carolina-based FairPoint, which says it’s the nation’s sixth-largest telecom, provides telephone service and high-speed Internet in 17 states. It has about 1 million lines in Maine, New Hampshire and Vermont.

Since the beginning of August, the unions have filed six complaints with the National Labor Relations Board alleging the company has used unfair labor practices. Two were initially rejected and are under appeal. The other four, two of which are identical, are pending.

The Associated Press contributed to this report.

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