A lot of incorrect information has been floating around regarding “provider of last resort” regulation in Maine. I am writing today to dispel the myths and to provide greater clarity on the issue in order to better inform the citizens of Maine.

Before getting into the details of the issue, my message is twofold, simple and direct:

1. FairPoint is not eliminating or taking away basic landline service anywhere in Maine.

2. FairPoint will continue to provide basic, affordable landline service throughout Maine.

Let me explain the issue that has been at the center of this storm of misinformation. It stems from what is called “provider of last resort” service, or POLR service, which is the most basic phone service available. It is important to point out that all telecommunications services in Maine have been deregulated since 2012 – except for POLR.

The theory behind POLR was that a provider would be designated to ensure that basic telephone service was available and was often reimbursed for allowable associated costs from the Federal Communications Commission’s universal service fund.

FairPoint is that designated provider in most of Maine, but it no longer gets reimbursed for the cost of providing POLR service, because the universal service fund has been discontinued and the FCC’s mandate has evolved to explicitly support broadband service.

Over the past several years, as the competitive and regulatory landscape changed, the Maine Legislature has tried to find a balance between protecting consumers while ensuring a robust telecommunications market.

This spring, the Legislature passed the amended version of L.D. 466, which does just that: protecting consumers while ensuring Maine has a robust telecommunications market. While the legislation may seem complicated, it advances a single, simple concept: providing a level playing field in competitive telecommunications markets while ensuring that all Mainers continue to have a landline option available regardless of where they live.

The Legislature did just that by providing a path to deregulation in competitive markets (22 municipalities) while ensuring consumers in less competitive markets have access to basic, regulated landline service. It was important to the Legislature that no Mainer is left without landline service. To that end, L.D. 466 requires FairPoint to continue to provide landline service throughout the state. I cannot stress enough that FairPoint is not discontinuing landline telephone service. In fact, just the opposite: L.D. 466 ensures there is a landline service option throughout the state.

The following 22 cities and towns were chosen for initial deregulation because of the robust level of competition that exists in those municipalities: Auburn, Augusta, Bangor, Bath, Biddeford, Brewer, Brunswick, Cape Elizabeth, Freeport, Gorham, Kennebunk, Kittery, Lewiston, Old Orchard Beach, Portland, Sanford, Scarborough, South Portland, Waterville, Westbrook, Windham and Yarmouth.

The law provides for a transition of these 22 communities over the next two years. The initial seven communities that will be deregulated in late August are Portland, Lewiston, Bangor, South Portland, Auburn, Biddeford and Sanford, while the other 15 municipalities will become deregulated on a rolling schedule over the next two years. Each of these 22 communities will have a one-year rate moratorium following the date of deregulation.

And what about the ongoing cost of basic landline service in these communities? L.D. 466 also requires price caps.

For customers who currently receive POLR services in communities with robust competition – for example, the initial seven communities listed above – FairPoint will continue to provide basic telephone service at the same rates, terms and conditions for one year, commencing Aug. 28. After the year, prices will be constrained by the competitive market.

For the communities with less competition – the approximately 470 towns and cities not affected by this legislation – the price for basic landline service may not exceed $20 for the next year. After that, the rate in those communities is limited to an annual increase of 5 percent – or approximately $1.

In closing, FairPoint continues to invest in its landline network, adding more fiber optic cable, and more high-speed broadband, positioning FairPoint to offer our customers the latest technological services. That investment – over $900 million in northern New England since 2008 – benefits all our customers, those who order both broadband service and telephone service. Our employees, who live and work here in Maine, are on the job every day maintaining, expanding and upgrading our network across the region.