Governor Seizes Verizon Overcharge; Stifles Small Business

I was recently forwarded a letter written by Chris Anderson of Pioneer Wireless (a Northern Maine Internet Service Provider) to Jack Cushman, economic advisor to Gov. Baldacci. The letter is a protest of the Governor's plan to intercept a confirmed customer overcharge by Verizon and give it back to Verizon. The letter raises some obvious questions such as why the customers who were overchanged aren't getting their money back.

8/13/2007
Mr. Jack Cashman
Economic Advisor to the Governor
Augusta, Maine
RE: Your visit to Aroostook Partnership for Progress

Mr. Cashman,

Thank you for the economic development update during your visit at the APP board meeting last Friday. During your discussion you highlighted the Governor’s plan to allow a confirmed overcharge by Verizon to be used, in aggregate, as a gift or grant to Verizon/Fairpoint for further broadband development in Maine. Is it true that the estimated overcharge amounts to a staggering $34,500,000 with Verizon agreeing to use $12,500,000 of it for broadband deployments? This proposal is very disturbing to me. I have been thinking about this all week-end and decided to write this letter. First, overcharges belong to the rate payers or to those that were billed in excess of expectations and not the State of Maine or the Pubic Utilities Commission to do with as they please.

Second, I am certain there must be laws in place that prevent regulated activities to fund unregulated activities. Does this diversion of funds violate those very laws?

Third, giving Verizon/ Fairpoint a windfall of $12,500,000 to extend broadband is
rewarding them for reluctant behavior at someone else’s expense. For years, Verizon has delayed further deployments of broadband because they claim it did not make economic sense. So now an overcharge is discovered and they get to keep the money as long as it is directed at broadband deployment? Something does not seem right about that.

Fourth, broadband deployments are occurring throughout the state. And it’s occurring through the entrepreneurial efforts of small businesses like ours and others. I find that PUC statistics and maps are woefully inaccurate and/or outdated regarding current activity. Firms such as Pioneer Wireless, Aroostook Internet, Cornerstone Communications, RedZone Wireless, MidCoast Internet and Point South Internet, to name a few, are using their own capital and taking significant risk to bring broadband services to areas of rural Maine; areas that Verizon has been reluctant to invest. Free capital gives subsidy to the large Telco monopoly making it impossible for the unsubsidized small businesses to compete, creating significant unfair advantage. In fact, this free money in the hands of Verizon/Fairpoint will most certainly spell doom for our company.

Fifth, if the State can somehow rationalize diverting regulated overcharges, why is Verizon / Fairpoint allowed to be the sole beneficiary? I can only dream of the things
Pioneer Wireless could do to accelerate broadband offerings with a fraction of this subsidy. Why not give it to ConnectME? The ConnectME Authority, created in late 2006 to accelerate broadband deployment, is just getting off the ground this year with a paltry (comparatively) $300,000 in grant money. Firms must then apply competitively with the hopes of being reviewed by an unbiased party to get a grant award. This would be a more fair and democratic way of dispensing the funds.

Sixth, central office (CO) or remote terminal (RT) DSL deployment is by no means ubiquitous to a target area. The only sure way for complete coverage is to deploy a combination of wired (DSL or Cable) and wireless technologies. Free capital of such a large magnitude in the hands of the large Telco will simply put Pioneer Wireless and others out of business. And thus, despite a massive rural deployment of DSL there will still be folks unable to receive the coveted DSL signal as promised but will no longer be able to enjoy our wireless service because, well…we will not be there to serve them.

The final point is that this plan of the Governor’s is not friendly to small business. It stifles the very creative energy that pushed our company to start Pioneer Wireless
Network six years ago. There are folks from Fort Kent to Calais that enjoy and depend on our service daily. I get thanked often for bringing high speed internet to their area when they know that no other firm was willing to take the risk. I get asked very often by underserved folks when they might expect us to serve them. We are trying hard to make rural broadband a viable business model. When state policy makers design deals that create unfair advantage for the large business to the detriment of the small business, our economy suffers in the long run. The State was recently ranked 48th worst state in the nation to do business. Policies such as these could be one of the very reasons we have achieved such an infamous reputation.

I’m not well versed in the regulated Telco world but felt compelled to write this letter. I look forward to hearing from you to discuss this issue further.

Sincerely,

Christopher B. Anderson
President

DHHS Worker Sentenced for Theft from Elderly

Another DHHS worker that was caught stealing has been sentenced to two years in jail with all but 30 days suspended. Albert Bouchard of Limestone was charged with stealing more than $9,000 in funds from elderly clients to purchase jewelry, electronics, gift certificates and furniture for himself, his wife, children and his girlfriend between 2001 and 2003. This seems to be a growing trend at Maine DHHS (formerly DHS).

From the Bangor Daily News:

In one instance, Bouchard charged a $300 digital camera to the account of one elderly woman with dementia and also made several cash withdrawals from her account.

He used another client’s account to purchase a $1,300 large-screen television for his home and delivered a 27-inch TV to the nursing facility at which the client was living.

Bouchard also charged the accounts of two clients with dementia for several pieces of expensive jewelry, including a $600 diamond anniversary ring and a $700 gold rope chain necklace. Rowe said Bouchard delivered inexpensive substitutes to the clients, who were residing at nursing care facilities. Full Story