FairPoint Issues Response to Public Letter from Senator Shaheen, Congresswoman Kuster; Clarifies Facts

FairPoint Communications, Inc. today sent the following letter to Senator Shaheen and Congresswoman Kuster in response to their public letter dated December 22, 2014: Dear Senator Shaheen and Congresswoman Kuster, Thank you for your recent letter. We appreciate this opportunity to highlight the critical need to bring FairPoint's benefit costs into the mainstream and clear up any misinformation you may have around negotiations with our unions. Similar letters have been sent to me, and I appreciate the chance to respond to your concerns. With more facts, it is my hope that you both may come to appreciate that there is much more to these issues – and much more at stake for New Hampshire's economy – than what you may have been previously led to believe. NEGOTIATING IN GOOD FAITH In your letter, you encourage us to return to negotiate a reasonable compromise with our striking employees. Of course this is an appropriate suggestion but we are concerned that this implies that FairPoint has been uncooperative, which simply isn't true. We have made numerous formal and informal efforts to reach agreement with our unionized workforce, all without success. Beginning on April 25, 2014, we made comprehensive proposals to both unions. We worked diligently with the unions through 24 formal meetings at the bargaining table. We made an extraordinary effort to provide over 11,000 pages of detailed documentation to respond to the unions' various requests for information. But our good faith efforts were not reciprocated. The unions waited to make their first comprehensive counterproposal until August 2 – the day the contract expired. After the contract expired the unions made two further proposals, but each was more costly than the first. Put simply, it doesn't appear that the unions are serious about addressing FairPoint's need for substantive reform to the company's benefit costs. So while the unions accuse us of bad faith bargaining, it appears that they do not want to seriously consider our proposals. You should understand that all of the Unfair Labor Practice charges which the unions have filed against us which to date have been decided have been found to be without merit by Region 1 of the National Labor Relations Board. In fact, on November 18th, at the urging of federal mediators, we sat down once again with union leadership hopeful that the unions were finally ready to offer meaningful counterproposals. Despite the fact that the unions publicized and promoted the meeting, this was apparently for show. They did not have a single proposal. Apparently they had spent their time crafting a long press release delivered less than an hour after the conclusion of the meeting that attacked FairPoint for the lack of progress. So we come back to what we have stated to the public and to the unions: We remain willing to consider and constructively respond to any serious counterproposal that meaningfully addresses the company's core issues in this negotiation. To date, we have not received any such proposals. The ball is in their court. The unions chose to walk away from their jobs to preserve contract provisions that are wholly inconsistent with today's competitive telecommunications landscape. We are ready to listen and collaborate with the unions, as we have been from day one. Any assertion to the contrary is simply untrue. BETTER SERVING GRANITE STATERS In your letter, you reference concerns about FairPoint's service to its customers and the community at large. We understand the importance New Hampshire places on FairPoint's ability to provide outstanding telecommunications services. We are working day and night to meet and exceed those expectations. Serving our customers and communities is our top priority and the importance of addressing our pre and post-strike service challenges are central to that effort. Our goal since the unions walked off the job has been to mitigate service disruptions to the greatest extent possible. We have utilized our management team, who are also hard working Granite Staters, along with outside contractors. In fact, we have members of management volunteering to work on their days off to service customers – they are an exceptionally dedicated workforce. The fact is that the team is doing exceptional work and showing productivity well above pre-strike levels despite being hampered by aggressive and disruptive picketing, sabotage and extraordinarily bad weather. Let me be clear – we appreciate your concerns and we know we have much more work to do. But a fact worth noting is that our team is currently clearing more customer service work orders per person each day than the unionized workforce cleared per person before they went on strike. Despite our best efforts to mitigate the disruptive impact of the unions' strike, a larger than normal backlog of work has developed. The majority of the backlog of orders is directly associated with the extreme weather we have encountered—four major storms in 50 days with regional impact approaching levels not seen since Irene in 2011. In terms of impact on FairPoint's lines, and the power companies alike, this is akin to two Irene-level weather events within a two-week period of time. THE ECONOMIC REALITY In addition, please allow me to convey to you both the economic reality of this situation involving FairPoint's ability to be the 21st century telecommunications provider New Hampshire's economy needs, and Granite Staters want and deserve. The reality is that FairPoint cannot give in to the demands of our striking unions. The benefits they demand are a barrier to the telecommunications services New Hampshire's economy, its residents and businesses need now and in the future. A union leader recently referred to the contracts for which they have walked away from their jobs to maintain – holdovers from the long-gone days of monopoly landline telephone service – as "the richest in the country." We don't know if that is so, but we do know that demands for further wage increases over their $82,500 average pay in 2013; for unlimited paid sick time off and no meaningful contributions toward health care premium costs, among other demands, are not within the mainstream of a highly competitive telecommunications market and wholly out of step with the realities of most working Granite Staters. To put this into context, I want to share with you the details of what the strikers could return to if they chose to come back to work: No reduction in base wages for current employees; Competitive wages for new employees that will include increases at six-month intervals with an average annual base pay of nearly $58,000 in the first four years of employment, plus overtime and bonus opportunities; A comprehensive medical plan with FairPoint paying almost 80% of premiums on average for employees and their families, which is more generous than for our other non-union employees, including management; A mainstream 401(k) plan with a dollar-for-dollar company match for up to 5% of the employee's eligible pay; Five paid sick days per calendar year for personal illness, four paid personal days, ten paid holidays and up to five weeks of paid vacation time depending on tenure. We think most would agree that these represent good jobs and careers that can and do support New Hampshire families. Again, thank you for the opportunity to offer these critically important facts. Sincerely, Paul Sunu Chief Executive Officer