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V O L . X X I I N O. V since 2010. "It's a good start. We've been spinning our wheels up to this point. We've been trying to get this done since 2011." Public Advocate Tim Schneider, whose office represents the interests of all Maine utility con- sumers in proceedings before the Public Utilities Commission, characterizes the agreement "as better than the status quo." "It effectively trades deregulation of phone service in 25 communities where we feel there are alternatives [to FairPoint's Provider of Last Resort service, or POLR] for more rigorous quality-of-ser- vice standards," Schneider says. e draft legislation based on the agreement reached with FairPoint, he adds, "is tailored to specifically protect" the state's overall goal of making sure that safe, reliable tele- phone service is universally available to residents living in remote rural communities. In effect, if the agreement eventually becomes law, Maine will join at least 17 other states that have either totally eliminated all POLR obligations, or only impose them when competition is lacking for basic voice service. In Reed's view, the state's tele- communication policy needs to catch up with mar- ket realities and move in a direction that encourages greater investment in broadband phone services by FairPoint and other landline providers. At issue is FairPoint's contention that an unre- solved legacy of Maine's 2012 deregulation legisla- tion — the POLR requirement that's still regulated by the Maine Public Utilities Commission — is an unnecessary burden that also should be deregulated. FairPoint contends Maine's POLR requirement unfairly singles it out, along with other incumbent local exchange carriers (ILECs), by imposing ser- vice quality standards that aren't imposed on com- peting cellular and Voice Over Internet Protocol (VoIP) services that command an ever-larger share of Maine's voice service market. But, unlike the smaller ILECs that receive approximately $8 million in annual subsidies from the Maine Universal Service Fund to cover the higher costs of providing basic telephone service in rural areas with a customer base too small to fully cover those costs, FairPoint hasn't been allowed to tap that fund to cover its POLR costs. e reasoning has been that as the largest landline telephone provider in the state, FairPoint's urban customers in densely popu- lated areas would help subsidize the cost of providing telephone service to its more rural customers. FairPoint has failed in various efforts over the past four years to address ongoing POLR concerns that include not being allowed to receive a subsidy from the Maine Universal Service Fund, which is replenished by monthly surcharge fees levied by phone, wireless and cable companies on their voice telephone customers. In 2014 the company tried unsuccessfully to get the PUC to grant a request for a $67 million Maine Universal Service Fund subsidy to cover its POLR losses. A bill submitted last year in the first session of the 127 th Legislature that was designed to tackle a number of POLR-related questions eventually was carried over to the current session. e directive lawmakers gave to FairPoint and opposing stakeholders, which included the public advocate: Work out your differences and come up with mutually agreeable language for the final bill. P H O T O / T I M G R E E N WAY Provider of Last Resort? FairPoint Communications, public advocate reach agreement over regulatory dispute B y J a m e s m c c a r t h y F O C U S » C O N T I N U E D F R O M C O V E R M A R C H 7 , 2 0 1 6 18 Mike Reed, FairPoint Communications' Maine state president, says he's hopeful a legislative proposal will move the state further down the path of fully deregulating the state's telecommunications industry and allowing competition to govern the state's Provider of Last Resort requirements.

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