FairPoint Communications announced a $13.6 million plan yesterday to expand high-speed DSL service in 74 New Hampshire communities if state officials allow the company to take over Verizon's landlines in Northern New England.

The plan would bring DSL service to 19 communities throughout the North Country that have no access, and it would expand service in 55 other communities throughout central and southern New Hampshire that have limited internet access. But utility regulators in New Hampshire, Maine and Vermont must first decide whether the small North Carolina-based company has the money or the expertise to take over landlines from Verizon Communications.

Walter Leach, FairPoint's vice president for corporate development, said the plan would extend internet access to about 100,000 homes and could take two years to implement if the state's Public Utilities Commission approves the $2.7 billion deal. A decision is expected in December.

The expansion would add equipment at the state's Verizon offices to support several ways of reaching customers, whether over an Ethernet connection, traditional DSL copper wires or faster fiber-optic cables, Leach said. The high-speed connections could ultimately allow FairPoint to offer video services, including more than 100 channels, pay-per-view service and high-definition television, he said.

"This is the latest and greatest state-of-the-art DSL product," Leach said. "It's better and different than what Verizon is doing today."

The plan could take a year to implement in areas without DSL service, and it could take up to two years to expand service in communities that have limited internet access, including Concord, Canterbury, Epsom, Tilton, Franklin, Laconia, Gilford, Center Harbor and Bristol. Despite the expanded service, Leach said FairPoint will offer the same rates as Verizon.

He said Verizon has the capability to expand DSL service in New Hampshire but has chosen to invest in other areas of the company. FairPoint's plan would extend service to 80 percent of Verizon's customer base in all three states, while Verizon has only offered service to 62 percent, he said.

"It's not a technology question for Verizon, it's merely an allocation of resources," he said. "They're spending their money elsewhere. We're going to spend it by putting it in these locations, which reach more into these rural areas."

Leach said FairPoint can easily afford the expansion plan if it inherits Verizon's customers and the $1.5 billion in annual revenue that they generate.

"There's a very significant amount of cash flow that is generated from that customer base," he said. "As long as you reinvest it in the three-state area, it makes sense."

But Meredith Hatfield, the state's consumer advocate, said the proposal raises several important questions, including how the company arrived at the $13.6 million figure, how it plans to extend service and whether or not it can pay for it.

The state Office of the Consumer Advocate is involved in the case and has been collecting information from the companies about their plans for the merger. Although FairPoint has announced its DSL expansion plans to the news media, Hatfield said her office will not know the details until the paperwork is filed with the Public Utilities Commission.

"Until we receive it in the docket as a response to a question we ask, we can't really rely on those numbers and we also can't really dig into them," Hatfield said.

FairPoint plans to spend $44 million on broadband expansion in all three states. Hatfield said her office expected a bigger share for New Hampshire, but it is unclear how FairPoint decided to divide the money.

Hatfield also said it is hard to know whether Verizon could afford a similar expansion plan based on its rate of return, as Leach suggested. It has been several years since the utilities commission has investigated Verizon's rates in New Hampshire, Hatfield said.

Single page