FairPoint Communications told regulators yesterday that it will not meet its commitment to expand broadband internet access to 75 percent of its access lines by the beginning of October.

The issue was only briefly discussed during a hearing in Derry yesterday in which regulators from New Hampshire, Maine and Vermont questioned FairPoint executives. But it could have significant implications for the state and the company.

FairPoint Communications bought Verizon's landline network in the three states in April 2008. In a settlement that allowed the sale to move forward in New Hampshire, FairPoint agreed to expand its broadband reach from 62 percent of access lines to 75 percent within 18 months of the sale, 85 percent within two years and 95 percent within five years. That commitment to invest in the infrastructure was a major selling point.

The company could be fined $500,000 for every percentage point it falls short, according to the settlement agreement.

FairPoint spokeswoman Jill Wurm said the company is scrambling to expand its network as much as possible by the deadline.

She said the company will file a report at the end of the month.

"We are charging ahead to build the network in order to be able to deliver service as quick as possible," she said.

FairPoint has been struggling financially and operationally since taking over the network at the end of January. Executives faced some stern words from regulators, but nothing that it hadn't heard in status conferences held since April.

In the seven months since FairPoint has taken over, "we have seen neither sufficient progress nor a firm commitment that will achieve an acceptable level of service," said Vermont Public Service Board Chairman James Volz.

Regulators questioned the company on operations, its financial outlook and recent organizational changes, including the hiring in July of Vicky Weatherwax, vice president of business solutions.

Weatherwax will oversee a plan submitted Tuesday to regulators that calls for hiring vendors to come up with a detailed plan for fixing operational problems.

Wholesale customers, FairPoint competitors who lease portions of the landline network to provide service to their own customers, have been among the hardest hit by the transfer to FairPoint. Several have asked regulators to impose civil penalties because their business has been hurt.

The plan outlines four meetings FairPoint managers will have with wholesale customers this month to address specifics and come up with solutions.

The plan does not set a timeline for fixing the problems, and the executives repeatedly declined to offer one.

CEO David Hauser said he would not "set an arbitrary deadline of when something's going to be fixed without knowing the amount of work to go into it." He also declined to set service benchmarks, saying too many metrics create confusion.

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