MaineBusiness.com

A long-running court dispute involving FairPoint Communications and Great Works Internet of Biddeford is coming to a head, with FairPoint threatening to pull the plug on some of Great Works' key business circuits if it doesn't pay $3 million by Dec. 18.

FairPoint, citing a 2006 court ruling, says it's not required to provide access to those circuits and is back-billing Great Works for past service. Great Works disputes FairPoint's legal argument, and says the company may just be trying to steal Great Works' lucrative business customers.

The dispute has been building behind the scenes since 2005. That's when Verizon Communications – FairPoint's predecessor – first took issue with its interconnection agreement with Great Works. But the dispute took on a new urgency last month, when FairPoint filed for Chapter 11 bankruptcy reorganization in New York City.

A bankruptcy filing automatically puts a hold on open court cases, and Great Works is worried that it won't be able to serve some big customers after Dec. 18 if FairPoint turns off the circuits. Great Works has filed a motion in the bankruptcy court, asking the judge to let the case go forward in U.S. District Court in Maine and before the Federal Communications Commission.

"For us, it's vital that this be settled soon," said Fletcher Kittredge, Great Works' founder and chief executive officer. "FairPoint has been threatening us with some pretty draconian action."

FairPoint's threat has already cost the company customers, Kittredge said, and the uncertainty makes it hard to go after new business accounts.

But FairPoint maintains that a previous court decision found it isn't required to provide access to the circuits, and if it chooses to do so, can charge a "market rate." That's why it's seeking $3,085,025 from the Biddeford company for service since 2006.

"We are going to move ahead with the proceedings," Jeff Nevins, a FairPoint spokesman, said this week.

The basis for the legal battle is the interpretation of how telecom companies share elements of their networks with local exchange carriers such as Great Works. It stems from the Federal Communications Act, the 1996 law meant to create competition in the industry.

Specifically, the dispute is over access to fiber-optic cable, the fastest and least costly way to transmit large amounts of data.

Maine doesn't have much fiber-optic cable, but Verizon has installed some to large customers, including universities and hospitals. Since 2001, Great Works has been leasing these lines to serve major customers that it says include Bowdoin College, Colby College, the University of Southern Maine, and University of Maine campuses in Farmington and Machias.

Verizon went to court in 2005 in a dispute over the rates that Great Works was paying for the connections, but the issue was never settled before Verizon sold its landline network to FairPoint last year.

The dispute escalated in March, according to Great Works, when FairPoint refused to accept new orders from the Biddeford company for fiber-optic connections.

It reached a critical point in September, when FairPoint billed for past access at a rate that Great Works says is 19 times its previous agreement. The bill came to more than $3 million, with FairPoint threatening to terminate the leases on Dec. 19 if Great Works doesn't pay.

This cutoff only would affect large institutions, not home customers.

In the meantime, Great Works has been paying for FairPoint's fiber circuits at the rate it originally agreed on with Verizon. If the case can move ahead, Great Works also plans to contest the number of circuits for which FairPoint says it's owed money.

Founded in 1994 when the Internet was in its infancy, Great Works is a leading Maine-based service provider. It serves 18,000 customers with both phone and Internet connections. The company is growing, with 75 employees and annual revenue of roughly $13 million.

But growth has been constrained by FairPoint's actions, according to Kittredge. For instance: The company signed a contract with the Skowhegan school system for high-speed access and set-up equipment. But the connections it needed from FairPoint were never made, Kittredge said, and he had to cancel the agreement. That has had a chilling effect on efforts to go after new accounts.

"We can't go out and solicit new businesses," he said. "We can't say, 'This is going to be great, but we may not be able to deliver it to you.' "

Great Works hasn't wanted to make a big deal in public of its fight with FairPoint. It's concerned that the news will cause existing customers to worry that they could lose their Internet connections.

"It's a threat I'm going to watch," said Mitch Davis, Chief Information Officer at Bowdoin College in Brunswick.

Bowdoin gets phone service from FairPoint, but most of its Internet access is from Great Works. Davis was aware of the initial court dispute, but didn't realize FairPoint was threatening to cut line access. He hopes the bankruptcy judge will let the case go forward and get settled.

Davis said he doubts FairPoint will really cut access. It would generate more bad publicity for a company with a tarnished image that's struggling to keep customers, he reasons.

But if that did happen, he was asked, would the school switch Internet service to FairPoint?

"I would do what I need to do to keep the college running," Davis said.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com