Regulators in both Washington and Oregon see Verizon's sale of their networks in the states to Frontier as a deal that carries "lots of risk, but very little upside," according to The Oregonian. Staffers in both states are recommending that utility commissioners reject the massive deal, which would triple Frontier’s size and impose $3 billion in debt. Frontier tells the paper that they're being "too pessimistic" about the deal, saying they hope to create "a very stable, moderately (indebted) company." Frontier executives have been on a country-wide tour trying to convince state regulators that they won't be another Fairpoint Communications.

According to the Burlington Free Press, the bondholders of more than $600 million in FairPoint debt are pushing for an investigation into the company's management. According to the filing Fairpoint, which filed for bankruptcy last week, engaged in action that "reveal(s) a pattern of misrepresentation and questionable decision-making, which merit investigation by an independent third-party." "This Court should not buy into their 'we’ve got it right this time' approach to these Chapter 11 Cases," argues the filing. Fairpoint continues to insist that the restructuring of $2.7 billion in debt obligations should have no impact on residential or business service.

Back in May, Verizon announced they hoped to sell another huge chunk of their DSL and landline network to Frontier. The $8.5 billion deal would infuse Frontier (which currently has 2.3 million customers) with 4.8 million new residential and small-business phone lines across 14 states, 1 million broadband connections, and 11,000 former Verizon employees. Like previous deals with Hawaii Telcom and Fairpoint, the deal would involve the use of a Reverse Morris Trust -- a tricky financial move that allows Verizon to avoid the tax penalties of a traditional sale, while offloading a ton of debt onto would-be suitors. Despite consumer worries this new sale could end the same way these last two did (bankruptcy), regulators in South Carolina, California and Nevada have all unanimously voted yes for the deal.

Yesterday, as you might have heard, Fairpoint Communications filed bankruptcy, but promised customers that things would remain the same -- something not comforting to Fairpoint customers who've grown used to flaky service and even flakier support. The Nashua Telegraph breaks down what Fairpoint owes, noting that the $619 million worth of unpaid bills listed in FairPoint’s US Bankruptcy Court filing is owed to 50 creditors. $574 million is owed to their primary lender, but they also owe $19 million to a computer consultant, $2 million to Verizon Business Network, $351,000 for telephone poles and even the Nashua Telegraph for ad money: story continues..

As had been expected, Fairpoint Communications has filed for bankruptcy after struggling with the debt incurred when they acquired Verizon's DSL and landline networks in Maine, New Hampshire and Vermont. In a prepared statement, the company said the proceeding would reduce the company's debt load by $1.7 billion. "The day-to-day operations of our business will not be impacted by today’s actions," said David Hauser, Chairman and CEO of FairPoint. "We want to assure our customers, employees and vendors that we remain committed to continuing to provide reliable, uninterrupted service to all of our customers."

That's a tall order, given that Fairpoint wasn't even doing that before they filed for Chapter 11.