WASHINGTON—Federal communications regulators on Wednesday cleared the way for
FairPoint's stock fell 25 cents to $12.44 in after-hours trading after adding 57 cents, or 4.7 percent, to close at $12.69. Verizon shares added 48 cents to close at $42.47.
The Federal Communications Commission -- in a 3-2 vote -- said the proposed sale of Verizon's phone lines in Vermont, New Hampshire and Maine is "unlikely" to result in any anticompetitive behavior or hurt the public interest.
The deal still needs formal approval from all three states.
Under the deal, announced in January 2007, FairPoint would get Verizon's telephone operations, which serve about 1.6 million homes, along with Internet service. Verizon is shedding its residential phone business to focus more on wireless and broadband services.
The FCC said the deal would enhance service in the region through investment, speed up deployment of high-speed Internet, or broadband, service, and create 700 jobs.
FairPoint Chairman and Chief Executive Gene Johnson said in a statement that the FCC recognized the deal is in the best interest of consumers and businesses.
A company spokeswoman said it expects the deal will close in the first quarter.
The commission's two Democrats, Jonathan Adelstein and Michael Copps, voted against it.
Adelstein said "inexplicably, there are no special measures in this order to address the concerns about broadband deployment, wholesale service, or service quality for customers in these three states."
FairPoint also said Wednesday that it reached an agreement with Vermont's Public Service Department to buy Verizon's operations in that state. Vermont regulators previously rejected the sale, saying that the deal would leave FairPoint saddled with too much debt and unable to invest in high-speed Web service.
The deal now goes to the Vermont Public Service Board. FairPoint said the Public Service Department will urge those regulators to approve the sale subject to certain conditions, including its commitment to invest about $120 million over three years after the sale closes.
Maine regulators have approved the deal, but have not yet issued a formal order. New Hampshire regulators have not signed off on the deal yet.
Charlotte, N.C.-based FairPoint owns local phone networks in 31 rural markets in 18 states, including the three where it is acquiring Verizon's business.
