AUGUSTA

A report for Maine utility regulators recommends against the proposed merger of Fairpoint Communications Inc. and Verizon Communications' landline business in northern New England.

A hearing examiner's report to the Public Utilities Commission says the $2.7 billion deal would subject ratepayers and shareholders to substantial risks that are not outweighed by benefits of the deal.

The report also sets forth conditions for the transaction in the event the PUC disagrees with its overall assessment.

FairPoint wants to buy Verizon's landlines in Maine, Vermont and New Hampshire. To go forward, the deal must be approved by utility regulators in all three states.

New Hampshire's Office of the Consumer Advocate is also recommending that the transaction be denied by that state's PUC.