Federal regulators approved FairPoint's ( FPT) $2.7 billion acquisition of Verizon's ( VZ) rural New England operations. The move by the Federal Communications Commission clears the way for Charlotte-based FairPoint to take over Verizon's local phone business in parts of Maine, New Hampshire and Vermont. The news comes just a day after FairPoint made promises to Vermont's Public Services Board to spend $40 million in annual network improvements and extend its broadband service offering to half its market in Vermont. The deal still needs final approval from the three state regulatory agencies. Last month, Vermont regulators nixed the deal, citing the heavy debt financing required by FairPoint to make the transaction happen and keep the networks running. FairPoint had $608 million in debt and $9 million in cash on its books as of September. Verizon has been shopping some of its so-called network assets around for the past three years as it tries to unload less-promising regions to raise cash. Verizon shares were unchanged at $42.47, and FairPoint shares fell a quarter to $12.44 in after-hours action.