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Fairpoint Will Miss Broadband Expansion Commitments
Utter incompetence versus wimpy regulators. Get ready, fight!
by Karl Bode 11:05AM Thursday Sep 10 2009 Tipped by S_engineer See Profile
Maine, New Hampshire and Vermont regulators yesterday took the unprecedented step of collectively meeting in order to question Fairpoint executives on their repeated problems in integrating Verizon's DSL and landline networks in the three states. As you might expect, Fairpoint CEO David Hauser downplayed the problems, giving a prepared speech (pdf) full of the kind of effusive optimism reserved solely for CEOs. While the company has struggled at times to even pick up the phone, Hauser insists that things are getting better.

Click for full size
According to Hauser, Fairpoint's now answering the phone in "20 seconds or less more than 89 percent of the time." He also claims that 2,200 (22%) of Fairpoint's current work orders are over due, down from an estimated 40% earlier this year. The CEO, who says he "sometimes picks up the phone myself" to deal with upset customers, blamed at least some of his problems on perception and pesky bloggers:
quote:
...while bloggers blog, our sales force is selling, our engineers are engineering, our customer service reps are servicing and installers are installing. You get the picture. Despite what you hear and read, there are lots of customers eager to buy services from FairPoint. In our first advertised promotion in 2009, we found thousands of customers happy to sign up.
Of course bloggers had nothing to do with Fairpoint's flirtations with bankruptcy, numerous state investigations for incompetence, or the company's NYSE delisting. Hauser, who actually told regulators hard performance metrics would be "confusing," skirted over the fact that Fairpoint will fail to meet their commitment for broadband expansion. In order to get deal approval, Fairpoint promised to expand their DSL availability to 75 percent of all access lines within 18 months of the sale, 85 percent within two years and 95 percent within five years.

If you remember, the entire reason the deal was approved was because Fairpoint was going to expand DSL services. Former owner Verizon, who gained billions in tax write-offs and reduced debt by using a Reverse Morris Trust for this deal, left New England with fairly pathetic DSL penetration of around 62% because they don't believe rural America is profitable. While Fairpoint promised they could fix this shortcoming if the deal was approved, few believed that the company had either the experience or financial resources to handle such a project.

Fairpoint's agreement with New England has the company facing penalties of $500,000 for every percentage point the company falls short, which obviously adds to the carrier's already substantial financial problems. Of course the same regulators who ignored consumer advocates, analysts, and unions when the deal was being proposed, have since allowed the company to repeatedly waffle on firm deadlines for improvement.

While some regulators are talking tough, they've consistently allowed Fairpoint to set their own nebulous guidelines for success. In some instances, Fairpoint's been allowed to craft their own confidential improvement plans that the public wasn't allowed to see. Fairpoint, which promised these problems would be resolved by May, yesterday informed regulators they won't have a new concrete improvement plan until November.

Who wins in the battle between utter incompetence and wimpy regulators? Probably not consumers.

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S_engineer
Premium
join:2007-05-16
Chicago, IL

1 edit

Hauser also said

.... he was working on the financial problems. That should make everyone sleep better.
Can't the FCC step in and block the pending sale of rural counties to Frontier after this mess? Not so much on for DSL but to protect existing POTS.
--
BF69~~~Please stop suffocating gerbils!

mr sean
Professional Infidel
Premium,ExMod 2001-07
join:2001-04-03
N. Absentia
kudos:1

1 recommendation

Translation

said by statement :
...we have been unable to fully implement our operating plan for 2009 and effectively compete in the marketplace, which we believe is having an adverse effect on our business, financial condition, results of operations and liquidity, as well as our ability to continue to comply with the financial covenants in our credit agreement.
That's why I sometimes answer the phone myself.
said by statement :
We have initiated discussions with our debt holders regarding a more comprehensive and permanent restructuring of our current capital structure to reduce indebtedness and debt service obligations. We are considering all other restructuring alternatives available to us, which may include the commencement of an in-court resolution under chapter 11 of the U.S. Bankruptcy Code, with or without a pre-arranged plan of reorganization.
 We're screwed.
said by statement :
If we have to restructure our debt through chapter 11, it’s important to understand that our customers will not experience an interruption of service nor will we slow our efforts to improve those areas where improvement is still needed.
You're screwed.
--
How you can make the world a Better Place

SteveCon
IBEW 2222 Boston, MA
Premium
join:2004-09-02
Boston, MA

When?

What's the over / under date for this company going under?? I say January 1, 2010.
--
UNIONS: The anti-theft device for working people.

astokes

join:2000-08-11
Bangor, ME

Re: When?

Blame the bloggers? that's a new one.

braynes
Premium
join:2005-03-14
Waterville, ME

Re: When?

said by astokes:

Blame the bloggers? that's a new one.
At this point they are just blaming anyone, perhaps they should just get a mailing list of everyone.
Bruce

cableties
Premium
join:2005-01-27

Hey Obama!

The next ones to hold "accountable" after the insurance companies, are the communications companies!

Un effin bull evabull!
--
Splat
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Hey Obama!

Or the regulators employed at various levels of government. Accountability is a good thing.
EPS4

join:2008-02-13
Hingham, MA

Northern New England

Just a minor issue, but I assume when you mention "New England" you mean "Northern New England"? Or does that 62% figure for DSL under VZ include Massachusetts and Rhode Island as well? (If so, that's even more pathetic...)

tenpin784
I Went To The Dark Side?

join:2001-03-30
Brierfield, AL

Re: Northern New England

The way its worded, sounds like New England altogether when Verizon was up here.
GenBlood

join:2005-04-14
Nashua, NH

I say they file for Chapter 11 .. before the end on November

It's just a matter of time before they have to admit they
messed up. They are losing customers at a high rate and
it not going to get any better.

I figure by the end of November they will be filing the papers
for Chapter 11. As soon as they file for Chapter 11 ... I'm
going to drop them ,,,

mouseferatu
Too many cats, Too many mice
Premium,MVM
join:2004-03-16
Im not sure
kudos:3

1 edit

And I have a bridge I can sell you cheap...

Says Mr. Hauser, the CEO who replaced the last, overpaid, CEO:

"...while bloggers blog, our sales force is selling, our engineers are engineering, our customer service reps are servicing and installers are installing. You get the picture. Despite what you hear and read, there are lots of customers eager to buy services from FairPoint. In our first advertised promotion in 2009, we found thousands of customers happy to sign up."

While it is arguably magnanimous of a person of Mr. Hauser's stature to sometimes pick up his own phone, it doesn't change much.

1) The customer still can't manage to get an accurate bill from FP, and FP still doesn't have the customers name, address, and phone numbers all linked. Do they not understand the "relational" in relational db's?

2) The customer still can't get reliable service from FP without knowing someone, and that "someone" had better be a former Verizon worker.

3) The "800 people" in Texas still can't find my account, "because Verizon didn't give it to them". I would suggest that they had better create a new one if they didn't get any info from Verizon or can't find it.

4) In northern New England, FP has thousands of customers who would be happy to bail out. FP is, for the majority of us, the only game in town. Many of Mr. Hauser's customers "happy to sign up" have no other choice, including cell.

5) It takes approximately 4-5 days to resolve a defective fiber connection. The cell dead areas are not given priority, so 911 can be down for days.

6) Most significantly, in the years that Verizon had these lines, I can count on one hand the number of times I ever saw a repair truck in my area. Fiber was *never* out. Probably just good luck, huh?
*******************************************************

Whether FairPoint succeeds or fails is immaterial to me, as we have, quite literally, no place to go but up.

If FairPoint actually gets their act together, the billing system might work, and perhaps the Internet and the phone lines would work consistently, too.

If FairPoint goes into bankruptcy, that is just fine, too. We end up with the mess that we have now, and someone has to try to pick up the pieces. They won't be worse than what we have unless they rely on two tin cans and some string...

IMO, the regulators in all three states were irresponsible. They planned poorly when they brought FairPoint in, and handing them pass after pass merely delays the inevitable and costs us all more in the long run.

Somehow, cynic that I am, I doubt that FP will be around much longer unless we keep handing out those passes and a heck of a lot of money...

Edit, correction: Bell Atlantic owned the lines here in the 1990's before Verizon was formed. They worked well, also.
--
"Do not meddle in the affairs of dragons, for thou art crispy and good with catsup."
bac522

join:2003-08-04
Manchester, NH

Fairpoint has been our best sales person...

As an owner of a small telecommunications company centered in Manchester our sales growth has been great due to Fairpoint. I say keep up the good work Fairpoint !
Odeeum48

join:2008-11-05
Bangor, ME

I gave them a chance...

I recently moved to an area where my only two options are Fairpoint and Time Warner. I honestly and objectively looked at the plans side by side, tried to ignore the possibility of poor customer service...and called into Fairpoint. I told them my situation, just bought a new house, need new service, would like to be a Fairpoint customer, etc.

When they told me what they had to offer, and because I wanted more than 3mbs...their pricing wasn't even close to TWs. I mentioned this, expecting something along the lines of "well, let me talk to my manager and see what we can do!"...instead I got nothing. I mentioned that Fairpoint really needed help from a PR perspective, maybe a killer deal or offer from them over the next 6 months would help get customers back, at least get them to talk about the possibility of signing up with Fairpoint. Go hard at TWs packages, really try to undercut them if only for PR purposes....

Nothing.

I tried this 3 times. 3 different people. No deals...no special offers to come remotely close to TWs package.

I reluctantly called TW and went with them

Commnet

@comcast.net

Re: I gave them a chance...

I guess I'm at a loss as to why the poor little fairpoint or frontier should have to be on the hook for providing all this expanded DSL and other coverage when verizon for all those years and all the tax subsidies never did it?

why didnt they hold verizon to it and make them do all this broadband nonsense. Its ridiculous fast internet isnt a right.

Karl Bode
News Guy
join:2000-03-02
kudos:39

Re: I gave them a chance...

I guess I'm at a loss as to why the poor little fairpoint or frontier should have to be on the hook for providing all this expanded DSL and other coverage when verizon for all those years and all the tax subsidies never did it?
For one because they're promising to in order to get the deals approved?
why didnt they hold verizon to it and make them do all this broadband nonsense.
A very good question, given Verizon also constantly makes promises they fail to deliver on.