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Hawaii Telcom Files For Bankruptcy
Can Fairpoint avoid the same fate?

Verizon has been offloading less profitable rural and smaller markets, most recently selling all Maine, New Hampshire and Vermont DSL and landline networks to Fairpoint. But before that, Verizon offloaded their Hawaii networks to a group to the Carlyle Group, who bought the network for $1.6 billion and created a new carrier named Hawaii Telcom to run it. After losing $320 million in its first two years of operation, the telco stayed relatively competitive by deploying ADSL2+ speeds up to 11Mbps, but glitchy service and poor customer support have taken their toll.

Hawaii Telcom, who has just 524,000 residential and business customers, today said they would be filing for bankruptcy. Like Fairpoint, the company took on a significant chunk of Verizon debt, then promised fiscal success, efficient management and a seamless transition -- but that $1 billion in debt has proven to be unmanageable. The company's CEO delivers the trademark bubbly bankruptcy announcement optimism you'd expect for an executive potentially facing his company's obliteration:
quote:
"Our decision to restructure through a Chapter 11 filing allows the company to reduce its level of debt and reorganize its business, so we can emerge a stronger and more financially secure company, better able to compete in the ever-changing communications industry," said company CEO Eric Yeaman. "I strongly believe that the filing provides the right course of action to support what is in the best interests of our customers, employees, suppliers and other valued constituents."
Hopefully Fairpoint, who acquired $1 billion in Verizon's debt and is paying $15 million a month to Verizon to help co-run the network before an official switchover -- can avoid the same fate.
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RVAguy
Premium Member
join:2006-01-05
Richmond, VA

RVAguy

Premium Member

Bad Management

I don't know this story, but with as dense as Hawaii is, ADSL2 should have been a slam dunk. My guess is, they hired some Joe who didn't know a thing about ADSL and enjoyed a night out with the sales folks of the nifty dslams. Bottom line, is poor planning will always lead to bankruptcy. For example, this company was way overpriced - 1.6 billion for 1/2 million customers. Look at the recent buyout of Embarq - 5.8 billion for sixteen times more customers... This company was doomed from the start. Verizon was laughing all the way to the bank on this one...

tileguy
Premium Member
join:2007-08-09
Derry, NH

tileguy

Premium Member

Re: Bad Management

Here in NH I've had my speed dropped from 20/2 to 15/2 with no price change and support has been slowly going downhill. Fairpoint is not a 'fair' solution and Verizon shoulda stuck with it. I can't even pay my bill online. Fairpoint sucks!!!
53059959 (banned)
Temp banned from BBR more then anyone
join:2002-10-02
PwnZone

53059959 (banned) to RVAguy

Member

to RVAguy
hahaha! that would be funny if verizon ended up buying back Hawaiian customers for a bargain price.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Good Idea

The Big 3 could learn something from Hawaii Telecom.

By filing for Chapter 11 bankruptcy, HT will be able to absolve itself of burdensome debt and other extraneous overhead and then continue to provide service to its customers.

By being relieved of these burdens, HT will be able to focus more on expanded next generation broadband deployments instead of paying for the mistakes of the past.
russotto
join:2000-10-05
West Orange, NJ

russotto

Member

Re: Good Idea

More likely Verizon will buy them out of receivership, having managed to dump some of its debt without taking the hit of bankruptcy themselves.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Good Idea

said by russotto:

More likely Verizon will buy them out of receivership, having managed to dump some of its debt without taking the hit of bankruptcy themselves.
Not a bad idea!
kalanic00
join:2006-07-16
Anchorage, AK

kalanic00

Member

Re: Good Idea

No shit - deploy FiOS there, and I'm flying over for a job.

wwdubbia
join:2002-06-03
Clinton, NY

wwdubbia to pnh102

Member

to pnh102
except the customers will pay for the mistakes of the past.
said by pnh102:

The Big 3 could learn something from Hawaii Telecom.

By filing for Chapter 11 bankruptcy, HT will be able to absolve itself of burdensome debt and other extraneous overhead and then continue to provide service to its customers.

By being relieved of these burdens, HT will be able to focus more on expanded next generation broadband deployments instead of paying for the mistakes of the past.

N3OGH
Yo Soy Col. "Bat" Guano
Premium Member
join:2003-11-11
Philly burbs

N3OGH to pnh102

Premium Member

to pnh102
While I'm completely opposed to the big 3 bail out, and totally going off topic here (well, a little).

Buying month to month phone service from a bankrupt provider is very similar to buying a 1 time airline ticket from a bankrupt airline.

If HT goes under tomorrow, the most you lose is what? The cost of one month's bill? If a bankrupt airline goes under, you MAY lose your fair. Probably not, as other carriers would be obligated to honor the ticket (under some laws, I believe).

But if I go out tomorrow and buy a 2009 Silverado (I have a 2003 Silverado with 101,000 miles on it, runs like a champ) and 2 weeks later GM goes teats up (chapter 9), I'm out 3 years of warranty.

So, if 2 years in my Silverado throws a rod, I'm on the hook for thousands of dollars of repairs on a vehicle that technically should still be under warranty.

I understand the differences with Chapter 11 re organization, but a lot of people don't and once these companies go into bankruptcy people will treat their product as though it's radioactive with a bumper sticker that says "I HEART Taliban" on the back...

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Good Idea

said by N3OGH:

But if I go out tomorrow and buy a 2009 Silverado (I have a 2003 Silverado with 101,000 miles on it, runs like a champ) and 2 weeks later GM goes teats up (chapter 9), I'm out 3 years of warranty.
We had a similar problem with my wife's 1999 Oldsmobile. GM folded the Olds division in 2003 and we needed new parts for it to pass MD state inspection. We had the worst time in the world finding these parts, coupled with the cost of getting the work done, that we decided to replace the car with a Honda instead.
said by N3OGH:

I understand the differences with Chapter 11 re organization, but a lot of people don't and once these companies go into bankruptcy people will treat their product as though it's radioactive with a bumper sticker that says "I HEART Taliban" on the back...
True, but people aren't buying these products without the Big 3 being in bankruptcy.

Jim Gurd
Premium Member
join:2000-07-08
Livonia, MI

Jim Gurd

Premium Member

Re: Good Idea

said by pnh102:

We had a similar problem with my wife's 1999 Oldsmobile. GM folded the Olds division in 2003 and we needed new parts for it to pass MD state inspection. We had the worst time in the world finding these parts, coupled with the cost of getting the work done, that we decided to replace the car with a Honda instead.
Why? Any GM dealership should have been able to get the parts. After all they are shared with other brands like Chevrolet, Buick and Pontiac.

The only exception might be cosmetic parts like trim, moldings, etc. Engine parts should be completely interchangeable.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Good Idea

said by Jim Gurd:

Why? Any GM dealership should have been able to get the parts. After all they are shared with other brands like Chevrolet, Buick and Pontiac.
Well we were told to go to a dealer, but we couldn't find a dealer that was open when it convenient for us (Saturdays and Sundays) which was able to schedule us for a repair. I also did not want to spend $2000 on repairs either. I'd rather throw that into a down payment for a new car.

nixen
Rockin' the Boxen
Premium Member
join:2002-10-04
Alexandria, VA

nixen

Premium Member

Re: Good Idea

said by pnh102:
said by Jim Gurd:

Why? Any GM dealership should have been able to get the parts. After all they are shared with other brands like Chevrolet, Buick and Pontiac.
Well we were told to go to a dealer, but we couldn't find a dealer that was open when it convenient for us (Saturdays and Sundays) which was able to schedule us for a repair. I also did not want to spend $2000 on repairs either. I'd rather throw that into a down payment for a new car.
If you went to any good garage - particularly one that specializes in GM vehicles - you could have gotten the repairs done for considerably lower than a dealer would have raped you for.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Good Idea

said by nixen:

If you went to any good garage - particularly one that specializes in GM vehicles - you could have gotten the repairs done for considerably lower than a dealer would have raped you for.
LOL.

We did go to a garage.

They told us that they could not do the repairs we needed because the particular problem with the car was caused by shoddy construction. The piece that was busted was literally welded into place when it should have been bolted on. They told us to go to a dealer.

But that is the beauty of Honda, aside from changing the oil, getting new brakes and fixing holes in tires, we are no longer on a first name basis with the mechanic.

nixen
Rockin' the Boxen
Premium Member
join:2002-10-04
Alexandria, VA

nixen

Premium Member

Re: Good Idea

Yegads: had you bought it used??

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Good Idea

said by nixen:

Yegads: had you bought it used??
The car was a hand-me-down. But a 1999 car of any make should be road-worthy for at least 10 years I think. Now to be fair, Maryland's state inspection is notoriously stringent and the Olds had been passing inspection in Pennsylvania (where we lived previously) for many years.

The funny part is our other car, a 2002 Honda Accord, had no problem passing Maryland state inspection.

nixen
Rockin' the Boxen
Premium Member
join:2002-10-04
Alexandria, VA

nixen

Premium Member

Re: Good Idea

said by pnh102:
said by nixen:

Yegads: had you bought it used??
The car was a hand-me-down. But a 1999 car of any make should be road-worthy for at least 10 years I think. Now to be fair, Maryland's state inspection is notoriously stringent and the Olds had been passing inspection in Pennsylvania (where we lived previously) for many years.

The funny part is our other car, a 2002 Honda Accord, had no problem passing Maryland state inspection.
Sounds like the prior owner jacked it up. As to Pennsylvania inspections: it was always trivially easy to pay a garage to pass you on the safety inspections. Emissions was a little tougher. Thought Maryland only had safety inspections when you got the car's title changed (i.e., bought new or from a prior owner).

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Good Idea

said by nixen:

Sounds like the prior owner jacked it up.
The previous owner was my late mother-in-law. She wasn't too big on aftermarket hydraulics for her cars though she was known as "Speedy Gonzales" to the local police when she was younger.

nixen
Rockin' the Boxen
Premium Member
join:2002-10-04
Alexandria, VA

nixen

Premium Member

Re: Good Idea

said by pnh102:
said by nixen:

Sounds like the prior owner jacked it up.
The previous owner was my late mother-in-law. She wasn't too big on aftermarket hydraulics for her cars though she was known as "Speedy Gonzales" to the local police when she was younger.
I meant as in, the prior owner got it mis-serviced somewhere. A competent shop won't just weld random things onto a car that aren't supposed to be welded there.

Jim Gurd
Premium Member
join:2000-07-08
Livonia, MI

Jim Gurd to N3OGH

Premium Member

to N3OGH
said by N3OGH:

If a bankrupt airline goes under, you MAY lose your fair.
Or you may plummet to earth because the maintenance wasn't done properly due to cost cutting.

asdfdfdfdfdfdf
@Level3.net

asdfdfdfdfdfdf to pnh102

Anon

to pnh102
I'm not trying to pick a fight with you in particular but I can't help but be struck by the differing standards.

"absolve itself of burdensome debt...instead of paying for the mistakes of the past"

If we were to advocate a similar approach to, let's say, homeowners who are drowning under excessive debt they took on, would we see ready support for such an idea, or would we be hearing about responsibility and moral hazard?

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Good Idea

said by asdfdfdfdfdfdf :

If we were to advocate a similar approach to, let's say, homeowners who are drowning under excessive debt they took on, would we see ready support for such an idea, or would we be hearing about responsibility and moral hazard?
We're already seeing this happening with numerous foreclosures.
russotto
join:2000-10-05
West Orange, NJ

russotto to asdfdfdfdfdfdf

Member

to asdfdfdfdfdfdf
said by asdfdfdfdfdfdf :

If we were to advocate a similar approach to, let's say, homeowners who are drowning under excessive debt they took on, would we see ready support for such an idea, or would we be hearing about responsibility and moral hazard?
I'm going to run my credit cards up to the limit and use that to pay off my mortgage. Then I'm going to spin off a new company which will bear my credit card debt, as well as my appliances and a few other possessions. That company will additionally pay me to run the appliances. When it somehow can't make a go of that, it will declare bankruptcy to shed the credit card debt. Then I'll borrow a little more out of the house and buy my appliances out of receivership, without ever taking a hit on my own credit. Cool, eh?

Snowy
Lock him up!!!
Premium Member
join:2003-04-05
Kailua, HI

Snowy

Premium Member

HTC's customer service was an unqualified dis-service

Good luck to those lying, scum sucking, POS in their customer service dept. From the day Verizon handed over operations customer service went downhill so fast it never recovered.
What should have been minor transition issues became major headaches for the local business community. HTC customer service didn't give a shit, they had the "we are monopoly" mindset & challenged it's customer base to find alternatives.
Even now, 2 years after moving my business to a new location HTC phonebooks still list my business address as .............
The first year they said they didn't what my new address was despite sending me a bill every month to that address.
After bitching about it I was assured by no less than 3 customer service reps & 2 customer service supervisors that my address would appear in the following years phonebook. It didn't happen. The second year in a row my business address is listed as ............. Thing is I knew it wasn't going to happen. They didn't even try to sound convincing which is why it got to 5 different people in the first place.
I'd never wish this on an enemy, but I hope those lying customer service POS find themselves without jobs.
The line people on the other hand are a good group & I know quite a few of them personally. What was not long ago considered a choice job has also fallen victim to their POS customer service reps & supervisors.
/rant

Hpower
join:2000-06-08
Canyon Country, CA

Hpower

Member

bleh

I guess they had it coming for them. Poor management for the loose...
Done_Posting
Shoot to kill
Premium Member
join:2003-08-22
Toledo, OH

Done_Posting

Premium Member

Correction!

I'd just like state for the record that it's Hawaii Telcom, not "Telecom". I know that's a petty thing to write about, but it irks me when people misspell or mispronounce it (sort of like the whole MB vs. Mb thing)...

- Tate

Snowy
Lock him up!!!
Premium Member
join:2003-04-05
Kailua, HI

Snowy

Premium Member

Re: Correction!

said by Done_Posting:

I'd just like state for the record that it's Hawaii Telcom, not "Telecom".

See, they even screwed that up!
"telecom" would have made sense so what do they do?
They screw up their name by choosing "telcom", purposefully deleting The 2nd "e" so they wouldn't look so phone companyish.
I doubt if 50% of their customers are positive of the correct spelling. Even less could care.
Once Oceanic Cable rolls out it's Time Warner Cable digital business class phone service, it's going to get even rougher for the former monopoly to stay afloat.