FairPoint: a poster child for …

Fairpoint executives in a conference call with investors recently put a brave face on their situation according to newspaper reports;

FairPoint lost fewer customers in the first three months of 2009 than Verizon did while operating the same system in the first three months of 2008.

The attitude that “it is not as bad as we thought” or “it could have been worse” is fast becoming the corporate catch all excuse for poor performance. Fairpoint Communication’s switchover of services from Verizon began in January after some delays. For months FairPoint has been plagued by service, billing and equipment troubles .In late January they reneged on an a union job agreement .The states of Maine, Vermont and New Hampshire have talked of imposing performance related fines on the company.

FairPoint executives also said Wednesday they expect to receive a large chunk of the stimulus money slated for rural broadband deployment. FairPoint has not only pledged to expand broadband to rural areas, but is obligated to do so by regulatory agreements with all three states. Many of the projects are “shovel ready,” the company said. “We are kind of the poster child for the stimulus funds and what they’re intended to do,” CEO Eugene Johnson said. “And we’re ready to go.”

This company lost nine million dollars in three months and gives out more than $100,000 in performance -based [!] bonuses. Poor customer service delays and outages for three months, and they will be getting a big chunk of stimulus money for broadband  .It is an impressive three month premiere of how the company that may  run the backbone of Vermont’s broadband infrastructure operates.

News of  the performance- based bonuses and a 30% raise were not mentioned along with the investor conference call story

The two top executives at troubled FairPoint Communications customers received performance-based bonuses recently at roughly the same time that the company was being lambasted over its poorly-executed system cutover in New England. Fair Point’s poor response to cutover problems related to the operational transition of former Verizon landline properties drew the ire of customers and regulators alike, but two company execs were still given more than $100,000 in bonuses.

FairPoint Chairman and CEO Gene Johnson received an $83,862 bonus and a 30 percent raise in 2008, according to an SEC filing, while FairPoint President Peter Nixon accepted a $50,000 bonus. Other executives also were reported to have received

raises.  

http://www.nashuatelegraph.com…

http://www.fiercetelecom.com/s…

6 thoughts on “FairPoint: a poster child for …

  1. Will either go bankrupt or disintegrate into whoever or whatever takes over their services.  They’re the most disorganized company- big or small- I’ve ever experienced (and having started several businesses myself, I’ve seen some disorganized companies!).  While working to open a business over the past month, we literally called Fairpoint every morning for over a week and sat on hold for an average of an hour– the call ending when we just had to get on with the day and couldn’t sit on hold any longer, or worse, the call would just suddenly hang-up (after sitting on hold for over and hour!!!).

    When we finally did get our lines set-up (phone, fax, internet) the tech who came to connect it knew only of the phone line and not of the fax or internet order.  He connected the phone from the outside to the box inside and then told us to wire from the box to the phone jack ourselves!  He suggested we do the same for our fax and internet.

    Which, as industrious young lads, we figured out.

    But then it took another week to figure out the internet.  Some of the tech support people were really nice and great- and dumbfounded about the instiliation guy; some were just horrible (“it’s your computer” “no, the computer just came from a house where it went online fine”) (“it’s your modem” “no, it’s a brand new modem”) (“don’t you have a fairpoint modem?” “no, we never got that” “OK, I’ll send you a fairpoint modem cause that’s supposed to come with the service”)…. after calling back twice to find out where the supposedly overnighted modem was and being told “it arrived there” when it most certainly didn’t I gave up and just kept the modem I bought.

    Eventually a really nice support person put in an ’emergency’ service order for us and got someone to come to get the internet going- at $120/hour or something like that.  The support person advised that when we get the bill for that, we just dispute the charges (which we will do, though we haven’t gotten the bill yet!).  The guy that came out was really nice and got our internet going.

    My experience is there are a lot of people at Fairpoint who are embarrassed and as frustrated as the rest of us with the company’s performance.  Of course, some of them are just asses.  But either way, Fairpoint won’ last long.  They’re a mess.

    What exactly is the problem with the Burlington Telecom model….?

  2. None of this is surprising, and the regulators who approved the Verizon/Fairpoint deal bear much of the responsibility.  It was obvious that Fairpoint did not have the organizational capacity to take on the Verizon land lines.  Nor access to sufficient capital to make the investments their slick ad campaign promised.  Some of you may remember that Fairpoint couldn’t even get the agreed-on financing when it came time to close the deal and had to go back for approval from the  enablers regulators for a higher interest rate on their bonds.

    Much of the infrastructure was in poor condition in any case and Fairpoint vastly overpaid for the assets they received.  I suspect they are also paying large amounts to Verizon for billing services and such that have still not been transitioned.

    To be fair, I think Fairpoint got snookered by Verizon almost as much as everyone else.  Too bad their investors, customers, and employees will suffer while their management runs the company into the ground.

  3. that stimulus money may go to this company; the state should get the money and pay for the backbone infrastructure then lease it Fairpoint; oh wait, that would be socialism…

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