FairPoint Communications — Much Too Little to Be So Big

Prior to the purchase of Verizon’s Maine, New Hampshire and Vermont landlines and internet connections, FairPoint Communications was a little bit like a franchise; it did have 300,00 customers but those customers were spread across the country in 17 states, mostly in small urban and rural areas.

Then on April 1 2008, FairPoint had 1.6 million more customers in Northern New England, and, in my humble opinion, FairPoint didn’t have then and does not have now the management or the technical ability to handle the conversion.

In April 2008 I wrote to the Maine PUC to complain that the new FairPoint Maine website did not have the costs of phone or internet plans, even though all other FairPoint websites did have this information. I argued that prior to the April 1 2008 takeover, FairPoint had months to create a website with this information. The lack of this information caused a very sharp spike in calls to the FairPoint customer service lines.

Kathy Adams of the Maine PUC responded to me by email, agreeing that the lack of cost information was a problem, but wrote “The information is on the website as required by Commission rules (www.tariffs.net/faripoint/tier.asp?cid=1647) but it is not in a user-friendly format, nor is it easy to find.”

1) No customer trying to find out if FairPoint was cheaper than, say, digital phone, could find this web site, even by Google search, and

2) The link Ms Adams provided did not work.

A key assumption by FairPoint Communications in talking over the Verizon customers was that 2,500 to 3,000 Verizon employees would prefer to stay in Northern New England and work for FairPoint. I argued then that there was an error in this part of their business plan, and my argument turned out to be correct. A sizeable number of Verizon employees choose to stay with Verizon.

In 2008 FairPoint lost more than 150,000 customers in Northern New England, and company-wide, FairPoint lost 12% of its landline customers. The average of lineline customer loss by telecommunication companies nationwide in 2008 was 7%.

On February 9 of this year, FairPoint had a backlog of 24,000 service orders. In this backlog were people without any service, businesses starting up or relocating and needing service, etc. Ms Adams of the Maine PUC told me twice in 2008 that the PUC was carefully monitoring FairPoint’s customer service.

If so, how did the PUC and FairPoint allow the service order backlog to grow to this size?

If CMP or Bangor Hydro had a backlog of 24,000 service orders, CMP and Bangor Hydro would have brought in 500 or more extra workers from other states.

In my humble opinion, there have been simply too many snafus related to the transfer of the linelines, the email accounts, the billing transfer and the service order backlog to accept the argument that FairPoint is capable of handling the 1.6 million customers it received from Verizon.

(I am completely ignoring here the 911 problems because FairPoint claims those problems were Verizon related and Verizon argues otherwise.)

Regarding the errors in the transfer of email accounts and billing from Verizon: in my prior life, I supervised the transfer of data from large computer systems to newer systems. In the run up to the transfers, employees tested, retested and then tested again each and every detail of the planned process, first with small batches of accounts and then with batches with accounts in the hundreds of thousands. With this pretesting, every actual transfer worked without a flaw.

By Tuesday evening FairPoint had to deliver to the Maine PUC a plan outlining how the company will address customer service and billing problems.

My concern is not with the details of FairPoint’s response, but with the Maine PUC and its apparent inability to adequately anticipate this “goldfish attempts to swallow whale” failure.

It is true that the ME, VT and NH PUCs hired an outside contractor, Liberty Consulting Group of Pennsylvania, to oversee the transition, but these problems occurred nevertheless.

And if there was active oversight of FairPoint as the PUC’s Ms Adams stated, how did the service backlog get to be so huge without the PUC knowing about it or demanding that action be taken.

I argue today, as I did a year ago, that it is my humble opinion, that neither “the PUC nor FairPoint has the management, the technical abilities or the horsepower to oversee or to make this transition from Verizon to FairPoint successful. Northern New England is already behind MA, CT and RI technologically, and we don’t need FairPoint’s failures to cause us to fall even further behind

How can we, the citizens of Maine, expect FairPoint’s delivery on Tuesday’s plan or any subsequent plan to be successful given FairPoint failures over the last year and the history of the PUC’s lack of anticipating these problems?

Certainly, it is in the American psyche to want the underdog to succeed in spite of the odds against him.

However, it is time for the PUCs of Maine, New Hampshire and Vermont, the State legislatures and Governors to realize this “goldfish attempts to swallow whale” experiment might never work.

Peter B. Hayward

Copyright © 2009 Peter B. Hayward. All Rights Reserved

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