FairPoint Communications Inc. (FRP) will take the hot seat once again next month when regulators from Maine, New Hampshire and Vermont grill executives about the company’s ongoing computer-systems setbacks, which continue to create serious snags for customers.
The New England LEC most recently faced lawmakers on Aug. 12 in Maine. That was the day FairPoint President Peter Nixon told a committee the LEC will have difficulty regaining customer trust. Utility commissioners are sure to pump Nixon on that point on Sept. 9 at a location that’s yet to be announced.
To be sure, the situation at FairPoint is so bad there’s been talk in news reports from public meetings of yanking the provider’s licenses and speculation it will file for bankruptcy. So what happened? How did a regional carrier, established in 1991, go from respected to reviled?
The headaches began last year after FairPoint bought landline and Internet assets from Verizon Communications Inc. Then, once FairPoint cut over to a new computer system this past February, the problems exploded. At one point, some subscribers couldn’t call the hospital, a public safety director has said. Others also have been unable to reach FairPoint customer service and still others have lost e-mail messages because of the provider’s systems hiccups. Indeed, FairPoint admitted in its second-quarter earnings filings with the Securities and Exchange Commission, “the magnitude of difficulties experienced was beyond our expectations.”
FairPoint now is trying to refurbish its tarnished image. It has replaced top executives and says “most areas” are operating “at or near normal levels.” But the reality is, the computer systems complications continue, and they all go back to dealing with a former Bell in the first place.
“RBOC systems have evolved from decades of regulation and legacy requirements,” Brian Washburn, research director for Current Analysis’ network services unit, told B/OSS. “The Bell System heritage makes these systems very different from what the independents operate.”
Combine that with short deadlines for switching systems and the trouble points start to add up.
“If you look at RBOC/ILEC M&A, existing support systems aren't getting cut over aggressively. It isn't done because it's not a good idea,” said Washburn.
Next, consider that FairPoint had to hire hundreds of new people as it took over the northern New England region.
“That means a lot of new faces came in that may have been individually seasoned, but had not worked together before,” Washburn explained. “That raises the chance for miscommunication.”
FairPoint, too, blamed “work force inexperience on the new systems” for much of its customer service reps’ “increased handle time.” The lack of institutional memory slowed new orders, which led to provisioning, installation and billing delays, FairPoint said in its second-quarter filing.