FairPoint : a poster child for …

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

FairPoint Communications 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."

Vermont's broadband provider ? 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.

also posted at greenmountaindaily.com

Some additional FairPoint news

Fitch Ratings has lowered FairPoint Communications’ credit rating and has placed the company on its negative credit watch on concerns about its financial situation, said the ratings agency in a Thursday press release.According to Fitch, “FairPoint is considering the engagement of a financial advisor to evaluate its current capital structure and explore options with regard to a potential restructuring,” said Fitch.
Fitch said it was concerned any possible restructuring could lead to “a bankruptcy filing or coercive debt exchange.”