Regulators From Three States Grill Fairpoint Executives

Regulators called the meeting because customers in their 3 states have expressed frustration with Fairpoint Communications.

They’ve complained about late installation orders, incorrect bills, and unreasonably long waits for service.

Vermont regulator David Coen said the company didn’t seem to be able to address the issues.

What I don’t see is a detailed action plan for fixing the problems. Its been seven months since the cutover. When should we expect such a plan and when do you expect to finally correct the problems?

Fairpoint CEO David Hauser says company officials know there are more than 2,000 late orders out of about 22,000.

He says the company is making strides in getting these late orders filled faster.

We know where these orders have problems. And that is a combination of process and system issues. We have identified the areas that need further attention and have improvement plans in place for those areas.

Fairpoint officers also said they want to hire a consultant to help them better integrate their computer systems.

That would allow more orders to be automated.

Company officials expected the consultant to report on progress in mid November.

But company officials were more vague on when the company’s backlog of orders might be cleared.

Maine regulator Vendean Vafiades asked if Hauser could tackle the company’s problems more urgently.

I know you do in the financial, but I’m just wondering if you do on this other piece. I’ve got the whole thing. Ok. I understand. I have a huge sense of urgency…I mean let’s face it. Northern new England is what makes or breaks Fairpoint now and next week and as far as I can see.

Fairpoint officials also say they’ve made progress in customer service.

They claim that wait times at their call centers have dropped to less than a half minute.

But by its own admission, the company is losing residential consumers at an annual rate of 17 percent a year.

Business customers are leaving at a somewhat slower rate.

CEO David Hauser says the company is also struggling with a huge debt load.

He says Fairpoint needs to work out a deal to restructure its bonds with its debt holders.

Or it may have to enter Chapter 11 bankruptcy,

If you go into chapter 11 and there is a steady cash flow stream of a company, which Fairpoint has, then the new owners will effectively be the prior creditors, in this case the banks being the biggest creditors. So they are now going to be equity holders.

Fairpoint officials say even in chapter 11, nothing would change for customers.

The company would keep running, and service would be uninterrupted.

Regulators heard the assurances, but still pushed executives to be more forthcoming with information and concrete plans.

New Hampshire chief regulator Thomas Getz criticized CEO David Hauser for minimizing the aggravation Fairpoint has caused many of its customers.

There may have been ‘significant strides’ but we’re still well short of where we expected to be and where we all should be in terms of customer service for business and retail customers in the three states. And we just ask that you mr hauser and all of your senior management pay very close attention and take that issue seriously.

Regulators called the meeting to learn more about where the company stood on many issues.

There’s no requirement that they take any action based on what they heard.

But they will certainly use what they’ve learned to more closely monitor Fairpoint as it moves nearer to a possible bankruptcy.