Idearc Media phone number list source and deregulation cause FairPoint phone book to have missing numbers and errors

November 12, 2009

UnionLeader.com – New Hampshire news, business and sports – More FairPoint woes: Phone book lost numbers – Wednesday, Nov. 11, 2009

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If you can’t seem to get the phone book to be any more accurate than the internet…. why bother printing it? Seems as though the companies need to get it right if they are going to attempt to state that they are the “best yellow pages” out there. If you saturate my house with phone books… atleast make sure the information is accurate. It isn’t enough that the yellow pages industry saturate our Dallas area homes, they also don’t seem to be that interested in making sure the information is accurate! Take some accountability and fix the problem… might go along way to creating the subscription based business model consumers deserve!

Meanwhile folks in New Hampshire are going to really not suffer as much as regulators might think. Take a look at the recent comments from local consumers regarding FairPoint’s phone book mistakes and Idearc’s errors when the the local phone book was published.  See, it wasn’t a big deal after all. AT&T also has announced recently that it intends to stop printing as many White Pages directories.


FairPoint phone company files for bankruptcy due to Verizon spin-off scheme.

October 26, 2009

FairPoint phone company files for bankruptcy, Thanks Verizon! – Yahoo! News

( http://ping.fm/K8AWU )

FairPoint Communication Phone Company is Bankrupt and files for Bankruptcy protection

We all knew it was going to happen. Verizon should be held accountable for actions related to bankruptcies of Idearc Media, FairPoint, and Hawaiian Telecom!

By CLARKE CANFIELD, Associated Press Writer Clarke Canfield, Associated Press Writer

PORTLAND, Maine – FairPoint Communications Inc. had its work cut out when it grew sixfold overnight by buying Verizon Communications’ land line and Internet operations in three New England states. But the nation’s credit crisis and a bungled technology transfer made the task virtually impossible.

With a battered financial sheet and a tattered reputation, FairPoint filed for Chapter 11 bankruptcy protection on Monday, barely 18 months after becoming the dominant telecommunications company in Maine, New Hampshire and Vermont.

The bankruptcy filing was widely anticipated and fulfilled critics’ predictions that FairPoint was taking on more than it could handle when it bought the Verizon properties for $2.3 billion.

But nobody’s taking satisfaction in saying, “I told you so.”

“What good does it do us? We can say it, but we’re left here to do deal with it,” said Pete McLaughlin of the International Brotherhood of Electrical Workers, which represents FairPoint employees.

FairPoint, based in Charlotte, N.C., owns and operates phone companies in 18 states with a total of 1.65 million lines. Its largest holdings are in Maine, New Hampshire and Vermont.

The company voluntarily filed for bankruptcy after agreeing on a deal with key lenders that would lower its debt from $2.7 billion to $1 billion and significantly cut its interest expenses, CEO David Hauser said. The plan is subject to approval by the U.S. Bankruptcy Court in the Southern District of New York.

Hauser said the filing will not affect the company’s day-to-day operations or its efforts to expand its high-speed Internet network in northern New England.

“From a customer point of view, this is a nonevent,” he said.

Monday’s filing prompted the New York Stock Exchange to suspend trading in the company’s stock. The company was notified last month that its stock could be removed from the exchange because the price had fallen below $1 a share for 30 consecutive trading days.

Regulators and politicians said they would look out for the interests of FairPoint’s customers and workers. The regulatory boards in Maine and New Hampshire said they have hired bankruptcy specialists to help during the process. Staff members from the three states’ regulatory boards planned to meet with FairPoint’s management and staff on Monday.

“The creditors seem to be taken care of, but that doesn’t mean the consumers’ interests have been protected,” said Maine Public Advocate Richard Davies, who represents consumers.

Besides negotiating with banks and bondholders to restructure its debt, FairPoint has been asking its nearly 3,000 union employees in the three-state region for concessions in a cost-cutting move.

Union leaders, meanwhile, said FairPoint’s problems were caused by “crushing debt and an organizational chaos,” not by its work force.

When FairPoint first proposed buying Verizon’s land line and Internet assets in northern New England, opponents said FairPoint was too small to take on such a large network. At the time, FairPoint had 975 employees and about 300,000 access lines nationwide; Verizon had more than 3,000 employees and 1.6 million access lines in northern New England alone.

Davies said two events are largely to blame for the company’s unraveling.

After the purchase was approved by regulators in Maine, New Hampshire and Vermont, but before the acquisition was completed on April 1, 2008, FairPoint was hobbled by the Wall Street financial crisis, he said. To finance the deal, the company planned to issue bonds paying 8.125 percent but instead had to issue bonds that paid 13.125 percent — causing its interest payments to soar.

When the company switched from Verizon’s computer systems to its own network last winter, it was plagued with customer-service, order-fulfillment and billing problems. Those problems caused costs to go up and its customer base to go down.

“Two factors that are major contributors to this weren’t known to regulators at the time the deal was approved,” he said. “Hindsight is a wonderful thing and if we’d known all these things back then I’m sure there would’ve been a different decision.”

Meredith Hatfield, New Hampshire’s consumer advocate, said the challenge now will be advocating for customers’ interests and getting FairPoint to follow through on its commitments.

“Obviously ratepayers and customers of FairPoint potentially have a lot to lose,” she said.

FairPoint said it has about $46 million of cash on hand. It said it received commitments for a $75 million debtor-in-possession revolving credit facility while in bankruptcy.


What do Idearc, FairPoint, and Hawaiian Telecom all have in common?

October 9, 2009

Here is an article that I have been biting my knuckles trying to keep quiet about.
WSJ Comments On Idearc Bankruptcy & Verizon Culpability : Natural Search Blog

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I read this article via a former employee of Idearc, one the Search Engine Marketing Industries most respected SEO consultants and who many believe to the the foremost experts on Local Search Marketing in the World, Chris Smith. Chris was formerly head of Idearc’s Search Engine Marketing team on the fella that helped put Superpages.com on the first page of Google. Chris did a tremendous job in the early day’s of local search beating other Internet Yellow Page Sites, such as YellowPages.com and Local.com (competing with keyword rich domains in the space is a challenge)

So the question is…. what do Idearc Media, FairPoint, and Hawaiian Telecom all have in common? They are all companies that Verizon spun off to fund Wireless and Fiber/TV/FIOS initiatives. Chris states, “Verizon might have some responsibility for the bankruptcies of Idearc, Hawaiian Telecom and FairPoint Communications”.

He also states:

In the case of Idearc, the business unit was too small to cause the great corporate mother ship to founder, and it’s the Verizon spin-off debt load it was saddled with that caused it to be unable to function in the first place. He misses the point that Verizon took too much money out of the spinoff deals. Those weren’t existing debts associated with those business units prior to their divestment.

These companies wouldn’t have “gone under” within Verizon. It’s possible that if a business unit starts to lose money for a quarter or two, the board would naturally require it to correct itself in some way.

I completely agree. I also think that the folks that worked for Ivan at Idearc at the time were over eager to accept whatever deal they could in order to be relieved of the burden of being under the Verizon direction. I don’t think it was smart of Kathy Harless and her team to take on such a debt burden…… seriously, over $9,000,000,000.00 for a company that has been losing its business to Google and Yellowbook and other competitors since 2001? It must have felt very confident on new product ideas such as Solutions at Home, Solutions Direct Mail, and Solutions on the Move! Nonetheless, the company would have never been able to create these new ideas and products under Verizon. Verizon used the Yellow Pages division as a cash cow to fund other ventures, then did it again when it unloaded debt on the smaller divisions.

I have a site that I am going to build: http://www.YellowCrooks.com, as I recently purchased the domain thanks to the idea from a former co-worker. He gave me the idea while being forced to watch an hour long rediculous “cocksure” video about sales, sales, and more sales. In my opinion sales was not the issue. The product offer and fulfillment was the major problem. (I have the credentials to state this since I was regarded as the most knowledgeable internet media consultant in the company {hey a FIGJAM moment for myself} and also have 3 President’s Awards for “Sales” in my 6.5 years in the division.) With the site I want folks to discuss what Verizon did. With all the transparency about Countrywide Mortgage and other recent events…. .why not?

Chris continues to state:

But, arguably these companies experienced a much higher degree of financial problems due to the extremely high debt they were required to service subsequent to spinoff. These spinoffs funded Verizon’s FiOS expansion — a gigantic project that was paid for by Verizon offloading the investment costs to the companies it spunoff.

It will be interesting to see if the Securities and Exchange Commission gives Verizon a pass on their spinoffs of bankrupt companies as Newmark seems to think reasonable, or if they don’t respond in some way to consumer and state government complaints.

In my opinion his comments are exactly why Idearc will have issues completing the bankruptcy. If I recall the company is going to come out with approx. 3 billion in debt when it emerges in Dec09/Jan10.

According to WebWire Press Release:

Idearc filed for voluntary chapter 11 bankruptcy in order to renegotiate its debt. Although Idearc was not technically bankrupt with over $500 million cash in the bank and net cash flow of $300 million per year, the weak economy spurred creditors into lowering the outstanding debt from $9 billion down to $3 billion along with more flexible payment terms. One of the terms is that Idearc give anything over $150 million in their bank account to creditors in order to pay down the $3 billion in debt. Essentially, Idearc will always have $150 million in the bank and anything over that will be taken out to pay down debt. Idearc’s 3 billion dollar debt has a note rate of 12%, the annual debt service is $360 million dollars, about 12.1% of 2008 gross annual revenue. The creditors/lenders have already approved the reduction in debt. The company is now waiting for approval from its board and the bankruptcy judge. According to the new deal, Idearc must give the creditors $250 million from its cash reserves as a sign of good faith. This will put Idearc’s cash position at approximately $250 million after the deal is completed

I hope the folks at the Downtown Courthouse in Dallas are taking all this into account! I know the counsel for the unsecured creditors is sure going to put pressure on fiduciary responsibility of Verizon. But in my opinion (or should I say prediction is) Verizon will probably buy Idearc back in some Bernie Madoff type crony deal and leave shareholders with pocket lint. Why? Because this is America! Heck, Verizon offered a separations package to folks that left the company and put it in writing that folks would not be hired back, yet these folks were later rehired after taking the Voluntary Separation Package with very nice severance packages. Do I blame the cocksure guy from Pepsi? Nope! Not for the burden. But it kinda makes me think of folks saying that Obama is not to blame for Bush’s choices. Well….. that might not be a good example…. or might just be?? Obama’s choice to put my kids in debt with the “Spendulus Plan” and Bail Outs might compare to turning “America’s local ad agencies” into a telemarketing service or abandon the internet business in favor of trying to keep the print alive. Honestly I have heard rumors (like I said!!! RUMOR!!!) about Idearc not wanting to stick with the .com product it offers since all it can muster is riding the coattails of Google and Yahoo in search. Margins in print make it easy to have 3000 “sales” reps. The smaller margins in .com might move the company towards that of a Media Buying Ad Agency and the company might follow in Google’s self automated pricing structure. Why should prices of ads be so darn “negotiable”?

I’d go a bit further and also agree with Chris and state “that if it looks like a rat and smells like a rat, it’s a rat”.

In the meantime….. y’all wish me luck….. I am hoping to start a company doing what I do best……

HELPING DALLAS AREA BUSINESS OWNERS REACH THE TOP OF GOOGLE AND MAKE MONEY!

Oh, yeah…. I think I am going to offer to create PPC campaigns for FREE and not charge a management fee or have you sign a contract…. Might be the wave of the future. Call me for details. FREE Google PPC Campaigns are subject to me providing my SEO services. Although technically I am not in business… maybe I can show folks how profitable SEO can be!