Fairpoint announced a delay in the complete takeover of Verizon properties they purchased in the northeast. The official cutover is now scheduled for the end of January 2009, which is a 60 day delay from the previous announced cutover date. Fairpoint is trying to “transition to about 60 new, fully integrated state-of-the-art systems which will replace the more than 600 systems currently being utilized by Verizon to support the acquired operations.” Fairpoint is still utilizing Verizon resources during the transition.
No real surprise here. The transition is indeed complex, and Fairpoint won’t publicly say it, but I’d be willing to bet the Verizon plant they’ve inherited has seen better days. It probably needs serious rehab work. I can say that from experience, having previously worked in network ops of a large bell company. Even the markets (i.e. large urban centers) that have the attention of bell companies can leave a lot to be desired from a physical plant perspective. Smaller, less densely populated markets receive even less attention. This Fairpoint delay can be spun as a smaller, less capable company trying to inherit more than it can handle – in fact I’ve seen commentary supporting this view already. I’m sure there are some scale challenges for Fairpoint. But the reality probably has more to do with trying to absorb network assets that need some serious rehab.
From the statement, and experience, isn’t this more the backend integration of moving trunks and internet services from Verizon to Fairpoint? If the plant works for Verizon now, there’s nothing that Fairpoint would do in 60 or 120 days that’s necessary for a transition. There’s all the customer billing accounts, customer mailings, and services that are currently handled by Verizon that need to move over to Fairpoint’s network. That’s no small potatoes.