FairPoint close to bankruptcy, back office to blame

FairPoint Communications Inc. (FRP) edged one step closer to bankruptcy on Sept. 30, the day it missed a $28 million interest payment. The rural LEC’s bank lenders knew the default was coming, and have given the company until Oct. 30 to make good. But the chances of FairPoint not filing Chapter 11 grow bleaker as FairPoint continues to struggle with unhappy customers, state regulators and money woes. And now that ratings service Standard & Poor’s has downgraded FairPoint to a ‘D,’ it seems everyone has lost faith in the provider’s ability to recover from its problems. All in all, FairPoint’s downfall, brought on by a disastrous takeover of Verizon Communications Inc. (VZ) landlines in New England, highlights how the back-office and its complexities can make or break a company.

FairPoint’s spiral started last year after it paid $2.17 billion for 1.6 million Verizon phone lines in Maine, New Hampshire and Vermont. The challenge was to consolidate those lines into one regional network, on the same OSS/BSS platform...