New leader to take helm at FairPoint

Posted June 16, 2009, at 10:45 p.m.

PORTLAND, Maine — The new chairman and chief executive officer of FairPoint Communications Inc. will work to repair the company’s reputation, improve customer service, cut costs and reduce debt when he assumes the job July 1.

David L. Hauser was named Tuesday to succeed Gene Johnson as FairPoint’s CEO and chairman of the board. Hauser, 57, comes to FairPoint from Duke Energy Corp. of Charlotte, N.C., where he has worked for 35 years and is chief financial officer. He has been on FairPoint’s board since 2005.

“We’ve been through some tough times, we’re getting dramatically better, and I want to keep getting better,” Hauser said.

FairPoint, based in Charlotte, has operations in 18 states with about 1.9 million access lines. Its largest holdings are in New England, where last year it bought Verizon Communications Inc.’s wired telephone and Internet operations in Maine, New Hampshire and Vermont for $2.3 billion.

The company has been plagued with customer service, Internet and billing problems in northern New England since taking over from Verizon’s computer systems at the end of January. After the switch, thousands of customers lost their e-mail, didn’t receive their bills and were unable to reach customer service agents.

The company lost 12 percent of its residential and business lines in Maine, New Hampshire and Vermont in 2008; that rate is nearly 5 percentage points higher than the nationwide average for peer companies. And its credit rating was downgraded by three ratings agencies last month after the company said it was exploring a possible restructuring of its debt.

The company has improved its service in the past couple of months, Hauser said. The average customer service wait time has fallen from 15 minutes on April 1 to less than a minute, he said. At the same time, the number of back orders for phone service has fallen from 13,000 to less than 4,000.

Still, Hauser said the company needs to reduce costs and fix its “debt problems.” He did not rule out the possibility of job cuts.

“I think FairPoint has its challenges, as I think is known, but I believe I can step in and make a difference and drive this company in the right direction,” he said.

Johnson, 62, announced in November he was planning to retire this year.

Johnson, who co-founded FairPoint in 1991, said he wanted to spend more time with his family and pursue his recreational interests.

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