As promised, the interview as personally transcribed from a digital recorder. My apologies that I didn’t get in tougher questions. The gent is charming and way too likable, so I didn’t press as hard as I should have, then ran out of time. Thanks for your help, everyone.
Q: How do you feel Embarq is doing in getting its new name out to the oldcustomers and attracting new customers?
A: The naming and rebranding the company is going extremely well. We’re getting great feedback from our customers, great feedback from our peers and even competitors in the industry that say they like — our advertising is good.
They like our name, our color, which really does stand out. We’re the only company in the industry with green, which really stands out.
It’s a distinctive name that stands for something.
In our advertising, you won’t see around here — I don’t know the specific situation around here, but most cable companies won’t run our ads. So we’re having some difficulty getting our TV spots out into the communities, but we are getting them out in some places.
Q: It was reported in July by the Kansas City Business Journal that among the changes in corporate culture following the split from Sprint was the right to wear jeans on Friday.
A: Yep, announced that in late May when we launched the company. We wear jeans on Friday.
Q: So if I come to headquarters this Friday, how many people would I see taking advantage of that?
A: I would say over 90 percent.
Q: Would you be among them?
A: Oh, yeah. Absolutely. Why do you think I made Jeans Friday? So somebody else could wear jeans? I like to wear jeans.
It’s amazing the little things like that. After we did it, we announced it to our employee celebration right around the 25th of May and I spent a lot of time going around the country after that. And more people have mentioned Jeans Friday than almost anything else.
Of course, other things are more significant, but it made a distinct statement.
Q: The report in the Kansas City Business Journal also said you canceled more than 320 meetings. Is that accurate?
A: More than 320 hours of meetings on an annual basis.
Let’s say an hour meeting once a week and I canceled that for the year, that’d be 50 hours, for example.
When I first got to Sprint, I was just frustrated that I couldn’t get all the work done I wanted to do because I was in so many meetings.
And the thing that also I noticed that people would come so prepared with all these decks and what have you.
So you start doing the math and start adding up what people are doing to prepare for meetings, and then you hold meetings to prepare for those meetings and meetings to prepare for that meeting and the multiplication effect.
For example, if I cancel a one hour meeting, it’sthe same as probably canceling 2,000 hours of meetings for every one hour of getting everyone prepared.
And, quite frankly, all the trees that get chopped down for all the paper for that.
I wanted us to be focused externally on our customers and not meeting with each other. It changed things quite a bit.
Q: Even though your a new company you have a unique history and the baggage that comes with it. Did you feel you got the short end of the stick when the company broke up?
A: Not at all. I knew what I was getting into when I took the job. And I had a lot of alternatives in terms of what I went and did next, and I chose to do this. I had a pretty good feel for what this new company was going to look like. Some people said, ‘Well, why did you take all that debt?’
Well, if you look at our balance sheet, compared to all the local exchange carriers, it looks like one of the healthiest in the industry.
And we got an investment-grade rating from all three rating agencies. I like the hand we were dealt.
Q: During the TelcomNext trade show, you complained about taxes and surcharges, yet you’ve been doing very well on your own. Morgan Stanley upgraded the stock last week. The earnings statement came out last week and exceeded expectations. The stock has been going up. It seems as if those taxes haven’t been holding the company back much. Do you have a comment on that?
A: Imagine what we could do if taxes were fair. And we still are losing customers to cable companies, and other voice over IP companies, even through we’re going well.
And you’re right, the stock price is up, But it’s just a matter of parity and fairness.
If you make a call on whomever your local cable company is, using voice over IP here in Oregon. Make a call to New York City on the cable company, and a call on our facilities, right next door to each other in New York.
We will both, once the call gets to New York, we will use exactly the same facilities in the city of New York - Verizon local lines. I will write a check to Vorizon 19 times higher than the cable company for using the exact same facilities —by law.
There’s nothing different; we’re getting the same thing.
Regardless of how rich you were, If you went into a grocery store, and your price was 19 times higher than everyone else’s, you’d say ‘That’s not fair; I’m getting the exact same thing.’ And that’s the issue about taxes and surcharges.
Just a couple of months ago, you probably saw that they finally eliminated the excise tax on telephone services, which had been around over 100 years to help fund the Spanish-American War. It was still there because it was really a luxury tax. Way back 100 years ago, it was a luxury, and it’s not anymore. So there are these taxes and fees when we are in a competitive industry that apply only to us and not to our competitors.
That’s a price increase to our customers.
If we didn’t have to pay those fees or taxes we could lower our prices.
Q: Can you talk a little bit about net neutrality?
The bottom line is there is no industry in the world that is structured - by the way, the term ‘net neutrality’ is an absurd term. It is exactly the opposite, making sure the net is not neutral, which it is today. It is taking the open Internet and closing it, and bringing in government regulation into the Internet that doesn’t exist today. And it’s being pushed by some very rich people who just want to be richer. That’s where it’s all coming from.
Q: Can you name names?
A: It’s Microsoft, Yahoo, you go right down the list. It’s those kind of companies that are the fundamental drivers behind net neutrality.
What they want is - they don’t want any innovation to come from the telecom sector.
They don’t want unique services, any added value. They want the network to be a commodity; dumb pipes, no innovation. So that all the innovation is done by the content providers.
Which, by the way, doesn’t exist today, which I think would be absolutely horrible for Internet service today.
The analogy I was using earlier was it would be tantamount to saying everybody has to live in a 100,000 house, and it must be 2100 square feet. Everyone must have exactly the same.
And that’s what it is. It’s dictated that. It would not allow us to provide different levels of service to different business customers.
Just like Federal Express, saying ‘That’s illegal.’ But I want my letter to get there overnight and I’m willing to pay for it.
Oh, no, you can’t offer that; that’s against the law.’
That is what they want. There is no question about it. That is exactly what they want. They want it to be illegal for us to offer superior service to anyone who’s willing to pay a premium.
And they say we’ll stop offering service to everyone else.
That’s never happened. They know that’s not true. There’s no truth to that at all.
And they have no basis for that whatsoever. It’s just nothing but scare tactics.
Q: AT&T chair Whitacre said in March ‘AT&T will not block or degrade traffic, period.’ Is that something you agree with?
A: Completely agree with. He’s absolutely correct.
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At this point, the local corporate PR person said we had time for only one more question, so I lobbed a softball to get a closing quote
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Q: would you define your corporate strategy and philosophy?
A: In a nutshell, it’s to be innovative and to bring practical ingenuity.
You can be innovative and come up with all sorts of complicated devices that no one knows how to use. So that’s what I was describing earlier, like integrating your voice mail. So a call that goes to your home phone or your wireless phone can go to one voicemail box.
Those are examples of what we want to do as a company. We want to be very involved in our communities; we support five percent of the United States. Like the gorge and provide great customer service and not be distracted by other markets. We want to do a really good job of providing good service to the communities that we serve.
Those are kind of the three colors of our new company
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Several places in the Q&A he referred to what he had been talking about earlier. He had addressed a group of local community leaders at a lunch meeting prior to our short interview. Interested parties can contact me for a transcript of his remarks. My e-mail is in my profile.
Thanks again to all
Hometownboy