Java Jive

Citizens Telephone Cooperative, Floyd County's largest private employer and a company facing serious financial problems, went public this week, granting The Floyd Press an interview to discuss the company's "challenges."

What General Manager Greg Sapp told the newspaper appears to be a lot of corporate hyperbole and double speak.

Press editor Wanda Combs asked Sapp about the reports on this web site about recent meetings with employees where the company threatened layoffs and cutbacks in service if revenues did not increase by July.  Sapp refused to respond to those comments. Instead, he offered a company brochure overview that sounded a lot like the pabulum that is offered at the annual meeting each year.

Said Sapp:

For the past 20 years, the number of telephone customers rountinely grew from 5 to 7 percent.  Over the past two years, we started losing over 1 percent of telephone customers. This year, at this point in time, we've averaging a 2 percent (loss). That's a 7 to 9 percent swing in the negative. That really throws our traditional business model, stands it on its head. The difference between where we were then and now is a difference of $1.6 million dollars.

When asked about the threat of employee layoffs, Sapp again refused to discuss specifics but told the Press:

We have to continue to operate to look at the workforce, the size it is versus what we need to operate at that time. Historically the company goes out of their way to protect the interest of employees.  The Cooperative is changing to reflect the changing market and economy so we can continue to provide the level of services customers demand at competitive prices and so that we can do that for a long time in the future. On any road to the future there's always going to be a few bumps in the road.

"Bumps in the road" is usually corporate-speak for "hard times are here folks and some of you will lose your jobs."

Several Citizens employees have told us that at an earlier company meeting, the message from management was more direct.

"We were told that the person sitting next to us might not be with the company the next time we met," one employee said.

On Wednesday, the day before the Floyd Press article came out, the company held more meetings with employees and Sapp told pretty much the same story as the one he gave Press editor Wanda Combs. The topic of layoffs and cutbacks was not discussed.

"There was a definite change in tone," one employee said. "The threat is still hanging out there but it was more subtle this time around."

Sapp told the Press that former General Manager Gerald Gallimore laid out the "challenges" the company faced when he spoke at the last annual meeting at Floyd County High School. I attended that meeting. The picture that Gallimore painted was rosier than the one presented to employees. He talked of increasing competition and challenges but did not go into specifics and he also did not say anything about the possibility of layoffs or cutbacks in service.

Sapp blamed a drop in subscribers and long distance revenue for much of the company's problems but interviews with Citizens employees who, for reasons that are easily understandable, ask not to be identified show other factors which have brought on the company's current financial crisis, including:

• Construction of a "wireless broadband" data system in the New River Valley that promised to provide customers with laptop modems speeds up to 3 mbps. Suscribers have fallen far short of expectations and some reports say Citizens is trying to find a buyer for the system.
• IPTV, a cable-TV service delivered over the phone lines, has not met projections for county-wide deployment and does not yet offer high-definition TV reception at a time when more and more homes are getting HD TV receivers. Citizens lags a distant third in subscribers behind DirecTV and Dish Network -- which offer HD services.
• Too much rapid expansion into areas outside Floyd County and costly ventures into service beyond Citizens' core business. The company has purchased a number of ailing cable TV franchises in other counties and has expanded into some of the most economically devastated areas of Virginia.

Citizens is an aggressive, innovative telecommunications company that provides Floyd Countians with a level of telephone and Internet services that aren't offered in many rural areas. I have praised those services on this web site many times. These services come at a price and Floyd Countians pay for them at a rate that is higher than many other areas.

But Citizens is, first and formost, a cooperative that should be more open and honest with the subscribers/members who -- in effect -- own the cooperative.

Says Sapp:

In no way does Citizens or its management conceal or hide anything. Citizens has challenges it must face in today's environment. We must continue to look to enhance efficiency and productivity...to retain the right size workforce to match the size and scope of our business.

Take a second look at what Sapp said above. Read between the lines. Then ask yourself: Is this a company that is open and honest with its customer/owners?

Ran into an old friend Monday evening at Food Lion. She backed away as soon as she saw me.

"I can't be seen talking to you," she said.

She works for Citizens Telephone Cooperative and the heat is on to find out who is talking to me about the company's financial problems and threats of layoffs and service cutbacks.

Several Citizens employees have told me that they have been ordered by their supervisors not to talk to me about the recent company meeting where employees were told of the company's mounting problems. They fear losing their jobs if they are identified as the source of information published here.

I find this disturbing. Citizens is a publicly-owned telephone cooperative. We, the customer-members of the cooperative, are also the owners and we deserve to know what is happening with the company that provides telephone, wireless, Internet and television service to Floyd County.  Employees should not be intimidated and forced to work in fear.

While management has failed to return my phone calls seeking their side of the story, they agreed Monday to talk to the editor of The Floyd Press. I guess we will find out on Thursday what their spin is on the situation..

And while Citizens goes to great lengths to keep their problems secret from the customer/owners they serve, their precarious financial situation is no secret within the telecommunications industry. Weekend guests of musician Bernie Coveney included an executive of AT&T who told Coveney that Citizens' problems are well known and the topic of much discussion.

I called a telecommunications lobbyist I know in Washington Monday and he told me that the word within the industry is that Citizens is strapped for cash and hemorrhaging because of over-expansion and bad management decisions.

Here's what iLocus, which monitors IP-related issues for the industry says about Citizens and its IPTV deployment:

The biggest challenge has been the expense of deploying IPTV. Being a small company and not having the deep pockets to afford leading edge technology has been the biggest challenge, as well as the buying power of ordering large quantities of set top boxes. At the same time, working through the uncharted territories, experimenting with unproven technology and trying to figure out what works with the company’s network has also been a major challenge related to IPTV.

Citizens was once considered the darling of the telecommunications industry.  Now it is the subject of speculation about an uncertain future.

But at the moment, the primary concern of Citizens' management appears to be finding ways to keep the lid on the situation instead of being honest and forthright with their customer/owners.  They want to know who is talking to me and some have tried to blame the employees who work in the Citizens retail office next door to Blue Ridge Muse at the Village Green.

They're wrong. The ladies who work there have not discussed the situation with me. They don't have to. Many other Citizens' employees have come forward. They tell a sad story of a dysfunctional company that has lost focus and the trust of its employees. It is a story that must, and will, be told.

Several employees have come forward since our first story about the problems facing Citizens Telephone Cooperative -- Floyd County's largest private employer. They tell horror stories of abusive supervisors and a company out of control. They also raise serious questions about management of the publicly-owned utility that has kept its subscriber-owners in the dark.

The broad range of concerns raised by employees shows this is more than a few gripes by a handful of disgruntled workers. Something may be seriously wrong with the company that controls phone and Internet service in the county and also seeks to become a dominant force in television and wireless phones as well.

The top echelons of Citizens remain disturbingly quiet about the recent meeting with employees where company management said revenue must be significantly increased by July or layoffs and cutbacks in service will begin.  Department heads and others say they have been told not to talk to me, the press or the subscribers who supposedly own the company.

The question is: why? Why is Citizens stonewalling the subscriber/owners of the company? What has brought the company to this point? Was it mismanagement? Was it over-expansion? Or do we have more serious and sinister reasons behind the problems?

A long-time Citizens employee asked me Friday if I had a grudge against someone at the company. When I told that employee that, no, I have a lot of friends who work for Citizens and have come to know a number of others who came forward in recent days, the response was: "Good. I needed to know that. Now, please keep digging."

I will. We -- the customers and owners of Citizens -- pay some of the highest rates around for telephone, Internet and wireless service. We deserve to know what's going on inside our increasingly troubled and secretive telephone company.

The lady at Blue Ridge Restaurant this week wanted to know why I write what I do.

"Why must you be so critical?  There are so many nice things to write about here in Floyd," she said.

Yes, many parts of Floyd deserve mention and attention and I try to talk about those things as much as possible: the music, the culture, the people, the heritage and more.

But I'm a journalist who subscribes to legendary Chicago reporter Finley Peter Dunne's adage that "it is the role of a newspaperman to comfort the afflicted and afflict the comfortable."

I can't help it. It's in my genes. Always has been. Always will be.

Citizens Telephone Cooperative, Floyd County's largest private employer, is strapped for cash and talking layoffs, cutbacks and trouble for the future.

At a recent company meeting, Citizens executives told employees that the company must raise revenues or it will cut staff, salaries and services.  The situation is so bad that Citizens is considering taking sales personnel off salary and putting them on commission and sending a strong message to others that they might want to think about seeking employment elsewhere.

Over the last few months, Citizens has quietly outsourced many of its services that once were local. Many service calls now go to a call center in Montana, the company switched its web hosting domain registration to GoDaddy, a Scottsdale, Arizona, computer giant and its cell phone service, launched with fanfare a couple of years ago, is actually rebranded from Verizon.

Citizens's problems stem from too-rapid growth, expansion into counties outside its traditional service area and a general slowdown in the economy. The company spent far more than anticipated in deploying fiber optic lines throughout Floyd County and on a wireless broadband service in the New River Valley.

As a cooperative, Citizens is supposedly owned by its customers but the customer-owners have not been told of the company's recent problems and employees were advised to avoid discussing the situation with the very people they actually work for. Those same employees have endured cutbacks in benefits from a company they feel cares more about the bottom line. Some disgruntled employees have filed suit and their cases were settled, quietly, out of court.

Floyd Countians pay more for most telephone services than residents in more populous areas like Montgomery and Roanoke counties. Our DSL Internet service, while extraordinary for a rural area, is more expensive than faster service in urban areas.

As customer owners of Citizens, we deserve more information about the company's problems. Citizens needs to be open and honest about the uncertain future it faces. We own the company. We need to know.

Floyd's "let somebody else take the risk" town council is at it again, demanding unbelievably high letters of credit from each town business participating in the grants that help fund the downtown rehabilitation and trying, as usual, to avoid taking any real risk itself.

From behind closed doors, which is the way the government likes to conduct its business, comes word that the Town Council has decided to demand the letters of credit which, in effect, says they want business to bear most of the cost and the risk for the strategy.

This places such onerous requirements into the deal that only a fool would want to participate.

We've seen this crap before from the Town Council. I remember an early meeting on Floyd's downtown revitalization project. Rob Shelor, council membe  and probable mayor to follow the resigning Skip Bishop, whined about the town having to invest $100,000 in a program that would bring $1 million to the community in grants and loan programs.

Todd Christianson, the state official charged with getting the grant through the system, told Shelor that if he didn't want the money he lots of other communities standing in line to invest in their town's future.

Shelor finally gave in but he continues to be a thorn in the side of any business that wants to bring tourists to Floyd.

Many business owners put their homes and future at risk to borrow the money to take a chance on Floyd's iffy business environment but the town government wants to avoid risk and claim the credit.

Hopefully, those who want to see a farmer's market in Floyd will proceed without the town's involvement, leaving the town council where it belongs -- out in the cold.

To say Town Government can be duplicitous is kind. It is exactly this kind of double dealing that has long plagued both the Town of Floyd and county government.

Details, of course, are sketchy because the Town Council uses one of the many loopholes in Virginia's antiquated Open Meetings Act to conduct its business in executive session -- in other words, secret.

In this election year, voters are calling for change on the national level. Last year, voters in Floyd County registered their anger at county government by sending two incumbent supervisors and the sitting Commonwealth's Attorney to the showers.

Maybe it's time to for the voters of the Town of Floyd to consider a similar house cleaning.

Blue Ridge Muse found itself on Floyd's most-wanted list this week because the forgetful owner forgot to renew the studio's business license.

Went down to the Town Hall to pay up and had to fork over an extra 10 bucks as a fine to get legal again with the jurisdiction.

Learned the "Most Wanted" list isn't all that exclusive. Many businesses in town have to be reminded to renew that little cardboard certificate that goes up on the wall.

One of them was Town Attorney Jim Shortt: The man charged with collecting overdue license fees. Question: Did Shortt write himself a threatening letter?