Listening to the radio while cruising around this evening, I heard a fascinating ad from my old employer Qwest. Rather than trying to get me to buy a bundle (Custom Choice!), they were trying to get me to sign up for telephone assistance. A decade ago I would have been ridiculed had the words “telephone assistance” ever crossed my lips. We were all about selling packages and cell phones. I can remember one of my co-workers shipping four cell phones to a lady in a nursing home with the promise of free long distance. Nice, huh?
The worm has definitely turned in telecom. The days of the second and third home line are long gone. Families with teenagers no longer get a second line. Home Internet users have migrated away from dial-up modems in favor of cable or DSL. And the younger generation is forgoing hard lines altogether in favor of cellies. So that leaves the low-income folks who can’t afford cell phones and senior citizens as their prime market for home phone service. Gone are the days of the $100/month target customer. Now they consider themselves lucky to retain a $20/month POTS line. Fascinating.
The Denver Post published an article Thursday which details the classified information former Qwest CEO Joe Nacchio said was critical to his defense against allegations of insider trading. The details are making a splash at both The Huffington Post and TPM. I didn’t originally buy his “classified” defense and am having a little trouble swallowing it now.
Even if you believe his story, it still doesn’t explain why he was optimistic about Qwest’s future while at the same time dumping stock. According to the timeline put forth in the documents, the critical meeting occurred in February 2001 and at that time Nacchio balked at the government’s request. What exactly made him believe the government would reward his refusal to play ball by giving him a nine-figure contract to build a network which he himself suspected might be illegal? I don’t get that one at all. Prosecutors also have a few questions.
If the secret contract story is to be believed, Joe had to know he wasn’t going to get the contract in February 2001 and began selling his stock beginning in the second quarter of that year. Whether the thing existed or not, the ride was coming to an end and he knew it. He should have told his investors. That he didn’t makes him a felon.
