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Getting back into the act at a late stage

John Purcell:
Getting back into the act at a late stage

A few dozen owl figurines decorate the office of John Purcell, a wise bird credited with changing the face of telecommunications.
Besides owning hundreds of owl collectibles and a slew of owlish art, Purcell heads the 96-employee Fiber Technologies LLC, a fiber-optic network builder based in Pittsford. He joined the firm in January after a three-year stint as a part-time telecom consultant.
In the early 1990s, Purcell led a team that hammered out the Open Market Plan that changed Rochester Telephone Corp. forever and helped usher in a new era of deregulation in local telephone service nationwide. He retired from the company, renamed Frontier Corp., in 1997.
Now Purcell, 56, has begun a new career.
He seeks to build intracity fiber-optic networks in some 43 second-tier cities in the Northeast. The markets include Rochester, Scranton, Pa., and Hartford, Conn.
Building fiber-optic networks is a hot area in telecommunications, fueled by the explosion of data traffic.
Fiber Technologies in late May closed on a $30 million equity investment package led by Fleet Equity Partners of Providence, R.I. The company immediately acquired White Knight Communications, a fiber-optic network builder with 85 employees and one of the area’s fastest-growing privately held firms.
Fleet Equity Partners has committed to providing $20 million as the major equity investor. The remaining $10 million comes from local investors, including Purcell and Frank Chiaino, former president and CEO of Time Warner Communications.
Purcell expects Fiber Technologies to reach 130 staffers here by early 2001. He projects revenues of $48 million to $55 million by 2001, and $90 million to $100 million in five years.
The company last month signed a $100 million deal with Choice One Communications Inc. in which Choice One will become an anchor tenant on Fiber Technologies’ multicity fiber-optic network.
“John’s style is to give clear direction,” says Steve Dubnik, chairman and CEO of Choice One.
Dubnik worked for Purcell from 1985 to 1987, when Purcell headed regional telephone operations for Rochester Tel and Dubnik was a fresh-faced graduate from Massachusetts Institute of Technology.
Those who followed his strategic directives and achieved results were given autonomy, with little direct involvement from Purcell. Those that did not achieve the targeted results saw much more of him, Dubnik says.
“That style is one that will work well (in an entrepreneurial venture),” he says. “One of the risks is you become too dependent on an individual. It is important to have someone to delegate and who can trust other people.”
Purcell worked at Rochester Tel and Frontier for 32 of its 101 years, from 1965 to 1997.
“When I went there, we still had two towns in the Rochester area that were manual. The people in Dansville and Church-ville would pick up their phone and the operator said, ‘Number please, ‘” he recalls. “It was kind of embarrassing.”
Rochester was one of the last major cities in the country to fully abandon manual connection.
“To go from that to when I left-having a national long-distance company, building a national network-it was a tremendous growth period and one that was a lot of fun,” he says.
Following his retirement from Frontier, Purcell worked at HPA Telecom Group Inc. as a part-time consultant. He spent his free time traveling the world, reading and with his family.

A new challenge

Purcell’s decision to return to work full-time surprised his friends.
“He was enjoying retired life. I think just the challenge attracted him,” says Larry Howe, a former Rochester Telephone employee and Purcell’s best friend. “But once he made the decision, he (became) dedicated to making it happen. He will do what it takes.”
Fiber Technologies’ potential and the opportunity to lead the venture were too good to pass up.
The concept was spawned in late 1998 when a White Knight subsidiary was asked to build and operate networks for four school districts: Batavia, Geneva, Cortland and Auburn. The company owned the networks and leased them to the school districts.
That success and profitability convinced the founders to leverage White Knight’s capabilities on a wider scale. Last year, the team approached HPA Telecom for help on a business plan.
“That’s how I got in the loop,” Purcell says.
He points to an array of reasons for making the decision to become president and CEO-one he did not rush into.
“I never looked to go back to work full-time,” he says. “The business plan was intriguing. The strategy of White Knight-I saw the potential.”
Once the business began presenting its plan to the financial community, several investors asked Purcell to consider leading the company.
“Several of them said, ‘You have a good plan, good people; they need a leader, need a president. If you do this, then we will fund this,'” he says. “After the second fund told me this, I got to thinking they could use me. I’m re-energized by enthusiasm for it.”
Purcell expects to break ground on the first intracity network in Syracuse this summer, and targets completion of the first five networks by year’s end. By early next year, five additional cities are expected to join Fiber Technologies’ lineup: Buffalo; Albany; Providence, R.I.; and Worcester and Springfield, Mass.
The company plans in 2001 to build additional networks in Rochester; Binghamton; Manchester, N.H.; Harrisburg, Pittsburgh, Scranton and Allentown, Pa.; and New Haven and Hartford, Conn.
Fiber Technologies is targeting competitive local exchange carriers, DSL firms, Internet service providers, data communications carriers and major private-network owners.

Window of opportunity

Network capacity between cities is readily available at fairly competitive rates. But within cities-particularly smaller cities-there is growing demand and a lack of supply.
“Thus, there is a business opportunity. The two first movers in each city will have a tremendous advantage,” Purcell says.
Network development in second-tier cities is difficult and costly, however. The lack of business density means it costs more than building in larger markets.
“The CLECs we have been talking to have all said the same thing: If we were up and running today, they would be customers. They are currently leasing from Bell Atlantic and paying a long dollar for it,” Purcell says. “More importantly, they don’t have the control over the network that they want.”
Fiber Technologies has most of the permits ready for its crews in Syracuse, Buffalo and Albany. But it still needs to coordinate with electric and telephone companies to use the utility poles. Some 80 percent of Fiber Technologies’ networks will be above ground.
“We are probably two to three weeks behind where we would like to be,” Purcell says.
In its first 60 days, the company has filed 120 applications with Verizon Communications for central office connections.

No reward without risk

Fiber Technologies’ concerns include additional competitors and technological changes in fiber.
“We need to get there first with a really flexible system that allows people to lease it and light it. People want 15- to 20-year leases,” he says.
“We have built into our business plan that competition and technology will probably impact pricing. That’s a big business risk, if you have a number of new entrants. We are also betting on the success of these CLECs. These are our customers.”
In April, another local start-up, American Fiber Systems, secured $50 million in Silicon Valley venture capital to build networks in 20 markets. That company is headed by former Frontier president David Rusin.
“Competition will come both ways. There are other people like us-(American Fiber Systems) is a perfect example-and there are major companies in large cities looking to move downmarket because customers take them there,” he says.
Both Dubnik and Howe say Purcell is well-suited for the role of start-up CEO.
“He is a very good boss and good man to work for,” Howe says. “He has a good feel for people and an understanding of what needs to be done.”
Purcell hopes to combine the best qualities of the slew of bosses he worked for at Frontier, from Alan Hasselwander to the late Ronald Bittner.
“I saw a lot of different qualities in a lot of different individuals,” he says. “I hope I learned a lot about the good, the bad and what worked.”
“As president, you have a chance to impact it right from the beginning,” he adds. “I hope this gives me, at this late stage in my business career, the ability to do just that. I didn’t expect it would come along.”

Shaped by experience

Purcell’s experience in telecommunications has led him to develop a management philosophy with three tenets: create a solid plan, communicate and celebrate the successes of others.
“You need to have a decent plan for anything you want to do,” he says. “I have the ability to communicate ideas. I do believe that’s one of the stronger things I bring to a company or an organization.”
He holds frequent and regular companywide meetings at Fiber Technologies to ensure employees clearly know what is going on.
“You also should share the credit because you probably didn’t do it yourself. Very few things are accomplished by yourself,” he says.
A native of Scranton, Pa., Purcell’s first trip to Rochester came after he graduated from LeMoyne College in Syracuse in 1965. He interviewed at Rochester Tel and Xerox Corp.
Purcell liked the idea of working for Rochester Tel, where he would never need to move and could just serve this community. He had grown up in a corporate family, where his father moved frequently with General Electric Corp.
“I thought that was not nearly as much fun, going to a lot of grade schools and high schools, so I wanted some stability,” he recalls. “I can’t tell you how great it is to say you worked your entire career at one company.”
Purcell’s career was influenced by a position he held in the early 1980s. He was sent in 1981 to manage the company’s first acquisition outside Rochester, in Highland, near West Point. He served five years as vice president and general manager of the non-Rochester local telephone properties.
“The first year or two I made a mess of it. I was drifting. I kept looking back to Rochester for direction,” he says. “Finally, I realized I could do all this. We really busted out and acquired two others.”
That success prompted CEO Hasselwander to push to buy more companies. It also led Purcell to work on acquisitions for the firm, from 1987 to 1995.
His other positions during his career include corporate communications, running the training school and leading its first deregulated company, a Cortland-based supply firm.
He also put together the Frontier Cellular joint venture with Bell Atlantic Mobile.
As CEO of Fiber Technologies, Purcell is looking to expand the management team and systems. A key focus is completing the company’s debt financing.
“I think we will be in the capital-raising business for a long time,” he says. “This combination of debt and equity will give us $60 million and build out our first 15 markets. If we are going to build 43, eventually we will need another $60 million to $70 million.”
The company still needs to decide how to meet its funding requirements beyond the first two years. The options are additional equity or debt financing.
Unlike many of its telecom and dot-com brethren, Fiber Technologies is not hot and heavy for going public.
“A public offering is not something we are focusing on,” Purcell says. “If we focus on running the business, we will have a lot of choices.”

Roads he’s traveled

He and his wife, Kathy, whom he met at LeMoyne College, live in Pittsford. She works at the University of Rochester Medical Center in the development services center. They have four children and five grandchildren.
Away from work, Purcell often can be found with a book in hand.
“I read as much as I can. I love history and biography,” he says.
His current read is “The Chief: The Life of William Randolph Hearst.”
“If I had another career, it would be teaching history,” Purcell says. “Deep down I would like to write a history book.”
Roughly seven years ago, he took up golf. He describes his game in one word: horrible.
His owl collection has grown to the hundreds. He is unsure how it started, but it now includes unique pieces gathered from his travels.
After leaving Frontier, Purcell traveled extensively with his wife, and often with the Howes. He has visited 47 states. Stops in the remaining three, Oregon, Oklahoma and Utah, are on hold because of the new job.
Howe describes Purcell as a take-charge person. That attitude extends to their vacation planning, where Purcell researches, charts and leads.
“He generally plans the trips and walks ahead of us to be sure the coast is clear,” Howe says. “It’s OK with us; he does an excellent job.”
Purcell also enjoys disparate music-opera and country. He annually attends performances at Glimmerglass Opera in Cooperstown.
A trustee at Nazareth College of Roches-ter and a board member at Monroe Golf Club, he spent 10 years on the board of the Rochester Philharmonic Orchestra.
One of his favorite moments was in 1990, when he bid for and won the chance to serve as a guest conductor for the RPO.
“They take it very seriously,” he says. “I trained for it for months. Nobody thought I would go through with it. It was a huge thrill.”

The Frontier legacy

Dubnik and Purcell have stayed in contact since the mid-1980s, even after both left Frontier.
Dubnik says his familiarity with Purcell played a key role in signing a 20-year agreement with a company that had not built anything yet.
“John is a very capable individual. It lent a lot of credibility to the company having John as the leader,” he says.
“He has demonstrated ability. He is an excellent presenter and has a lot of experience raising capital.”
Purcell takes pride in the number of former colleagues, such as Dubnik, who havegone on to make a mark in the industry.
Eight people who worked for Purcell at Frontier now are presidents of telecommunications companies; another seven are officers or vice presidents.
“It is tremendously satisfying, seeing their success and realizing there was something going on good there at Rochester Tel,” he says.
Among the leaders Purcell learned from at Rochester Tel and Frontier was chief financial officer David Mitchell, especially during the peak acquisition period in the late 1980s and early 1990s.
“It was a time of tremendous activity, and he focused on getting it right,” he says of Mitchell. “We were taking risks, but we were always buying companies that were growing faster than Rochester.
“It was a great run. (David) taught me an awful lot about how to get it right going in.”
Bittner possessed different skills. Chief among them was an ability to see the big picture.
“He was a visionary guy, a guy who believed in big chances, and that opportunity was there and you have to go for it,” Purcell says. “Those two leaders, Mitchell and Bittner, would be the most (influential on me).”
While he often gets credit as “the father of the Open Market Plan,” Purcell redirects the credit to a former regional vice president at Frontier.
“I get credit for it, but it was really Paul Zielinski. He foresaw so many of the things that are happening now,” Purcell says. “I still have the draft papers somewhere that he outlined for me for the Open Market Plan. He was really the genius.”
Purcell says a key break in his career was his first one, when then personnel director Hasselwander hired him in 1965. The company needed a labor relations staffer, and Purcell had majored in labor relations at LeMoyne.
While at that job, he met Robert Flavin, the president of Local 1170 of the Communications Workers of America. Flavin would remain as president until passing away recently.
Hasselwander would help guide Purcell’s career later at Frontier, as well.
“I was very fortunate, working for people who went on to lead the company,” Purcell says. “Timing is still the secret to life.”

7/28/00

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