FairPoint Communications 2006 Annual Report Download - page 29

required to remove our existing facilities from under the streets or abandon our networks. Similarly, we may not be able to obtain right-of-way agreements on
favorable terms, or at all, in new service areas, and, if we are unable to do so, our ability to expand our networks, if we decide to do so, could be impaired.

Our success depends upon the talents and efforts of our senior management team. With the exception of Eugene B. Johnson, our Chairman and Chief
Executive Officer, none of these senior executives are employed by us pursuant to an employment agreement. The loss of any member of our senior
management team, due to retirement or otherwise, and the inability to attract and retain highly qualified technical and management personnel in the future,
could have a material adverse effect on our business, financial condition and results of operations.

Our operations and properties are subject to federal, state and local laws and regulations relating to protection of the environment, natural resources, and
worker health and safety, including laws and regulations governing the management, storage and disposal of hazardous substances, materials and wastes.
Under certain environmental laws, we could be held liable, jointly and severally and without regard to fault, for the costs of investigating and remediating any
contamination at owned or operated properties; or for contamination arising from the disposal by us or our predecessors of hazardous wastes at formerly
owned properties or at third party waste disposal sites. In addition, we could be held responsible for third party property or personal injury claims relating to
any such contamination or violations of environmental laws. Changes in existing laws or regulations or future acquisitions could require us to incur
substantial future costs relating to such matters.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and related
regulations implemented by the SEC, the New York Stock Exchange and the Public Company Accounting Oversight Board, are creating uncertainty for
public companies, increasing legal and financial compliance costs and making some activities more time consuming. We evaluate our internal controls
systems to allow management to report on, and our independent auditors to attest to, our internal controls as required by Section 404 of the Sarbanes-Oxley
Act. Our evaluation of our internal controls may result in our identifying material weaknesses in our internal controls. If we fail to maintain effective controls
and procedures, we may be unable to provide financial information in a timely and reliable manner.
Risks Related to our Regulatory Environment

We operate in a heavily regulated industry, and the majority of our revenues generally have been supported by regulations, including access revenue and
Universal Service Fund support for the provision of telephone services in rural areas. Laws and regulations applicable to us and our competitors may be, and
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