Frontier Communications 2006 Annual Report Download - page 6

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CITIZENS COMMUNICATIONS COMPANY AND SUBSIDIARIES
Data and internet services
We offer data services including internet access (via dial up or high-speed internet access), frame relay,
ethernet and asynchronous transfer mode (ATM) switching services. We offer other data transmission services to
other carriers and high-volume commercial customers with dedicated high-capacity circuits like DS-1’s and
DS-3’s. Such services are generally offered on a contract basis and the service is billed on a fixed monthly
recurring charge basis. Data and internet services are typically billed monthly in advance.
Directory services
Directory services involves the provision of white and yellow page directories of residential and business
listings. We provide this service through a third-party contractor and are paid a percentage of revenues from the
sale of advertising in these directories. Our directory service also includes “Frontier Pages,” an internet-based
directory service which generates advertising revenue. We recognize the revenue from these services over the life
of the related white or yellow pages book.
Television services
We offer a television product in partnership with Echostar’s DISH Network (DISH). We provide access to
all-digital television channels featuring movies, sports, news, music, and high-definition TV programming. We
offer packages that include 100, 200 or 250 channels, high-definition channels, family channels and ethnic
channels. We are in an “agency” relationship with DISH. We bill the customer for the monthly services and remit
those billings to DISH without recognizing any revenue. We in-turn receive from DISH and recognize as revenue
activation fees and a nominal billing and collection fee.
Wireless services
During 2006, we began offering wireless data services in certain markets. Our wireless data services utilize
technologies that are relatively new, and we depend to some degree on the representations of equipment vendors,
lab testing and the experiences of others who have been successful at deploying these new technologies. During
2007, we expect to begin offering differentiated wireless voice and data packages in certain markets. Our success
in offering wireless voice services will, to a great extent, be determined by the relationships we are developing
with both wireless carriers and switching equipment vendors, and is also dependent on their capabilities.
In the fourth quarter of 2006, the Company revised its reporting of certain operating metrics to be consistent
with those used by management to run the business. The data reported below is consistent with that used by
management internally on a daily basis.
The following table sets forth certain information with respect to our revenue generating units (RGUs),
which consists of access lines plus high-speed internet subscribers, as of December 31, 2006 and 2005.
Frontier RGUs at December 31,
State 2006 2005
NewYork ....................................... 952,500 1,001,500
Minnesota ....................................... 296,900 296,400
Arizona ......................................... 198,700 196,000
California ........................................ 190,200 188,400
West Virginia .................................... 178,100 171,000
Illinois .......................................... 129,100 130,800
Tennessee ....................................... 111,000 110,300
Wisconsin ....................................... 77,600 77,100
Iowa............................................ 57,600 59,200
Nebraska ........................................ 54,100 55,700
All other states (13) ................................ 274,000 269,200
Total ....................................... 2,519,800 2,555,600
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