Frontier Communications 2009 Annual Report Download - page 6

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Network (DISH), and we added approximately 53,000 DISH subscribers during 2009. At December 31,
2009, we had approximately 173,000 DISH customers.
•Customer Revenue
During 2009, our customer revenue from both residential and business customers declined by $74.0
million, or 4%, although our average monthly customer revenue per access line improved by $1.81, or
3%.
•Access Lines
During 2009, our rate of access line loss for both residential and business access lines improved from
the prior year. We believe this is primarily attributable to the customer recognition of the value of our
product bundles, fewer residential moves out of territory, fewer moves by businesses to competitors and
our ability to compete with cable telephony in a maturing market place.
Communications Services
As of December 31, 2009, we operated as an incumbent local exchange carrier (ILEC) in 24 states.
The communications industry is undergoing significant changes and difficulties and our financial results
reflect the impact of this challenging environment. Accordingly, as discussed in more detail in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” (MD&A), our revenues have
decreased in 2009.
Our business is with both residential and business customers. Our services include:
•access services;
•local services;
•long distance services;
•data and internet services;
•directory services;
•television services; and
•wireless services.
Frontier is typically the leading incumbent carrier in the markets we serve and provides the “last mile” of
telecommunications services to residential and business customers in these markets.
Access services. Switched access services allow other carriers to use our facilities to originate and
terminate their long distance voice and data traffic. These services are generally offered on a month-to-month
basis and the service is billed on a minutes-of-use basis. Access charges are based on access rates filed with the
Federal Communications Commission (FCC) for interstate services and with the respective state regulatory
agency for intrastate services. In addition, subsidies received from state and federal universal service funds
based on the higher cost of providing telephone service to certain rural areas are a part of our access services
revenue.
Revenue is recognized when services are provided to customers or when products are delivered to
customers. Monthly recurring access service fees are billed in advance. The unearned portion of this revenue is
initially deferred as a component of other liabilities on our balance sheet and recognized as revenue over the
period that the services are provided.
Local services. We provide basic telephone wireline services to residential and business customers in our
service areas. We also provide enhanced services to our customers by offering a number of calling features,
including call forwarding, conference calling, caller identification, voicemail and call waiting. We also offer
packages of communications services. These packages permit customers to bundle their basic telephone line
service with their choice of enhanced, long distance, television and internet services for a monthly fee and/or
usage fee depending on the plan.
We intend to continue our efforts to increase the penetration of our enhanced services. We believe that
increased sales of such services will produce revenue with higher operating margins due to the relatively low
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES