Frontier Communications 2010 Annual Report Download - page 11

reduced their spending by not purchasing our services or by discontinuing some or all of our services. These
trends may continue and may result in a continued challenging revenue environment. The weak economic
environment may produce increased delinquencies and bankruptcies and, therefore, affect our ability to collect
money owed to us by residential and business customers.
We employ a number of strategies to combat the competitive pressures and changes in customer behavior
noted above. Our strategies are focused on preserving and generating new revenues through customer retention,
upgrading and up-selling services to existing customers, new customer growth, win-backs of former customers,
new product deployment, and by managing our profitability and cash flow through targeted reductions in
operating expenses and capital expenditures.
We are focused on enhancing the customer experience to differentiate us from our competition. Our
commitment to providing exemplary customer service is demonstrated by our 100% U.S.-based workforce, our
expanded customer services hours, shorter scheduling windows for in-home appointments, call reminders and
follow-up calls for service appointments. Additionally, we seek to achieve our customer retention goals by
offering attractive packages of value-added services to our local access line customers. Our bundled services
include HSI, unlimited long distance calling, enhanced telephone features and video offerings.
We are also focused on increasing sales of existing products, including unlimited long distance minutes,
bundles of long distance minutes, wireless data, Internet portal advertising, and the Frontier Peace of Mind
product suite. This last category is a suite of products that is aimed at managing the personal computing
experience for our customers and is designed to provide value and simplicity to meet customers’ ever-changing
needs. The Frontier Peace of Mind products and services suite includes services such as an in-home, full
installation of the Company’s HSI product, two hour appointment windows for the installation, hard drive back-
up services, 24-7 help desk PC support and inside wire maintenance (when bundled). In 2010, the Frontier
Peace of Mind products generated approximately $5.3 million in revenue for Frontier legacy operations. We
also continue to offer our www.myfitv.com website, which provides easy online access to free television
programs, video on demand movies and other entertainment. Although we are optimistic about the
opportunities to increase revenue and reduce customer churn (i.e., customer attrition) that are provided by each
of these initiatives, we cannot provide assurance about their long term profitability or impact on revenue. Hard
drive back-up services, 24-7 help desk PC support and our www.myfitv.com website are also available to
consumers and small businesses outside of our service territories.
On the commercial side of our business, we are focused on many of the same strategies and enhancements
described above as well as providing state-of-the-art transport services to wireless cell towers in our territories
and expanding the number and quality of people selling and servicing our medium and enterprise customers
with sophisticated products (e.g. IP PBX, E911 equipment) and services (e.g., ethernet, SIP trunking).
The goal of offering multiple products and services to our customers pursuant to price protection
programs, billing on a single bill, providing superior customer service, and being active in our local
communities is to generate customer loyalty which should help us generate new, and retain existing, customer
revenue.
For additional discussion of our competitive strategies, see “Company Strategies” above.
Regulatory Environment
The majority of our operations are regulated by the FCC and various state regulatory agencies, often called
public service or utility commissions.
Some of our revenue is subject to regulation by the FCC and various state regulatory agencies. We expect
federal and state lawmakers to continue to review the statutes governing the level and type of regulation for
telecommunications services.
Regulation of our business
We are subject to federal, state and local regulation. We have various regulatory authorizations for our
regulated service offerings. At the federal level, the FCC generally exercises jurisdiction over facilities and
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES