Frontier Communications 2010 Annual Report Download - page 8

Local and long distance voice services. We provide basic telephone wireline services to residential and
business customers in our service areas. Our service areas are largely residential and generally less densely
populated than the primary service areas of the largest ILECs. 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. All of these local services are billed monthly in advance. Long
distance network service to and from points outside our operating territories are provided by interconnection
with the facilities of interexchange carriers. Our long distance services are billed either as unlimited/fixed
number of minutes in advance or on a per minute-of-use basis.
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, video and Internet services for a
monthly fee or usage fee depending on the plan.
We are continuing our efforts to increase the penetration of our enhanced services which may produce
revenue with higher operating margins due to the relatively low marginal operating costs necessary to offer
such services. Integrating these services with other services may provide the opportunity to capture an increased
percentage of our customers’ communications expenditures (wallet share).
Data and Internet services. We offer a wide range of wireline data services to our residential, commercial
and carrier customers. Residential services include HSI, dial up Internet, portal and e-mail products, and Peace
of Mind services, such as hard drive back-up. Commercial and carriers services include Metro Ethernet;
Dedicated Internet; Internet Protocol, optical, Multiprotocol Label Switching (MPLS), and TDM data transport
services. These services are all supported by a 24x7 help desk and an advanced Network Operations Center.
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.
We also offer wireless data services in select markets utilizing networks that we own or operate. Long-
term contracts are billed in advance on an annual or semi-annual basis. End-user subscribers are billed in
advance on a monthly recurring basis and colleges, universities and businesses are billed on a monthly
recurring basis for a fixed number of users. Hourly, daily and weekly casual end-users are billed by credit card
at the time of use.
Access services. Our 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 billed on a minutes-of-use basis. Access charges are based on access rates filed with the
FCC for interstate services and with the respective state regulatory agency for intrastate services. In addition,
subsidies are received from state and federal authorities based on the higher cost of providing telephone service
to certain rural areas are a part of our access services revenue. Monthly recurring access service fees are billed
in advance.
Directory services. Directory services involves the provision of white and yellow page directories for
residential and business listings. We provide this service through third-party contractors. In most of our legacy
markets, the third-party contractors are paid a percentage of revenues from the sale of advertising in these
directories. In our remaining legacy markets, we receive a flat fee from the contractors. In the acquired
Territories, we receive fees for listing or advertising from white pages. Our directory service also includes
“Frontier Pages,” an Internet-based directory service which generates advertising revenues.
Video services. We offer video services under an agency relationship with DISH in our legacy markets and
with DirecTV in the acquired Territories (other than West Virginia where we sell the DISH product and
continue to support existing customers who have the DirecTV product). We receive from the applicable
satellite provider and recognize as revenue activation fees, other residual fees and nominal management, billing
and collection fees. We also purchase receivables at a discount and bill customers for the monthly services and
remit those billings to the applicable satellite provider without recognizing any revenue. Additionally, we offer
fiber optic video services on a selective basis in the states of Indiana, Oregon and Washington.
We also continue to offer our www.myfitv.com website which provides easy online access to video
content, entertainment and news available on the worldwide web. This service is available to consumers in and
outside of our service territories.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES