Frontier Communications 2014 Annual Report Download - page 28

In addition, enhancements to product offerings and the management of broadband speed and
capacity issues may influence our customers to consider other service providers, like cable operators
or wireless providers. We may be unable to attract or retain new customers from cable companies due
to their deployment of enhanced broadband and VoIP technology. In addition, new capacity services
for wireless broadband technologies may permit our competitors to offer broadband data services to
our customers throughout most or all of our service areas. Any resulting inability to attract new or retain
existing customers could adversely impact our business and results of operations in a material manner.
Our services could be adversely affected and we may be subject to increased costs and
claims in connection with Internet and systems security and malicious practices.
We use encryption and authentication technology licensed from third parties to provide secure
transmission of confidential information, including our business data and customer information. We
also rely on employees in our network operations centers, data centers, call centers and retail stores to
follow our procedures when handling such information. Any unauthorized access, computer viruses,
accidental or intentional release of confidential information or other disruptions could result in increased
costs, customer dissatisfaction leading to loss of customers and revenues, and fines and other
liabilities.
In addition, our Company or our customers using our network to access the Internet may become
victim to malicious and abusive Internet activities, including unsolicited mass advertising (“spam”),
peer-to-peer file sharing, distribution of viruses, worms and other destructive or disruptive software.
These activities could adversely affect our network, result in excessive call volume at our call centers
and damage our or our customers’ equipment and data.
The Company maintains security measures, disaster recovery plans and business continuity plans
for our business. However, the Company’s information technology networks and infrastructure may
nonetheless be vulnerable to damage, disruptions or shutdowns due to attack by hackers or breaches,
employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures,
systems failures, natural disasters or other catastrophic events. Any such events could result in legal
claims or proceedings, liability or penalties, disruption in operations, misappropriation of sensitive data,
damage to the Company’s reputation and costly response measures, which could adversely affect the
Company’s business. There can be no assurance that such disruptions or misappropriations and the
resulting repercussions will not be material to our results of operations, financial condition or cash
flows.
Item 1B. Unresolved Staff Comments
None.
27
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES