Frontier Communications 2014 Annual Report Download - page 8

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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 voice service with their choice of video and Internet services, and other product offerings.
Access services. Our switched access services allow other carriers to use our facilities to
originate and terminate their local and long distance voice traffic. These services are generally offered
on a month-to-month basis and the service is billed primarily on a minutes-of-use basis. Switched
access charges have been based on access rates filed with the FCC for interstate services and with
the respective state regulatory agency for intrastate services. On November 18, 2011, the FCC
released the USF/ICC Report & Order (the 2011 Order) that, beginning in July 2012, requested that we
transition to terminating switched access rates over time to near zero by July 2017. The 2011 Order
enables companies to recover part of the decline through increases in subscriber line fees charged to
some residential and business wireline voice customers. While the FCC has asserted jurisdiction over
these terminating access rates, during the transition the charges will continue to be based on tariffs
filed with both the FCC and state regulatory agencies. Monthly recurring access service fees are billed
in advance. We also receive subsidies from state and federal authorities based on the higher cost of
providing wireline service to certain rural areas that are included in our access services revenue.
Beginning in July 2012, the Company began receiving federal subsidies for the deployment of
broadband in unserved and high-cost areas.
Video services. We offer FiOSvideo services on a limited basis in the states of Indiana, Oregon
and Washington pursuant to franchises, permits and similar authorizations issued by local franchising
authorities. In connection with the Connecticut Acquisition, we offer Frontier TV powered by U-verse
to our customers in Connecticut. We continue to offer satellite TV video service to our customers under
an agency relationship with DISH in all of our markets. We receive from DISH, and recognize as
revenue, activation fees, other residual fees and nominal management, billing and collection fees.
Customer Premise Equipment. We offer our small, medium and enterprise business customers
a wide range of third-party communications equipment tailored to their specific business needs by
partnering with Mitel, Cisco, Avaya and other equipment manufacturers. Equipment sales are most
often sold in conjunction with a variety of voice, data and Internet services; however, equipment may
also be sold on a standalone basis. We recognize revenue for these equipment sales in accordance
with the contracts, and separately from any related maintenance agreements, generally at time of
installation and acceptance by our customers.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES