Earthlink 2004 Annual Report Download - page 18

•
changes in the mix of our subscriber base, particularly changes in the overall mix of our customer base between narrowband and
broadband and, more specifically, the mix of our narrowband customer base between value-priced and premium narrowband customers
and the mix of our broadband customer base between retail and wholesale customers;
•
changes in the number of hours users use our access services;
•
the amount of marketing expenditures we incur, including fluctuations in payments to marketers of our services for adding paying
subscribers to our customer base;
•
changes in the terms, including pricing, of our agreements with our telecommunications providers;
•
the effects of strategic alliances, acquisitions and other business combinations, and our ability to successfully integrate them into our
business;
•
fluctuations and impairments in the values of our investments, including our equity investments in other companies and our
investments in marketable securities, attributable to the operating and financial results of the companies in which we have invested;
•
technical difficulties, system downtime or interruptions;
•
changes in the demand and rates for Internet advertising;
•
increases or reductions in advertising and commerce revenues from significant customers;
•
the effects of litigation and the timing of resolutions of disputes;
•
the amount and timing of operating costs and capital expenditures;
•
changes in governmental regulation and taxation policies;
•
events, such as a sustained decline in our stock price, that cause us to conclude that goodwill or other long-
term assets are impaired and
for which a significant charge to earnings is required; and
•
changes in, or the effect of, accounting rules, on our operating results, such as recording expenses for stock options granted to
employees.
Our third-party network providers may be unwilling or unable to provide Internet, wireline and wireless telecommunications access.
We rely on telecommunications providers for network, voice and data services. Our principal providers for narrowband
telecommunications services are Level 3 and Qwest, and our largest providers of broadband connectivity are Covad and Time Warner Cable.
We also purchase broadband access from ILECs, CLECs and other cable providers. We also use various telecommunications providers for
voice services, including our VoIP services, our wireless services and to provide toll-free and fee-based customer support. Our ability to
provide Internet access, voice services and related customer support to our subscribers will be limited if third parties are unable or unwilling to
provide telecommunications and last mile access to our existing and future customers, we are unable to secure alternative arrangements upon
partial or complete termination of third-party network and voice provider agreements or there is a loss of access to third-party providers’
networks for other reasons. These events could also limit our ability to expand or could reduce the size of our footprint, which could, in turn,
have a material adverse effect on our business. If we lose access to third-party networks under our current arrangements, we may not be able to
make alternative arrangements on terms acceptable to us, or at all. We do not currently have any plans or commitments with respect to
alternative arrangements. While our contracts with our third-
party providers require them to provide commercially reliable service to us and our
subscribers, the performance of third-party providers may not meet our or our customers’ requirements and we may not be able to
15