Earthlink 2010 Annual Report Download - page 24

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Table of Contents
applied in a competitively neutral manner. To the extent that our competitors do not pay the same level of fees that we do, we could be at a
competitive disadvantage. Termination of the existing franchise or license agreements before their expiration dates, or a failure to renew the
franchise or license agreements, and a requirement that we remove the corresponding portion of our facilities or abandon the corresponding
portion of our network, could harm our business. In addition, we would be adversely affected if we are unable to obtain additional authorizations
for any new network construction on reasonable terms.
A number of states are considering reforming their laws and regulations governing the issuance of franchises and permits by local
governmental authorities, and some states already have enacted laws authorizing some types of entities to secure a state-
wide franchise.
Congress also has considered from time to time, and may consider in the future, various proposals intended to reform the relationship between
federal, state and local governments in connection with the franchising process. We cannot predict how these issues will be resolved, or the
extent to which these developments will affect our ability to compete. Unresolved issues also exist regarding the ability of new local service
providers to gain access to commercial office buildings to serve tenants. The outcome of these challenges cannot be predicted.
Other Regulation
Internet Taxation. The Internet Tax Non-
Discrimination Act, which is in effect through November 2014, places a moratorium on taxes on
Internet access and multiple, discriminatory taxes on electronic commerce. Certain states have enacted various taxes on Internet access and
electronic commerce, and selected states' taxes are being contested on a variety of bases. If these state tax laws are not successfully contested, or
if future state and federal laws imposing taxes or other regulations on Internet access and electronic commerce are adopted, our cost of providing
Internet access services could be increased and our business could be adversely affected.
Consumer Protection.
Federal and state governments have adopted consumer protection laws and undertaken enforcement actions to
address advertising and user privacy. As part of these efforts, the Federal Trade Commission ("FTC") and some state Attorney General offices
have conducted investigations into the privacy practices of companies that collect information about individuals on the Internet. The FTC and
various state agencies as well as individuals have investigated and asserted claims against, or instituted inquiries into, ISPs in connection with
marketing, billing, customer retention, cancellation and disclosure practices.
Proprietary Rights
Our EarthLink, EarthLink Business and PeoplePC trademarks are valuable assets to our business, and are registered trademarks in the
United States. In particular, we believe the strength of the EarthLink, EarthLink Business and PeoplePC brands among existing and potential
customers is important to the success of our business. Additionally, our EarthLink, EarthLink Business and PeoplePC service marks, proprietary
technologies, domain names and similar intellectual property are also important to the success of our business. Although we do have several
patents, we do not consider these patents important to our business. We principally rely upon trademark law as well as contractual restrictions to
establish and protect our technology and proprietary rights and information. We require employees and consultants and, when possible, suppliers
and distributors to sign confidentiality agreements, and we generally control access to, and distribution of, our technologies, documentation and
other proprietary information. We will continue to assess appropriate occasions for seeking trademark and other intellectual property protections
for those aspects of our business and technology that we believe constitute innovations providing us with a competitive advantage. From time to
time, third parties have alleged that certain of our technologies infringe on their intellectual property rights. To date, none of these claims has had
an adverse effect on our ability to market and sell our services.
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