Earthlink 2012 Annual Report Download - page 11

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Table of Contents
Consumer Services Segment
Our Consumer Services segment provides nationwide Internet access and related value-
added services to individual customers. We
derived approximately 74%, 29% and 24% of our revenues during the years ended December 31, 2010, 2011 and 2012, respectively, from our
Consumer Services segment. The decreases were primarily due to revenues generated from our acquisitions, which are included in our Business
Services segment, and continued maturation in the market for consumer Internet access.
Services
Broadband Access. We offer high-
speed, or broadband, Internet access with a wide variety of content and features, including email, a
customizable start page, antivirus and firewall protection, and technical and customer support. We provide high-
speed access services via cable
and DSL, and offer different speeds of service. Availability for these services depends on the cable or telephone service provider. We also
provide consumer IP-based phone service. However, we do not currently market our consumer IP-based phone services.
Narrowband Access. We offer dial-
up, or narrowband, Internet access with a wide variety of content and features, including email, a
customizable start page, antivirus and firewall protection, acceleration tools and technical and customer support. We also offer value-priced dial-
up access through our PeoplePC
TM
Online offering that provides customers with Internet access at comparatively lower prices.
Value-Added Services. We offer ancillary services sold as add-
on features to our Internet access services, such as security products,
premium email only, home networking and email storage, among others. We offer free and fee-based value-
added services to both subscribers
and non-
subscribers. We also generate advertising revenues by leveraging the value of our customer base and user traffic; through paid
placements for searches, powered by the Google
TM
search engine; from fees generated through revenue sharing arrangements with online
partners whose products and services can be accessed through our web properties; from commissions received from partners for the sale of
partners' services to our subscribers; and from sales of advertising on our various web properties.
Sales and Distribution
We engage in limited sales and marketing for our Consumer Segment services. Our marketing efforts are focused on retaining
customers and adding customers through alliances and partnerships. We offer our products and services primarily through direct customer
contact through our call centers, search engine marketing, affinity marketing partners, resellers and marketing alliances such as our relationships
with Time Warner Cable and Dish Network.
Customer Service and Retention
Our customer support is available by chat and phone as well as through help sites and Internet guide files on our web sites. We have
been recognized historically by customer service and marketing organizations for ranking high in customer satisfaction for our dial-up and high-
speed Internet services. We believe that quality customer service and technical support increase customer satisfaction, which reduces churn. We
also believe that satisfied and more tenured customers provide cost benefits, including reduced contact center support costs and reduced bad debt
expense. We provide award-
winning customer service, invest in loyalty and retention efforts and continually monitor customer satisfaction for
our services.
Network Infrastructure
We provide subscribers with Internet access primarily through third-
party network service providers. Our principal provider for
narrowband services is Level 3 Communications, Inc. We also have agreements with certain regional and local narrowband providers. We
provide cable broadband services through agreements with Time Warner Cable that allow us to provide broadband services over Time Warner
Cable's and Bright House Networks' cable network in substantially all their markets and with Comcast that allow us to provide broadband
services over Comcast's cable network in certain Comcast markets. We provide DSL broadband services through agreements with AT&T,
CenturyLink, Megapath and Verizon Internet Services, Inc. Many of our agreements have a short term or operate on a month-to-
month basis. We
cannot be certain of renewal or non-
termination of our contracts or that legislative or regulatory factors will not affect our contracts. In addition,
Level 3 Communications, Inc. is planning on decommissioning its managed modem network at the end of 2013 and we will have to transition
customers to other narrowband providers.
6