Earthlink 2014 Annual Report Download - page 10

Table of Contents
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 on our online properties and search revenues through paid placements for searches, powered
by the Google
TM
search engine.
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 relationship with Time Warner
Cable.
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 dial-up Internet access primarily through third-
party network service providers. Our principal providers for
narrowband services are AT&T, GlobalPOPs and Windstream. We also have agreements with certain regional and local dial-
up providers. We
provide residential broadband services via DSL and cable service agreements. We provide cable broadband services through agreements with
Time Warner Cable that allow us to provide broadband services over their cable network in substantially all their markets, with Bright House
Networks that allow us to provide broadband services over their cable network in certain of their markets and with Comcast that allow us to
provide broadband services over their cable network in certain Comcast markets. We provide DSL broadband services through agreements with
AT&T, CenturyLink, Fairpoint, Frontier, Megapath and Verizon. These agreements generally have volume based tiered pricing which is leading
to higher unit costs as we see a decline in subscribers over time. 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.
We maintain a leased backbone consisting of a networked loop of connections between multiple cities and our technology centers. We maintain
data centers to provide service availability and connectivity.
Competition
The Internet access industry is extremely competitive, and we expect competition to continue to intensify. We compete directly or indirectly with
national communications companies and local exchange carriers, such as AT&T, CenturyLink ,
Verizon and Windstream; cable companies
providing broadband access, including Charter Communications, Inc., Comcast, Cox Communications, Inc. and Time Warner Cable; local and
regional ISPs; established online services companies, such as AOL and the Microsoft Network; free or value-
priced ISPs, such as United Online,
Inc. which provides service under the brands Juno and NetZero; wireless Internet service providers; content companies and email providers, such
as Google and Yahoo!; and satellite and fixed wireless service providers. Competitors for our advertising services also include content providers,
large web publishers, web search engine and portal companies, Internet advertising providers, content aggregation companies, social-
networking
web sites, and various other companies that facilitate Internet advertising. Customers are increasingly interested in accessing information
anywhere and anytime they want, and newer services in wireless Internet technology such as 4G wireless broadband services and Wi-
Fi
networks, and devices such as wireless data cards, tablets, smartphones and mobile wireless routers that connect to such devices, are also
competing with our Internet access services.
We believe the primary competitive factors in the Internet access industry are price, speed, features, coverage area and quality of service. While
we believe our Internet access services compete favorably based on some of these factors when compared to some Internet access providers, we
are at a competitive disadvantage relative to some or all of these factors with respect to other of our competitors. Many of our competitors have
substantially greater market presence and greater financial, technical, marketing and other resources than we have. Our dial-
up Internet access
services do not compete favorably with broadband services with respect to speed, and dial-
up Internet access services no longer have a
significant, if any, price advantage over certain broadband services. Most of the largest providers of broadband services, such as cable and
telecommunications companies, control their own networks
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