FairPoint Communications 2004 Annual Report Download - page 10

Network Access Charges
Network access charges relate to long distance, or toll calls, that typically involve more than one company in the provision of telephone
service. Since toll calls are generally billed to the customer originating the call, a mechanism is required to compensate each company
providing services relating to the call. This mechanism is the access charge and we bill access charges to long distance companies and other
customers for the use of our facilities to access the customer, as described below.
 We generate intrastate access revenue when an intrastate long distance call involving an interexchange
carrier is originated by a customer in one of our rural local exchanges to a customer in another exchange in the same state, or when such a
call is terminated to a customer in one of our rural local exchanges. The interexchange carrier pays us an intrastate access payment for either
terminating or originating the call. We bill the call through our carrier access billing system and receive the access payment from the
interexchange carrier. The access charge for intrastate services is regulated and approved by the state regulatory authority.
 We generate interstate access revenue when an interstate long distance call is originated by a customer
in one of our rural local exchanges to a customer in another state, or when such a call is terminated to a customer in one of our rural local
exchanges. We bill interstate access charges in the same manner as we bill intrastate access charges; however, the interstate access charge
is regulated and approved by the Federal Communications Commission instead of the state regulatory authority.
Universal Service Fund High Cost Loop
The Universal Service Fund supplements the amount of local service revenue received by us to ensure that basic local service rates for
customers in high cost rural areas are consistent with rates charged in lower cost urban and suburban areas. The Universal Service Fund,
which is funded by monthly fees charged to interexchange carriers and local exchange carriers, makes payments to us on a monthly basis
based upon our cost support for local exchange carriers whose cost of providing the local loop connections to customers is significantly greater
than the national average.
Long Distance Services
We offer switched and dedicated long distance services throughout our service areas through resale agreements with national
interexchange carriers. In addition, through our wholly-owned subsidiary FairPoint Carrier Services, Inc., or Carrier Services, we offer
wholesale long distance services to communications providers that are not affiliated with us.
Data and Internet Services
We offer Internet access via digital subscriber line technology, dedicated T-1 connections, Internet dial-up, high speed cable modem and
wireless broadband. Customers can utilize this access in combination with customer owned equipment and software to establish a presence
on the web. In addition, we offer enhanced Internet services, which include obtaining Internet protocol addresses, basic web site design and
hosting, domain name services, content feeds and web-based e-mail services. Our services include access to 24-hour, 7-day a week
customer support.
Other Services
We seek to capitalize on our rural local exchange carriers' local presence and network infrastructure by offering enhanced services to
customers, as well as billing and collection services for interexchange carriers.
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