FairPoint Communications 2005 Annual Report Download - page 18

Potential Internet Regulatory Obligations
In connection with our Internet access offerings, we could become subject to laws and regulations as they are adopted or applied to the Internet. There is
currently only limited regulations applicable to the Internet. As the significance of the Internet expands, federal, state and local governments may adopt
rules and regulations, or apply existing laws and regulations to the Internet, and related matters are under consideration in both federal and state legislative and
regulatory bodies. The Federal Communications Commission is currently reviewing the appropriate regulatory framework governing broadband access to the
Internet through telephone and cable operators’ communications networks. We cannot predict whether the outcome will prove beneficial or detrimental to our
competitive position. In February 2004, the Federal Communications Commission initiated a proceeding to examine the regulatory implications of voice over
Internet protocol technology. We cannot predict the results of these proceedings, the nature of these regulations or their impact on our business.
The Federal Communications Commission adopted FCC Order 05-150. This Order puts wireline broadband Internet access service, commonly delivered
by digital subscriber line (DSL) technology, on an equal regulatory footing with cable modem service. This approach is consistent with a recent United States
Supreme Court decision upholding the FCC’s light regulatory treatment of cable modem service. Specifically, the FCC determined that wireline broadband
Internet access services are defined as information services functionally integrated with a telecommunications component. In the past, the FCC required
facilities-based providers to offer wireline broadband transmission components separately from their Internet service as a stand alone service on a common-
carrier basis, and thus classified that component as a telecommunications service. The FCC order also provides an option which allows rate of return carriers,
such as our operating companies, the option to continue providing DSL service as a common carrier (status quo) offering.
Environmental Regulations
Like all other local telephone companies, our 28 rural local exchange carrier subsidiaries are subject to federal, state and local laws and regulations
governing the use, storage, disposal of, and exposure to hazardous materials, the release of pollutants into the environment and the remediation of
contamination. As an owner of property, we could be subject to environmental laws that impose liability for the entire cost of cleanup at contaminated sites,
regardless of fault or the lawfulness of the activity that resulted in contamination. We believe, however, that our operations are in substantial compliance with
applicable environmental laws and regulations.
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Any of the following risks could materially adversely affect our business, consolidated financial condition, results of operations or liquidity or the
market price of our common stock. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us
or that we currently deem to be immaterial may also materially and adversely affect our business operations.
Risks Related to our Common Stock and our Substantial Indebtedness
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Our board of directors has adopted a dividend policy which reflects an intention to distribute a substantial portion of the cash generated by our business
in excess of operating needs, interest and principal payments on our indebtedness, dividends on our future senior classes of capital stock, if any, capital
expenditures, taxes and future reserves, if any, as regular quarterly dividends to our stockholders. Our board of directors may, in its discretion, amend or
repeal this dividend policy. Our dividend policy is
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