FairPoint Communications 2005 Annual Report Download - page 27

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The failure of any of our billing systems could result in our inability to adequately bill and provide customer service to our customers. We are in the
process of converting all of our companies on the ICMS platform, approximately two thirds of our access lines, to a new platform by the middle of 2006 and
we plan to convert our remaining companies to this same platform by the middle of 2007. At the completion of this project, we will have a single integrated
billing platform for our end-user customers. The failure to successfully complete this conversion or the failure of any of our billing systems could have a
material adverse effect on our business, financial condition and results of operations.
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Our provision of long distance services is dependent on underlying agreements with other carriers that provide us with transport and termination services.
These agreements are based, in part, on our estimate of future supply and demand and may contain minimum volume commitments. If we overestimate
demand, we may be forced to pay for services we do not need. If we underestimate demand, we may need to acquire additional capacity on a short-term basis
at unfavorable prices, assuming additional capacity is available. If additional capacity is not available, we will not be able to meet this demand. In addition, if
we cannot meet any minimum volume commitments, we may be subject to underutilization charges, termination charges, or rate increases which may
adversely affect our results of operations.
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We are dependent on rights-of-way and other permits from railroads, utilities, state highway authorities, local governments and transit authorities to
install conduit and related communications equipment for any expansion of our networks. We may need to renew current rights-of-way for our networks and
cannot assure you that we would be successful in renewing these agreements on acceptable terms. Some of our agreements may be short-term, revocable at will,
or subject to termination upon customary default provisions, and we may not have access to existing rights-of-way after they have expired or terminated. If any
of these agreements were terminated or could not be renewed, we may be required to remove our existing facilities from under the streets or abandon our
networks. Similarly, we may not be able to obtain right-of-way agreements on favorable terms, or at all, in new service areas, and, if we are unable to do so,
our ability to expand our networks, if we decide to do so, could be impaired.
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Our success depends upon the talents and efforts of our senior management team. With the exception of Eugene B. Johnson, our Chairman and Chief
Executive Officer, none of these senior executives are employed by us pursuant to an employment agreement. The loss of any member of our senior
management team, due to retirement or otherwise, and the inability to attract and retain highly qualified technical and management personnel in the future,
could have a material adverse effect on our business, financial condition and results of operations.
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Our operations and properties are subject to federal, state and local laws and regulations relating to protection of the environment, natural resources, and
worker health and safety, including laws and regulations governing the management, storage and disposal of hazardous substances, materials and wastes.
Under certain environmental laws, we could be held liable, jointly and severally and without regard to fault, for the costs of investigating and remediating any
contamination at owned or operated properties; or for contamination arising from the disposal by us or our predecessors of hazardous wastes at formerly
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