FairPoint Communications 2005 Annual Report Download - page 7

our rural local exchanges. The interexchange carrier pays us an intrastate access payment for either terminating or originating the call. We bill access charges
relating to such calls through our carrier access billing system and receive the access payment from the interexchange carrier. Access charges for intrastate
services are 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, interstate access charges are 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. These payments fluctuate based upon
our average cost per loop compared to the national average cost per loop. For example, if the national average cost per loop increases and our operating costs
(and average cost per loop) remain constant or decrease, the payments we receive from the Universal Service Fund would decline. Conversely, if the national
average cost per loop decreases and our operating costs (and average cost per loop) remain constant or increase, the payments we receive from the Universal
Service Fund would increase.
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 DSL 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.
 Our advanced digital switch and voicemail platforms allow us to offer enhanced services such as call waiting, call forwarding and
transferring, call hunting, three-way calling, automatic callback, call hold, caller name and number identification, voice mail, teleconferencing, video
conferencing, store-and-forward fax, follow-me numbers, Centrex services and direct inward dial.
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