FairPoint Communications 2007 Annual Report Download - page 31

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Table of Contents
with Verizon to provide wireless services in those areas where the Northern New England business and Cellco Partnership doing business
as Verizon Wireless currently operate.
In addition, consolidation and strategic alliances within the communications industry or the development of new technologies could
affect our competitive position. We cannot predict the number of competitors that will emerge, especially as a result of existing or new
federal and state regulatory or legislative actions, but increased competition from existing and new entities could have a material adverse
effect on our business, financial condition and results of operations.
Competition may lead to loss of revenues and profitability as a result of numerous factors, including:
• loss of customers (in general, when we lose a customer for local service we also lose that customer for all related services);
• reduced usage of our network by our existing customers who may use alternative providers for long distance and data services;
• reductions in the prices for our services which may be necessary to meet competition; and/or
• increases in marketing expenditures and discount and promotional campaigns.
In addition, our provision of long distance service is subject to a highly competitive market served by large nation-wide carriers that
enjoy brand name recognition.
 

The communications industry is subject to rapid and significant changes in technology, frequent new service introductions and
evolving industry standards. We cannot predict the effect of these changes on our competitive position, profitability or industry.
Technological developments may reduce the competitiveness of our networks and require unbudgeted upgrades or the procurement of
additional products that could be expensive and time consuming. In addition, new products and services arising out of technological
developments may reduce the attractiveness of our services. If we fail to adapt successfully to technological changes or obsolescence or fail
to obtain access to important new technologies, we could lose customers and be limited in our ability to attract new customers and/or sell
new services to our existing customers. Our ability to respond to new technological developments may be diminished or our response
thereto delayed while our management devotes significant effort and resources to closing the merger and integrating our business and the
Spinco business.
 
 
We originate and terminate calls for long distance carriers and other interexchange carriers over our network. For that service, we
receive payments for access charges. These payments represent a significant portion of our revenues and are expected to be material to our
business following the merger. If these carriers go bankrupt or experience substantial financial difficulties, our inability to then collect
access charges from them could have a negative effect on our business, financial condition and results of operations.
 

Following the merger, approximately 66% of our employees will be members of unions employed under seven collective bargaining
agreements. The two principal collective bargaining agreements to which Verizon is currently a party expire in August 2008. Upon the
expiration of any of these collective bargaining agreements, we may not be able to negotiate new agreements on favorable terms to us or at
all. Furthermore, the process of renegotiating the collective bargaining agreements could result in labor disputes or other difficulties and
delays. These potential labor disruptions could have a material adverse effect on our results of operations and financial condition. In the
event of any work stoppage or other disruption, we will be required to engage third-party contractors. Labor disruptions, strikes or
significant negotiated wage or benefits increases
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