FairPoint Communications 2009 Annual Report Download - page 33

Table of Contents
The FCC limits how carriers may use or disclose customer proprietary network information, referred to as CPNI, and specifies what carriers must
do to safeguard CPNI provided to third parties. Congress has enacted, and state legislatures are considering, legislation to criminalize the unauthorized
sale of call detail records and to further restrict the manner in which carriers make such information available.
Prior to the Effective Date, we will be required to obtain FCC approval that the ownership and control of FairPoint as proposed under the Plan will
be in the public interest. With respect thereto, an opportunity will be provided for public comment. We cannot predict that we will obtain FCC approval,
whether the FCC will impose any conditions on its approval of the Plan and related transfer of control or the timing of its approval.
In addition, if we seek in the future to acquire companies that hold FCC authorizations, in most instances we will be required to seek approval from
the FCC prior to completing those acquisitions. The FCC has broad authority to condition, modify, cancel, terminate or revoke operating authority for
failure to comply with applicable federal laws or rules, regulations and policies of the FCC. Fines or other penalties also may be imposed for such
violations.
Broadband and Internet Regulation
The FCC has adopted a series of orders that recognize the competitive nature of certain services that utilize advanced technologies.
With respect to our local network facilities, the FCC has determined that certain unbundling requirements do not apply to certain fiber facilities
such as certain types of loops and packet switches.
The FCC has ruled that dedicated broadband Internet access services offered by telephone companies (using DSL technology), cable operators,
electric utilities and terrestrial wireless providers qualify as largely deregulated information services. LECs or their affiliates may offer the underlying
broadband transmission services that are used as an input to dedicated broadband Internet access services through private carriage arrangements on
negotiated commercial terms. The FCC order also allows rural rate-of-return carriers, including our Legacy FairPoint operations, the option to continue
providing DSL service as a common carrier (status quo) offering. The FCC also has concluded that broadband Internet access service providers must
comply with CALEA. Despite the FCC's previous ruling that broadband Internet access is an information service, the FCC continues to evaluate this
finding and is expected to issue a Notice of Proposed Rulemaking ("NPRM") that could re-regulate broadband Internet access. We can provide no
assurance about the outcome of such NPRM and how it may affect our business.
In addition, a Verizon petition asking the FCC to forbear from applying common carrier regulation to certain broadband services sold primarily to
larger business customers was deemed granted by operation of law on March 19, 2006 when the FCC did not deny the petition by the statutory
deadline. The U.S. Court of Appeals for the District of Columbia Circuit has rejected a challenge to that outcome. The forbearance deemed granted to
Verizon has been extended to our Northern New England operations by the FCC in its order approving the transaction. In October 2007, the FCC
stated its intention to define more precisely the scope of forbearance obtained by Verizon, but it has not yet done so.
The FCC has imposed particular regulatory obligations on IP-based telephony. It has concluded that interconnected VoIP providers must comply
with CALEA; provide enhanced 911 emergency calling capabilities; comply with certain disability access requirements; comply with the FCC's rules
protecting CPNI; provide local number portability; and pay regulatory fees. Recently there have also been discussions among policymakers concerning
"net neutrality," or the potential requirement for non-discriminatory treatment of traffic over broadband networks. The FCC released a statement of
principles favoring customer choice of content and services available over broadband networks. It has
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