FairPoint Communications 2009 Annual Report Download - page 37

Table of Contents
"New Hampshire Regulatory Settlement") under which we have agreed to meet the broadband build-out, capital investment and service quality
requirements of the NH 2008 Order subject to modifications described in the New Hampshire Regulatory Settlement. The New Hampshire Consumer
Advocate has agreed not to oppose the terms of the New Hampshire Regulatory Settlement. The terms of the New Hampshire Regulatory Settlement
include the following:
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•The NH 2008 Settlement provided for penalties in the event that we did not meet prescribed service quality requirements. We did not
meet certain of those requirements during 2009. Under the New Hampshire Regulatory Settlement, service quality penalties for 2009
will be deferred until December 31, 2010. If we meet specified service levels on average in five performance areas over the twelve
calendar months in 2010, the 2009 penalties will be waived. If we meet the service objectives for some but not all of these five
performance areas, the penalties will be reduced by 20% for each performance area in which we meet the prescribed service levels on
average over that period.
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•We have agreed to adhere to the broadband coverage commitments prescribed in the NH 2008 Order; however, certain broadband build-
out commitments with a deadline of April 1, 2010 are extended to December 31, 2010.
•We confirmed our commitment to spending a total of at least $56.4 million on our New Hampshire broadband build-out.
•We will have the option to resell non-satellite based service providers' broadband service offerings in order to fulfill our broadband
build-out and/or service requirements with respect to the last eight percent (8%) of our broadband availability requirements as contained
within the NH 2008 Settlement, provided that the services meet or exceed all requirements of the NH 2008 Order, and the resold
services are purchased through and serviced by us.
•Pricing restrictions regarding stand-alone DSL service will terminate on April 1, 2011; however,we will continue to honor the "for life"
pricing that Verizon had offered to certain customers.
•The first $500,000 of any penalty amounts resulting from any failure to meet broadband commitments will be paid to the New
Hampshire Telecommunications Planning and Development Fund. We will retain penalty amounts above $500,000 to be invested within
three years of the date of the penalty as additional expenditures for our network, subject to NHPUC approval.
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•We reconfirmed our commitment to spend $285.4 million in capital expenditures through March 31, 2013, of which $157.6 million has
been spent through December 31, 2009 (subject to verification through a reconciliation of our New Hampshire capital expenditures to
the consolidated capital expenditures in our 2009 consolidated financial statements).
•In May 2009, we had obtained NHPUC approval for the release of $50 million from a segregated account in exchange for our
commitment to make $65 million in "other expenditures" on our network. In the New Hampshire Regulatory Settlement, we will reduce
our $65 million "other expenditure" commitment by $10 million and reallocate that $10 million to recurring maintenance capital
expenditures to be spent on or before March 31, 2013. This $10 million increases the $285.4 million capital expenditure commitment to
$295.4 million.
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