FairPoint Communications 2009 Annual Report Download - page 39

Table of Contents
We are in the process of seeking approval of the New Hampshire Regulatory Settlement in connection with the confirmation of the Plan.
The foregoing summary of the New Hampshire Regulatory Settlement is qualified in its entirety by reference to the full text of the New Hampshire
Regulatory Settlement which is filed as an exhibit to the Plan.
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After extensive negotiations with the Vermont Department of Public Service (the "Vermont DPS"), we reached an agreement with the Vermont
DPS on a regulatory settlement (the "Vermont Regulatory Settlement"). The Vermont Regulatory Settlement sets forth changes to the VT 2008 Order
(as defined below) entered into in connection with the Merger. The Vermont DPS will use reasonably practicable efforts to request that the Vermont
Public Service Board (the "Vermont Board") approve the Vermont Regulatory Settlement. The Vermont Regulatory Settlement provides for, among
other things, the following:
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•In general, all of the service quality programs contained in the January 8, 2008 settlement agreement among Verizon, us and the Vermont
DPS (the "VT 2008 Settlement") and the February 15, 2008 Order Re: Modified Proposal In Docket Number 7270 (the "VT 2008
Order") will remain in place subject to the modifications described in the Vermont Regulatory Settlement.
•Service quality penalties for 2008 and 2009 will be deferred until December 31, 2010. If we meet specified service objectives on average
in ten performance areas over the twelve calendar months in 2010, the 2008 and 2009 penalties will be waived. If we meet the service
objectives for some but not all of these ten performance areas, the penalties will be reduced by 10% for each performance area specified
for which we meet specified service levels on average over the 12 calendar months in 2010.
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•We have agreed to adhere to the broadband milestone penalties prescribed in the 2008 Order; however, the broadband build-out
milestone penalties will not be enforced prior to June 30, 2011, provided that we file a broadband permitting and construction plan with
an appropriate regulatory body by May 1, 2010, file all necessary permit applications by October 1, 2010 and undertake commercially
practicable efforts to implement the plan. The broadband permitting and construction plan will at a minimum identify tower sites and set a
schedule for permitting and construction.
•We will undertake to deploy broadband services to 95% of all access lines in those exchanges that have been identified for 100%
broadband availability in the VT 2008 Order (the "100% Exchanges") by June 30, 2011. With respect to the remaining 5% of lines in the
100% Exchanges, we will deploy broadband to any requesting customer using an extended service interval of 90 days from the date of
the receipt of the order from the customer, provided such order is made no sooner than June 30, 2011. Failure to meet such requirements
will require us to waive certain service charges.
•We also will request that the Vermont Board authorize us to use Universal Service Funds for three consecutive years to upgrade plant
and infrastructure in the 100% Exchanges, in order to improve our service quality and network reliability. If the Vermont Board
authorizes us to use the USF, and to the extent permitted by FCC rules, we will invest the USF in network
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