FairPoint Communications 2009 Annual Report Download - page 55

Table of Contents
result in additional material misstatements in our financial statements, prevent us from providing timely financial statements or meeting our reporting
requirements both with the SEC and under our debt obligations, cause investors to lose confidence in our reported financial information and have a
negative effect on the trading price of our common stock.
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
We sponsor pension and post-retirement healthcare plans for certain employees. During the year ended December 31, 2009, we experienced actual
gains on pension plan assets totaling 17.3%. Since the actuarial value of plan assets is dependent on the value of the assets held by each plan, a
significant decline in the market value of such assets could have a detrimental impact on our pension plans and could result in us making additional
contributions to these plans, as required under the Employee Retirement Income Security Act of 1974, as amended. Furthermore, if the third party
trustee who holds these plan assets were to become insolvent, access to the plan assets could be limited, and we could be required to pay participant
benefits from our assets. Such required contributions could have a negative impact on our financial condition and results of operations.
Risks Relating to Our Regulatory Environment
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We operate in a heavily regulated industry. Laws and regulations applicable to us and our competitors may be, and have been, challenged in the
courts, and could be changed by Congress or regulators. In addition, the following factors could have a significant impact on us:
 A portion of our revenues comes from network access charges, which are paid to
us by intrastate and interstate interexchange carriers for originating and terminating communications in the regions served. This also includes Universal
Service Support payments for local switching support, long-term support, and ICLS. In recent years, several of these long-distance carriers have
declared bankruptcy. Future declarations of bankruptcy by a carrier that utilizes our access services could negatively affect our business, financial
condition, results of operations and liquidity.
The amount of access charge revenues that we receive is based on rates set by federal and state regulatory bodies, and those rates could change in
the future. Further, from time to time federal and state regulatory bodies conduct rate cases, "earnings" reviews, or make adjustments to price cap
formulas that may result in rate changes. In addition, reforms of the federal and state access charge systems, combined with the development of
competition, have caused the aggregate amount of access charges paid by long-distance carriers to decrease. Additional reforms have been proposed. If
any of the currently proposed reforms were adopted by the FCC it would likely involve significant changes in the access charge system and, if not
offset by a revenue replacement mechanism, could potentially result in a significant decrease in or elimination of access charges. Decreases in or loss of
access charges may or may not result in offsetting increases in local, subscriber line or Universal Service Support revenues. Regulatory developments
of this type could adversely affect our business, financial condition, results of operations and liquidity.
 We receive federal Universal Service Support, referred to as the Universal Service
Fund, and in some cases, state universal support, to support our operations in high-cost areas. These federal revenues include Universal Service
Support payments for local switching support, ICLS, or IAS. High-cost support for the operations conducted by our Northern New England
operations, referred to as our non-rural operations or non-rural LECs, and for FairPoint's traditional, rural local exchange operations, referred to as our
rural operations or rural LECs, is determined pursuant to different methodologies, aspects of which are now under review. The
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