FairPoint Communications 2010 Annual Report Download - page 32

Table of Contents
are permitted for existing services such as basic exchange service, message toll service and most vertical services. The final order also continues an SQI plan
with a $10.5 million penalty cap. Other provisions of the order include lifeline credits for qualified customers that subscribe to bundled services and a
requirement to separately publish and distribute white and Yellow Pages directories. The VT 2008 Order was conditioned on our being subject to the terms and
conditions of the Amended Incentive Regulation Plan. As a part of our settlement with the Vermont DPS, and as ordered by the Vermont Board as a condition
of approval of the Merger, we agreed to exceed the existing Amended Incentive Regulation Plan’s broadband build-out milestones and agreed to a condition that
requires us to reach 100% broadband availability in 50% of our exchanges in Vermont by December 31, 2010. This requirement has been adopted by the
Vermont Board as a condition of approval and is in addition to the broadband expansion requirements contained in the existing Amended Incentive
Regulation Plan. We have also agreed in our settlement with the Vermont DPS to implement a performance enhancement plan, which was adopted by the
Vermont Board as a condition of approval (in addition to the retail service quality plan required under the Amended Incentive Regulation Plan). As noted above,
some of these matters are subject to modifications as part of the Vermont Regulatory Settlement.
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We may be required to obtain from municipal authorities permits for street opening and construction or operating franchises to install and expand facilities
in certain communities. If we enter into the video markets, municipal franchises may be required for us to operate as a cable television provider. Some of these
franchises may require the payment of franchise fees. We have historically obtained municipal franchises as required. In some areas, we will not need to
obtain permits or franchises because the subcontractors or electric utilities with which we will have contracts already possess the requisite authorizations to
construct or expand our networks. In association with the Recovery Act, there may be an increase in our requirements associated with road move requests
pursuant to new funding for roads. It is not certain whether funding will be available to us for this potential obligation.
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Like all other local telephone companies, our 33 LEC subsidiaries are subject to federal, state and local laws and regulations governing the use, storage,
disposal of and exposure to hazardous materials, the release of pollutants into the environment and the remediation of contamination. As an owner of property,
we could be subject to environmental laws that impose liability for the entire cost of cleanup at contaminated sites, regardless of fault or the lawfulness of the
activity that resulted in contamination. We believe, however, that our operations are in substantial compliance with applicable environmental laws and
regulations.
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We make available on our website, www.fairpoint.com, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-
K and all amendments to such reports as soon as reasonably practical after we file such material with, or furnish such material to, the SEC. Our filings with
the SEC are available to the public over the Internet at the SEC’s website at www.sec.gov, or at the SEC’s public reference room located at 100 F Street, N.E.,
Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room.
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Any of the following risks could materially adversely affect our business, consolidated financial condition, results of operations, liquidity and/or the
market price of our Common Stock. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us
or that we currently deem to be immaterial may also materially and adversely affect our business operations.
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In connection with the Chapter 11 Cases, we were required to prepare projected financial information to demonstrate to the Bankruptcy Court the feasibility
of the Plan and our ability to continue operations upon emergence from Chapter 11 bankruptcy
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