FairPoint Communications 2010 Annual Report Download - page 39

Table of Contents
We expect to continue to experience net access line losses. Our inability to retain access lines could adversely affect our business, financial condition,
results of operations, liquidity and/or the market price of our Common Stock.



We originate and terminate calls on behalf of long-distance carriers and other interexchange carriers over our network in exchange for access charges.
Interstate and intrastate access charges represented approximately 35.6% of our total revenues in 2010. Should one or more of these carriers find alternative
means of providing services, loss of revenues from these carriers could have a material adverse impact on our business, financial condition, results of
operations, liquidity and/or the market price of our Common Stock. In addition, should one or more of the carriers that we do business with become insolvent
or experience substantial financial difficulties, our inability to timely collect access charges from them could have a material adverse impact on our business,
financial condition, results of operations, liquidity and/or the market price of our Common Stock.


We face intense competition from a variety of sources for our voice and Internet services in most of the areas we now serve. Regulations and technology
change quickly in the communications industry, and changes in these factors historically have had, and may in the future have, a significant impact on
competitive dynamics. In most of our services areas, we face competition from wireless carriers for voice services. As technology and economies of scale
improve, competition from wireless carriers is expected to increase. We also face increasing competition from wireline and cable television companies for our
voice and Internet services. We estimate that as of December 31, 2010, most of the customers that we serve had access to voice and Internet services through a
cable television company. Wireline and cable television companies have the ability to bundle their services, which has and is expected to continue to intensify
the competition we face from these providers. VoIP providers, Internet service providers, satellite companies and electric utilities also compete with our services,
and such competition is expected to continue to increase in the future. In addition, many of our competitors have access to a larger workforce and have
substantially greater name-brand recognition and financial, technological and other resources than we do.
In addition, consolidation and strategic alliances within the communications industry or the development of new technologies have had and may continue to
have an effect on our competitive position. We cannot predict the number of competitors that will emerge, particularly in light of possible regulatory or
legislative actions that could facilitate or impede market entry, but increased competition from existing and new entities could have a material adverse effect on
our business, financial condition, results of operations, liquidity and/or the market price of our Common Stock.
Competition may lead to loss of revenues and profitability as a result of numerous factors, including:
 loss of customers (given the likelihood that when we lose customers for local service, we will also lose them for all related services);
 reduced network usage by existing customers who may use alternative providers for voice and data services;
 reductions in the service prices that may be necessary to meet competition; and
 increases in marketing expenditures and discount and promotional campaigns.

Rapid and significant changes in technology and new service introductions occur frequently in the communications industry and industry standards
evolve continually, including but not limited to a transition in the industry from primarily voice products to data
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