FairPoint Communications 2010 Annual Report Download - page 51

Table of Contents
(2) Total access line equivalents includes voice access lines and HSD lines, which include DSL lines, wireless broadband, cable modem and fiber-to-the-
premises.
(3) Wholesale access lines include residential and business resale lines and unbundled network element platform (“UNEP”) lines.
(4) Long-term debt at December 31, 2010 and 2009 is included in Liabilities subject to compromise (see note 2 to the consolidated financial statements for
further information).

The following discussion should be read in conjunction with our financial statements and the notes thereto included elsewhere in this Annual Report. The
following discussion includes certain forward-looking statements. For a discussion of important factors, including the continuing development of our
business, actions of regulatory authorities and competitors and other factors which could cause actual results to differ materially from the results referred to in
the forward-looking statements, see “Item 1A. — Risk Factors” in this Annual Report.
On October 26, 2009, we filed the Chapter 11 Cases. On January 13, 2011, the Bankruptcy Court entered the Confirmation Order which confirmed our
Third Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (as confirmed, the “Plan”).
On January 24, 2011 (the “Effective Date”), we substantially consummated our reorganization through a series of transactions contemplated by the Plan,
and the Plan became effective pursuant to its terms.
For a description of the Chapter 11 Cases and the Plan, see “Item. 1—Business—Emergence from Chapter 11 Proceedings.”

We are a leading provider of communications services in rural and small urban communities, offering an array of services, including HSD, Internet
access, voice, television and broadband product offerings. We operate in 18 states with approximately 1.4 million access line equivalents (including voice
access lines and HSD lines, which include DSL, wireless broadband, cable modem and fiber-to-the-premises) in service as of December 31, 2010.
We were incorporated in Delaware in February 1991 for the purpose of acquiring and operating incumbent telephone companies in rural and small urban
markets. Many of our telephone companies have served their respective communities for over 75 years.
As our primary source of revenues, access lines are an important element of our business. Over the past several years, communications companies,
including FairPoint, have experienced a decline in access lines due to increased competition, including competition from wireless carriers and cable television
operators, increased availability of broadband services and challenging economic conditions. In addition, while we were operating under the Transition
Services Agreement, we had limited ability to change current product offerings. Upon completion of the Cutover from the Verizon systems to the new FairPoint
systems, we expected to be able to modify bundles and prices to be more competitive in the marketplace. However, due to certain systems functionality issues
(as described herein), we have had limited ability to make changes to our product offerings. While voice access lines are expected to continue to decline, we
expect to offset a portion of this lost revenue with growth in HSD revenue as we continue to build-out our network to provide HSD products to customers who
did not previously have access to such products and to offer more competitive services to existing customers. In addition, due to the Cutover issues and the
Chapter 11 Cases, we have lost significant market share in recent years. Our strategy will be to leverage our ubiquitous network in our Northern New England
operations to regain market share, particularly in the business and wholesale markets and for data services.
We are subject to regulation primarily by federal and state governmental agencies. At the federal level, the FCC generally exercises jurisdiction over the
facilities and services of communications common carriers, such as FairPoint, to the extent those
50