FairPoint Communications 2011 Annual Report Download - page 20

Table of Contents
• In connection with the NHPUC Order No. 25,129 in Docket No. DT 10-025, final settlement of our SQI penalties for 2009 were deferred
until our 2010 SQI results were approved by the NHPUC. The order identified five key performance metrics, and for each metric that we
met in 2010, the 2009 penalties would be reduced by 20%. The 2010 SQI results indicated that we had met three of the five key metrics,
reducing the 2009 penalties by 60%. In January of 2011, the NHPUC initiated an audit of our 2010 SQI plan. The audit was completed
in the third quarter of 2011, and the results confirmed that we had met three of the five key metrics during 2010. The NHPUC staff
agreed with this assessment and made a recommendation to the NHPUC that such assessment be accepted. The NHPUC approved this
assessment in an order dated February 6, 2012.
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• We agreed to adhere to the broadband coverage commitments prescribed in the NH 2008 Order; however, certain broadband build-out
commitments with a deadline of April 1, 2010 were extended to December 31, 2010. We believe that we have fulfilled this broadband
coverage commitment as of December 31, 2010.
• We confirmed our commitment to spend a total of at least $56.4 million on our New Hampshire broadband build-out by March 31, 2015
and we have spent $52.3 million as of December 31, 2011.
• We have the option to resell terrestrial (non-satellite) based service providers’ broadband service offerings in order to fulfill our broadband
build out and/or service requirements with respect to the last eight percent (8%) of our broadband availability requirements as contained
within the NH 2008 Settlement, provided that the services meet or exceed all requirements of the NH 2008 Order, and the resold services
are purchased through and serviced by us.
• Pricing restrictions regarding stand-alone DSL service terminated on April 1, 2011; provided, however, that we will continue to honor the
“for life” pricing that Verizon had offered to certain customers. We believe that we are in compliance with this commitment.
• The first $500,000 of any penalty amounts resulting from any failure to meet broadband commitments will be paid to the New Hampshire
Telecommunications Planning and Development Fund. Any penalties above $500,000 will be invested within three years of the date of the
penalty as additional expenditures for our network, subject to NHPUC approval.
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• We reconfirmed our commitment to spend $285.4 million in capital expenditures through March 31, 2013, of which $273.5 million has
been spent through December 31, 2011; provided, however, that the amounts expended toward the $56.4 million broadband commitment
described above may be applied to the $285.4 million capital expenditure commitment.
• We agreed to reduce our $65.0 million “other expenditure” commitment by $10.0 million and reallocate the $10.0 million to recurring
maintenance capital expenditures to be spent on or before March 31, 2013. This $10.0 million increases the $285.4 million capital
expenditure commitment to $295.4 million.
• We may further reduce our $65.0 million “other expenditure” commitment by up to $10.5 million to the extent such amounts are needed
and are actually expended beyond the original $56.4 million broadband commitment in order to achieve 95% broadband availability by
March 31, 2013.
• We may further reduce our $65.0 million “other expenditure” commitment by $4.5 million of capital expenditures already expended in
excess of amounts estimated to develop our Next Generation Network.
• We will have from April 1, 2010 to March 31, 2015 to meet whatever “other expenditure” commitment remains after the preceding
reductions, which will be spent on “network enhancing activities.”
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