FairPoint Communications 2011 Annual Report Download - page 6
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Table of Contents
We are a leading provider of communications services in rural and small urban communities, offering an array of services, including high speed data
(“HSD”), Internet access, data transport, voice, video and other broadband enabled product offerings. We operate in 18 states with approximately 1.3 million
access line equivalents (including voice access lines and HSD lines, which include digital subscriber lines (“DSL”), wireless broadband, cable modem and
fiber-to-the-premises) in service as of December 31, 2011.
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 80 years.
Access lines have historically been 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 Competitive Local Exchange Carriers (“CLECs”), wireless
carriers and cable television operators, increased availability of alternative communications services, including wireless and voice over IP (“VoIP”), and
challenging economic conditions. While voice access lines are expected to continue to decline, we expect to offset a portion of this lost revenue with growth in
special access, HSD and other broadband service revenue as we continue to build out our network 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 issues associated with the cutover (the “Cutover”) from the
systems of Verizon in February 2009 with respect to our Northern New England operations and the filing for bankruptcy protection under chapter 11 of title
11 (“Chapter 11”) of the United States Code (the “Bankruptcy Code”) in October 2009, we lost significant market share in recent years. Our strategy is 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 offer our IP/Multiple Protocol Label Switched (“IP/MPLS”) network that is fiber-optic based (the “Next Generation Network”) to support more high-
speed data services and extend fiber into more communities across our Northern New England operations. This fiber-optic build also supplies critical
infrastructure known as “backhaul” for wireless traffic in the region, and addresses the increasing bandwidth needs being driven by new applications for
smart phones, tablets and other wireless devices. Today we provide cellular backhaul connectivity to more than 1,600 towers in our Northern New England
footprint. Recent Ethernet network expansion allows us to provide fiber based Ethernet cellular backhaul to more than half of these towers.
We are subject to regulation primarily by federal and state governmental agencies. At the federal level, the Federal Communications Commission (the
“FCC”) generally exercises jurisdiction over the facilities and services of communications common carriers, such as FairPoint, to the extent those facilities are
used to provide, originate or terminate interstate or international communications. State regulatory commissions generally exercise jurisdiction over common
carriers’ facilities and services to the
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