FairPoint Communications 2013 Annual Report Download - page 44

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(3) Legacy access services include products such as DS1, DS3, frame relay, ATM and private line.
Data and Internet Services Revenues
We receive revenues from monthly recurring charges for the provision of data and Internet services to residential and business
customers through DSL technology, fiber-to-the-home technology, retail Ethernet, dedicated T-1 connections, Internet dial-up,
high speed cable modem and wireless broadband.
We have invested in our broadband network to extend the reach and capacity of the network to customers who did not
previously have access to data and Internet products and to offer more competitive services to existing customers, including retail
Ethernet products. During the years ended December 31, 2013 and 2012, we grew broadband subscribers by 1.0% and 3.9%,
respectively, as penetration reached 37.5% of voice access lines at December 31, 2013 from 34.3% and 30.4% at December 31,
2012 and 2011, respectively. We expect to continue our investment in our broadband network to further grow data and Internet
services revenues in the coming years.
The following table reflects the primary drivers of year-over-year changes in data and Internet services revenues (in millions):
Year Ended Year Ended
December 31, 2013 December 31, 2012
Increase % Increase %
Retail Ethernet services (1) $ 8.9 $ 8.7
Other data and Internet technology based services (2) 9.6 6.9
Total changes in data and Internet revenues $ 18.5 13% $ 15.6 12%
(1) Retail Ethernet services revenue is comprised of data services provided through E-LAN, E-LINE and E-DIA technology
on our Next Generation Network. In the years ended December 31, 2013, 2012 and 2011, respectively, we recognized
$27.7 million, $18.8 million and $10.1 million of retail Ethernet revenues from our Next Generation Network.
(2) Includes all other services such as DSL, T-1, dial-up, high speed cable modem and wireless broadband.
Other Services Revenues
We receive revenues from other services, including special purpose projects on behalf of third party requests, video services
(including cable television and video-over-DSL), billing and collection, directory services, the sale and maintenance of customer
premise equipment and certain other miscellaneous revenues. Other services revenues also include revenue we receive from late
payment charges to end users and interexchange carriers. Due to the composition of other services revenues, it is difficult to predict
future trends.
The following table reflects the primary drivers of year-over-year changes in other services revenues (in millions):
Year Ended Year Ended
December 31, 2013 December 31, 2012
Increase (Decrease) % Increase (Decrease) %
Special purpose projects (1) $ 2.7 $ 1.4
Late payment fees (2) (1.6) 1.0
Other (3) 1.2 (2.9)
Total changes in other services revenues $ 2.3 5% $ (0.5) (1)%
(1) Special purpose projects are completed on behalf of third party requests.
(2) Late payment fees are related to customers who have not paid their bills in a timely manner.
(3) Other revenues were primarily attributable to directory services, billing and collections and various other miscellaneous
services revenues.
Cost of Services and Sales
Cost of services and sales includes the following costs directly attributable to a service or product: salaries and wages,
benefits (including stock based compensation), materials and supplies, contracted services, network access and transport costs,
customer provisioning costs, computer systems support and cost of products sold. Aggregate customer care costs, which include
billing and service provisioning, are allocated between cost of services and sales and selling, general and administrative expenses.