FairPoint Communications 2013 Annual Report Download - page 8

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trends have shown an increasing adoption and demand for higher speed broadband services while traditional voice services are
giving way to wireless and alternative carriers. Our plan is to continue to add advanced data products and services that meet our
business and wholesale customers’ needs while providing HSD options, attractive pricing features and appealing bundle offers
that help retain our residential customer base.
We have been successful in meeting the needs of our wireless carrier customers through our Fiber to the Tower ("FTTT")
initiative. We have seen an increase in fiber backhaul from wireless carriers since late 2010. We now have over 1,000 cell towers
served with fiber. Our extensive fiber network of over 16,000 miles of fiber optic cable in Maine, New Hampshire and Vermont
is a competitive advantage in delivering FTTT services.
We believe recent regulatory reforms in Maine, New Hampshire and Vermont will serve to promote fair competition among
communication services providers in that region. We continue to believe that there is a significant organic growth opportunity
within these business markets given our extensive fiber network and IP-based product suite combined with our relatively low
business market share in these areas.
Generation of Revenue
We offer a broad portfolio of services to meet the communications and technology needs of our customers, including bundling
of services designed to simplify our customers' purchasing and management processes. Our basic offerings are outlined below.
See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 8. Financial
Statements and Supplementary Data" included elsewhere in this Annual Report for more information regarding our revenue sources
and financial results, respectively.
Data and Internet Services
We believe data and Internet services are the cornerstone of our growth strategy for our business customers who require
more advanced data solutions and our wholesale customers who experience capacity demands from their end users for higher
speed services. We offer an extensive array of high capacity data services including: optical, Ethernet, IP services, Ethernet virtual
circuit technology for cellular backhaul and private line special access services. We work with large businesses and carriers to
deliver network capacity to meet their specific needs, including migrating networks from time division multiplexing to Ethernet-
based high capacity circuits. We have recently expanded our portfolio to include Hosted PBX (Primary Branch Exchange) service
over our Ethernet network. This service provides a cloud based voice offering for business customers. The service leverages our
softswitch platform and uses a set of approved vendors for on-site hardware and maintenance support. Hosted PBX service allows
us to continue to expand the services we offer to business customers, while leveraging our Ethernet network.
We offer broadband Internet access via digital subscriber line ("DSL") technology, fiber-to-the-home technology, dedicated
T-1 connections, Internet dial-up, high speed cable modem and wireless broadband. Customers can utilize this access in combination
with customer-owned equipment and software to establish a presence on the Internet. We offer enhanced Internet services, which
include obtaining IP addresses, basic website design and hosting, domain name services, content feeds and web-based e-mail
services. We also offer carrier Ethernet services throughout our market to our business and wholesale customers. Carrier Ethernet
services provide high capacity internet access as well as private corporate networking solutions at high speeds to our business
customers.
Voice Services
Local Calling Services. Local calling service enables the local customer to originate and receive an unlimited number of
calls within a defined "exchange" area. Local calling services include basic local lines and local private lines. We provide local
calling services to residential and business customers, generally for a fixed monthly charge and service charges for special calling
features. In a LEC's territory, the amount that we can charge a customer for local service is generally determined by proceedings
involving the appropriate state regulatory authorities.
Long Distance Services. We offer dedicated long distance services within our service areas on our network and through
resale agreements with national interexchange carriers. In addition, through our wholly-owned subsidiary, FairPoint Carrier
Services, Inc., we offer wholesale long distance services to communications providers that are not affiliated with us.
High-Cost Loop Funding. We receive Connect America Fund ("CAF") Phase I frozen support (formerly Universal Service
Fund ("USF") high-cost support) subsidies to supplement the amount of local service revenue received by us to ensure that basic
local service rates for customers in high-cost areas are consistent with rates charged in lower cost areas, as described below in "—
Regulatory Environment".