Windstream 2007 Annual Report Download - page 51

Windstream Corporation
Form 10-K, Part I
Item 1. Business
In addition, certain of Windstream’s wireline subsidiaries serve as a competitive service provider in four states on both
a facilities-based and resale basis, and, where necessary, have negotiated interconnection agreements with the
appropriate incumbent local exchange carriers. Windstream’s strategy is to provide voice and data service in
combination with other services provided by subsidiaries of Windstream, including long distance and Internet services.
Windstream’s primary focus for marketing and selling these competitive services is directed toward business customers
through the offering of competitively priced and reliable services.
PRODUCTS AND OFFERINGS
Voice services consist of traditional telephone services provided from telephone exchange offices to customer premises
of both residential and business customers. Voice revenues include monthly recurring charges for basic services such
as local dial-tone, and enhanced services that include call waiting, call forwarding, caller identification, three-way
calling, no-answer transfer, voicemail, and other enhanced services.
Long distance telecommunications services generate revenues from switched interstate and intrastate long distance,
long distance calling card, international calls and operator services. Long distance telecommunications services are
provided on a resale basis by Windstream subsidiaries. Windstream provides long distance service in all of the states in
which it provides local exchange service. In addition, Windstream offers long distance service outside its local service
areas. As of December 31, 2007, Windstream provided long distance service to over 2.0 million customers. The long
distance marketplace is extremely competitive and continues to receive relaxed regulation from both the Federal
Communications Commission (“FCC”) and state regulatory commissions. As a long distance service provider,
Windstream’s interstate business is subject to limited regulation by the FCC, and its intrastate long distance business is
subject to limited regulation by state regulatory commissions. State regulatory commissions currently require long
distance service providers to obtain a certificate of operating authority, and the majority of states also require long
distance service providers to file tariffs. To meet the competitive demands of the long distance industry, Windstream
has created several business and residential service offerings to attract potential customers, such as volume price
discounts, calling cards and simplified one-rate plans.
Data and special access services primarily consist of retail high-speed Internet services and the provision of special
access dedicated circuits. We provide high-speed Internet access using digital subscriber line technology for a monthly
fee. Windstream’s Greenstreak program was launched across all markets in the first quarter of 2007 and offers high-
speed Internet along with measured local phone service that allows unlimited incoming calls, 911 access and outgoing
local calls for 10 cents a minute. We also provide Internet access services to dial up Internet subscribers and data
transmission services over special circuits and private lines. Our Internet access services also enable customers to
establish an e-mail account and to send and receive e-mail. In addition, we offer enhanced Internet services, which
include obtaining Internet protocol addresses, basic web site design and hosting. Special access services provide
customers dedicated point-to-point switching arrangements for voice and data traffic, and allows constant use at
maximum capacity.
Switched access and interconnection services are provided by Windstream by connecting the equipment and facilities
of its customers to the communications networks of long distance carriers, other competitive local service providers
and wireless carriers. These companies pay access and network usage charges to Windstream’s local exchange
subsidiaries for the use of their local networks to originate and terminate their voice and data transmissions.
Miscellaneous service revenues primarily consist of charges for service fees, rentals and billing and collections
services. Miscellaneous revenues also include commissions from activating digital satellite television service through
our relationship with EchoStar Communications Corporation. These services are offered to virtually all households in
our service areas through a co-branded DISH Network satellite television agreement. In addition, Windstream provides
cable television service to approximately 32,000 customers in Georgia and Missouri. The cable television properties
are not significant to Windstream’s wireline operating results.
Product sales represent equipment sales to customers, including sales of high-speed Internet modems and customer
premise equipment.
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