Windstream 2010 Annual Report Download - page 67

Windstream Corporation
Form 10-K, Part I
Item 1. Business
To address competition, Windstream remains focused on providing improved customer service, increasing operating
efficiencies and improving the quality of its network. In an effort to further develop enhanced services and bundled
product offerings, the Company will continue to invest in its network to offer faster speeds in its high-speed Internet
offerings. As of December 31, 2010, the Company could deliver speeds of 3Mb to 97 percent of its addressable lines.
Additionally, speeds of 6Mb and 12Mb are available to 67 percent and 37 percent of its addressable lines, respectively.
The Company recently completed upgrades to its network to deliver MPLS and ethernet internet access services,
allowing the Company to provide higher data speeds and more advanced data products to its business customers.
During 2010, excluding acquisitions of NuVox, Iowa Telecom and Q-Comm, the Company added approximately
79,000 high-speed Internet customers. As of December 31, 2010 the Company had approximately 1,303,000 total high-
speed Internet customers, which represents a penetration rate of 39 percent of total access lines in service, and includes
1,169,000 consumer high-speed Internet connections, or 61 percent of primary consumer access lines in service.
Although high-speed Internet services have been a source of revenue and customer growth for Windstream, that service
offering experiences competition primarily from cable competitors. In addition, we could experience some increased
competition from high-speed Internet offerings of wireless competitors
MANAGEMENT
The Company’s staff at its headquarters and regional offices supervise, coordinate and assist subsidiaries in
management activities including investor relations, acquisitions and dispositions, corporate planning, tax planning,
cash and debt management, accounting, insurance, sales and marketing support, government affairs, legal matters,
human resources and engineering services.
EMPLOYEES
At December 31, 2010, Windstream had 10,086 employees, of which 1,791 employees are part of collective bargaining
units. During 2010, Windstream had no material work stoppages due to labor disputes with its unionized employees
(see “Risk Factors”).
SEASONALITY
Our business is not subject to significant seasonal fluctuations.
REGULATION
Our incumbent local exchange carrier subsidiaries (collectively the “ILECs”) are regulated by both federal and state
agencies. Our interstate products and services and the related earnings are subject to federal regulation by the Federal
Communications Commission (“FCC”) and our local and intrastate products and services and the related earnings are
subject to regulation by state Public Service Commissions (“PSCs”). The FCC has principal jurisdiction over matters
including, but not limited to, interstate switched and special access rates, as well as high-speed Internet service
offerings. It also regulates the rates that ILECs may charge for the use of their local networks in originating or
terminating interstate and international transmissions. The PSCs have jurisdiction over matters including local service
rates, intrastate access rates, quality of service, the disposition of public utility property and the issuance of securities
or debt by the local operating companies. As a regulated entity, the Company is required to comply with various
federal and state regulations.
Communications services providers are regulated differently depending primarily upon the network technology used to
deliver the service. The Company believes this regulatory approach advantages certain companies and disadvantages
others by impeding market-based competition where service providers using different technologies exchange
telecommunications traffic and compete for customers.
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