Windstream 2015 Annual Report Download - page 97

15
Item 1A. Risk Factors
Risks Relating to Our Business
The following discussion of “Risk Factors” identifies the most significant factors that may adversely affect our business, results
of operations or financial position. This information should be read in conjunction with “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included in this
report. The following discussion of risks is not all-inclusive but is designed to highlight what we believe are important factors to
consider when evaluating our business and expectations. These factors could cause our future results to differ materially from our
historical results and from expectations reflected in forward-looking statements. Additionally, this discussion should not be
construed as a listing of risks by order of potential magnitude or probability to occur.
Competition in our business markets could adversely affect our results of operations and financial condition.
We serve business customers in markets across the country, competing against other communications providers and cable television
companies for business customers. Competition in our business markets could adversely affect growth in business revenues and
ultimately have a material adverse impact on our results of operations and financial condition. If we are unable to compete
effectively, we may be forced to lower prices or increase our sales and marketing expenses. In addition, we may need to continue
to make significant capital expenditures to keep up with technological advances and offer competitive services. For additional
information, see the risk factor “Rapid changes in technology could affect our ability to compete for business customers.”
In certain markets where we serve business customers, we lease significant amounts of network capacity to provide service to our
customers. We lease these facilities from companies competing directly with us for business customers. For additional information,
see the risk factor “In certain operating territories, we are dependent on other carriers to provide facilities which we use to provide
service to our customers.”
Rapid changes in technology could affect our ability to compete for business customers.
The technology used to deliver communications services has changed rapidly in the past and will likely continue to do so in the
future. If we are unable to keep up with such changes, we may not be able to offer competitive services to our business customers.
This could adversely affect our ability to compete for business customers, which, in turn, would adversely affect our results of
operations and financial condition.
In certain operating territories and/or at certain locations, we are dependent on other carriers to provide facilities that we use
to provide service to our customers.
In certain markets and/or at certain locations, especially where we provide services to businesses, we may lease a significant
portion of our network capacity from other carriers. These carriers may compete directly with us for customers. The prices for
network services are contained in tariffs, interconnection agreements, and negotiated contracts. Terms, conditions and pricing for
tariff network services may be changed, but they must be approved by the appropriate regulatory agency before they go into
effect. For network service purchased pursuant to interconnection agreements, the rates, terms and conditions included therein are
approved by state commissions while other network services, such as some high-capacity Ethernet services, may be obtained
through commercial contracts subject to limited government oversight.
The availability and pricing of network services purchased via commercial agreements are subject to change without regulatory
oversight. For interconnection agreement-based network services, if an agreement cannot be negotiated and we have to invoke
binding arbitration by a state regulatory agency, that process is expensive, time consuming, and the results may not be favorable
to us. In addition, rates for network services set forth above are susceptible to changes in the availability and pricing of the provider’s
facilities and services. Furthermore, in the event a provider becomes legally entitled to deny or limit access to capacity (or already
is, as is the case with respect to certain services) or if state commissions allow the providers to increase rates for tariffed or
interconnection agreement-based rates, we may not be able to effectively compete. In addition, if the provider does not adequately
maintain or timely install these facilities, despite legal obligations, our service to customers may be adversely affected. As a result
of all these items, our competitive position, our operations, financial condition and operating results could be materially affected.