10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ______________________________________________________________________

FORM 10-Q

________________________________________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         

Commission File Number 001-32408

______________________________________________________________________

FairPoint Communications, Inc.

(Exact name of registrant as specified in its charter)

 ______________________________________________________________________

Delaware	13-3725229
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
521 East Morehead Street, Suite 500 Charlotte, North Carolina	28202
(Address of principal executive offices)	(Zip Code)

(704) 344-8150

(Registrant's telephone number, including area code)

______________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  x    No  o

As of November 1, 2013, there were 26,477,975 shares of the registrant's common stock, par value $0.01 per share, outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and December 31, 2012	5
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (Unaudited)	6
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2013 and 2012 (Unaudited)	7
	Condensed Consolidated Statement of Stockholders' Deficit for the nine months ended September 30, 2013 (Unaudited)	8
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
	Signatures	41

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some statements in this quarterly report on Form 10-Q for the quarter ended September 30, 2013 (this "Quarterly Report") are known as "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this Quarterly Report that are not historical facts. When used in this Quarterly Report, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements, including factors discussed in this Quarterly Report, in "Item 1A. Risk Factors" of our annual report on Form 10-K for the year ended December 31, 2012 (the "2012 Annual Report"), in "Item 1A. Risk Factors" of our quarterly report on Form 10-Q for the quarter ended March 31, 2013 and the factors set forth below:

• future performance generally and our share price as a result thereof;

• restrictions imposed by the agreements governing our indebtedness;

• our ability to satisfy certain financial covenants included in the agreements governing our indebtedness;

• financing sources and availability, and future interest expense;

• our ability to repay or refinance our indebtedness;

• our ability to fund substantial capital expenditures;

• anticipated business development activities and future capital expenditures;

• the effects of regulation, including changes in federal and state regulatory policies, procedures and mechanisms including but not limited to the availability and levels of regulatory support payments, and the remaining restrictions and obligations imposed by federal and state regulators as a condition to the approval of the Merger (as defined herein) and the Plan (as defined in the notes to the condensed consolidated financial statements);

• adverse changes in economic and industry conditions, and any resulting financial or operational impact, in the markets we serve;

• labor matters, including workforce levels, our workforce reduction initiatives, labor negotiations and any resulting work stoppages, and any resulting financial or operational impact;

• material technological developments and changes in the communications industry, including declines in access lines and disruption of our third party suppliers' provisioning of critical products or services;

• change in preference and use by customers of alternative technologies;

• the effects of competition on our business and market share;

• our ability to overcome changes to or pressure on pricing on our profitability;

• intellectual property infringement claims by third parties;

• failure of, or attack on, our information technology infrastructure;

• risks related to our reported financial information and operating results;

• availability of net operating loss ("NOL") carryforwards to offset anticipated tax liabilities;

• the impact of changes in assumptions on our ability to meet obligations to our company-sponsored qualified pension plans and post-retirement healthcare plans;

• the impact of lump sum payments related to accrued vested benefits under our company-sponsored qualified pension plans on future pension contributions;

• the effects of severe weather events, such as hurricanes, tornadoes and floods, terrorist attacks, cyber-attacks or other natural or man-made disasters; and

• changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (the "SEC"), may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.

You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date on which this Quarterly Report was filed with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent reports filed with the SEC on Forms 10-K, 10-Q and 8-K.

3

Except as otherwise required by the context, references in this Quarterly Report to:

• "FairPoint Communications" refers to FairPoint Communications, Inc., excluding its subsidiaries.

• "FairPoint," the "Company," "we," "us" or "our" refer to the combined business of FairPoint Communications, Inc. and all of its subsidiaries after giving effect to the merger on March 31, 2008 with Northern New England Spinco Inc., a subsidiary of Verizon Communications Inc. ("Verizon"), which transaction is referred to herein as the "Merger".

• "Northern New England operations" refers to the local exchange business acquired from Verizon and certain of its subsidiaries after giving effect to the Merger.

• "Telecom Group" refers to FairPoint, exclusive of our acquired Northern New England operations.

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

September 30, 2013 and December 31, 2012

(in thousands, except share data)

	September 30, 2013			December 31, 2012
	(unaudited)
Assets:
Cash	$	24,740		$	23,203
Restricted cash	1,688			6,818
Accounts receivable (net of $13.9 million and $18.9 million allowance for doubtful accounts, respectively)	89,264			86,999
Prepaid expenses	25,512			20,128
Other current assets	3,318			4,219
Deferred income tax, net	16,257			16,376
Assets held for sale	—			12,549
Total current assets	160,779			170,292
Property, plant and equipment (net of $850.9 million and $642.1 million accumulated depreciation, respectively)	1,311,197			1,438,309
Intangible assets (net of $29.9 million and $21.6 million accumulated amortization, respectively)	108,640			116,992
Debt issue costs, net	7,378			1,111
Restricted cash	651			651
Other assets	3,983			5,006
Total assets	$	1,592,628		$	1,732,361
Liabilities and Stockholders’ Deficit:
Current portion of long-term debt	$	6,400		$	10,000
Current portion of capital lease obligations	1,396			1,220
Accounts payable	51,456			57,832
Claims payable and estimated claims accrual	256			1,282
Accrued interest payable	3,417			176
Other accrued liabilities	67,822			72,036
Liabilities held for sale	—			407
Total current liabilities	130,747			142,953
Capital lease obligations	825			1,470
Accrued pension obligations	209,041			203,537
Accrued post-retirement healthcare obligations	656,352			616,379
Deferred income taxes	71,153			127,361
Other long-term liabilities	18,606			11,474
Long-term debt, net of current portion	912,630			947,000
Total long-term liabilities	1,868,607			1,907,221
Total liabilities	1,999,354			2,050,174
Commitments and contingencies (See Note 14)
Stockholders’ deficit:
Common stock, $0.01 par value, 37,500,000 shares authorized, 26,478,175 and 26,288,998 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively	264			262
Additional paid-in capital	510,728			506,153
Retained deficit	(667,792		)	(568,239		)
Accumulated other comprehensive loss	(249,926		)	(255,989		)
Total stockholders’ deficit	(406,726		)	(317,813		)
Total liabilities and stockholders’ deficit	$	1,592,628		$	1,732,361

See accompanying notes to condensed consolidated financial statements (unaudited).

5

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

Three and Nine Months EndedSeptember 30, 2013 and 2012

(Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues	$	235,989		$	242,052		$	705,958		$	733,979
Operating expenses:
Cost of services and sales, excluding depreciation and amortization	107,646			105,502			332,420			330,937
Selling, general and administrative expense, excluding depreciation and amortization	79,520			80,915			252,489			257,055
Depreciation and amortization	52,877			89,782			228,833			276,769
Reorganization related expense (income)	(229		)	172			(790		)	(4,043		)
Total operating expenses	239,814			276,371			812,952			860,718
Loss from operations	(3,825		)	(34,319		)	(106,994		)	(126,739		)
Interest expense	(20,304		)	(16,991		)	(58,403		)	(51,002		)
Loss on debt refinancing	—			—			(6,787		)	—
Other income	951			548			1,386			725
Loss from continuing operations before income taxes	(23,178		)	(50,762		)	(170,798		)	(177,016		)
Income tax benefit	14,218			13,433			61,201			55,902
Loss from continuing operations	(8,960		)	(37,329		)	(109,597		)	(121,114		)
Gain on sale of discontinued operations, net of taxes	—			—			10,044			—
Net loss	$	(8,960	)	$	(37,329	)	$	(99,553	)	$	(121,114	)
Weighted average shares outstanding:
Basic	26,206			25,993			26,181			25,970
Diluted	26,206			25,993			26,181			25,970
(Loss) earnings per share, basic:
Continuing operations	$	(0.34	)	$	(1.44	)	$	(4.18	)	$	(4.66	)
Discontinued operations	—			—			0.38			—
Loss per share, basic	$	(0.34	)	$	(1.44	)	$	(3.80	)	$	(4.66	)
(Loss) earnings per share, diluted:
Continuing operations	$	(0.34	)	$	(1.44	)	$	(4.18	)	$	(4.66	)
Discontinued operations	—			—			0.38			—
Loss per share, diluted	$	(0.34	)	$	(1.44	)	$	(3.80	)	$	(4.66	)

See accompanying notes to condensed consolidated financial statements (unaudited).

6

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

Three and Nine Months EndedSeptember 30, 2013 and 2012

(Unaudited)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net loss	$	(8,960	)	$	(37,329	)	$	(99,553	)	$	(121,114	)
Other comprehensive income, net of taxes:
Interest rate swaps (net of $(0.4) million and $(0.4) million tax expense, respectively, for three months and nine months ended September 30, 2013)	(542		)	—			(542		)	—
Qualified pension and post-retirement healthcare plans (net of $0.5 million, $0 million, $1.4 million and $0.8 million tax expense, respectively)	1,887			52			6,605			3,391
Total other comprehensive income	1,345			52			6,063			3,391
Comprehensive loss	$	(7,615	)	$	(37,277	)	$	(93,490	)	$	(117,723	)

See accompanying notes to condensed consolidated financial statements (unaudited).

7

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders' Deficit

Nine Months Ended September 30, 2013

(Unaudited)

(in thousands)

	Common Stock			Additional paid-in capital			Retained deficit			Accumulated other comprehensive loss			Total stockholders' deficit
	Shares	Amount
Balance at December 31, 2012	26,289	$	262	$	506,153		$	(568,239	)	$	(255,989	)	$	(317,813	)
Net loss	—	—		—			(99,553		)	—			(99,553		)
Issuance of common stock	178	2		(2		)	—			—			—
Exercise of stock options	11	—		53			—			—			53
Stock-based compensation expense	—	—		4,524			—			—			4,524
Interest rate swaps	—	—		—			—			(542		)	(542		)
Employee benefit other comprehensive loss before reclassifications	—	—		—			—			(2,429		)	(2,429		)
Employee benefit amounts reclassified from accumulated other comprehensive loss	—	—		—			—			9,034			9,034
Balance at September 30, 2013	26,478	$	264	$	510,728		$	(667,792	)	$	(249,926	)	$	(406,726	)

See accompanying notes to condensed consolidated financial statements (unaudited).

8

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2013 and 2012

(Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net loss	$	(99,553	)	$	(121,114	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes	(55,472		)	(56,743		)
Provision for uncollectible revenue	6,665			2,951
Depreciation and amortization	228,833			276,769
Post-retirement healthcare	39,936			36,919
Qualified pension	7,175			(4,047		)
Gain on sale of business	(16,910		)	—
Loss on debt refinancing	6,787			—
Other non-cash items	3,605			1,497
Changes in assets and liabilities arising from operations:
Accounts receivable	(9,002		)	(861		)
Prepaid and other assets	(5,443		)	(2,937		)
Restricted cash	4,554			(7,796		)
Accounts payable and accrued liabilities	(10,664		)	732
Accrued interest payable	3,241			162
Other assets and liabilities, net	11,287			(2,082		)
Reorganization adjustments:
Non-cash reorganization income	(980		)	(5,119		)
Claims payable and estimated claims accrual	(46		)	(8,803		)
Restricted cash - cash claims reserve	577			20,291
Total adjustments	214,143			250,933
Net cash provided by operating activities	114,590			129,819
Cash flows from investing activities:
Net capital additions	(91,091		)	(95,996		)
Proceeds from sale of business	30,452			—
Distributions from investments	1,296			634
Net cash used in investing activities	(59,343		)	(95,362		)
Cash flows from financing activities:
Refinancing costs	(13,217		)	—
Proceeds from issuance of long-term debt	920,590			—
Repayments of long-term debt	(960,200		)	(30,000		)
Restricted cash	—			1,158
Proceeds from exercise of stock options	53			53
Repayment of capital lease obligations	(936		)	(938		)
Net cash used in financing activities	(53,710		)	(29,727		)
Net change	1,537			4,730
Cash, beginning of period	23,203			17,350
Cash, end of period	$	24,740		$	22,080
Supplemental disclosure of cash flow information:
Reorganization costs paid	$	324		$	621
Non-cash settlement of claims payable	$	—		$	7,668

See accompanying notes to condensed consolidated financial statements (unaudited).

9

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Unaudited)

(1) Organization and Principles of Consolidation

Organization

FairPoint is a leading provider of advanced communications services to business, wholesale and residential customers within its service territories. FairPoint offers its customers a suite of advanced data services such as Ethernet, high capacity data transport and other IP-based services over a ubiquitous, next-generation fiber network with more than 15,000 route miles (the "Next Generation Network") in addition to Internet access, high-speed data ("HSD") and local and long distance voice services. FairPoint is the incumbent communications provider in the markets it serves, primarily rural communities and small urban markets. Many of its local exchange carriers ("LECs") have served their respective communities for more than 80 years. As of September 30, 2013, the Company's service territory spanned 17 states and operated with approximately 1.2 million access line equivalents in service, including approximately 330,000 broadband subscribers.

On October 26, 2009, the Company and substantially all of its direct and indirect subsidiaries filed voluntary petitions for relief under chapter 11 of title 11 ("Chapter 11") of the United States Code. These cases were jointly administered under the caption In re FairPoint Communications, Inc. (collectively, the "Chapter 11 Cases") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). On January 24, 2011, the Company substantially consummated its reorganization through a series of transactions contemplated by its Third Amended Joint Plan of Reorganization Under Chapter 11 of the United States Code (as confirmed by the Bankruptcy Court, the "Plan").

Principles of Consolidation

The consolidated financial statements include all majority-owned subsidiaries of the Company. Partially owned equity affiliates are accounted for under the cost method or equity method when the Company demonstrates significant influence, but does not have a controlling financial interest. Intercompany accounts and transactions have been eliminated.

(2) Accounting Policies

(a) Presentation and Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items.

The Company has reclassified its long-term workers compensation accrual from “Employee benefit obligations” to “Other long-term liabilities” in the December 31, 2012 consolidated balance sheet to be consistent with current period presentation.

Examples of significant estimates include the allowance for doubtful accounts, revenue reserves, the depreciation of property, plant and equipment, valuation of intangible assets, qualified pension and post-retirement healthcare plan assumptions, stock-based compensation and income taxes.

(b) Revenue Recognition

Revenues are recognized as services are rendered and are primarily derived from the usage of the Company's networks and facilities or under revenue-sharing arrangements with other communications carriers. Revenues are primarily derived from: voice services, access (including pooling), Internet and broadband services, Connect America Fund ("CAF") receipts and other miscellaneous services. Local access charges are billed to local end users under tariffs approved by each state's Public Utilities Commission ("PUC") (or its similar agency) or by rates, terms and conditions determined by the Company. Access revenues are derived for the intrastate jurisdiction by billing access charges to interexchange carriers, wireless carriers and to other LECs. These charges are billed based on toll or access tariffs approved by the local state's PUC. Access charges for the interstate jurisdiction are billed in accordance with tariffs filed by the National Exchange Carrier Association ("NECA") or by the individual company and approved by the Federal Communications Commission (the "FCC").

10

Revenues are determined on a bill-and-keep basis or a pooling basis. If on a bill-and-keep basis, the Company bills the charges to either the access provider or the end user and keeps the revenue. If the Company participates in a pooling environment (interstate or intrastate), the toll or access billed is contributed to a revenue pool. The revenue is then distributed to individual companies based on their company-specific revenue requirement. This distribution is based on individual state PUC's (intrastate) or the FCC's (interstate) approved separation rules and rates of return. Distribution from these pools can change relative to changes made to expenses, plant investment or rate-of-return. Some companies participate in federal and certain state universal service programs that are pooling in nature but are regulated by rules separate from those described above. These rules vary by state. Revenues earned through the various pooling arrangements are initially recorded based on the Company's estimates. Rule changes associated with the FCC's CAF/ICC Order (as defined hereinafter) impact the NECA interstate pooling, in that a portion of the Company's interstate Universal Service Fund ("USF") revenues, which are administered through the NECA pools and which prior to January 1, 2012 were based on costs, are now based on the CAF Phase I rules and will be based on CAF Phase II rules when those are put into effect.

Long distance retail and wholesale revenues are predominantly recurring in nature, whether offered under the Company's flat-rated unlimited packages or whether offered in a usage sensitive pricing package. In either case, they are billed in arrears and recognized when earned. Data and Internet services revenues are substantially all recurring revenues and are billed one month in advance and deferred until earned.

As of September 30, 2013 and December 31, 2012, unearned revenue of $17.2 million and $18.3 million, respectively, was included in current "Other accrued liabilities" on the condensed consolidated balance sheets.

The majority of the Company's other miscellaneous services revenue is generated from ancillary special projects at the request of third parties, video services, directory services and late payment charges to end users and interexchange carriers. The Company requires customers to pay for ancillary special projects in advance. Once the ancillary special project is completed and all project costs have been accumulated for proper accounting recognition, the advance payment is recognized as revenue with any over payments refunded to the customer as appropriate. The Company recognizes revenue upon the provision of video services in certain markets by reselling DirecTV content and providing cable and IP television video-over-digital subscriber line services. The Company also publishes telephone directories in some of its markets and recognizes revenues associated with these publications. The Company bills late payment fees to customers who have not paid their bills in a timely manner. In general, late fee revenue relates to wholesale customers, which is recognized as it is collected.

Non-recurring customer activation fees, along with the related costs up to, but not exceeding, the activation fees, are deferred and amortized over the customer relationship period.

The Company was subject to retail service quality plans in the states of Maine, New Hampshire and Vermont in 2012 and for a portion of 2013 in Maine and Vermont, pursuant to which service quality index ("SQI") penalties were imposed upon the Company's failure to meet the requirements of the respective plans. Penalties resulting from these commitments are recorded as a reduction to revenue and to other accrued liabilities on the condensed consolidated balance sheets. The Company also adopted a separate performance assurance plan ("PAP") for certain services provided on a wholesale basis to competitive local exchange carriers ("CLECs") in the northern New England service territories of each of the states of Maine, New Hampshire and Vermont, pursuant to which FairPoint is required to provide performance credits in the event the Company is unable to meet the provisions of the respective PAP. Penalties resulting from these commitments are recorded as a reduction to revenue. In Maine and New Hampshire, these penalties are recorded as a reduction to accounts receivable on the condensed consolidated balance sheets since they are paid by the Company in the form of credits applied to CLEC bills. PAP penalties in Vermont are recorded to other accrued liabilities on the condensed consolidated balance sheets as a majority of these penalties are paid to the Vermont Universal Service Fund ("VUSF"), while the remaining credits assessed in Vermont are paid by the Company in the form of credits applied to CLEC bills.

Revenue is recognized net of tax collected from customers and remitted to governmental authorities.

Management makes estimated adjustments, as necessary, to revenue and accounts receivable for billing errors, including certain disputed amounts.

(c) Depreciation Life Study

In connection with the Company's adoption of fresh start accounting on January 24, 2011, property, plant and equipment assets were revalued to their fair value, generally their appraised value after considering economic obsolescence. New remaining useful lives were established and accumulated depreciation was reset to zero.

Periodically, the Company reviews the estimated remaining useful lives of its group asset categories to address continuing changes in technology, competition and the Company’s overall reduction in capital spending and increased focus on more efficient utilization of its existing assets. In the third quarter of 2013, the Company conducted this review and determined that changes to

11

the estimated remaining useful lives for certain asset categories were appropriate. Accordingly, as a result of the changes to the remaining useful lives, depreciation expense in the third quarter of 2013 was approximately $29.0 million less than it would have been absent the changes, resulting in a reduction in net loss of approximately $27.0 million or a benefit of $1.03 per share.

(d) Accounting for Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management determines its estimates of future taxable income based upon the scheduled reversal of deferred tax liabilities and tax planning strategies. The Company establishes valuation allowances for deferred tax assets when it is estimated to be more likely than not that the tax assets will not be realized.

FairPoint Communications files a consolidated income tax return with its subsidiaries. All intercompany tax transactions and accounts have been eliminated in consolidation.

(e) Operating Segments

Management views its business of providing data, video and voice communication services to business, wholesale and residential customers as one operating segment. The Company's services consist of retail and wholesale telecommunications and data services, including voice and HSD in 17 states. The Company's chief operating decision maker assesses operating performance and allocates resources based on the consolidated results.

(f) Interest Rate Swap Agreements

In the third quarter of 2013, the Company entered into interest rate swap agreements. For further information regarding these interest rate swap agreements, see note (7) "Interest Rate Swap Agreements." The interest rate swap agreements, at their inception, qualified for and were designated as cash flow hedging instruments. In accordance with the Derivatives and Hedging Topic of the Accounting Standards Codification ("ASC"), the Company records its interest rate swaps on the condensed consolidated balance sheet at fair value. The effective portion of changes in fair value are recorded in accumulated other comprehensive loss and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion is recognized in earnings. Both at inception and on a quarterly basis, the Company performs an effectiveness test.

(3) Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02 related to disclosure of reclassifications out of accumulated other comprehensive income. This ASU requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income. In addition, it also requires companies to report changes in accumulated other comprehensive income balances. This new guidance was to be applied prospectively and was effective for interim and annual periods beginning after December 15, 2012, with early adoption permitted. The Company adopted this ASU during the quarter ended March 31, 2013 and it did not have a material impact on the Company's condensed consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, which is designed to reduce diversity in practice of financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. This new guidance becomes effective for the Company on January 1, 2014 and the Company does not expect it to have a material impact on its condensed consolidated financial statements.

(4) Dividends

The Company currently does not pay a dividend on its common stock and does not expect to pay dividends in the foreseeable future.

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(5) Income Taxes

The Company recorded a tax benefit on the loss from continuing operations for the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012 of $14.2 million, $13.4 million, $61.2 million and $55.9 million, respectively, which equates to an effective tax rate of 61.3%, 26.5%, 35.8% and 31.6%, respectively. For the three months ended September 30, 2013, the effective tax rate differs from the 35% federal statutory rate primarily due to a decrease in the valuation allowance plus state taxes. The decrease in the valuation allowance is due to a change in judgment regarding the realizability of deferred tax assets resulting primarily from the change in the timing of book depreciation due to our depreciation life study. This change in the valuation allowance resulted in $9.6 million of tax benefit during the quarter. For the three months ended September 30, 2012 and the nine months ended September 30, 2013 and 2012, the effective tax rate differs from the 35% federal statutory rate primarily due to an increase in the valuation allowance offset by state taxes. In addition, the Company recorded deferred income tax expense for the nine months ended September 30, 2013 of $6.7 million on the gain on sale of its Idaho-based operations on January 31, 2013, which is reported within discontinued operations in the statement of operations for the nine months ended September 30, 2013.

Deferred Income Taxes

At September 30, 2013, the Company had gross federal NOL carryforwards of $210.7 million after taking into consideration the NOL tax attribute reduction of $581.8 million resulting from the Company's discharge of indebtedness upon emergence from Chapter 11 protection. The Company's remaining federal NOL carryforwards will expire from 2021 to 2033. At September 30, 2013, the Company had a net, after attribute reduction, state NOL deferred tax asset of $9.8 million. At September 30, 2013, the Company had no alternative minimum tax credits. Telecom Group completed an initial public offering on February 8, 2005, which resulted in an "ownership change" within the meaning of the United States federal income tax laws addressing NOL carryforwards, alternative minimum tax credits and other similar tax attributes. The Merger and the Company's emergence from Chapter 11 protection also resulted in ownership changes. As a result of these ownership changes, there are specific limitations on the Company's ability to use its NOL carryforwards and other tax attributes. The Company believes that it can use the NOLs even with these restrictions in place.

Valuation Allowance. At September 30, 2013 and December 31, 2012, the Company established a valuation allowance against its deferred tax assets of $193.8 million and $192.5 million, respectively, which consist of a $158.1 million and $159.5 million federal allowance, respectively, and a $35.7 million and $33.0 million state allowance, respectively. During the nine months ended September 30, 2013, a decrease in the Company's valuation allowance of approximately $1.9 million was allocated to accumulated other comprehensive loss in the condensed consolidated balance sheet.

Unrecognized Tax Benefits. Unrecognized tax benefits are reserves established for probable loss contingencies that could be reasonably estimated. The Company's unrecognized tax benefits totaled $3.8 million as of September 30, 2013 and $3.8 million as of December 31, 2012. The total unrecognized tax benefits that, if recognized, would affect the effective tax rate are $3.8 million. The Company does not expect a significant increase or decrease in its unrecognized tax benefits during the next twelve months.

The Company recognizes any interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, the Company did not make any payment of interest and penalties. There was nothing accrued in the condensed consolidated balance sheets for the payment of interest and penalties at September 30, 2013 and December 31, 2012, respectively, as the remaining unrecognized tax benefits would only serve to reduce the Company's current federal and state NOL carryforwards, if ultimately recognized.

Income Tax Returns

The Company and its eligible subsidiaries file consolidated income tax returns in the United States federal jurisdiction and certain consolidated, combined and separate entity tax returns, as required, with various state and local governments. The Company is no longer subject to United States federal, state and local, or non-United States income tax examinations by tax authorities for years prior to 2008. NOL carryovers from closed tax years may be subject to examination by federal or state taxing authorities if utilized in a year open to examination. As of September 30, 2013 and December 31, 2012, the Company does not have any significant additional jurisdictional tax audits.

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(6) Long-Term Debt

Long-term debt for the Company at September 30, 2013 and December 31, 2012 is shown below (in thousands):

	September 30, 2013			December 31, 2012
New Term Loan, due 2019 (weighted average rate of 7.50%)	$	636,800		$	—
Discount on New Term Loan (a)	(17,770		)	—
Notes, 8.75%, due 2019	300,000			—
Old Term Loan, due 2016 (weighted average rate of 6.50%)	—			957,000
Total long-term debt	919,030			957,000
Less: current portion	(6,400		)	(10,000		)
Total long-term debt, net of current portion	$	912,630		$	947,000

(a) The $17.8 million discount on the New Term Loan (as defined below) is being amortized using the effective interest method over the term of the senior secured credit facility due 2019.

As of September 30, 2013, the Company had $59.1 million, net of $15.9 million of outstanding letters of credit, available for borrowing under the New Revolving Facility (as defined below).

The approximate aggregate maturities of long-term debt, excluding the debt discount on the New Term Loan (as defined below), for each of the five years subsequent to September 30, 2013 and thereafter are as follows (in thousands):

Trailing twelve months ending September 30,	Balance Due
2014	$	6,400
2015	6,400
2016	6,400
2017	6,400
2018	6,400
Thereafter	904,800
Total long-term debt, including current portion	$	936,800

Refinancing

On February 14, 2013 (the "Refinancing Closing Date"), FairPoint Communications refinanced the Old Credit Agreement Loans (as defined herein) (the "Refinancing"). In connection with the Refinancing, FairPoint Communications (i) issued $300.0 million aggregate principal amount of its 8.75% senior secured notes due 2019 (the "Notes") in a private offering exempt from registration under the Securities Act pursuant to an indenture (the "Indenture") that FairPoint Communications entered into on the Refinancing Closing Date with certain of its subsidiaries that guarantee the indebtedness under the New Credit Agreement (as defined herein) (the "Subsidiary Guarantors") and U.S. Bank National Association, as trustee and collateral agent, and (ii) entered into a new credit agreement (the "New Credit Agreement"), dated as of the Refinancing Closing Date, with the lenders party thereto from time to time and Morgan Stanley Senior Funding, Inc., as administrative agent and letter of credit issuer. The New Credit Agreement provides for a $75.0 million revolving credit facility (the ''New Revolving Facility''), which has a sub-facility providing for the issuance of up to $40.0 million in letters of credit, and a $640.0 million term loan facility (the ''New Term Loan'' and, together with the New Revolving Facility, the ''New Credit Agreement Loans"). On the Refinancing Closing Date, FairPoint Communications used the proceeds of the Notes offering, together with $640.0 million of borrowings under the New Term Loan and cash on hand to (i) repay principal of $946.5 million outstanding on the Old Term Loan (as defined herein), plus approximately $7.7 million of accrued interest and (ii) pay approximately $32.6 million of fees, expenses and other costs relating to the Refinancing.

The New Credit Agreement. The principal amount of the New Term Loan and commitments under the New Revolving Facility may be increased by an aggregate amount of up to $200.0 million, subject to certain terms and conditions specified in the New Credit Agreement. The New Term Loan will mature on February 14, 2019 and the New Revolving Facility will mature on February 14, 2018, subject in each case to extensions pursuant to the terms of the New Credit Agreement.

Interest Rates and Fees. Interest on borrowings under the New Credit Agreement Loans accrue at an annual rate equal to either a British Bankers Association London Inter-Bank Offered Rate ("LIBOR") or the base rate, in each case plus an applicable

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margin. LIBOR is a per annum rate for dollar deposits with an interest period of one, two, three or six months (at FairPoint Communication's election), subject to a minimum LIBOR floor of 1.25%. The base rate is the per annum rate equal to the greatest of (x) the federal funds effective rate plus 0.50%, (y) the rate of interest publicly quoted from time to time by The Wall Street Journal as the United States ''Prime Rate'' and (z) LIBOR with an interest period of one month plus 1.00%. The applicable margin for the New Term Loan is (a) 6.25% per annum with respect to term loans bearing interest based on LIBOR or (b) 5.25% per annum with respect to term loans bearing interest based on the base rate. The applicable interest rate for the New Revolving Facility is, initially, (a) 5.50% with respect to revolving loans bearing interest based on LIBOR or (b) 4.50% per annum with respect to revolving loans bearing interest based on the base rate, in each case subject to adjustment based on FairPoint Communication's consolidated total leverage ratio, as defined in the New Credit Agreement. FairPoint Communications is required to pay a quarterly letter of credit fee on the average daily amount available to be drawn under letters of credit equal to the applicable interest rate for revolving loans bearing interest based on LIBOR, plus a fronting fee of 0.125% per annum on the average daily amount available to be drawn under such letters of credit. In addition, FairPoint Communications is required to pay a quarterly commitment fee on the average daily unused portion of the New Revolving Facility, which is 0.50% initially, subject to reduction to 0.375% based on FairPoint Communication's consolidated total leverage ratio. In the third quarter of 2013, the Company entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period beginning on September 30, 2015 and maturing on September 30, 2017. Each respective swap agreement requires the Company to pay a fixed rate of 2.665% and provides that the Company will receive a variable rate based on the three month LIBOR rate subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to the Company will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing December 31, 2015. For further information regarding these agreements, see note (7) "Interest Rate Swap Agreements."

Security/Guarantors. All obligations under the New Credit Agreement, together with certain designated hedging obligations and cash management obligations, are unconditionally guaranteed on a senior secured basis by each of the Subsidiary Guarantors and secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Notes.

Mandatory Repayments. Commencing in the second quarter of 2013, FairPoint Communications is required to make quarterly repayments of the New Term Loan in a principal amount equal to $1.6 million during the term of the New Credit Agreement. In addition, mandatory repayments are required under the New Credit Agreement with (i) a percentage, initially equal to 50% and subject to reduction to 25% based on FairPoint Communication's consolidated total leverage ratio, of FairPoint Communication's excess cash flow, as defined in the New Credit Agreement, beginning with the fiscal year ending December 31, 2013, (ii) the net cash proceeds of certain asset dispositions, insurance proceeds and condemnation awards and (iii) issuances of debt not permitted to be incurred under the New Credit Agreement. Optional prepayments and mandatory prepayments resulting from the incurrence of debt not permitted to be incurred under the New Credit Agreement are required to be made at (i) 103.0% of the aggregate principal amount prepaid if such prepayment is made on or prior to February 14, 2014, (ii) 102.0% of the aggregate principal amount prepaid if such prepayment is made after February 14, 2014, but on or prior to February 14, 2015 and (iii) 101.0% of the aggregate principal amount prepaid if such prepayment is made after February 14, 2015 and on or prior to February 14, 2016. No premium is required to be paid for prepayments made after February 14, 2016.

Covenants. The New Credit Agreement contains customary representations and warranties and affirmative and negative covenants for a transaction of this type, including two financial maintenance covenants: (i) a consolidated interest coverage ratio and (ii) a consolidated total leverage ratio. The New Credit Agreement also contains a covenant limiting the maximum amount of capital expenditures that FairPoint Communications and its subsidiaries may make in any fiscal year. As of September 30, 2013, FairPoint Communications was in compliance with all covenants under the New Credit Agreement.

Events of Default. The New Credit Agreement also contains customary events of default for a transaction of this type.

The Notes. On the Refinancing Closing Date, FairPoint Communications issued $300.0 million of the Notes pursuant to the Indenture in a private offering exempt from registration under the Securities Act.

The terms of the Notes are governed by the Indenture. The Notes are senior secured obligations of FairPoint Communications and are guaranteed by the Subsidiary Guarantors. The Notes and the guarantees thereof are secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the New Credit Agreement. The Notes will mature on August 15, 2019 and accrue interest at a rate of 8.75% per annum, which is payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2013.

On or after February 15, 2016, FairPoint Communications may redeem all or part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest thereon, to the applicable redemption date. At any time prior to February 15, 2016, FairPoint Communications may redeem all or part of the Notes at a redemption price equal to 100% of the principal

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amount of the Notes redeemed, plus a "make-whole" premium as of, and accrued and unpaid interest to, the applicable redemption date. In addition, at any time prior to February 15, 2016, FairPoint Communications may, on one or more occasions, redeem up to 35% of the original aggregate principal amount of the Notes, using net cash proceeds of certain qualified equity offerings, at a redemption price of 108.75% of the principal amount of Notes redeemed, plus accrued and unpaid interest to the applicable redemption date.

The holders of the Notes have the ability to require FairPoint Communications to repurchase all or any part of the Notes if FairPoint Communications experiences certain kinds of changes in control or engages in certain asset sales, in each case at the repurchase prices and subject to the terms and conditions set forth in the Indenture.

The Indenture contains certain covenants which are customary with respect to non-investment grade debt securities, including limitations on FairPoint Communication's ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase FairPoint Communication's capital stock, make certain investments, enter into certain types of transactions with affiliates, create liens and sell certain assets or merge with or into other companies. These covenants are subject to a number of important limitations and exceptions.

The Indenture also provides for customary events of default, including cross defaults to other specified debt of FairPoint Communications and certain of its subsidiaries.

Old Credit Agreement

On January 24, 2011, FairPoint Communications and FairPoint Logistics, Inc. (collectively, the "Old Credit Agreement Borrowers") entered into a $1,075.0 million senior secured credit facility with a syndicate of lenders and Bank of America, N.A., as the administrative agent for the lenders (the "Old Credit Agreement"), comprised of a $75.0 million revolving facility (the "Old Revolving Facility") and a $1.0 billion term loan (the "Old Term Loan" and together with the Old Revolving Facility, the "Old Credit Agreement Loans"). On January 24, 2011, the Company paid to the lenders providing the Old Revolving Facility an aggregate fee equal to $1.5 million. Interest on the Old Credit Agreement Loans accrued at an annual rate equal to either (a) LIBOR plus 4.50%, with a minimum LIBOR floor of 2.00% for the Old Term Loan or (b) a base rate plus 3.50% per annum, which base rate was equal to the highest of (x) Bank of America's prime rate, (y) the federal funds effective rate plus 0.50% and (z) the applicable LIBOR plus 1.00%. In addition, the Company was required to pay a 0.75% per annum commitment fee on the average daily unused portion of the Old Revolving Facility. The entire outstanding principal amount of the Old Credit Agreement Loans was to be due and payable on January 24, 2016. The Old Credit Agreement required quarterly repayments of principal of the Old Term Loan after the first anniversary of January 24, 2011. During 2012 and in the first quarter of 2013, prior to the Old Credit Agreement being retired, the Company made $43.0 million and $10.5 million, respectively, of principal payments on the Old Term Loan.

The Old Credit Agreement contained customary representations, warranties and affirmative and negative covenants. The Old Credit Agreement also contained minimum interest coverage and maximum total leverage maintenance covenants, along with a maximum senior leverage covenant measured upon the incurrence of certain types of debt. As of December 31, 2012, the Old Credit Agreement Borrowers were in compliance with all covenants under the Old Credit Agreement.

On February 14, 2013, the Company completed the Refinancing and repaid all amounts outstanding under the Old Credit Agreement.

Debt Issue Costs

On February 14, 2013, the Company completed the Refinancing and capitalized $7.6 million of debt issue costs associated with the New Credit Agreement and Notes. These debt issue costs are being amortized over a weighted average life of 6.2 years using the effective interest method.

On January 24, 2011, the Company entered into the Old Credit Agreement and capitalized $2.4 million of debt issue costs associated with the Old Credit Agreement. These debt issue costs were being amortized over a weighted average life of 3.7 years using the effective interest method. Upon the completion of the Refinancing, the balance of the Old Credit Agreement debt issue costs was principally written off.

As of September 30, 2013 and December 31, 2012, the Company had capitalized debt issue costs of $7.4 million and $1.1 million, respectively, net of amortization.

(7) Interest Rate Swap Agreements

The Company uses interest rate swap agreements to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows relating to interest payments on a portion of its outstanding debt. The Company's interest rate swaps, which are designated as cash flow hedges, involve the receipt of variable amounts from counterparties in

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exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not hold or issue any derivative financial instruments for speculative trading purposes.

In the third quarter of 2013, the Company entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period beginning on September 30, 2015 and maturing on September 30, 2017. Each respective swap agreement requires the Company to pay a fixed rate of 2.665% and provides that the Company will receive a variable rate based on the three month LIBOR rate subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to the Company will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing December 31, 2015.

The effect of the Company’s interest rate swap agreements on the condensed consolidated balance sheet at September 30, 2013 is shown below (in thousands):

	As of September 30, 2013
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps	Other long-term liabilities	$	908

The effect of the Company’s interest rate swap agreements on the condensed consolidated statements of operations for the three and nine months ended September 30, 2013 is shown below (in thousands):

	Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion)
	Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
Interest rate swaps	$	542	$	542

There were no amounts reclassified into current earnings due to ineffectiveness during the periods presented. The Company estimates that none of the amount reported in accumulated other comprehensive loss for interest rate swaps is expected to be reclassified to interest expense in the next 12 months as the interest rate swap agreements are not effective until September 30, 2015.

Each interest rate swap agreement contains a provision whereby if the Company defaults on any of its indebtedness, the Company may also be declared in default under the interest rate swap agreements.

(8) Fair Value

The Fair Value Measurements and Disclosures Topic of the ASC defines fair value, establishes a framework for measuring fair value and establishes a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value. The Fair Value Measurements and Disclosures Topic of the ASC also expands financial statement disclosures about fair value measurements.

In determining fair value, the Company uses a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Valuations based on quoted prices for similar instruments in active markets or quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company's non-financial assets and liabilities, including its long-lived assets and indefinite-lived intangible assets, are measured and subsequently adjusted, if necessary, to fair value on a non-recurring basis. The Company periodically performs routine reviews of triggering events and/or an impairment test, as applicable. Based on these procedures, the Company did not require an adjustment to fair value to be recorded in the first three quarters of 2013 or in 2012.

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The Company's financial instruments, other than interest rate swap agreements and long-term debt, consist primarily of cash, restricted cash, accounts receivable and accounts payable. The carrying amounts of these financial instruments are estimated to approximate fair value due to the relatively short period of time to maturity for these instruments. As of September 30, 2013, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Long-term interest rate swap liability (a)	$	—	$	908	$	—

(a) The fair value is determined using valuation models which rely on the expected LIBOR based yield curve and estimates of counterparty and the Company’s non-performance risk.  Because each of these inputs are directly observable or can be corroborated by observable market data, we have categorized these interest rate swaps as Level 2 within the fair value hierarchy.

Long-term debt is not carried at fair value, but measured on a recurring basis. The estimated fair values of the Company's long-term debt as of September 30, 2013 and December 31, 2012 are as follows (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
New Term Loan, due 2019 (b)	$	619,030	$	638,392	$	—	$	—
Notes, 8.75%, due 2019	300,000		301,500		—		—
Old Term Loan, repaid February 2013	—		—		957,000		929,500

(a) The Company estimated fair value based on market prices of the Company's debt securities at the balance sheet date, which falls within Level 2 of the fair value hierarchy.

(b) The carrying amount of the New Term Loan is net of the discount of $17.8 million.

(9) Employee Benefit Plans

The Company sponsors noncontributory qualified pension plans and post-retirement healthcare plans, which provide certain cash payments and medical and dental benefits to covered retired employees and their beneficiaries and covered dependents. These plans were assumed as part of the acquisition of the Northern New England operations from Verizon. The qualified pension plan and the post-retirement healthcare plan covering non-represented employees are frozen. Therefore, no new benefits are being earned by participants and no new participants are becoming eligible for benefits in these plans. Participants in the qualified pension plan and the post-retirement healthcare plan covering represented employees continue to accrue benefits in accordance with the respective plan documents and contractual requirements in the collective bargaining agreements. Eligibility to participate in the plans is based on an employee's age and years of service. The Company makes contributions to the qualified pension plans to meet minimum Employee Retirement Income Security Act of 1974, as amended ("ERISA"), funding requirements and has the ability to elect to make additional discretionary contributions. Payments of benefits under the post-retirement healthcare plans are funded by the Company as the benefits are paid.

Absent a settlement or curtailment, the Company remeasures the net liabilities of its qualified pension and other post-retirement healthcare plans annually.

Net Periodic Benefit Cost. Net periodic benefit cost is generally recognized as a component of selling, general and administrative expense on the consolidated statements of operations; however, the Company capitalizes a portion of net periodic benefit cost in conjunction with its use of internal labor resources utilized on capital projects. Components of the net periodic benefit cost related to the Company's qualified pension plans and post-retirement healthcare plans for the three and nine months ended September 30, 2013 and 2012 are presented below (in thousands):

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	Three Months Ended September 30, 2013					Three Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	4,633		$	5,874	$	3,649		$	5,923
Interest cost	3,774			5,785		3,695			5,774
Expected return on plan assets	(3,082		)	—		(3,356		)	(8		)
Amortization of actuarial loss	1,635			1,464		575			1,398
Plan settlement	52			—		89			—
Net periodic benefit cost	$	7,012		$	13,123	$	4,652		$	13,087

	Nine Months Ended September 30, 2013					Nine Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	13,910		$	20,838	$	11,841		$	19,491
Interest cost	11,175			18,770		10,994			18,139
Expected return on plan assets	(9,384		)	—		(9,887		)	(25		)
Amortization of actuarial loss	3,981			5,934		1,617			4,762
Plan settlement	1,065			—		445			—
Net periodic benefit cost	$	20,747		$	45,542	$	15,010		$	42,367

Contributions and Benefit Payments. On July 6, 2012, the Moving Ahead for Progress in the 21^st Century Act was signed into law. This act contained a pension funding stabilization provision, which allows pension plan sponsors to use higher interest rate assumptions when determining funded status and funding obligations. As a result, the Company's 2013 minimum required qualified pension plan contribution is significantly lower than it would have been in the absence of this stabilization provision. On September 25, 2012, the Company elected to defer use of the higher segment rates under the act until the first plan year beginning on or after January 1, 2013 solely for determination of the adjusted funding target attainment percentage ("AFTAP") used to determine benefit restrictions under Internal Revenue Code Section 436.

The Company expects to contribute approximately $22.0 million to its qualified pension plans in 2013, which includes the minimum required contribution amount required by the Pension Protection Act of 2006 in addition to discretionary contributions. During the nine months ended September 30, 2013, contributions of $13.2 million were made to the qualified pension plans. The Company expects to fund approximately $5.1 million in benefit payments to its post-retirement healthcare plans during fiscal year 2013, of which $2.6 million was funded during the nine months ended September 30, 2013. Accordingly, during the remainder of fiscal year 2013, the Company expects to contribute approximately $8.8 million to its qualified pension plans and fund approximately $2.5 million in benefit payments to its post-retirement healthcare plans.

Return on Plan Assets. For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, the actual return on the pension plan assets were gains of approximately 4.1%, 4.1%, 7.0% and 7.7%, respectively. Net periodic benefit cost for 2013 assumes a weighted average annualized expected return on plan assets of approximately 7.6%. Should the Company's actual return on plan assets be lower than the expected return assumption, the net periodic benefit cost may increase in future periods and the Company may be required to contribute additional funds to its qualified pension plans.

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(10) Accumulated Other Comprehensive Loss

The following table provides a reconciliation of adjustments reclassified from accumulated other comprehensive loss to the statement of operations (in thousands):

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Employee benefits:
Amortization of actuarial loss (a)	$	3,099		$	9,915
Plan settlement (a)	52			1,065
Total employee benefit amounts reclassified from accumulated other comprehensive loss	3,151			10,980
Tax expense	(634		)	(1,946		)
Total employee benefit amounts reclassified from accumulated other comprehensive loss, net	$	2,517		$	9,034

(a) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See note (9) "Employee Benefit Plans" for details.

(11) Earnings Per Share

Basic earnings per share of the Company is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive, the diluted earnings per share calculation calculated using the treasury stock method includes the impact of stock units, shares of non-vested restricted stock and shares that could be issued under outstanding stock options.

The following table provides a reconciliation of the common shares used for basic earnings per share and diluted earnings per share (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average number of common shares used for basic earnings per share (a)	26,206	25,993	26,181	25,970
Effect of potential dilutive shares (b)	—	—	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	26,206	25,993	26,181	25,970
Anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation (c)	5,300	4,853	5,300	4,853

(a) Weighted average number of common shares used for basic earnings per share excludes 275,188, 242,844, 283,357 and 246,351 weighted average shares of non-vested restricted stock as of the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

(b) Since the Company incurred a loss for the three and nine months ended September 30, 2013 and 2012, all potentially dilutive securities are anti-dilutive for these periods and, therefore, are excluded from the determination of diluted earnings per share.

(c) Anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation include warrants, non-vested restricted stock and stock options issued under the FairPoint Communications, Inc. 2010 Long Term Incentive Plan.

(12) Stockholders' Deficit

At September 30, 2013, 37,500,000 shares of common stock were authorized and 26,478,175 shares of common stock (including shares of non-vested restricted stock) and 3,582,402 warrants, each eligible to purchase one share of common stock, were outstanding.

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The initial exercise price applicable to the warrants is $48.81 per share of common stock. The exercise price applicable to the warrants is subject to adjustment upon the occurrence of certain events described in the warrant agreement that the Company entered into with the Bank of New York Mellon, as the warrant agent, on January 24, 2011. The warrants may be exercised at any time on or before the seventh anniversary of January 24, 2011.

(13) Assets Held for Sale and Discontinued Operations

On November 28, 2012, the Company entered into an agreement to sell the capital stock of its Idaho-based operations to Blackfoot Telecommunications Group ("Blackfoot") of Missoula, Montana for $30.5 million in gross cash proceeds. The closing of the transaction was completed on January 31, 2013. Eleven FairPoint employees joined the Blackfoot organization at closing. The Company recorded a gain, before $6.7 million of deferred taxes, of $16.9 million upon the closing of the transaction, which is reported within discontinued operations in the condensed consolidated statement of operations for the nine months ended September 30, 2013. Due to differences between the book and tax basis of the Idaho-based operations, the gain reported on the sale for income tax purposes will be $27.1 million.

The Idaho-based operations' assets and liabilities were classified as held for sale and were recorded as single line items in the current asset and current liability sections of the condensed consolidated balance sheet at December 31, 2012. A summary of assets and liabilities held for sale at December 31, 2012 is as follows (in thousands):

	December 31, 2012
Assets held for sale:
Accounts receivable, net	$	261
Prepaid expenses	37
Other current assets	3
Property, plant and equipment (net of $4.6 million accumulated depreciation)	6,441
Other assets	5,807
Total assets held for sale	$	12,549
Liabilities held for sale:
Accounts payable	$	137
Other accrued liabilities	148
Other long-term liabilities	122
Total liabilities held for sale	$	407

The operations of the Idaho-based operations are immaterial to the financial results of the consolidated Company and therefore have not been segregated as discontinued operations in the condensed consolidated statements of operations. Revenue and income before income taxes of the Idaho-based operations for the three months ended September 30, 2012 and the nine months ended September 30, 2013 and 2012 are as follows (in thousands):

	Three Months Ended September 30, 2012		Nine Months Ended September 30,
			2013(a)		2012
Revenue	$	1,984	$	674	$	5,927
Income (loss) before income taxes	$	406	$	477	$	1,075

(a) Reflects revenue and income before income taxes of the Idaho-based operations for the period of January 1, 2013 through the completion of the transaction on January 31, 2013.

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(14) Commitments and Contingencies

(a) Leases

The Company does not have any leases with contingent rental payments or any leases with contingency renewal, purchase options or escalation clauses.

(b) Legal Proceedings

From time to time, the Company is involved in litigation and regulatory proceedings arising out of its operations. The Company's management believes that it is not currently a party to any legal or regulatory proceedings, the adverse outcome of which, individually or in the aggregate, would have a material adverse effect on the Company's financial position or results of operations. Notwithstanding that the Company emerged from Chapter 11 protection on January 24, 2011, one of the Chapter 11 Cases (Northern New England Telephone Operations LLC - Case No. 09-16365) remains open.

(c) Restricted Cash

As of September 30, 2013, the Company had $2.3 million of restricted cash, of which $0.1 million is reserved for payment of outstanding related bankruptcy issues (the "Cash Claims Reserve"), $1.6 million is reserved for broadband build-out in New Hampshire and $0.6 million is restricted for other purposes.

During the nine months ended September 30, 2013, $0.6 million of the Cash Claims Reserve was released due to favorable resolution of claims, $2.8 million of restricted cash reserved for broadband build-out in Vermont was utilized and $1.7 million of restricted cash reserved for broadband build-out in New Hampshire was utilized.

(d) Magnitude of Bankruptcy Claims

Claims totaling approximately $4.9 billion were filed with the Bankruptcy Court against the Company. As of November 1, 2013, through the claim resolution process, $3.8 billion of these claims have been settled and $1.1 billion of these claims have been disallowed by the Bankruptcy Court. Additionally, $15.2 million of these claims have been withdrawn by the respective creditors. The disallowance of one claim in the amount of $0.2 million has been appealed by the claimant.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report. The following discussion includes certain forward-looking statements. For a discussion of important factors, including the continuing development of our business, actions of regulatory authorities and competitors and other factors which could cause actual results to differ materially from the results referred to in the forward-looking statements, see "Item 1A. Risk Factors" in the 2012 Annual Report, "Item 1A. Risk Factors" in the quarterly report on Form 10-Q for the quarter ended March 31, 2013 and "Cautionary Note Regarding Forward-Looking Statements" contained in this Quarterly Report. Our discussion and analysis of financial condition and results of operations are presented in nine sections:

•Overview

•February 2013 Refinancing

•Regulatory Environment

•Basis of Presentation

•Results of Operations

•Off-Balance Sheet Arrangements

•Critical Accounting Policies

•New Accounting Standards

•Liquidity and Capital Resources

Overview

We are a leading provider of advanced communications services to business, wholesale and residential customers within our service territories. We offer our customers a suite of advanced data services such as Ethernet, high capacity data transport and other IP-based services over our Next Generation Network in addition to Internet access, HSD and local and long distance voice

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services. Our service territory spans 17 states where we are the incumbent communications provider primarily serving rural communities and small urban markets. Many of our LECs have served their respective communities for more than 80 years. We operate with approximately 1.2 million access line equivalents, including approximately 330,000 broadband subscribers, in service as of September 30, 2013.

We own and operate the Next Generation Network in the northern New England states of Maine, New Hampshire and Vermont, giving us capacity to support more HSD services and extend our fiber reach into more communities across the region. The IP/Multiple Protocol Label Switched network architecture of our Next Generation Network allows us to provide Ethernet, transport and other IP-based services with the highest level of reliability at a lower cost of service. This fiber network also supplies critical infrastructure for wireless carriers serving the region as their bandwidth needs increase, driven by mobile data from smartphones, tablets and other wireless devices. As of September 30, 2013, we provide cellular transport, also known as backhaul, through over 1,200 mobile Ethernet backhaul connections. We have fiber connectivity to more than 1,000 cellular telecommunications towers in our service footprint.

Transformation of our Business

Access lines have historically been an important element of our business. Communications companies, including FairPoint, continue to experience a decline in access lines due to increased competition from CLECs, wireless carriers and cable television operators, increased availability of alternative communications services, including wireless and voice over IP ("VoIP"), and challenging economic conditions. Our objective is to transform our revenue by continuing to add advanced data products and services such as Ethernet, high capacity data transport and other IP-based services over our Next Generation Network in addition to HSD services, to minimize our dependence on voice access lines. We will continue our efforts to retain customers to mitigate the loss of voice access lines through bundled packages including video and other value added services.

Over the past few years, we have made significant capital investments in our Next Generation Network to expand our business service offerings to meet the growing data needs of our customers and to increase broadband speeds and capacity in our consumer markets. We have also focused our sales and marketing efforts on these advanced data solutions. Specifically, within the last couple of years, we built and launched high capacity Ethernet services to allow us to meet the capacity needs of our business customers as well as supply high capacity infrastructure to our wholesale customers. These advanced data services are our flagship product and are laying the foundation not only for new business but also for additional IP-based voice services in the future.

Additionally, we believe the bandwidth needs of cellular backhaul will continue to grow with the continued adoption of bandwidth-intensive technology. Our extensive fiber network, with over 15,000 route miles, including over 1,000 cellular telecommunications towers currently served with fiber, puts us in an excellent position to grow our revenue base as demand for cellular backhaul services increases. We expect to see demand increase on existing fiber-connected towers where we would provision or expand mobile Ethernet backhaul connections or construct new fiber routes to cellular telecommunications towers.

Coupled with recent regulatory reform in the states of Maine, New Hampshire and Vermont that will serve to promote fair competition among communication services providers in the region, we believe that there is a significant organic growth opportunity within the business and wholesale markets given our extensive fiber network and IP-based product suite combined with our relative low market share in these areas.

February 2013 Refinancing

On February 14, 2013, the Refinancing Closing Date, we completed the Refinancing of the Old Credit Agreement Loans. In connection with the Refinancing, we (i) issued $300.0 million of Notes in a private offering exempt from registration under the Securities Act pursuant to the Indenture that we entered into on the Refinancing Closing Date and (ii) entered into the New Credit Agreement, dated as of the Refinancing Closing Date. The New Credit Agreement provides for the $75.0 million New Revolving Facility, including a sub-facility for the issuance of up to $40.0 million in letters of credit, and the $640.0 million New Term Loan. On the Refinancing Closing Date, we used the proceeds of the Notes offering, together with $640.0 million of borrowings under the New Term Loan and cash on hand to (i) repay principal of $946.5 million outstanding on the Old Term Loan, plus approximately $7.7 million of accrued interest and (ii) pay approximately $32.6 million of fees, expenses and other costs relating to the Refinancing. For further information regarding the New Credit Agreement, the Notes and our repayment of the Old Credit Agreement Loans, see "—Liquidity and Capital Resources" herein and note (6) "Long-Term Debt" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report.

Regulatory Environment

We are generally subject to common carrier regulation primarily by federal and state governmental agencies. At the federal level, the FCC generally exercises jurisdiction over communications common carriers, such as FairPoint, to the extent those carriers provide, originate or terminate interstate or international communications. State regulatory commissions generally exercise jurisdiction over common carriers to the extent those carriers provide, originate or terminate intrastate communications. In addition,

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pursuant to the Telecommunications Act of 1996, which amended the Communications Act of 1934 (the "Communications Act"), state and federal regulators share responsibility for implementing and enforcing the domestic pro-competitive policies introduced by that legislation.

We are required to comply with the Communications Act which requires, among other things, that telecommunications carriers offer telecommunications services at just and reasonable rates and on terms and conditions that are not unreasonably discriminatory. The Communications Act contains requirements intended to promote competition in the provision of local services and lead to deregulation as markets become more competitive.

The FCC's CAF/ICC Order (as defined herein and sometimes referred to in the industry as the "Transformation Order") modified regulation for us beginning January 1, 2012. Effective January 1, 2012, the FCC eliminated the rural/non-rural distinction among incumbent local exchange carriers ("ILECs") and treats ILECs as either price cap or rate-of-return. Under the new rules, effective January 1, 2012, all of our ILECs are treated as price cap companies for CAF purposes, including the Telecom Group rate-of-return companies. However, the Telecom Group rate-of-return companies continue to be treated as rate-of-return for regulation of interstate switched and special access services. In addition, the FCC has preempted certain state regulation over our ILECs, including capping all state originating and terminating switched access charges and reducing terminating state switched access charges beginning July 1, 2012, in a two-year transition to make state switched access charges equal to interstate switched access charges. Following this two-year transition and starting July 1, 2014, all terminating usage rates will transition to zero over the following four to seven years.

Overview of FCC CAF/ICC Order to Reform Universal Service and Intercarrier Compensation

On March 16, 2010, the FCC submitted the National Broadband Plan ("NBP") to the United States Congress. The NBP is a plan to bring high-speed Internet services to the entire country, including remote and high-cost areas. In accordance with the NBP, the FCC commenced several rulemakings that concern, among other things, reforming high-cost and low-income programs to promote universal service to make those funds more efficient while promoting broadband communications in areas that otherwise would be unserved and to address changes to interstate access charges and other forms of intercarrier compensation ("ICC").

On November 18, 2011, the FCC released its comprehensive landmark order to modify the nationwide system of universal support and the ICC system (referred to hereafter as the "CAF/ICC Order"). In this order, the FCC replaced all existing USF for price cap carriers with its CAF. The intent of CAF is to bring high-speed affordable broadband services to all Americans. The CAF/ICC Order fundamentally reforms the ICC process that governs how communications companies bill one another for exchanging traffic, gradually phasing down these charges.

In conjunction with the CAF/ICC Order, the FCC adopted a Notice of Proposed Rulemaking to deal with related matters, including but not limited to: (i) the actual cost model to be adopted for CAF Phase II funding, (ii) treatment of originating access charges, (iii) modifications to CAF for rate-of-return ILECs, (iv) development of CAF Phase II for mobility, (v) CAF Phase II reverse auction rules, (vi) remote areas funding and (vii) IP to IP interconnection issues. It is not known what decisions will be made on these issues or how they may impact us. In general, CAF Phase I is interim support provided to price cap carriers during the period in which the FCC establishes its permanent CAF funding rules for CAF Phase II. CAF Phase I includes certain support structures, including frozen support and optional incremental support. CAF Phase I will continue until CAF Phase II is implemented, which is dependent on how long it takes the FCC to complete its CAF Phase II proceedings.

CAF Phase I and Phase II Support. Pursuant to the CAF/ICC Order, beginning in 2012, we started receiving monthly CAF Phase I frozen support, which is based on and equal to all forms of USF high-cost support we received during 2011. This support is considered transitional funding while the FCC is developing its CAF Phase II program. FCC rules require that if we continue receiving CAF Phase I frozen support beyond 2012, which we have, we will have specific broadband spending obligations starting in 2013. According to the FCC rules, in 2013, we are required to spend one-third of the frozen support to "build and operate broadband-capable networks used to offer the provider's own retail broadband service in areas substantially unserved by an unsubsidized competitor." Should we continue to receive CAF Phase I frozen support in 2014 and 2015, this spend obligation will increase to two-thirds and 100%, respectively. In February of 2013, we filed a petition with the FCC for a partial waiver of the spending obligations. On October 30, 2013, the FCC issued an order denying FairPoint's Petition, but clarifying the spending rules in a manner that effectively provides the relief we requested by allowing us to certify to the spending obligations at the holding company level.

Pursuant to the revised CAF programs, during 2012, we were offered $4.8 million of one-time funding under the FCC's CAF Phase I incremental support program. Under this program, we can use some or all of this support subject to certain restrictions. We notified the FCC that we accepted $2.0 million of CAF Phase I incremental support funding, which will primarily be used in Vermont. On September 10, 2012, we filed a petition with the FCC asking it to waive its rules to allow us to use the remaining $2.8 million of CAF Phase I incremental support funding to bring high-speed broadband services to 697 customer locations in the state of Maine. This petition was withdrawn on August 27, 2013 in response to the FCC making the unused 2012 funding available in the second round of support offered in the 2013 CAF program. On May 22, 2013, the FCC filed the Report and Order in WC

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Docket 10-90, which offered the second round of support under the FCC's CAF Phase I incremental support program. We were offered $4.8 million, with the opportunity to oversubscribe to the funding. Additional funding was available in this program to the extent other price cap carriers declined their full amount and because the FCC made an additional $185.0 million available to price cap carriers for this round of support. On August 20, 2013, we applied for $3.3 million from the FCC's CAF Phase I incremental support program. This funding is subject to a challenge process by competing carriers, which is expected to have minimal impact on our funding request.

FCC New Rules for ICC Process. The CAF/ICC Order reforms rules associated with local, state toll and interstate toll traffic exchanged among communications carriers including ILECs, CLECs, cable companies, wireless carriers and VoIP providers. The new rules, the majority of which were effective beginning July 1, 2012, establish separate rules for price cap carriers and rate-of-return carriers. Although the FCC order treats our rate-of-return carriers (including companies operating under average schedules) as price cap carriers for CAF funding, it treats them as rate-of-return carriers for purposes of ICC reform. For both price cap and rate-of-return carriers, the FCC establishes a multi-year transition of terminating traffic compensation to "bill and keep", or zero compensation. For both price cap and rate-of-return carriers, the FCC requires carriers to establish fiscal year 2011 ("FY2011") baseline compensation, which is the amount of relevant compensation billed during the period beginning October 1, 2010 and ending September 30, 2011, and collected by March 31, 2012. This FY2011 revenue is used as a starting point for revenue for the transitional period, which is six years for price cap operations and nine years for rate-of-return operations. For each FairPoint ILEC, the FY2011 baseline revenue is reduced by a specified percent during each year of the transition, resulting in a target revenue for each tariff year. At the same time, the FCC rules require reductions in ICC rates for specified services and jurisdictions. As the recoverable revenue declines and the rates decline, any target revenue which will not be covered by ICC revenue can be recovered, in part, from end users through an access recovery charge ("ARC"). Price cap ILECs are permitted to implement monthly end user ARCs with five annual increases of no more than $0.50 for residential/single-line business consumers, for a total monthly ARC of no more than $2.50 in the fifth year; and $1.00 (per month) per line for multi-line business customers, for a total of $5.00 (per month) per line in the fifth year, provided that: (1) any such residential increases would not result in regulated residential end user rates that exceed the $30.00 residential rate ceiling; and (2) any multi-line business customer's total subscriber line charge ("SLC") plus ARC does not exceed $12.20. Rate-of-return ILECs are permitted to implement monthly end user ARCs with six annual increases of no more than $0.50 (per month) for residential/single-line business consumers, for a total ARC of no more than $3.00 in the sixth year; and $1.00 (per month) per line for multi-line business customers for a total of $6.00 (per month) per line in the sixth year, provided that: (1) such increases would not result in regulated residential end user rates that exceed the $30.00 Residential Rate Ceiling; and (2) any multi-line business customer's total SLC plus ARC does not exceed $12.20. If the combination of ICC and ARC revenue is not sufficient to cover the targeted revenue, then additional funding will be provided by the CAF in certain circumstances, though there is no guarantee that the ILEC will be made whole.

Vermont Incentive Regulation Plan

Effective April 1, 2011, we entered into an Incentive Regulation Plan ("IRP") for our northern New England Vermont service territory. The IRP included a 2011-2015 Amended Retail Service Quality Plan ("RSQP"), which significantly reduced FairPoint's exposure to retail service quality index ("SQI") penalties from $10.5 million to $1.65 million. As of March 31, 2013, the RSQP and related SQI penalties were eliminated in Vermont based upon our achievement of certain retail service metrics. We believe the IRP has allowed our Northern New England operations' retail rates in Vermont to compete with those competitive carriers under a relatively level regulatory scheme, while preserving certain regulatory protections for consumers in areas where competition may not be adequate.

Recent Legislation for Maine and New Hampshire

During the middle of fiscal year 2012, legislation was enacted into law in both Maine and New Hampshire, which decreased the scope of retail telecommunications regulation for us, eliminating many of the state-specific Merger conditions and providing us with increased ability to compete in the Maine and New Hampshire telecommunications marketplace.

Effective August 10, 2012, the New Hampshire legislation was enacted in its Session Laws of 2012, Chapter 177 (known as Senate Bill 48) ("SB 48"). SB 48 created a new class of telecommunications carriers known as "excepted local exchange carriers" ("ELECs") and our Northern New England operations qualify as an ELEC in New Hampshire. SB 48 essentially leveled the regulatory scheme imposed upon New Hampshire telecommunications carriers and states that the New Hampshire PUC has no authority to impose or enforce any obligation on a specific ELEC that also is not applicable to all other ELECs in New Hampshire except with respect to:

(i) Obligations that arise pursuant to the Communications Act, as amended;

(ii) Obligations imposed on our Northern New England operations that arose prior to February 1, 2011 that relate to the availability of broadband services, soft disconnect processes and capital expenditure commitments within New Hampshire;

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(iii) Obligations that relate to the provision of services to CLECs, interexchange carriers and wireless carriers, regardless of technology; or

(iv) Certain obligations related to telephone poles and carrier of last resort responsibilities.

In New Hampshire, beginning with the August 10, 2012 effective date of the legislation, our exposure to annual SQI penalties was eliminated (from $12.5 million to zero) and we have pricing discretion with respect to existing and new retail telecommunications services other than basic local exchange service and certain services provided to customers who qualify for the federal lifeline discount.

On April 12, 2012, Maine Governor Paul LePage signed Public Law 2011, Chapter 623 (also known as P.L. 2011, c.623) (the "Maine Deregulation Legislation") into law. The Maine Deregulation Legislation significantly deregulates retail telecommunications service offerings and reduces regulation applicable to ILECs, such as our Northern New England operations. The legislation eliminated regulatory oversight on all retail services other than the basic exchange service defined in Maine as Provider of Last Resort ("POLR") service and significantly reduced FairPoint's maximum exposure to SQI penalties, and reduced the number of reportable retail metrics.

Under the Maine Deregulation Legislation, our maximum exposure to annual SQI penalties, beginning with Maine's fiscal year ending July 31, 2013, decreased from $12.5 million to $2.0 million. Effective as of Maine's SQI fiscal year beginning August 1, 2013, we are no longer subject to SQI penalties and we have pricing discretion with respect to all existing and new telecommunications services other than POLR service.

In this new retail regulatory environment, rules relating to ELECs in New Hampshire and POLR services in Maine are either untested or still being created.

We estimate that these significant changes in both federal and state regulation did not have a material impact through September 30, 2013 and will not have a material impact in the remainder of 2013. However, in the long run, we are uncertain of the ultimate impact as federal and state regulation continues to evolve.

Furthermore, the Maine PUC ("MPUC") issued a show cause order on March 19, 2013 (the "Show Cause Order"), which required us to show cause by written comments filed by April 5, 2013, stating: (1) why the MPUC should not establish August 14, 2013, April 14, 2014 and April 14, 2015 as the deadlines for the remainder of our broadband build-out obligations which the Show Cause Order described as 85%, 87% and 90%, respectively, in Maine; and (2) why the MPUC should not require us to prepare and file, by April 30, 2013, a detailed engineering plan for the remaining portions of our build-out project. The Show Cause Order also required us to file, by April 5, 2013, a detailed report cataloging the number and percentage of addressable lines as of February 28, 2013. In our filing on April 5, 2013, we stated that directives in the Show Cause Order are based on the unfounded assumption that the Maine Supreme Judicial Court sitting as the Law Court has upheld a determination by the MPUC in the calculation order issued on January 11, 2012 (the "Calculation Order") "that a line may only be counted as an 'addressable' line in the numerator if it is capable of achieving an upload speed of 512 kilobits per second and a download speed of 1.5 megabits per second" even if that line is served by the legacy Asynchronous Transfer Mode ("ATM") network we acquired from Verizon. On August 14, 2013 the MPUC issued an Order Approving a Stipulation between Northern New England Telephone Operations LLC and the Office of the Maine Public Advocate (the "stipulation order"). In exchange for the termination of the show cause proceeding, the stipulation order requires us to: (1) achieve, in Maine, 85% broadband addressability by August 14, 2013 and 87% by April 14, 2014. If either of these commitments is not met, we must achieve 90% broadband addressability in Maine by May 14, 2015. In calculating these percentages, there is no speed requirement for lines served by the legacy ATM network; 2) contribute $100,000 to ConnectME upon completion of the broadband commitment; and 3) spend an additional $11 million during the period from January 1, 2014 to December 31, 2016 on broadband facilities and services that benefit small businesses and residences in Maine. The money may be spent in our sole discretion although the expenditure must include 30 central office overlays. Central office overlays are defined as the addition of equipment to an existing central office that will enable customers served by that central office with loop lengths of up to 22,000 feet from that central office and who purchase our internet service to have the ability to access our Ethernet-based internet service. Additionally, we must make a good faith effort to obtain CAF Phase 1 incremental funding for Maine in the amount corresponding to a broadband expenditure by us of $2,787,904, which is expected to result in CAF funding of approximately $1,034,850, for a total broadband expenditure of $3,822,754. Northern New England Telephone Operations LLC advised the MPUC of the achievement of 85% broadband addressability by August 14, 2013 on August 14, 2013.

Basis of Presentation

We view our business of providing data, voice and communication services to business, wholesale and residential customers as one reportable segment.

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Results of Operations

The following table sets forth our consolidated operating results reflected in our condensed consolidated statements of operations. The quarter-to-quarter and year-to-year comparisons of financial results are not necessarily indicative of future results (in thousands, except for access line equivalents):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues:
Voice services	$	101,272		$	111,337		$	306,649		$	337,639
Access	80,182			82,015			241,049			253,524
Data and Internet services	41,550			36,793			119,778			106,243
Other	12,985			11,907			38,482			36,573
Total revenues	235,989			242,052			705,958			733,979
Operating expenses:
Costs of services and sales, excluding depreciation and amortization	107,646			105,502			332,420			330,937
Selling, general and administrative expense, excluding depreciation and amortization	79,520			80,915			252,489			257,055
Depreciation and amortization	52,877			89,782			228,833			276,769
Reorganization related (income) expense	(229		)	172			(790		)	(4,043		)
Total operating expenses	239,814			276,371			812,952			860,718
Loss from operations	(3,825		)	(34,319		)	(106,994		)	(126,739		)
Interest expense	(20,304		)	(16,991		)	(58,403		)	(51,002		)
Loss on debt refinancing	—			—			(6,787		)	—
Other income	951			548			1,386			725
Loss before income taxes	(23,178		)	(50,762		)	(170,798		)	(177,016		)
Income tax benefit	14,218			13,433			61,201			55,902
Loss from continuing operations	(8,960		)	(37,329		)	(109,597		)	(121,114		)
Gain on sale of discontinued operations, net of taxes	—			—			10,044			—
Net loss	$	(8,960	)	$	(37,329	)	$	(99,553	)	$	(121,114	)
							As of September 30,
Access line equivalents (1):							2013			2012
Residential							542,238			602,530
Business							293,899			303,904
Wholesale							60,315			67,886
Total voice access lines							896,452			974,320
Broadband subscribers							330,698			322,551
Total access line equivalents							1,227,150			1,296,871

(1) In August 2012, we divested our pay phone operations in our northern New England footprint and completed the process of transitioning these pay phone stations to the buyer in 2013. The Company currently retains access lines for any pay phone stations the buyer continues to operate. In addition, on January 31, 2013, we completed the sale of our Idaho-based operations. Individually and in aggregate, the operations of these divestitures are immaterial to our financial results and, therefore, have not been segregated as discontinued operations in the condensed consolidated statements of operations. At September 30, 2013, excluding all access lines equivalents associated with these divestitures on a pro forma basis, we would have had 1,226,188 access line equivalents, which included 542,238 residential, 292,937 business and 60,315 wholesale voice access lines and 330,698 broadband subscribers. At September 30, 2012, excluding these divestitures on a pro forma basis, we would have had 1,287,038 access line equivalents, which included 599,995 residential, 298,055 business and 67,886 wholesale voice access lines and 321,102 broadband subscribers.

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Voice Services Revenues

We receive revenues through the provision of local calling services to business and residential customers, generally for a fixed monthly charge and service charges for special calling features. We also generate revenue through 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 provide wholesale long distance services to communications providers that are not affiliated with us. As of September 30, 2013 and 2012, voice access lines in service decreased 8.0% and 7.8% year-over-year, respectively, which directly impacts local voice services revenues and our opportunity to provide long distance services to our customers, resulting in a decrease in minutes of use. Excluding divestitures, on a pro forma basis, September 30, 2013 and 2012 voice access lines in services would have declined 7.3% and 7.7% year-over-year, respectively. We expect the trend of decline in voice access lines in service, and thereby a decline in aggregate voice services revenues, to continue as customers are turning to the use of alternative communications services as a result of our ever-increasing competition.

We were subject to retail service quality plans in the states of Maine, New Hampshire and Vermont for the three and nine months ended September 30, 2012, pursuant to which we incur SQI penalties resulting from any failure to meet the requirements of the respective plans. In New Hampshire, the retail service quality plan was eliminated by SB 48, which was effective August 10, 2012, thereby extinguishing our exposure to SQI penalties in that state. We were subject to the retail service quality plan in Vermont during the three months ended March 31, 2013; however, effective March 31, 2013, we were no longer subject to the retail service quality plan based on our achievement of certain retail service quality metrics. We were still subject to the retail service quality plan in Maine through July 31, 2013; however, under the Maine Deregulation Legislation enacted in August 2012, SQI penalties have been eliminated.

We adopted a separate performance assurance plan ("PAP") for certain services provided on a wholesale basis to CLECs in each of the states of Maine, New Hampshire and Vermont, pursuant to which we are required to issue performance credits in the event we are unable to meet the provisions of the respective PAP. In 2012, a majority of the penalty credits resulting from these commitments were recorded as a reduction to local voice services revenues with a small portion recorded to access revenues. However, as our wholesale business shifts from unbundled network elements ("UNEs") to access-driven services, a majority of penalty credits have followed and are now being recorded to access revenues. We expect this trend to continue and the impact of penalty credits on voice services revenues to decrease. Our maximum exposure to penalties under the PAPs has not been reduced by the recent deregulation legislation in Maine and New Hampshire or by the IRP adopted in Vermont. During the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, local voice services revenues were reduced by $0 million, $0.8 million, $0.5 million and $1.3 million, respectively, as a result of our failure to meet specified performance standards as defined by the provisions of the separate PAPs in Maine, New Hampshire and Vermont.

We receive support 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 through CAF Phase I frozen support. A portion of the CAF Phase I frozen support represents high-cost loop funding and is recorded as voice services revenue. We expect to receive the same level of CAF Phase I frozen support revenue in 2013, plus or minus small adjustments recorded during the respective quarters, until the FCC completes its proceedings to adopt a CAF cost model and develops CAF Phase II for our operating areas. Timing of when these FCC proceedings will be completed or whether we will accept or refuse any funding under the CAF Phase II support programs due to the cost of our obligations associated with the funding is unknown. For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $3.2 million, $3.8 million, $9.7 million and $10.7 million, respectively, of high-cost loop funding from the CAF Phase I frozen support program.

The following table reflects the primary drivers of changes in voice services revenues as compared to the same period in fiscal year 2012:

	Three Months Ended					Nine Months Ended
	September 30, 2013					September 30, 2013
(in millions)	Increase (Decrease)			%		Increase (Decrease)			%
Local voice services revenues, excluding:	$	(8.1	)			$	(23.7	)
(Increase) decrease in accrual of SQI penalties (1)	0.2					(0.4		)
Decrease in high-cost loop credits to customers (2)	0.1					0.8
Divestiture of Idaho-based operations	(0.8		)			(2.1		)
Long distance services revenues	(1.5		)			(5.6		)
Total change in voice services revenues	$	(10.1	)	(9	)%	$	(31.0	)	(9	)%

(1) During the three months ended September 30, 2013 and 2012, SQI penalties resulted in a decrease of $0.3 million and $0.5 million, respectively, to local voice services revenues. In the first quarter of 2012, a $1.6 million reversal of SQI

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penalties was a large contributor to the $0.4 million net increase to local voice services revenues during the nine months ended September 30, 2012. SQI penalties were $0.3 million during the first nine months of fiscal year 2013.

(2) In 2012, the Vermont Public Service Board ("VPSB") and the MPUC each approved a tariff change whereby we are no longer required to provide high-cost loop credits to customers. For the three and nine months ended September 30, 2012, we recognized a reduction to local voice services revenues related to high-cost loop credits remitted to customers of $0.1 million and $0.8 million, respectively.

Access Revenues

We receive revenues for the provision of network access through carrier Ethernet based products and legacy access products to end user customers and long distance and other competing carriers who use our local exchange facilities to provide interexchange services to their customers. Network access can be provided to carriers and end users that buy dedicated local and interexchange capacity to support their private networks (i.e. special access) or it can be derived from fixed and usage-based charges paid by carriers for access to our local network (i.e. switched access).

Carriers are migrating from legacy access products, such as DS1, DS3, frame relay, ATM and private line, to carrier Ethernet based products. These carrier Ethernet based products are more sustainable, but generally, at the outset, have lower average revenue per user than the legacy products they are replacing, resulting in a decline in access revenues. We expect the decline in access revenues to continue with customer migration; however, with the increasing need for bandwidth, including cellular backhaul, demand for carrier Ethernet based products is expected to increase over time. Our extensive fiber network, with over 15,000 route miles, including over 1,000 cellular telecommunications towers currently served with fiber, puts us in a position to grow our revenue base as demand for cellular backhaul and other Ethernet services expands. We expect to see demand increase on existing fiber-connected towers where we would provision or expand mobile Ethernet backhaul connections. We also construct new fiber routes to cellular telecommunications towers when the business case presents itself.

As described above, we adopted a separate PAP for certain services provided on a wholesale basis to CLECs in each of the states of Maine, New Hampshire and Vermont, pursuant to which we are required to issue performance credits in the event we are unable to meet the provisions of the respective PAP. As our wholesale business shifts from UNEs to access-driven services, a majority of penalty credits have transitioned in the same manner and are now being recorded to access revenues instead of voice services revenues. We expect this trend to continue and the impact of penalty credits to access revenues to increase. Our maximum exposure to penalties under the PAPs has not been reduced by the recent deregulation legislation in Maine and New Hampshire or by the IRP adopted in Vermont.

The following table reflects the primary drivers of changes in access revenues as compared to the same period in fiscal year 2012:

	Three Months Ended					Nine Months Ended
	September 30, 2013					September 30, 2013
(in millions)	Increase (Decrease)			%		Increase (Decrease)			%
Carrier Ethernet services (1)	$	2.9				$	6.3
(Increase) decrease in accrual of PAP penalties (2)	0.1					(2.4		)
Divestiture of Idaho-based operations	(0.9		)			(2.4		)
Legacy access services (3)	(3.9		)			(14.0		)
Total change in access revenues	$	(1.8	)	(2	)%	$	(12.5	)	(5	)%

(1) We offer carrier Ethernet services throughout our market to our wholesale customers, which include Ethernet virtual circuit technology for cellular backhaul. As of September 30, 2013, we provide cellular transport through over 1,200 mobile Ethernet backhaul connections on our Next Generation Network, which has grown significantly over the last two years.

(2) During the three and nine months ended September 30, 2013, access services revenues were reduced by $0 million and $2.6 million, respectively, as a result of our failure to meet specified performance standards as defined by the provisions of the separate PAPs in Maine, New Hampshire and Vermont. The impact of PAP penalties on access revenues to the three and nine months ended September 30, 2012 was negligible, given that a majority of these penalties were recorded to voice services revenues in fiscal year 2012.

(3) Legacy access services include products such as DS1, DS3, frame relay, ATM and private line.

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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 digital subscriber line ("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. From September 30, 2012 to September 30, 2013, we grew broadband subscribers by 2.5% and added more than 8,100 subscribers as penetration reached 36.9% of our voice access lines at September 30, 2013 from 33.1% at September 30, 2012. 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 changes in data and Internet services revenues as compared to the same period in fiscal year 2012:

	Three Months Ended				Nine Months Ended
	September 30, 2013				September 30, 2013
(in millions)	Increase (Decrease)		%		Increase (Decrease)		%
Retail Ethernet services (1)	$	2.2			$	6.6
Other data and Internet technology based services	2.6				6.9
Total change in data and Internet services revenues	$	4.8	13	%	$	13.5	13	%

(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. During the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $7.2 million, $5.0 million, $19.9 million and $13.3 million, respectively, of retail Ethernet revenues from our Next Generation Network.

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 changes in other services revenues as compared to the same period in fiscal year 2012:

	Three Months Ended					Nine Months Ended
	September 30, 2013					September 30, 2013
(in millions)	Increase (Decrease)			%		Increase (Decrease)			%
Special purpose projects (1)	$	1.1				$	1.4
Late payment fees (2)	(0.3		)			(0.8		)
Other (3)	0.3					1.3
Total change in other services revenues	$	1.1		9	%	$	1.9		5	%

(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 fluctuations in directory services, billing and collections and in 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

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billing and service provisioning, are allocated between cost of services and sales and selling, general and administrative expenses. We expect cost of services and sales to decrease over time as voice access lines decline and we continue to make operational improvements and align our human resources with the changing telecommunications landscape.

The following table reflects the primary drivers of changes in cost of services and sales as compared to the same period in fiscal year 2012:

	Three Months Ended					Nine Months Ended
	September 30, 2013					September 30, 2013
(in millions)	Increase (Decrease)			%		Increase (Decrease)			%
Access expense (1)	$	(2.4	)			$	(8.9	)
Employee expense (2)	0.3					0.2
Severance expense (3)	2.7					3.7
Other	1.5					6.5
Total change in cost of services and sales	$	2.1		2	%	$	1.5		—	%

(1) Decrease in 2013 access expense is primarily attributable to increased usage of our IP infrastructure, which has enabled us to significantly reduce the associated costs of utilizing other carriers.

(2) For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $44.2 million, $43.9 million, $143.2 million and $143.0 million, respectively, of employee expense. Although we have reduced our workforce, an increase in overtime expense and a decrease in capitalized labor, associated with a reduction in labor intensive capital projects in fiscal 2013, have combined to increase employee expense in the third quarter of 2013 compared to the third quarter of 2012. The decrease for the nine months ended September 30, 2013 compared to the same period in 2012 is attributed to the reduction in our workforce.

(3) For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $2.7 million, $0 million, $5.9 million and $2.2 million, respectively, of severance expense.

Selling, General and Administrative Expense

Selling, general and administrative ("SG&A") expense includes salaries and wages and benefits (including stock-based compensation) not directly attributable to a service or product, bad debt charges, taxes other than income, advertising and sales commission costs, customer billing, call center and information technology costs, professional service fees and rent for administrative space.

The following table reflects the primary drivers of changes in SG&A expense as compared to the same period in fiscal year 2012:

	Three Months Ended					Nine Months Ended
	September 30, 2013					September 30, 2013
(in millions)	Increase (Decrease)			%		Increase (Decrease)			%
Bad debt expense (1)	$	0.8				$	3.7
Contracted services (2)	(2.1		)			(9.9		)
Post-retirement healthcare expense (3)	0.3					3.3
Pension expense (4)	2.2					5.4
Employee expense (5)	2.5					3.6
Severance expense (6)	0.2					(1.4		)
Other	(5.3		)			(9.3		)
Total change in SG&A expense	$	(1.4	)	(2	)%	$	(4.6	)	(2	)%

(1) The increase in 2013 bad debt expense for the first nine months of 2013 is primarily due to significant settlements with wholesale carriers and an improvement in accounts receivable aging that occurred in fiscal year 2012. For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $2.5 million, $1.7 million, $6.7 million and $3.0 million of bad debt expense, respectively.

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(2) The decrease in 2013 contracted services is primarily attributable to reductions in consulting fees and the use of contract labor associated with our process improvements. For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $4.0 million, $6.1 million, $13.9 million and $23.8 million, respectively, of contracted services.

(3) Increase in 2013 post-retirement healthcare net periodic benefit cost is primarily attributable to (i) an increase in service cost resulting from a reduction of approximately 46 basis points in the weighted average discount rate used to value the post-retirement healthcare obligations at December 31, 2012 compared to December 31, 2011; and (ii) an increase in amortization of actuarial losses resulting from higher unamortized actuarial losses being accrued in accumulated other comprehensive loss at December 31, 2012 compared to December 31, 2011.

(4) Increase in 2013 qualified pension net periodic benefit cost is primarily attributable to (i) an increase in service cost resulting from a reduction of approximately 54 basis points in the weighted average discount rate used to value the qualified pension obligations at December 31, 2012 compared to December 31, 2011; (ii) an increase in amortization of actuarial losses resulting from higher unamortized actuarial losses being accrued in accumulated other comprehensive loss at December 31, 2012 compared to December 31, 2011; and (iii) higher settlement expense in 2013 as compared to 2012.

(5) For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $30.5 million, $28.0 million, $94.2 million and $90.6 million, respectively, of employee expense. The increase in the first nine months of 2013 is primarily attributable to an increase in employee benefits and stock compensation expense, partially offset by a decrease in salaries due to a reduction in workforce.

(6) For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $0.8 million, $0.6 million, $1.8 million and $3.2 million of severance expense, respectively.

Depreciation and Amortization

Depreciation and amortization includes depreciation of our communications network and equipment and amortization of intangible assets. We require significant capital expenditures to maintain, upgrade and enhance our network facilities and operations. We expect to reduce our capital expenditures in the upcoming years, which will likely reduce or stabilize our depreciation expense. We expect amortization expense to remain consistent throughout the remainder of our intangible assets' useful lives.

For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, we recognized $50.1 million, $87.0 million, $220.4 million and $268.4 million of depreciation expense, respectively. We recognized $2.8 million of amortization expense in each of the three months ended September 30, 2013 and 2012 and $8.4 million of amortization expense in each of the nine months ended September 30, 2013 and 2012.

In connection with our adoption of fresh start accounting on January 24, 2011, property, plant and equipment assets were revalued to their fair value, generally their appraised value after considering economic obsolescence. New remaining useful lives were established and accumulated depreciation was reset to zero.

Periodically, we review the estimated remaining useful lives of our group asset categories to address continuing changes in technology, competition and our overall reduction in capital spending and increased focus on more efficient utilization of our existing assets. In the third quarter of 2013, we conducted this review and determined that changes to the estimated remaining useful lives for certain of our asset categories were appropriate. Accordingly, as a result of the changes applied to the remaining useful lives, our depreciation expense in the third quarter of 2013 was approximately $29.0 million less than it would have been absent the changes.

Reorganization Related Income

Reorganization related income represents income or expense amounts that have been recognized as a direct result of the Chapter 11 Cases occurring after January 24, 2011. We will continue to incur expenses associated with the Chapter 11 Cases until all such cases have been closed with the Bankruptcy Court. In addition, income may be recognized to the extent that we favorably settle outstanding claims in the claims reserve established to pay outstanding bankruptcy claims and various other bankruptcy related fees (the "Claims Reserve"). As of September 30, 2013, the Claims Reserve has a balance of $0.3 million.

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Interest Expense

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2013		2012		2013		2012
New Credit Agreement Loans	$	12.6	$	—	$	31.6	$	—
Notes	6.6		—		16.5		—
Old Credit Agreement Loans	—		16.7		7.7		50.2
Amortization of debt issue costs	0.3		0.2		0.6		0.5
Amortization of debt discount	0.7		—		1.6		—
Other interest expense	0.1		0.1		0.4		0.3
Total interest expense	$	20.3	$	17.0	$	58.4	$	51.0

Interest expense increased $3.3 million (19%) and $7.4 million (15%) in the three and nine months ended September 30, 2013, respectively, as compared to the same periods in 2012. The increase in interest expense is primarily attributable to the increase in interest rates and amortization of the debt discount and debt issuance fees related to the New Credit Agreement Loans as a result of the Refinancing, partially offset by a lower weighted average long-term debt outstanding during the three and nine months ended September 30, 2013 as compared to the same periods of 2012.

Interest on borrowings under the Old Credit Agreement Loans accrued at an annual rate equal to either LIBOR or the base rate, in each case plus an applicable margin. Generally, the Old Credit Agreement Loans accrued interest at 6.50%. During the three and nine months ended September 30, 2012, the Old Credit Agreement Loans had an outstanding weighted average balance of $986.6 million and $994.6 million, respectively, taking into consideration $2.5 million of scheduled amortization payments made at the end of the first and second quarters of 2012 and an optional repayment of $25.0 million on August 31, 2012. During the first half of the first quarter of 2013, the Old Credit Agreement Loans had an outstanding weighted average balance of $952.3 million, taking into consideration $10.5 million of prepayments made during this period.

On February 14, 2013, in connection with the Refinancing, we repaid the entire outstanding balance of the Old Credit Agreement Loans, issued $300.0 million aggregate principal amount of the Notes and entered into the New Credit Agreement Loans, which include the $640.0 million New Term Loan outstanding and the undrawn $75.0 million New Revolving Facility. The Notes accrue interest at a rate of 8.75% per annum. Interest on borrowings under the New Credit Agreement Loans accrues at an annual rate equal to either LIBOR or the base rate, in each case plus an applicable margin. Generally, the New Term Loan accrued interest at 7.50% during the first nine months of 2013, as applicable. Regularly scheduled amortization payments of $1.6 million were made on the New Term Loan at the end of the second and third quarters of 2013. In addition, the New Term Loan was issued at a $19.4 million discount, which is being amortized using the effective interest method. As of September 30, 2013, we were party to interest rate swap agreements; however, since the agreements are not effective until September 30, 2015, they will have no impact on interest expense in 2013 or 2014.

For further information regarding the New Credit Agreement Loans and the Notes, see "—Liquidity and Capital Resources—Debt" herein and note (7) "Interest Rate Swap Agreements" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report.

Loss on Debt Refinancing

On February 14, 2013, we completed the Refinancing and paid all amounts outstanding under the Old Credit Agreement. In connection with this Refinancing, we incurred $5.6 million in related fees and wrote off $1.2 million of debt issue costs and other prepayments related to the Old Credit Agreement.

Other Income

Other income generally includes non-operating gains and losses such as those incurred on the sale or disposal of assets. During the three months ended September 30, 2013 and 2012, we recognized net $1.0 million and net $0.5 million of other income, respectively. During the nine months ended September 30, 2013 and 2012, we recognized net $1.4 million and net $0.7 million of other income, respectively.

Income Taxes

The effective income tax rate on the loss from continuing operations for the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012 was 61.3%, 26.5%, 35.8% and 31.6%, respectively. For the three

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months ended September 30, 2013, the effective tax rate differs from the 35% federal statutory rate primarily due to a decrease in the valuation allowance plus state taxes. The decrease in the valuation allowance is due to a change in judgment regarding the realizability of deferred tax assets resulting primarily from the change in the timing of book depreciation due to our depreciation life study. This change in the valuation allowance resulted in $9.6 million of tax benefit during the quarter. For the three months ended September 30, 2012 and the nine months ended September 30, 2013 and 2012, the effective tax rate differs from the 35% federal statutory rate primarily due to an increase in the valuation allowance offset by state taxes.

Gain on Sale of Discontinued Operations, Net of Tax

On January 31, 2013, we completed the sale of our capital stock in our Idaho-based operations to Blackfoot for $30.5 million in cash. The operating results of these Idaho-based operations are immaterial and, accordingly, have not been segregated as discontinued operations for reporting purposes. A gain, before $6.7 million of deferred taxes, of $16.9 million was recorded upon the closing of the transaction, which is reported within discontinued operations in the condensed consolidated statement of operations for the nine months ended September 30, 2013.

Details of our Idaho-based operations' operating results are included in note (13) "Assets Held for Sale and Discontinued Operations" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report.

Off-Balance Sheet Arrangements

As of September 30, 2013, we had approximately $15.9 million in outstanding standby letters of credit under the New Revolving Facility. We do not have any other off-balance sheet arrangements.

Critical Accounting Policies

Our critical accounting policies are as follows:

•Revenue recognition;

•Allowance for doubtful accounts;

•Accounting for qualified pension and other post-retirement healthcare benefits;

•Accounting for income taxes;

•Depreciation of property, plant and equipment;

•Stock-based compensation; and

•Valuation of long-lived assets.

There have been no material changes to our critical accounting policies described in the 2012 Annual Report.

New Accounting Standards

In February 2013, the FASB issued ASU 2013-02 related to disclosure of reclassifications out of accumulated other comprehensive income. This ASU requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income. In addition, it also requires companies to report changes in accumulated other comprehensive income balances. This new guidance was to be applied prospectively and was effective for interim and annual periods beginning after December 15, 2012, with early adoption permitted. We adopted this ASU during the quarter ended March 31, 2013 and it did not have a material impact on our consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, which is designed to reduce diversity in practice of financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. This new guidance becomes effective for us on January 1, 2014 and we do not expect it to have a material impact on our condensed consolidated financial statements.

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Liquidity and Capital Resources

Overview

Our current and future liquidity is greatly dependent upon our operating results. We expect that our primary sources of liquidity will be cash flow from operations, cash on hand and funds available under the New Revolving Facility. Our short- and long-term liquidity needs arise primarily from:

(i) interest and principal payments on our indebtedness;

(ii) capital expenditures;

(iii) working capital requirements as may be needed to support and grow our business; and

(iv) contributions to our qualified pension plans and payments under our post-retirement healthcare plans.

Based on our current and anticipated levels of operations and conditions in our markets, we believe that cash on hand (including amounts available under our New Revolving Facility) as well as cash flow from operations will enable us to meet our working capital, capital expenditure, debt service and other funding requirements for at least the next 12 months. We expect to be in compliance with the maintenance covenants contained in the New Credit Agreement for 2013.

Cash Flows

Cash and cash equivalents at September 30, 2013 totaled $24.7 million compared to $23.2 million at December 31, 2012, excluding restricted cash of $2.3 million and $7.5 million, respectively. During the nine months ended September 30, 2013, cash inflows were largely associated with $30.5 million of proceeds from the sale of our Idaho-based operations and cash flows from operations of $114.5 million, a majority of which was offset by the Refinancing and $91.1 million of capital expenditures.

The following table sets forth our condensed consolidated cash flow results reflected in our condensed consolidated statements of cash flows (in millions):

	Nine Months Ended September 30,
Net cash flows provided by (used in):	2013			2012
Operating activities	$	114.5		$	129.8
Investing activities	(59.3		)	(95.4		)
Financing activities	(53.7		)	(29.7		)
Net increase in cash	$	1.5		$	4.7

Operating activities.Net cash provided by operating activities is our primary source of funds. Net cash provided by operating activities for the nine months ended September 30, 2013decreased$15.3 million as compared to the same period in 2012. Net cash provided by operating activities for the nine months ended September 30, 2012 includes payment of $8.8 million in claims of the Company as of and prior to January 24, 2011 (the "Predecessor Company"), of which $3.8 million of these claims were paid using funds of the Cash Claims Reserve established on January 24, 2011 by the Predecessor Company. Accordingly, $5.0 million of cash on hand was used to pay claims of the Predecessor Company during the nine months ended September 30, 2012. During the nine months ended September 30, 2013, $0.2 million of cash on hand was used to pay claims. During the nine months ended September 30, 2013 and 2012, $0.6 million and $8.8 million of the Cash Claims Reserve was reclaimed by the Company as a source of cash on hand, respectively.

In addition, during the first nine months of 2012, $7.7 million of the Cash Claims Reserve was reclassified to another restricted cash account to be used to deploy broadband in unserved areas of Vermont and New Hampshire. This reclassification had no impact on cash provided by operating activities.

Investing activities.Net cash used in investing activities for the nine months ended September 30, 2013decreased$36.1 millionas compared to the same period in 2012. This decrease is driven by the sale of our Idaho-based operations during the first quarter of 2013 for $30.5 million in cash proceeds. Capital expenditures were $91.1 million and $96.0 million for the nine months ended September 30, 2013 and 2012, respectively.

Financing activities.Net cash used in financing activities for the nine months ended September 30, 2013increased$24.0 million as compared to the same period in 2012. This increase is largely attributable to the Refinancing, whereby we issued $300.0

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million aggregate principal amount of the Notes, entered into the New Credit Agreement including the $640.0 million New Term Loan and used the proceeds, along with cash on hand, to repay principal of $946.5 million outstanding on the Old Term Loan, and approximately $32.6 million of fees, expenses and other costs relating to the Refinancing. For further information regarding the New Credit Agreement, the Notes and our repayment of the Old Credit Agreement Loans, see "—Debt" herein and note (6) "Long-Term Debt" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report. During the nine months ended September 30, 2013, we paid approximately $3.2 million of principal outstanding on the New Term Loan. During the nine months ended September 30, 2012, we paid $30.0 million of principal outstanding on the Old Term Loan.

Pension Contributions and Post-Retirement Healthcare Plan Expenditures

Through September 30, 2013, we have contributed approximately $13.2 million to our Company sponsored qualified pension plans and, accordingly, have met the minimum funding requirements under the Pension Protection Act of 2006 for 2013. As of September 30, 2013, we have made benefit payments of $2.6 million under our post-retirement healthcare plans.

On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act was signed into law. This act contains a pension funding stabilization provision which allows pension plan sponsors to use higher interest rate assumptions when determining funded status and funding obligations and as a result, in the aggregate, our near-term estimated required pension plan contributions will be lower than they would have been in the absence of this stabilization provision. We believe that the intent of the stabilization provision is to alter the timing of pension plan contributions, not to reduce the long-term funding of pension plans. Accordingly, the relief we will receive as a result of the stabilization provision may be temporary in nature in that our near-term required contributions will be less than they otherwise would have been and will increase in the medium to long-term.

On September 25, 2012, we elected to defer use of the higher segment rates under this act until the first plan year beginning on or after January 1, 2013 solely for determination of the AFTAP used to determine benefit restrictions under Section 436 of the Code.

In 2013, we expect to contribute approximately $22.0 million to our qualified pension plans and to fund approximately $5.1 million in benefit payments under our post-retirement healthcare plans. In 2014, we expect our pension plan contributions will be approximately $28.0 million to $30.0 million.

Capital Expenditures

We require significant capital expenditures to maintain, upgrade and enhance our network facilities and operations. During the first nine months of 2013, our capital expenditures totaled $91.1 million compared to $96.0 million during the same period in 2012. We anticipate that we will fund future capital expenditures through cash flows from operations and cash on hand (including amounts available under our New Revolving Facility).

Debt

The New Credit Agreement. In connection with the Refinancing, we entered into the New Credit Agreement, which provides for the $75.0 million New Revolving Facility, including a sub-facility for the issuance of $40.0 million in letters of credit, and the $640.0 million New Term Loan. The New Credit Agreement Loans replace the Old Credit Agreement Loans, which were terminated on the Refinancing Closing Date. The principal amount of the New Term Loan and commitments under the New Revolving Facility may be increased by an aggregate amount up to $200.0 million, subject to certain terms and conditions specified in the New Credit Agreement. The New Term Loan will mature on February 14, 2019 and the New Revolving Facility will mature on February 14, 2018, subject in each case to extensions pursuant to the terms of the New Credit Agreement. As of September 30, 2013, the Company had $59.1 million, net of $15.9 million of outstanding letters of credit, available for borrowing under the New Revolving Facility.

Interest Rates and Fees. Interest on borrowings under the New Credit Agreement Loans accrue at an annual rate equal to either LIBOR or the base rate, in each case plus an applicable margin. LIBOR is the per annum rate for an interest period of one, two, three or six months (at our election), with a minimum LIBOR floor of 1.25% for the New Term Loan. The base rate for any date is the per annum rate equal to the greatest of (x) the federal funds effective rate plus 0.50%, (y) the rate of interest publicly quoted from time to time by The Wall Street Journal as the United States ''Prime Rate'' and (z) LIBOR with an interest period of one month plus 1.00%. The applicable margin for the New Term Loan is (a) 6.25% per annum with respect to term loans bearing interest based on LIBOR or (b) 5.25% per annum with respect to term loans bearing interest based on the base rate. The applicable rate for the New Revolving Facility is, initially, (a) 5.50% with respect to revolving loans bearing interest based on LIBOR or (b) 4.50% per annum with respect to revolving loans bearing interest based on the base rate, in each case subject to adjustment based on our consolidated total leverage ratio, as defined in the New Credit Agreement. We are required to pay a quarterly letter of credit fee on the average daily amount available to be drawn under letters of credit issued under the New Revolving Facility equal to

36

the applicable rate for revolving loans bearing interest based on LIBOR plus a fronting fee of 0.125% per annum on the average daily amount available to be drawn under such letters of credit. In addition, we are required to pay a quarterly commitment fee on the average daily unused portion of the New Revolving Facility, which is 0.50% initially, subject to reduction to 0.375% based on our consolidated total leverage ratio. In the third quarter of 2013, we entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period beginning on September 30, 2015 and maturing on September 30, 2017. Each respective swap agreement requires us to pay a fixed rate of 2.665% and provides that we will receive a variable rate based on the three month LIBOR rate, subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to us will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing December 31, 2015. For further information regarding these agreements, see note (7) "Interest Rate Swap Agreements" to our condensed consolidated financial statements in “Item 1. Financial Statements” included elsewhere in this Quarterly Report.

Security/Guarantors. All obligations under the New Credit Agreement, together with certain designated hedging obligations and cash management obligations, are unconditionally guaranteed on a senior secured basis by each of the Subsidiary Guarantors and secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Notes.

Mandatory Repayments. Commencing in the second quarter of 2013, we are required to make quarterly repayments of the New Term Loan in a principal amount equal to $1.6 million during the term of the New Credit Agreement, with such repayments being reduced based on the application of mandatory and optional prepayments of the New Term Loan made from time to time. In addition, mandatory repayments are due under the New Credit Agreement with (i) a percentage, initially equal to 50% and subject to reduction to 25% in subsequent fiscal years based on our consolidated total leverage ratio, of our excess cash flow, as defined in the New Credit Agreement, beginning with the fiscal year ending December 31, 2013, (ii) the net cash proceeds of certain asset dispositions, insurance proceeds and condemnation awards and (iii) issuances of debt not permitted to be incurred under the New Credit Agreement. Optional prepayments and mandatory prepayments resulting from the incurrence of debt not permitted to be incurred under the New Credit Agreement are required to be made at (i) 103.0% of the aggregate principal amount prepaid if such prepayment is made on or prior to February 14, 2014, (ii) 102.0% of the aggregate principal amount of the New Term Loan so prepaid if such prepayment is made after February 14, 2014, but on or prior to February 14, 2015 and (iii) 101.0% of the aggregate principal amount prepaid if such prepayment is made after February 14, 2015 and on or prior to February 14, 2016. No premium is required to be paid for prepayments made after February 14, 2016.

Covenants. The New Credit Agreement contains customary representations and warranties and affirmative and negative covenants for a transaction of this type, including two financial maintenance covenants: (i) a consolidated interest coverage ratio, and (ii) a consolidated total leverage ratio. The New Credit Agreement also contains a covenant limiting the maximum amount of capital expenditures that we and our subsidiaries may make in any fiscal year. We expect to be in compliance with the maintenance covenants contained in the New Credit Agreement for 2013.

Events of Default. The New Credit Agreement also contains customary events of default for a transaction of this type.

The Notes.On the Refinancing Closing Date, we issued $300.0 million in aggregate principal amount of the Notes pursuant to the Indenture in a private offering exempt from registration under the Securities Act.

The terms of the Notes are governed by the Indenture. The Notes are senior secured obligations of FairPoint Communications and are guaranteed by the Subsidiary Guarantors. The Notes and the guarantees thereof are secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the New Credit Agreement. The Notes will mature on August 15, 2019 and accrue interest at a rate of 8.75% per annum, which is payable semi-annually in arrears on February 15 and August 15 of each year.

On or after February 15, 2016, we may redeem all or part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest thereon, to the applicable redemption date. At any time prior to February 15, 2016, we may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a "make-whole" premium as of, and accrued and unpaid interest to, the applicable redemption date. In addition, at any time prior to February 15, 2016, we may, on one or more occasions, redeem up to 35% of the original aggregate principal amount of the Notes, using net cash proceeds of certain qualified equity offerings, at a redemption price of 108.75% of the principal amount of Notes redeemed, plus accrued and unpaid interest to the applicable redemption date.

The holders of the Notes have the ability to require us to repurchase all or any part of the Notes if we experience certain kinds of changes in control or engage in certain asset sales, in each case at the repurchase prices and subject to the terms and conditions set forth in the Indenture.

37

The Indenture contains certain covenants which are customary with respect to non-investment grade debt securities, including limitations on our ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase our capital stock, make certain investments, enter into certain types of transactions with affiliates, create liens and sell certain assets or merge with or into other companies. These covenants are subject to a number of important limitations and exceptions.

The Indenture also provides for customary events of default, including cross defaults to other specified debt of FairPoint Communications and certain of its subsidiaries.

The Old Credit Agreement. On January 24, 2011, the Old Credit Agreement Borrowers entered into the Old Credit Agreement. The Old Credit Agreement was comprised of the Old Revolving Facility, which had a sub-facility providing for the issuance of up to $30.0 million of letters of credit, and the Old Term Loan. The entire outstanding principal amount of the Old Credit Agreement Loans was due and payable five years after January 24, 2011, subject to certain conditions. On February 14, 2013, we entered into the New Credit Agreement and repaid all outstanding amounts under the Old Credit Agreement, which was subsequently terminated. In addition, the following agreements relating to the Old Credit Agreement Loans were terminated on the Refinancing Closing Date: (i) the Security Agreement, dated as of January 24, 2011, among FairPoint Communications, the subsidiaries of FairPoint Communications party thereto and Bank of America, N.A., as administrative agent, (ii) the Pledge Agreement, dated as of January 24, 2011, made by FairPoint Communications and the subsidiaries of FairPoint Communications party thereto in favor of Bank of America, N.A., as administrative agent, and (iii) the Continuing Guaranty, dated as of January 24, 2011, made by the subsidiaries of FairPoint Communications party thereto in favor of Bank of America, N.A., as administrative agent.

Pre-Petition Agreements. As a condition to the approval of the Merger and related transactions by state regulatory authorities we agreed to make certain capital expenditures following the completion of the Merger, which were modified by regulatory settlements agreed to with representatives for each of Maine, New Hampshire and Vermont and approved by the applicable regulatory authorities in Maine, New Hampshire and Vermont and approved by the Bankruptcy Court as part of the Plan.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to market risk in the normal course of our business operations due to ongoing investing and funding activities, including those associated with the variable interest rate in our New Credit Agreement and our qualified pension plan assets. Market risk refers to the potential change in fair value of a financial instrument as a result of fluctuations in interest rates, fixed income securities and equity prices. We do not hold or issue derivative instruments, derivative commodity instruments or other financial instruments for trading or speculative purposes. Our primary market risk exposures are interest rate risk and investment risk as follows:

Interest Rate Risk - Long-Term Debt.We are exposed to interest rate risk, primarily as it relates to the variable interest rates we are charged under credit agreements to which we are a party. As of September 30, 2013, our interest rate risk exposure was attributable to the New Credit Agreement, which includes the New Term Loan and the New Revolving Facility, each of which is subject to variable interest rates. We use our variable rate debt, in addition to fixed rate debt, to finance our operations and capital expenditures and believe it is prudent to limit the variability of our interest payments on our variable rate debt. To meet this objective, from time to time, we may enter into interest rate derivative agreements to manage fluctuations in cash flows resulting from interest rate risk.

As of September 30, 2013, we were party to interest rate swap agreements in connection with borrowings under the New Credit Agreement covering a combined notional amount of $170.0 million. However, these agreements are not effective until September 30, 2015. Accordingly, on September 30, 2013, the entire $636.8 million principal balance of the New Term Loan was subject to interest rate risk. Interest payments on the New Term Loan are subject to a LIBOR floor of 1.25%. As a result, while LIBOR remains below 1.25%, we incur interest at above market rates. To the extent that LIBOR remains below 1.25%, we are buffered from the full financial impact of interest rate risk; however, as LIBOR rises, a change in interest rates could materially affect our condensed consolidated financial statements. For example, with the principal balance of the New Term Loan as of September 30, 2013, a 1% increase in the interest rate above the LIBOR floor of 1.25% would unfavorably impact interest expense and pre-tax earnings by approximately $6.4 million on an annual basis.

For further information regarding the New Credit Agreement, see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt," note (6) "Long-Term Debt" and note (7) "Interest Rate Swap Agreements" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report.

Interest Rate and Investment Risk - Pension Plans.We are exposed to risks related to the fair value of our pension plan assets and the discount rate used to value our pension plan liabilities and the amount of lump-sum payments made to participants.

38

Our pension plan assets consist of a portfolio of fixed income securities, equity securities and cash. Changes in the fair value of this portfolio can occur due to changes in interest rates and the general economy. In addition, interest rates are a primary factor in the determination of our actuarially determined liability and the amount of the accrued benefit paid in the form of a lump-sum to a pension plan retiree when requested. For activity in our qualified pension plan assets, see note (9) "Employee Benefit Plans" to our condensed consolidated financial statements in "Item 1. Financial Statements" included elsewhere in this Quarterly Report. Our qualified pension plan assets have historically funded a large portion of the benefits paid under our qualified pension plans. Payment of significant lump sum payments, lower returns on plan assets, decrease in the fair value of plan assets and lower discount rates could negatively impact the funded status of the plan and we may be required to make larger contributions to the pension plan than currently anticipated. Due to uncertainties in the pension funding calculation, the amount and timing of pension contributions are unknown other than as disclosed in this Quarterly Report.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) of the Exchange Act). Disclosure controls and procedures are controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Based upon this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of September 30, 2013.

Changes in Internal Control Over Financial Reporting

We are committed to continuing to improve our internal control processes and will continue to review and update our financial reporting controls and procedures as necessary to accommodate modifications to our business processes and accounting procedures. There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

39

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are involved in litigation and regulatory proceedings arising out of our operations. Management believes that we are not currently a party to any legal or regulatory proceedings, the adverse outcome of which, individually or in the aggregate, would have a material adverse effect on our business, financial position or results of operations. Notwithstanding that we emerged from Chapter 11 protection on January 24, 2011, one of the Chapter 11 Cases remains open.

Item 1A. Risk Factors.

During the quarter ended September 30, 2013, there were no material changes to the risk factors disclosed in "Item 1A. Risk Factors" of the 2012 Annual Report, as updated by "Item 1A. Risk Factors" of the quarterly report on Form 10-Q for the quarter ended March 31, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

The exhibits filed as part of this Quarterly Report are listed in the index to exhibits immediately preceding such exhibits, which index to exhibits is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		FAIRPOINT COMMUNICATIONS, INC.
Date: November 5, 2013	By:	/s/ Ajay Sabherwal
	Name:	Ajay Sabherwal
	Title:	Executive Vice President and Chief Financial Officer
		(duly authorized officer and principal financial officer)

41

Exhibit Index

Exhibit No.	Description
2.1	Third Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code.(1)
3.1	Ninth Amended and Restated Certificate of Incorporation of FairPoint.(2)
3.2	Second Amended and Restated By Laws of FairPoint.(2)
4.1	Warrant Agreement, dated as of January 24, 2011, by and between FairPoint and The Bank of New York Mellon.(3)
4.2	Specimen Stock Certificate.(2)
4.3	Specimen Warrant Certificate.(3)
4.4	Indenture dated as February 14, 2013, among FairPoint Communications, Inc., the Subsidiary Guarantors and U.S. Bank National Association, as trustee.(4)
4.5	First Supplemental Indenture dated as of September 16, 2013, among FairPoint Communications, Inc., the Subsidiary Guarantors and U.S. Bank National Association, as trustee.*
11	Statement Regarding Computation of Per Share Earnings (included in the financial statements contained in this Quarterly Report).
31.1	Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification required by 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.‡
32.2	Certification required by 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.‡
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*

* Filed herewith.

‡ Submitted herewith. Pursuant to SEC Release No. 33-8238, this certification will be treated as "accompanying" this Quarterly Report on Form 10-Q and not "filed" as part of such report for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of Section 18 of the Exchange Act and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

(1) Incorporated by reference to the Current Report on Form 8-K of FairPoint filed on January 14, 2011.

(2) Incorporated by reference to the Registration Statement on Form 8-A of FairPoint filed on January 24, 2011.

(3) Incorporated by reference to the Current Report on Form 8-K of FairPoint filed on January 25, 2011, Film Number 11544980.

(4) Incorporated by reference to the Current Report on Form 8-K of FairPoint filed on February 14, 2013.

42

EX-4.5

Exhibit 4.5

First Supplemental Indenture

FIRST SUPPLEMENTAL INDENTURE, dated as of September 16, 2013 (this “Supplemental Indenture”), between FairPoint Communications, Inc., a Delaware corporation (the “Company”), the Subsidiary Guarantors party hereto (the “Subsidiary Guarantors”) and U.S. Bank National Association, as Trustee (the “Trustee”) to the Indenture referred to below. Capitalized terms used but not defined herein shall have the respective meanings set forth in the Indenture.

W I T N E S S E T H:

WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have entered into an indenture, dated as of February 14, 2013 (the “Indenture”), providing for the issuance by the Company of 8.75% senior secured notes due 2019 (the “Notes”);

WHEREAS, pursuant to Section 9.01 of the Indenture, the Company, the Subsidiary Guarantors and the Trustee may, without the consent of any Holder of a Note, amend or supplement the Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents and the Intercreditor Agreement to, among other things, cure any ambiguity, defect or inconsistency; or conform the text of the Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement to any provision of the section of the Offering Memorandum entitled “Description of Notes” to the extent that such provision in the Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement was intended to conform to such “Description of Notes”;

WHEREAS, the Company and the Subsidiary Guarantors wish to implement the amendments set forth in this Supplemental Indenture to correct and conform the references to the maturity date in Exhibit A to the Indenture and the Global Notes to the “Description of Notes” section of the Offering Memorandum;

WHEREAS, the Company is delivering contemporaneously herewith to the Trustee, pursuant to the Indenture, an Officers’ Certificate and an Opinion of Counsel in connection with the execution and delivery of this Supplemental Indenture; and

WHEREAS, this Supplemental Indenture complies with and is authorized by the applicable provisions of the Indenture, including Section 9.01 thereof.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Subsidiary Guarantors and the Trustee mutually covenant and agree as follows:

1.    Amendments. Paragraph 1 on the face side of the Form of Note in Exhibit A to the Indenture is hereby amended by replacing the maturity date of “February 15, 2019” with “August 15, 2019”.

2.    Effectiveness. Upon the execution and delivery of this Supplemental Indenture by the Company, the Subsidiary Guarantors and the Trustee, the Indenture shall be amended and supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes.

3.    Indenture Remains in Full Force and Effect. Except as amended and supplemented hereby, all provisions of the Indenture shall remain in full force and effect.

4.    Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

5.    Headings. The Headings of the Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

6.    Severability. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

7.    Counterpart Originals. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

8.    Limitation of Liability. Neither the Trustee nor the Collateral Agent shall be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company and the Subsidiary Guarantors.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first above written.

FairPoint Communications, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

EllTel Long Distance Corp.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

FairPoint BroadBand, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

FairPoint Carrier Services, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

MJD Services Corp.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

MJD Ventures, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

C-R Communications, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

C-R Long Distance, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

El Paso Long Distance Company

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Ravenswood Communications, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Berkshire Cellular, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Berkshire New York Access, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

C&E Communications, Ltd.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Taconic Technology Corp.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Comerco, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

FairPoint Logistics, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Germantown Long Distance Company

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Orwell Communications, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

By: /s/ John R. Whitener

Name:    John R. Whitener

Title: Vice President and Treasurer

Quality One Technologies, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Peoples Mutual Long Distance Company

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

S T Enterprises, Ltd.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Unite Communications Systems, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

Utilities, Inc.

By: /s/ Shirley J. Linn

Name:    Shirley J. Linn

Title: Executive Vice President, Secretary and

General Counsel

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By: /s/ Michael M. Hopkins

Name: Michael M. Hopkins

Title: Vice President

U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

By: /s/ Michael M. Hopkins

Name: Michael M. Hopkins

Title: Vice President

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul H. Sunu, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(i) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

(ii) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(iii) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

(iv) disclosed in this Quarterly Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(i) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(ii) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 5, 2013

/s/ Paul H. Sunu

Paul H. Sunu

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ajay Sabherwal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(i) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

(ii) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(iii) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

(iv) disclosed in this Quarterly Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(i) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(ii) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 5, 2013

/s/ Ajay Sabherwal

Ajay Sabherwal

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”) for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul H. Sunu, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of

1934; and

2.    The information contained in the Report fairly presents, in all material respects, the financial condition and

results of operations of the Company.

/s/ Paul H. Sunu

Paul H. Sunu

Chief Executive Officer

November 5, 2013

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of FairPoint Communications, Inc. (the “Company”) for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ajay Sabherwal, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of

1934; and

2.    The information contained in the Report fairly presents, in all material respects, the financial condition and

results of operations of the Company.

/s/ Ajay Sabherwal

Ajay Sabherwal

Chief Financial Officer

November 5, 2013

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The Company sponsors noncontributory qualified pension plans and post-retirement healthcare plans, which provide certain cash payments and medical and dental benefits to covered retired employees and their beneficiaries and covered dependents. These plans were assumed as part of the acquisition of the Northern New England operations from Verizon. The qualified pension plan and the post-retirement healthcare plan covering non-represented employees are frozen. Therefore, no new benefits are being earned by participants and no new participants are becoming eligible for benefits in these plans. Participants in the qualified pension plan and the post-retirement healthcare plan covering represented employees continue to accrue benefits in accordance with the respective plan documents and contractual requirements in the collective bargaining agreements. Eligibility to participate in the plans is based on an employee's age and years of service. The Company makes contributions to the qualified pension plans to meet minimum Employee Retirement Income Security Act of 1974, as amended ("ERISA"), funding requirements and has the ability to elect to make additional discretionary contributions. Payments of benefits under the post-retirement healthcare plans are funded by the Company as the benefits are paid.

Absent a settlement or curtailment, the Company remeasures the net liabilities of its qualified pension and other post-retirement healthcare plans annually.

Net Periodic Benefit Cost. Net periodic benefit cost is generally recognized as a component of selling, general and administrative expense on the consolidated statements of operations; however, the Company capitalizes a portion of net periodic benefit cost in conjunction with its use of internal labor resources utilized on capital projects. Components of the net periodic benefit cost related to the Company's qualified pension plans and post-retirement healthcare plans for the three and nine months ended September 30, 2013 and 2012 are presented below (in thousands):

	Three Months Ended September 30, 2013					Three Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	4,633		$	5,874	$	3,649		$	5,923
Interest cost	3,774			5,785		3,695			5,774
Expected return on plan assets	(3,082		)	—		(3,356		)	(8		)
Amortization of actuarial loss	1,635			1,464		575			1,398
Plan settlement	52			—		89			—
Net periodic benefit cost	$	7,012		$	13,123	$	4,652		$	13,087

	Nine Months Ended September 30, 2013					Nine Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	13,910		$	20,838	$	11,841		$	19,491
Interest cost	11,175			18,770		10,994			18,139
Expected return on plan assets	(9,384		)	—		(9,887		)	(25		)
Amortization of actuarial loss	3,981			5,934		1,617			4,762
Plan settlement	1,065			—		445			—
Net periodic benefit cost	$	20,747		$	45,542	$	15,010		$	42,367

Contributions and Benefit Payments. On July 6, 2012, the Moving Ahead for Progress in the 21^st Century Act was signed into law. This act contained a pension funding stabilization provision, which allows pension plan sponsors to use higher interest rate assumptions when determining funded status and funding obligations. As a result, the Company's 2013 minimum required qualified pension plan contribution is significantly lower than it would have been in the absence of this stabilization provision. On September 25, 2012, the Company elected to defer use of the higher segment rates under the act until the first plan year beginning on or after January 1, 2013 solely for determination of the adjusted funding target attainment percentage ("AFTAP") used to determine benefit restrictions under Internal Revenue Code Section 436.

The Company expects to contribute approximately $22.0 million to its qualified pension plans in 2013, which includes the minimum required contribution amount required by the Pension Protection Act of 2006 in addition to discretionary contributions. During the nine months ended September 30, 2013, contributions of $13.2 million were made to the qualified pension plans. The Company expects to fund approximately $5.1 million in benefit payments to its post-retirement healthcare plans during fiscal year 2013, of which $2.6 million was funded during the nine months ended September 30, 2013. Accordingly, during the remainder of fiscal year 2013, the Company expects to contribute approximately $8.8 million to its qualified pension plans and fund approximately $2.5 million in benefit payments to its post-retirement healthcare plans.

Return on Plan Assets. For the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, the actual return on the pension plan assets were gains of approximately 4.1%, 4.1%, 7.0% and 7.7%, respectively. Net periodic benefit cost for 2013 assumes a weighted average annualized expected return on plan assets of approximately 7.6%. Should the Company's actual return on plan assets be lower than the expected return assumption, the net periodic benefit cost may increase in future periods and the Company may be required to contribute additional funds to its qualified pension plans.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Revenues	$ 235,989		$ 242,052		$ 705,958		$ 733,979
Operating expenses:
Cost of services and sales, excluding depreciation and amortization	107,646		105,502		332,420		330,937
Selling, general and administrative expense, excluding depreciation and amortization	79,520		80,915		252,489		257,055
Depreciation and amortization	52,877		89,782		228,833		276,769
Reorganization related expense (income)	(229)		172		(790)		(4,043)
Total operating expenses	239,814		276,371		812,952		860,718
Loss from operations	(3,825)		(34,319)		(106,994)		(126,739)
Interest expense	(20,304)		(16,991)		(58,403)		(51,002)
Loss on debt refinancing	0		0		(6,787)		0
Other income	951		548		1,386		725
Loss from continuing operations before income taxes	(23,178)		(50,762)		(170,798)		(177,016)
Income tax benefit	14,218		13,433		61,201		55,902
Loss from continuing operations	(8,960)		(37,329)		(109,597)		(121,114)
Gain on sale of discontinued operations, net of taxes	0		0		10,044		0
Net loss	$ (8,960)		$ (37,329)		$ (99,553)		$ (121,114)
Weighted average shares outstanding:
Basic, in shares	26,206	[1]	25,993	[1]	26,181	[1]	25,970	[1]
Diluted, in shares	26,206		25,993		26,181		25,970
(Loss) earnings per share, basic:
Continuing operations, in dollars per share	$ (0.34)		$ (1.44)		$ (4.18)		$ (4.66)
Discontinued operations, in dollars per share	$ 0.00		$ 0.00		$ 0.38		$ 0.00
Loss per share, basic, in dollars per share	$ (0.34)		$ (1.44)		$ (3.80)		$ (4.66)
(Loss) earnings per share, diluted:
Continuing operations, in dollars per share	$ (0.34)		$ (1.44)		$ (4.18)		$ (4.66)
Discontinued operations, in dollars per share	$ 0.00		$ 0.00		$ 0.38		$ 0.00
Loss per share, diluted, in dollars per share	$ (0.34)		$ (1.44)		$ (3.80)		$ (4.66)

[1] Weighted average number of common shares used for basic earnings per share excludes 275,188, 242,844, 283,357 and 246,351 weighted average shares of non-vested restricted stock as of the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

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Accounting Policies

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Accounting Policies

Accounting Policies

(a) Presentation and Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items.

The Company has reclassified its long-term workers compensation accrual from “Employee benefit obligations” to “Other long-term liabilities” in the December 31, 2012 consolidated balance sheet to be consistent with current period presentation.

Examples of significant estimates include the allowance for doubtful accounts, revenue reserves, the depreciation of property, plant and equipment, valuation of intangible assets, qualified pension and post-retirement healthcare plan assumptions, stock-based compensation and income taxes.

(b) Revenue Recognition

Revenues are recognized as services are rendered and are primarily derived from the usage of the Company's networks and facilities or under revenue-sharing arrangements with other communications carriers. Revenues are primarily derived from: voice services, access (including pooling), Internet and broadband services, Connect America Fund ("CAF") receipts and other miscellaneous services. Local access charges are billed to local end users under tariffs approved by each state's Public Utilities Commission ("PUC") (or its similar agency) or by rates, terms and conditions determined by the Company. Access revenues are derived for the intrastate jurisdiction by billing access charges to interexchange carriers, wireless carriers and to other LECs. These charges are billed based on toll or access tariffs approved by the local state's PUC. Access charges for the interstate jurisdiction are billed in accordance with tariffs filed by the National Exchange Carrier Association ("NECA") or by the individual company and approved by the Federal Communications Commission (the "FCC").

Revenues are determined on a bill-and-keep basis or a pooling basis. If on a bill-and-keep basis, the Company bills the charges to either the access provider or the end user and keeps the revenue. If the Company participates in a pooling environment (interstate or intrastate), the toll or access billed is contributed to a revenue pool. The revenue is then distributed to individual companies based on their company-specific revenue requirement. This distribution is based on individual state PUC's (intrastate) or the FCC's (interstate) approved separation rules and rates of return. Distribution from these pools can change relative to changes made to expenses, plant investment or rate-of-return. Some companies participate in federal and certain state universal service programs that are pooling in nature but are regulated by rules separate from those described above. These rules vary by state. Revenues earned through the various pooling arrangements are initially recorded based on the Company's estimates. Rule changes associated with the FCC's CAF/ICC Order (as defined hereinafter) impact the NECA interstate pooling, in that a portion of the Company's interstate Universal Service Fund ("USF") revenues, which are administered through the NECA pools and which prior to January 1, 2012 were based on costs, are now based on the CAF Phase I rules and will be based on CAF Phase II rules when those are put into effect.

Long distance retail and wholesale revenues are predominantly recurring in nature, whether offered under the Company's flat-rated unlimited packages or whether offered in a usage sensitive pricing package. In either case, they are billed in arrears and recognized when earned. Data and Internet services revenues are substantially all recurring revenues and are billed one month in advance and deferred until earned.

As of September 30, 2013 and December 31, 2012, unearned revenue of $17.2 million and $18.3 million, respectively, was included in current "Other accrued liabilities" on the condensed consolidated balance sheets.

The majority of the Company's other miscellaneous services revenue is generated from ancillary special projects at the request of third parties, video services, directory services and late payment charges to end users and interexchange carriers. The Company requires customers to pay for ancillary special projects in advance. Once the ancillary special project is completed and all project costs have been accumulated for proper accounting recognition, the advance payment is recognized as revenue with any over payments refunded to the customer as appropriate. The Company recognizes revenue upon the provision of video services in certain markets by reselling DirecTV content and providing cable and IP television video-over-digital subscriber line services. The Company also publishes telephone directories in some of its markets and recognizes revenues associated with these publications. The Company bills late payment fees to customers who have not paid their bills in a timely manner. In general, late fee revenue relates to wholesale customers, which is recognized as it is collected.

Non-recurring customer activation fees, along with the related costs up to, but not exceeding, the activation fees, are deferred and amortized over the customer relationship period.

The Company was subject to retail service quality plans in the states of Maine, New Hampshire and Vermont in 2012 and for a portion of 2013 in Maine and Vermont, pursuant to which service quality index ("SQI") penalties were imposed upon the Company's failure to meet the requirements of the respective plans. Penalties resulting from these commitments are recorded as a reduction to revenue and to other accrued liabilities on the condensed consolidated balance sheets. The Company also adopted a separate performance assurance plan ("PAP") for certain services provided on a wholesale basis to competitive local exchange carriers ("CLECs") in the northern New England service territories of each of the states of Maine, New Hampshire and Vermont, pursuant to which FairPoint is required to provide performance credits in the event the Company is unable to meet the provisions of the respective PAP. Penalties resulting from these commitments are recorded as a reduction to revenue. In Maine and New Hampshire, these penalties are recorded as a reduction to accounts receivable on the condensed consolidated balance sheets since they are paid by the Company in the form of credits applied to CLEC bills. PAP penalties in Vermont are recorded to other accrued liabilities on the condensed consolidated balance sheets as a majority of these penalties are paid to the Vermont Universal Service Fund ("VUSF"), while the remaining credits assessed in Vermont are paid by the Company in the form of credits applied to CLEC bills.

Revenue is recognized net of tax collected from customers and remitted to governmental authorities.

Management makes estimated adjustments, as necessary, to revenue and accounts receivable for billing errors, including certain disputed amounts.

(c) Depreciation Life Study

In connection with the Company's adoption of fresh start accounting on January 24, 2011, property, plant and equipment assets were revalued to their fair value, generally their appraised value after considering economic obsolescence. New remaining useful lives were established and accumulated depreciation was reset to zero.

Periodically, the Company reviews the estimated remaining useful lives of its group asset categories to address continuing changes in technology, competition and the Company’s overall reduction in capital spending and increased focus on more efficient utilization of its existing assets. In the third quarter of 2013, the Company conducted this review and determined that changes to the estimated remaining useful lives for certain asset categories were appropriate. Accordingly, as a result of the changes to the remaining useful lives, depreciation expense in the third quarter of 2013 was approximately $29.0 million less than it would have been absent the changes, resulting in a reduction in net loss of approximately $27.0 million or a benefit of $1.03 per share.

(d) Accounting for Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management determines its estimates of future taxable income based upon the scheduled reversal of deferred tax liabilities and tax planning strategies. The Company establishes valuation allowances for deferred tax assets when it is estimated to be more likely than not that the tax assets will not be realized.

FairPoint Communications files a consolidated income tax return with its subsidiaries. All intercompany tax transactions and accounts have been eliminated in consolidation.

(e) Operating Segments

Management views its business of providing data, video and voice communication services to business, wholesale and residential customers as one operating segment. The Company's services consist of retail and wholesale telecommunications and data services, including voice and HSD in 17 states. The Company's chief operating decision maker assesses operating performance and allocates resources based on the consolidated results.

(f) Interest Rate Swap Agreements

In the third quarter of 2013, the Company entered into interest rate swap agreements. For further information regarding these interest rate swap agreements, see note (7) "Interest Rate Swap Agreements." The interest rate swap agreements, at their inception, qualified for and were designated as cash flow hedging instruments. In accordance with the Derivatives and Hedging Topic of the Accounting Standards Codification ("ASC"), the Company records its interest rate swaps on the condensed consolidated balance sheet at fair value. The effective portion of changes in fair value are recorded in accumulated other comprehensive loss and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion is recognized in earnings. Both at inception and on a quarterly basis, the Company performs an effectiveness test.

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Schedule of Long-term Debt Balances

Long-term debt for the Company at September 30, 2013 and December 31, 2012 is shown below (in thousands):

	September 30, 2013			December 31, 2012
New Term Loan, due 2019 (weighted average rate of 7.50%)	$	636,800		$	—
Discount on New Term Loan (a)	(17,770		)	—
Notes, 8.75%, due 2019	300,000			—
Old Term Loan, due 2016 (weighted average rate of 6.50%)	—			957,000
Total long-term debt	919,030			957,000
Less: current portion	(6,400		)	(10,000		)
Total long-term debt, net of current portion	$	912,630		$	947,000

(a) The $17.8 million discount on the New Term Loan (as defined below) is being amortized using the effective interest method over the term of the senior secured credit facility due 2019.

Schedule of Maturities of Long-term Debt

The approximate aggregate maturities of long-term debt, excluding the debt discount on the New Term Loan (as defined below), for each of the five years subsequent to September 30, 2013 and thereafter are as follows (in thousands):

Trailing twelve months ending September 30,	Balance Due
2014	$	6,400
2015	6,400
2016	6,400
2017	6,400
2018	6,400
Thereafter	904,800
Total long-term debt, including current portion	$	936,800

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Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The following table provides a reconciliation of adjustments reclassified from accumulated other comprehensive loss to the statement of operations (in thousands):

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Employee benefits:
Amortization of actuarial loss (a)	$	3,099		$	9,915
Plan settlement (a)	52			1,065
Total employee benefit amounts reclassified from accumulated other comprehensive loss	3,151			10,980
Tax expense	(634		)	(1,946		)
Total employee benefit amounts reclassified from accumulated other comprehensive loss, net	$	2,517		$	9,034

(a) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See note (9) "Employee Benefit Plans" for details.

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Commitments and Contingencies (Details Textual) (USD $)	9 Months Ended		9 Months Ended		9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013 Subsequent Event	Sep. 30, 2013 Claims reserve	Sep. 30, 2013 Other purposes	Sep. 30, 2013 New Hampshire Broadband build-out	Sep. 30, 2013 Vermont Broadband build-out
Restricted Cash [Abstract]
Restricted cash	$ 2,300,000		$ 100,000	$ 600,000	$ 1,600,000
Increase (decrease) in restricted cash			600,000		1,700,000	2,800,000
Magnitude of Bankruptcy Claims [Abstract]
Claims filed with Bankruptcy Court against company	4,900,000,000
Amount of bankruptcy claims settled		3,800,000,000
Claims disallowed by court		1,100,000,000
Claims withdrawn by creditors		15,200,000
Claims disallowed and appealed by claimant		$ 200,000

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Interest Rate Swap Agreements Interest Rate Swap Agreements (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2013
Derivative [Line Items]
Description of variable rate basis	LIBOR
Interest Rate Swap
Derivative [Line Items]
Notional amount	$ 170,000,000.0
Counterparties	3
Fixed rate	2.665%
London Interbank Offered Rate (LIBOR) | Interest Rate Swap
Derivative [Line Items]
Floor interest rate	1.25%

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Periodic Benefit Costs of Pension and Post-Retirement Healthcare

Components of the net periodic benefit cost related to the Company's qualified pension plans and post-retirement healthcare plans for the three and nine months ended September 30, 2013 and 2012 are presented below (in thousands):

	Three Months Ended September 30, 2013					Three Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	4,633		$	5,874	$	3,649		$	5,923
Interest cost	3,774			5,785		3,695			5,774
Expected return on plan assets	(3,082		)	—		(3,356		)	(8		)
Amortization of actuarial loss	1,635			1,464		575			1,398
Plan settlement	52			—		89			—
Net periodic benefit cost	$	7,012		$	13,123	$	4,652		$	13,087

	Nine Months Ended September 30, 2013					Nine Months Ended September 30, 2012
	Qualified Pension			Post- retirement Healthcare		Qualified Pension			Post- retirement Healthcare
Service cost	$	13,910		$	20,838	$	11,841		$	19,491
Interest cost	11,175			18,770		10,994			18,139
Expected return on plan assets	(9,384		)	—		(9,887		)	(25		)
Amortization of actuarial loss	3,981			5,934		1,617			4,762
Plan settlement	1,065			—		445			—
Net periodic benefit cost	$	20,747		$	45,542	$	15,010		$	42,367

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Fair Value Fair Value (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

As of September 30, 2013, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Long-term interest rate swap liability (a)	$	—	$	908	$	—

(a) The fair value is determined using valuation models which rely on the expected LIBOR based yield curve and estimates of counterparty and the Company’s non-performance risk.  Because each of these inputs are directly observable or can be corroborated by observable market data, we have categorized these interest rate swaps as Level 2 within the fair value hierarchy.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Long-term debt is not carried at fair value, but measured on a recurring basis. The estimated fair values of the Company's long-term debt as of September 30, 2013 and December 31, 2012 are as follows (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
New Term Loan, due 2019 (b)	$	619,030	$	638,392	$	—	$	—
Notes, 8.75%, due 2019	300,000		301,500		—		—
Old Term Loan, repaid February 2013	—		—		957,000		929,500

(a) The Company estimated fair value based on market prices of the Company's debt securities at the balance sheet date, which falls within Level 2 of the fair value hierarchy.

(b) The carrying amount of the New Term Loan is net of the discount of $17.8 million.

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Stockholders' Deficit (Details Textual) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Jan. 24, 2011 Common Stock
Class of Warrant or Right [Line Items]
Common stock, authorized	37,500,000	37,500,000
Common stock, outstanding	26,478,175	26,288,998
Warrants, outstanding	3,582,402
Exercise price of warrants (in dollars per share)			$ 48.81

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Income Taxes (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Income Tax Contingency [Line Items]
Income tax benefit	$ 14,218,000	$ 13,433,000	$ 61,201,000	$ 55,902,000
Effective tax expense (benefit) rate	61.30%	26.50%	35.80%	31.60%
Federal statutory rate	35.00%		35.00%
NOL carryforwards	210,700,000		210,700,000
Estimated NOL tax attribute reduction	581,800,000		581,800,000
Expiration period of NOL carryforwards			2021 to 2033
State NOL deferred tax asset	9,800,000		9,800,000
Tax valuation allowance	193,800,000		193,800,000		192,500,000
Federal tax valuation allowance	158,100,000		158,100,000		159,500,000
State tax valuation allowance	35,700,000		35,700,000		33,000,000
Unrecognized tax benefits, total	3,800,000		3,800,000		3,800,000
Unrecognized tax benefits, affect tax rate if recognized	3,800,000		3,800,000
Service Life
Income Tax Contingency [Line Items]
Tax benefit from decrease in valuation allowance	9,600,000
Blackfoot Telecommunications Group
Income Tax Contingency [Line Items]
Discontinued Operation, Tax Effect of Income (Loss) from Disposal of Discontinued Operation			6,700,000
Accumulated other comprehensive loss
Income Tax Contingency [Line Items]
Decrease in valuation allowance			$ 1,900,000

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Fair Value Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Feb. 14, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 936,800
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term interest rate swap liability	0	[1]
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term interest rate swap liability	908	[1]
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term interest rate swap liability	0	[1]
Term Loan, due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	619,030	[2]		0	[2]
Fair Value	638,392	[2],[3]		0	[2],[3]
Unamortized Discount	17,770	[2],[4]	17,800	0	[4]
Senior Secured Notes due 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	300,000			0
Fair Value	301,500	[3]		0	[3]
Old Term Loan Due 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	0			957,000
Fair Value	$ 0	[3]		$ 929,500	[3]

[1] The fair value is determined using valuation models which rely on the expected LIBOR based yield curve and estimates of counterparty and the Company’s non-performance risk. Because each of these inputs are directly observable or can be corroborated by observable market data, we have categorized these interest rate swaps as Level 2 within the fair value hierarchy.

[2] The carrying amount of the New Term Loan is net of the discount of $17.8 million.

[3] The Company estimated fair value based on market prices of the Company's debt securities at the balance sheet date, which falls within Level 2 of the fair value hierarchy.

[4] The $17.8 million discount on the New Term Loan (as defined below) is being amortized using the effective interest method over the term of the senior secured credit facility due 2019.

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Organization and Principles of Consolidation (Details Textual)	Sep. 30, 2013 States
Product Information [Line Items]
Number of operating states	17
Communication Services
Product Information [Line Items]
Number of Access Line Equivalents	1,200,000
Number of Data Subscribers	330,000
Communication Services | Minimum
Product Information [Line Items]
Number of route miles in fiber network	15,000

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Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013		Sep. 30, 2013
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncome [Line Items]
Total employee benefit amounts reclassified from accumulated other comprehensive loss, net of tax			$ 9,034
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment
ReclassificationAdjustmentOutOfAccumulatedOtherComprehensiveIncome [Line Items]
Amortization of actuarial loss	3,099	[1]	9,915	[1]
Plan Settlement	52	[1]	1,065	[1]
Total employee benefit amounts reclassified from accumulated other comprehensive loss	3,151		10,980
Tax on employee benefit amounts reclassified from accumulated other comprehensive loss	(634)		(1,946)
Total employee benefit amounts reclassified from accumulated other comprehensive loss, net of tax	$ 2,517		$ 9,034

[1] These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See note (9) "Employee Benefit Plans" for details.

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Interest Rate Swap Agreements Interest Rate Swap Agreements (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The effect of the Company’s interest rate swap agreements on the condensed consolidated balance sheet at September 30, 2013 is shown below (in thousands):

	As of September 30, 2013
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps	Other long-term liabilities	$	908

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The effect of the Company’s interest rate swap agreements on the condensed consolidated statements of operations for the three and nine months ended September 30, 2013 is shown below (in thousands):

	Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion)
	Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
Interest rate swaps	$	542	$	542

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Statement of Other Comprehensive Income [Abstract]
Interest rate swaps, tax	$ (0.4)	$ 0	$ (0.4)	$ 0
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	$ (0.5)	$ 0	$ (1.4)	$ (0.8)

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net loss	$ (99,553)	$ (121,114)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes	(55,472)	(56,743)
Provision for uncollectible revenue	6,665	2,951
Depreciation and amortization	228,833	276,769
Post-retirement healthcare	39,936	36,919
Qualified pension	7,175	(4,047)
Gain on sale of business	(16,910)	0
Loss on debt refinancing	6,787	0
Other non-cash items	3,605	1,497
Changes in assets and liabilities arising from operations:
Accounts receivable	(9,002)	(861)
Prepaid and other assets	(5,443)	(2,937)
Restricted cash	4,554	(7,796)
Accounts payable and accrued liabilities	(10,664)	732
Accrued interest payable	3,241	162
Other assets and liabilities, net	(11,287)	2,082
Reorganization adjustments:
Non-cash reorganization income	(980)	(5,119)
Claims payable and estimated claims accrual	(46)	(8,803)
Restricted cash - cash claims reserve	577	20,291
Total adjustments	214,143	250,933
Net cash provided by operating activities	114,590	129,819
Cash flows from investing activities:
Net capital additions	(91,091)	(95,996)
Proceeds from sale of business	30,452	0
Distributions from investments	1,296	634
Net cash used in investing activities	(59,343)	(95,362)
Cash flows from financing activities:
Refinancing costs	(13,217)	0
Proceeds from issuance of long-term debt	920,590	0
Repayments of long-term debt	(960,200)	(30,000)
Restricted cash	0	1,158
Proceeds from exercise of stock options	53	53
Repayment of capital lease obligations	(936)	(938)
Net cash used in financing activities	(53,710)	(29,727)
Net change	1,537	4,730
Cash, beginning of period	23,203	17,350
Cash, end of period	24,740	22,080
Supplemental disclosure of cash flow information:
Reorganization costs paid	324	621
Non-cash settlement of claims payable	$ 0	$ 7,668

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2013

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02 related to disclosure of reclassifications out of accumulated other comprehensive income. This ASU requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income. In addition, it also requires companies to report changes in accumulated other comprehensive income balances. This new guidance was to be applied prospectively and was effective for interim and annual periods beginning after December 15, 2012, with early adoption permitted. The Company adopted this ASU during the quarter ended March 31, 2013 and it did not have a material impact on the Company's condensed consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, which is designed to reduce diversity in practice of financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. This new guidance becomes effective for the Company on January 1, 2014 and the Company does not expect it to have a material impact on its condensed consolidated financial statements.

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Organization and Principles of Consolidation

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Principles of Consolidation

Organization and Principles of Consolidation

Organization

FairPoint is a leading provider of advanced communications services to business, wholesale and residential customers within its service territories. FairPoint offers its customers a suite of advanced data services such as Ethernet, high capacity data transport and other IP-based services over a ubiquitous, next-generation fiber network with more than 15,000 route miles (the "Next Generation Network") in addition to Internet access, high-speed data ("HSD") and local and long distance voice services. FairPoint is the incumbent communications provider in the markets it serves, primarily rural communities and small urban markets. Many of its local exchange carriers ("LECs") have served their respective communities for more than 80 years. As of September 30, 2013, the Company's service territory spanned 17 states and operated with approximately 1.2 million access line equivalents in service, including approximately 330,000 broadband subscribers.

On October 26, 2009, the Company and substantially all of its direct and indirect subsidiaries filed voluntary petitions for relief under chapter 11 of title 11 ("Chapter 11") of the United States Code. These cases were jointly administered under the caption In re FairPoint Communications, Inc. (collectively, the "Chapter 11 Cases") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). On January 24, 2011, the Company substantially consummated its reorganization through a series of transactions contemplated by its Third Amended Joint Plan of Reorganization Under Chapter 11 of the United States Code (as confirmed by the Bankruptcy Court, the "Plan").

Principles of Consolidation

The consolidated financial statements include all majority-owned subsidiaries of the Company. Partially owned equity affiliates are accounted for under the cost method or equity method when the Company demonstrates significant influence, but does not have a controlling financial interest. Intercompany accounts and transactions have been eliminated.

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Employee Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Qualified Pension
Schedule of net periodic benefit cost related to pension and post-retirement healthcare
Service cost	$ 4,633	$ 3,649	$ 13,910	$ 11,841
Interest cost	3,774	3,695	11,175	10,994
Expected return on plan assets	(3,082)	(3,356)	(9,384)	(9,887)
Amortization of actuarial loss	1,635	575	3,981	1,617
Plan settlement	52	89	1,065	445
Net periodic benefit cost	7,012	4,652	20,747	15,010
Post-retirement Healthcare
Schedule of net periodic benefit cost related to pension and post-retirement healthcare
Service cost	5,874	5,923	20,838	19,491
Interest cost	5,785	5,774	18,770	18,139
Expected return on plan assets	0	(8)	0	(25)
Amortization of actuarial loss	1,464	1,398	5,934	4,762
Plan settlement	0	0	0	0
Net periodic benefit cost	$ 13,123	$ 13,087	$ 45,542	$ 42,367

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Accumulated Other Comprehensive Loss - Reclassifications (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Loss [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table provides a reconciliation of adjustments reclassified from accumulated other comprehensive loss to the statement of operations (in thousands):

	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
Employee benefits:
Amortization of actuarial loss (a)	$	3,099		$	9,915
Plan settlement (a)	52			1,065
Total employee benefit amounts reclassified from accumulated other comprehensive loss	3,151			10,980
Tax expense	(634		)	(1,946		)
Total employee benefit amounts reclassified from accumulated other comprehensive loss, net	$	2,517		$	9,034

(a) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See note (9) "Employee Benefit Plans" for details.

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Accounting Policies - Depreciation Life Study (Details Textual) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Change in Accounting Estimate [Line Items]
Change in depreciation expense	$ 52,877	$ 89,782	$ 228,833	$ 276,769
Increase in Net Income	(8,960)	(37,329)	(99,553)	(121,114)
Service Life
Change in Accounting Estimate [Line Items]
Change in depreciation expense	29,000
Increase in Net Income	$ 27,000
Earnings per share	$ 1.03

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Long Term Debt (Details Textual) (USD $)	0 Months Ended		1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended										0 Months Ended		9 Months Ended		9 Months Ended				9 Months Ended			9 Months Ended		0 Months Ended								0 Months Ended
	Feb. 14, 2013	Jan. 24, 2011	Feb. 14, 2013	Mar. 31, 2013	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Term Loan, due 2019		Feb. 14, 2013 Term Loan, due 2019	Dec. 31, 2012 Term Loan, due 2019		Sep. 30, 2013 Senior Secured Notes due 2019	Feb. 14, 2013 Senior Secured Notes due 2019	Feb. 14, 2013 Revolving Credit Facility Letter of Credit	Feb. 14, 2013 Revolving Credit Facility Line of Credit covenants	Feb. 14, 2013 Term Loan, due 2019 Notes Payable to Banks	Jan. 24, 2011 Term Loan, due 2019 Term Loan under the Credit Agreement	Sep. 30, 2013 Condition One	Sep. 30, 2012 Condition One	Sep. 30, 2013 Condition One Term Loan under the Credit Agreement	Sep. 30, 2013 Condition Two, Subcondition One	Sep. 30, 2012 Condition Two, Subcondition One	Sep. 30, 2012 Condition Two, Subcondition Two	Sep. 30, 2013 Condition Two, Subcondition Three	Sep. 30, 2012 Condition Two, Subcondition Three	Feb. 14, 2013 Senior Secured Notes Due 2019	Sep. 30, 2013 Line of Credit	Jan. 24, 2011 Line of Credit	Jan. 24, 2011 Line of Credit Years 1-3	Feb. 14, 2013 Maximum Revolving Credit Facility Line of Credit	Feb. 14, 2013 Maximum Term Loan, due 2019 Notes Payable to Banks	Feb. 14, 2013 Minimum Revolving Credit Facility Line of Credit	Feb. 14, 2013 Minimum Term Loan, due 2019 Notes Payable to Banks	Feb. 14, 2013 Federal Funds Effective Rate	Feb. 14, 2013 London Interbank Offered Rate (LIBOR)	Feb. 14, 2013 London Interbank Offered Rate (LIBOR) Senior Secured Notes Due 2019 Term Loan, due 2019	Feb. 14, 2013 Commitment Fee, Period One Revolving Credit Facility Line of Credit	Feb. 14, 2013 Commitment Fee, Period Two Revolving Credit Facility Line of Credit	Feb. 14, 2013 Debt Instrument, Redemption, Period Six Senior Secured Notes Due 2019 Term Loan, due 2019 Notes Payable to Banks	Feb. 15, 2013 Debt Instrument, Redemption, Period Six Senior Secured Notes Due 2019 Term Loan, due 2019 Notes Payable to Banks	Feb. 14, 2013 Mandatory Repayments, Period One Senior Secured Notes Due 2019 Term Loan, due 2019 Notes Payable to Banks	Feb. 14, 2013 Mandatory Repayments, Subsequent Periods Senior Secured Notes Due 2019 Term Loan, due 2019 Notes Payable to Banks	Feb. 15, 2013 Debt Instrument, Redemption Period Four Senior Secured Notes Due 2019 Term Loan, due 2019 Notes Payable to Banks	Feb. 15, 2013 Debt Instrument, Redemption, Period Five Senior Secured Notes Due 2019 Term Loan, due 2019 Notes Payable to Banks	Feb. 15, 2013 Debt Instrument, Redemption, Period One Senior Secured Notes Due 2019	Jan. 24, 2011 Bank of America Syndicate Revolving Credit Facility Senior Secured Credit Facility	Jan. 24, 2011 Bank of America Syndicate Line of Credit Senior Secured Credit Facility
Schedule of Available-for-sale Securities [Line Items]
Debt Issuance Cost, Weighted Average Amortization Period, Effective Interest Method	6 years 2 months 12 days	3 years 8 months 12 days
Long Term Debt (Textual) [Abstract]
Unamortized Discount							$ 17,770,000	[1],[2]	$ 17,800,000	$ 0	[1]
Remaining borrowing capacity					59,100,000
Letter of credit outstanding					15,900,000
Refinancing [Abstract]
Debt Instrument, Face Amount													300,000,000.0				1,000,000,000.0									300,000,000.0
Stated interest rate												8.75%	8.75%													8.75%				5.50%	6.25%	4.50%	5.25%
Line of of credit facility oustanding														40,000,000.0	75,000,000.0
Long-term debt					919,030,000	957,000,000										640,000,000.0
Line of credit facility additional borrowings																640,000,000.0
Repayments of Debt			946,500,000
Interest Paid			7,700,000
Payments of Debt Issuance Costs			32,600,000
Maximum borrowing capacity																															200,000,000.0															75,000,000.0	1,075,000,000.0
Loan origination fees of Revolving Facility for future years																													1,500,000
Minimum floor interest rate on Term Loan under condition one																				2.00%
Interest rate in addition to Libor under subcondition two of condition two																							0.50%
Base interest rate under condition					LIBOR													LIBOR			Bank of America's prime rate			LIBOR
Point in addition to base interest rate under condition																			4.50%			3.50%			1.00%									0.50%	1.00%	1.25%
Debt Instrument, Fronting Fee, Percentage																																0.125%
Percentage commitment fee on average daily unused portion of exit revolving facility																											0.75%										0.50%	0.375%
Debt Instrument, Periodic Payment, Principal				10,500,000		43,000,000																																	1,600,000
Debt Instrument, Mandatory Repayments, Percentage of Excess Cash Flow																																									50.00%	25.00%
Debt Instrument, Redemption Price, Percentage																																								101.00%			103.00%	102.00%	108.75%
Debt Instruments, Retrictive Covenants, Number															2
Debt Instrument, Default Redemption, Percent of Principal																																													100.00%
Debt Instrument, Principal, Redemption Percentage, Maximum																																													35.00%
Debt Issue Costs [Abstract]
Deferred Finance Costs, Noncurrent, Gross	7,600,000		7,600,000
Deferred Finance Costs, Gross																												2,400,000
Deferred Finance Costs, Noncurrent, Net					$ 7,378,000	$ 1,111,000

[1] The $17.8 million discount on the New Term Loan (as defined below) is being amortized using the effective interest method over the term of the senior secured credit facility due 2019.

[2] The carrying amount of the New Term Loan is net of the discount of $17.8 million.

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Earnings Per Share (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Weighted average shares of non-vested restricted stock excluded from basic earnings per share	275,188	242,844	283,357	246,351

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 13.9	$ 18.9
Property, plant and equipment, accumulated depreciation	850.9	642.1
Intangible assets, accumulated amortization	$ 29.9	$ 21.6
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	37,500,000	37,500,000
Common stock, shares issued	26,478,175	26,288,998
Common stock, shares outstanding	26,478,175	26,288,998

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Long-Term Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt for the Company at September 30, 2013 and December 31, 2012 is shown below (in thousands):

	September 30, 2013			December 31, 2012
New Term Loan, due 2019 (weighted average rate of 7.50%)	$	636,800		$	—
Discount on New Term Loan (a)	(17,770		)	—
Notes, 8.75%, due 2019	300,000			—
Old Term Loan, due 2016 (weighted average rate of 6.50%)	—			957,000
Total long-term debt	919,030			957,000
Less: current portion	(6,400		)	(10,000		)
Total long-term debt, net of current portion	$	912,630		$	947,000

(a) The $17.8 million discount on the New Term Loan (as defined below) is being amortized using the effective interest method over the term of the senior secured credit facility due 2019.

As of September 30, 2013, the Company had $59.1 million, net of $15.9 million of outstanding letters of credit, available for borrowing under the New Revolving Facility (as defined below).

The approximate aggregate maturities of long-term debt, excluding the debt discount on the New Term Loan (as defined below), for each of the five years subsequent to September 30, 2013 and thereafter are as follows (in thousands):

Trailing twelve months ending September 30,	Balance Due
2014	$	6,400
2015	6,400
2016	6,400
2017	6,400
2018	6,400
Thereafter	904,800
Total long-term debt, including current portion	$	936,800

Refinancing

On February 14, 2013 (the "Refinancing Closing Date"), FairPoint Communications refinanced the Old Credit Agreement Loans (as defined herein) (the "Refinancing"). In connection with the Refinancing, FairPoint Communications (i) issued $300.0 million aggregate principal amount of its 8.75% senior secured notes due 2019 (the "Notes") in a private offering exempt from registration under the Securities Act pursuant to an indenture (the "Indenture") that FairPoint Communications entered into on the Refinancing Closing Date with certain of its subsidiaries that guarantee the indebtedness under the New Credit Agreement (as defined herein) (the "Subsidiary Guarantors") and U.S. Bank National Association, as trustee and collateral agent, and (ii) entered into a new credit agreement (the "New Credit Agreement"), dated as of the Refinancing Closing Date, with the lenders party thereto from time to time and Morgan Stanley Senior Funding, Inc., as administrative agent and letter of credit issuer. The New Credit Agreement provides for a $75.0 million revolving credit facility (the ''New Revolving Facility''), which has a sub-facility providing for the issuance of up to $40.0 million in letters of credit, and a $640.0 million term loan facility (the ''New Term Loan'' and, together with the New Revolving Facility, the ''New Credit Agreement Loans"). On the Refinancing Closing Date, FairPoint Communications used the proceeds of the Notes offering, together with $640.0 million of borrowings under the New Term Loan and cash on hand to (i) repay principal of $946.5 million outstanding on the Old Term Loan (as defined herein), plus approximately $7.7 million of accrued interest and (ii) pay approximately $32.6 million of fees, expenses and other costs relating to the Refinancing.

The New Credit Agreement. The principal amount of the New Term Loan and commitments under the New Revolving Facility may be increased by an aggregate amount of up to $200.0 million, subject to certain terms and conditions specified in the New Credit Agreement. The New Term Loan will mature on February 14, 2019 and the New Revolving Facility will mature on February 14, 2018, subject in each case to extensions pursuant to the terms of the New Credit Agreement.

Interest Rates and Fees. Interest on borrowings under the New Credit Agreement Loans accrue at an annual rate equal to either a British Bankers Association London Inter-Bank Offered Rate ("LIBOR") or the base rate, in each case plus an applicable margin. LIBOR is a per annum rate for dollar deposits with an interest period of one, two, three or six months (at FairPoint Communication's election), subject to a minimum LIBOR floor of 1.25%. The base rate is the per annum rate equal to the greatest of (x) the federal funds effective rate plus 0.50%, (y) the rate of interest publicly quoted from time to time by The Wall Street Journal as the United States ''Prime Rate'' and (z) LIBOR with an interest period of one month plus 1.00%. The applicable margin for the New Term Loan is (a) 6.25% per annum with respect to term loans bearing interest based on LIBOR or (b) 5.25% per annum with respect to term loans bearing interest based on the base rate. The applicable interest rate for the New Revolving Facility is, initially, (a) 5.50% with respect to revolving loans bearing interest based on LIBOR or (b) 4.50% per annum with respect to revolving loans bearing interest based on the base rate, in each case subject to adjustment based on FairPoint Communication's consolidated total leverage ratio, as defined in the New Credit Agreement. FairPoint Communications is required to pay a quarterly letter of credit fee on the average daily amount available to be drawn under letters of credit equal to the applicable interest rate for revolving loans bearing interest based on LIBOR, plus a fronting fee of 0.125% per annum on the average daily amount available to be drawn under such letters of credit. In addition, FairPoint Communications is required to pay a quarterly commitment fee on the average daily unused portion of the New Revolving Facility, which is 0.50% initially, subject to reduction to 0.375% based on FairPoint Communication's consolidated total leverage ratio. In the third quarter of 2013, the Company entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period beginning on September 30, 2015 and maturing on September 30, 2017. Each respective swap agreement requires the Company to pay a fixed rate of 2.665% and provides that the Company will receive a variable rate based on the three month LIBOR rate subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to the Company will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing December 31, 2015. For further information regarding these agreements, see note (7) "Interest Rate Swap Agreements."

Security/Guarantors. All obligations under the New Credit Agreement, together with certain designated hedging obligations and cash management obligations, are unconditionally guaranteed on a senior secured basis by each of the Subsidiary Guarantors and secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the Notes.

Mandatory Repayments. Commencing in the second quarter of 2013, FairPoint Communications is required to make quarterly repayments of the New Term Loan in a principal amount equal to $1.6 million during the term of the New Credit Agreement. In addition, mandatory repayments are required under the New Credit Agreement with (i) a percentage, initially equal to 50% and subject to reduction to 25% based on FairPoint Communication's consolidated total leverage ratio, of FairPoint Communication's excess cash flow, as defined in the New Credit Agreement, beginning with the fiscal year ending December 31, 2013, (ii) the net cash proceeds of certain asset dispositions, insurance proceeds and condemnation awards and (iii) issuances of debt not permitted to be incurred under the New Credit Agreement. Optional prepayments and mandatory prepayments resulting from the incurrence of debt not permitted to be incurred under the New Credit Agreement are required to be made at (i) 103.0% of the aggregate principal amount prepaid if such prepayment is made on or prior to February 14, 2014, (ii) 102.0% of the aggregate principal amount prepaid if such prepayment is made after February 14, 2014, but on or prior to February 14, 2015 and (iii) 101.0% of the aggregate principal amount prepaid if such prepayment is made after February 14, 2015 and on or prior to February 14, 2016. No premium is required to be paid for prepayments made after February 14, 2016.

Covenants. The New Credit Agreement contains customary representations and warranties and affirmative and negative covenants for a transaction of this type, including two financial maintenance covenants: (i) a consolidated interest coverage ratio and (ii) a consolidated total leverage ratio. The New Credit Agreement also contains a covenant limiting the maximum amount of capital expenditures that FairPoint Communications and its subsidiaries may make in any fiscal year. As of September 30, 2013, FairPoint Communications was in compliance with all covenants under the New Credit Agreement.

Events of Default. The New Credit Agreement also contains customary events of default for a transaction of this type.

The Notes. On the Refinancing Closing Date, FairPoint Communications issued $300.0 million of the Notes pursuant to the Indenture in a private offering exempt from registration under the Securities Act.

The terms of the Notes are governed by the Indenture. The Notes are senior secured obligations of FairPoint Communications and are guaranteed by the Subsidiary Guarantors. The Notes and the guarantees thereof are secured by a first-priority lien on substantially all personal property of FairPoint Communications and the Subsidiary Guarantors, subject to certain exclusions set forth in the related security documents, pari passu with the lien securing the obligations under the New Credit Agreement. The Notes will mature on August 15, 2019 and accrue interest at a rate of 8.75% per annum, which is payable semi-annually in arrears on February 15 and August 15, commencing on August 15, 2013.

On or after February 15, 2016, FairPoint Communications may redeem all or part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest thereon, to the applicable redemption date. At any time prior to February 15, 2016, FairPoint Communications may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a "make-whole" premium as of, and accrued and unpaid interest to, the applicable redemption date. In addition, at any time prior to February 15, 2016, FairPoint Communications may, on one or more occasions, redeem up to 35% of the original aggregate principal amount of the Notes, using net cash proceeds of certain qualified equity offerings, at a redemption price of 108.75% of the principal amount of Notes redeemed, plus accrued and unpaid interest to the applicable redemption date.

The holders of the Notes have the ability to require FairPoint Communications to repurchase all or any part of the Notes if FairPoint Communications experiences certain kinds of changes in control or engages in certain asset sales, in each case at the repurchase prices and subject to the terms and conditions set forth in the Indenture.

The Indenture contains certain covenants which are customary with respect to non-investment grade debt securities, including limitations on FairPoint Communication's ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase FairPoint Communication's capital stock, make certain investments, enter into certain types of transactions with affiliates, create liens and sell certain assets or merge with or into other companies. These covenants are subject to a number of important limitations and exceptions.

The Indenture also provides for customary events of default, including cross defaults to other specified debt of FairPoint Communications and certain of its subsidiaries.

Old Credit Agreement

On January 24, 2011, FairPoint Communications and FairPoint Logistics, Inc. (collectively, the "Old Credit Agreement Borrowers") entered into a $1,075.0 million senior secured credit facility with a syndicate of lenders and Bank of America, N.A., as the administrative agent for the lenders (the "Old Credit Agreement"), comprised of a $75.0 million revolving facility (the "Old Revolving Facility") and a $1.0 billion term loan (the "Old Term Loan" and together with the Old Revolving Facility, the "Old Credit Agreement Loans"). On January 24, 2011, the Company paid to the lenders providing the Old Revolving Facility an aggregate fee equal to $1.5 million. Interest on the Old Credit Agreement Loans accrued at an annual rate equal to either (a) LIBOR plus 4.50%, with a minimum LIBOR floor of 2.00% for the Old Term Loan or (b) a base rate plus 3.50% per annum, which base rate was equal to the highest of (x) Bank of America's prime rate, (y) the federal funds effective rate plus 0.50% and (z) the applicable LIBOR plus 1.00%. In addition, the Company was required to pay a 0.75% per annum commitment fee on the average daily unused portion of the Old Revolving Facility. The entire outstanding principal amount of the Old Credit Agreement Loans was to be due and payable on January 24, 2016. The Old Credit Agreement required quarterly repayments of principal of the Old Term Loan after the first anniversary of January 24, 2011. During 2012 and in the first quarter of 2013, prior to the Old Credit Agreement being retired, the Company made $43.0 million and $10.5 million, respectively, of principal payments on the Old Term Loan.

The Old Credit Agreement contained customary representations, warranties and affirmative and negative covenants. The Old Credit Agreement also contained minimum interest coverage and maximum total leverage maintenance covenants, along with a maximum senior leverage covenant measured upon the incurrence of certain types of debt. As of December 31, 2012, the Old Credit Agreement Borrowers were in compliance with all covenants under the Old Credit Agreement.

On February 14, 2013, the Company completed the Refinancing and repaid all amounts outstanding under the Old Credit Agreement.

Debt Issue Costs

On February 14, 2013, the Company completed the Refinancing and capitalized $7.6 million of debt issue costs associated with the New Credit Agreement and Notes. These debt issue costs are being amortized over a weighted average life of 6.2 years using the effective interest method.

On January 24, 2011, the Company entered into the Old Credit Agreement and capitalized $2.4 million of debt issue costs associated with the Old Credit Agreement. These debt issue costs were being amortized over a weighted average life of 3.7 years using the effective interest method. Upon the completion of the Refinancing, the balance of the Old Credit Agreement debt issue costs was principally written off.

As of September 30, 2013 and December 31, 2012, the Company had capitalized debt issue costs of $7.4 million and $1.1 million, respectively, net of amortization.

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net loss	$ (8,960)	$ (37,329)	$ (99,553)	$ (121,114)
Other comprehensive income, net of taxes:
Interest rate swaps (net of $(0.4) million and $(0.4) million tax expense, respectively, for three months and nine months ended September 30, 2013)	(542)	0	(542)	0
Qualified pension and post-retirement healthcare plans (net of $0.5 million, $0 million, $1.4 million and $0.8 million tax expense, respectively)	1,887	52	6,605	3,391
Total other comprehensive income	1,345	52	6,063	3,391
Comprehensive loss	$ (7,615)	$ (37,277)	$ (93,490)	$ (117,723)

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Assets:
Cash	$ 24,740	$ 23,203
Restricted cash	1,688	6,818
Accounts receivable (net of $13.9 million and $18.9 million allowance for doubtful accounts, respectively)	89,264	86,999
Prepaid expenses	25,512	20,128
Other current assets	3,318	4,219
Deferred income tax, net	16,257	16,376
Assets held for sale	0	12,549
Total current assets	160,779	170,292
Property, plant and equipment (net of $850.9 million and $642.1 million accumulated depreciation, respectively)	1,311,197	1,438,309
Intangible assets (net of $29.9 million and $21.6 million accumulated amortization, respectively)	108,640	116,992
Debt issue costs, net	7,378	1,111
Restricted cash	651	651
Other assets	3,983	5,006
Total assets	1,592,628	1,732,361
Liabilities and Stockholders’ Deficit:
Current portion of long-term debt	6,400	10,000
Current portion of capital lease obligations	1,396	1,220
Accounts payable	51,456	57,832
Claims payable and estimated claims accrual	256	1,282
Accrued interest payable	3,417	176
Other accrued liabilities	67,822	72,036
Liabilities held for sale	0	407
Total current liabilities	130,747	142,953
Capital lease obligations	825	1,470
Accrued pension obligations	209,041	203,537
Accrued post-retirement healthcare obligations	656,352	616,379
Deferred income taxes	71,153	127,361
Other long-term liabilities	18,606	11,474
Long-term debt, net of current portion	912,630	947,000
Total long-term liabilities	1,868,607	1,907,221
Total liabilities	1,999,354	2,050,174
Commitments and contingencies (See Note 14)
Stockholders’ deficit:
Common stock, $0.01 par value, 37,500,000 shares authorized, 26,478,175 and 26,288,998 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively	264	262
Additional paid-in capital	510,728	506,153
Retained deficit	(667,792)	(568,239)
Accumulated other comprehensive loss	249,926	255,989
Total stockholders’ deficit	(406,726)	(317,813)
Total liabilities and stockholders’ deficit	$ 1,592,628	$ 1,732,361

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares

The following table provides a reconciliation of the common shares used for basic earnings per share and diluted earnings per share (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average number of common shares used for basic earnings per share (a)	26,206	25,993	26,181	25,970
Effect of potential dilutive shares (b)	—	—	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	26,206	25,993	26,181	25,970
Anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation (c)	5,300	4,853	5,300	4,853

(a) Weighted average number of common shares used for basic earnings per share excludes 275,188, 242,844, 283,357 and 246,351 weighted average shares of non-vested restricted stock as of the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

(b) Since the Company incurred a loss for the three and nine months ended September 30, 2013 and 2012, all potentially dilutive securities are anti-dilutive for these periods and, therefore, are excluded from the determination of diluted earnings per share.

(c) Anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation include warrants, non-vested restricted stock and stock options issued under the FairPoint Communications, Inc. 2010 Long Term Incentive Plan.

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Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include all majority-owned subsidiaries of the Company. Partially owned equity affiliates are accounted for under the cost method or equity method when the Company demonstrates significant influence, but does not have a controlling financial interest. Intercompany accounts and transactions have been eliminated.

Presentation and use of estimates

Presentation and Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items.

The Company has reclassified its long-term workers compensation accrual from “Employee benefit obligations” to “Other long-term liabilities” in the December 31, 2012 consolidated balance sheet to be consistent with current period presentation.

Examples of significant estimates include the allowance for doubtful accounts, revenue reserves, the depreciation of property, plant and equipment, valuation of intangible assets, qualified pension and post-retirement healthcare plan assumptions, stock-based compensation and income taxes.

Revenue Recognition

Revenue Recognition

Revenues are recognized as services are rendered and are primarily derived from the usage of the Company's networks and facilities or under revenue-sharing arrangements with other communications carriers. Revenues are primarily derived from: voice services, access (including pooling), Internet and broadband services, Connect America Fund ("CAF") receipts and other miscellaneous services. Local access charges are billed to local end users under tariffs approved by each state's Public Utilities Commission ("PUC") (or its similar agency) or by rates, terms and conditions determined by the Company. Access revenues are derived for the intrastate jurisdiction by billing access charges to interexchange carriers, wireless carriers and to other LECs. These charges are billed based on toll or access tariffs approved by the local state's PUC. Access charges for the interstate jurisdiction are billed in accordance with tariffs filed by the National Exchange Carrier Association ("NECA") or by the individual company and approved by the Federal Communications Commission (the "FCC").

Revenues are determined on a bill-and-keep basis or a pooling basis. If on a bill-and-keep basis, the Company bills the charges to either the access provider or the end user and keeps the revenue. If the Company participates in a pooling environment (interstate or intrastate), the toll or access billed is contributed to a revenue pool. The revenue is then distributed to individual companies based on their company-specific revenue requirement. This distribution is based on individual state PUC's (intrastate) or the FCC's (interstate) approved separation rules and rates of return. Distribution from these pools can change relative to changes made to expenses, plant investment or rate-of-return. Some companies participate in federal and certain state universal service programs that are pooling in nature but are regulated by rules separate from those described above. These rules vary by state. Revenues earned through the various pooling arrangements are initially recorded based on the Company's estimates. Rule changes associated with the FCC's CAF/ICC Order (as defined hereinafter) impact the NECA interstate pooling, in that a portion of the Company's interstate Universal Service Fund ("USF") revenues, which are administered through the NECA pools and which prior to January 1, 2012 were based on costs, are now based on the CAF Phase I rules and will be based on CAF Phase II rules when those are put into effect.

Long distance retail and wholesale revenues are predominantly recurring in nature, whether offered under the Company's flat-rated unlimited packages or whether offered in a usage sensitive pricing package. In either case, they are billed in arrears and recognized when earned. Data and Internet services revenues are substantially all recurring revenues and are billed one month in advance and deferred until earned.

As of September 30, 2013 and December 31, 2012, unearned revenue of $17.2 million and $18.3 million, respectively, was included in current "Other accrued liabilities" on the condensed consolidated balance sheets.

The majority of the Company's other miscellaneous services revenue is generated from ancillary special projects at the request of third parties, video services, directory services and late payment charges to end users and interexchange carriers. The Company requires customers to pay for ancillary special projects in advance. Once the ancillary special project is completed and all project costs have been accumulated for proper accounting recognition, the advance payment is recognized as revenue with any over payments refunded to the customer as appropriate. The Company recognizes revenue upon the provision of video services in certain markets by reselling DirecTV content and providing cable and IP television video-over-digital subscriber line services. The Company also publishes telephone directories in some of its markets and recognizes revenues associated with these publications. The Company bills late payment fees to customers who have not paid their bills in a timely manner. In general, late fee revenue relates to wholesale customers, which is recognized as it is collected.

Non-recurring customer activation fees, along with the related costs up to, but not exceeding, the activation fees, are deferred and amortized over the customer relationship period.

The Company was subject to retail service quality plans in the states of Maine, New Hampshire and Vermont in 2012 and for a portion of 2013 in Maine and Vermont, pursuant to which service quality index ("SQI") penalties were imposed upon the Company's failure to meet the requirements of the respective plans. Penalties resulting from these commitments are recorded as a reduction to revenue and to other accrued liabilities on the condensed consolidated balance sheets. The Company also adopted a separate performance assurance plan ("PAP") for certain services provided on a wholesale basis to competitive local exchange carriers ("CLECs") in the northern New England service territories of each of the states of Maine, New Hampshire and Vermont, pursuant to which FairPoint is required to provide performance credits in the event the Company is unable to meet the provisions of the respective PAP. Penalties resulting from these commitments are recorded as a reduction to revenue. In Maine and New Hampshire, these penalties are recorded as a reduction to accounts receivable on the condensed consolidated balance sheets since they are paid by the Company in the form of credits applied to CLEC bills. PAP penalties in Vermont are recorded to other accrued liabilities on the condensed consolidated balance sheets as a majority of these penalties are paid to the Vermont Universal Service Fund ("VUSF"), while the remaining credits assessed in Vermont are paid by the Company in the form of credits applied to CLEC bills.

Revenue is recognized net of tax collected from customers and remitted to governmental authorities.

Management makes estimated adjustments, as necessary, to revenue and accounts receivable for billing errors, including certain disputed amounts.

Depreciation Life Study

Depreciation Life Study

In connection with the Company's adoption of fresh start accounting on January 24, 2011, property, plant and equipment assets were revalued to their fair value, generally their appraised value after considering economic obsolescence. New remaining useful lives were established and accumulated depreciation was reset to zero.

Periodically, the Company reviews the estimated remaining useful lives of its group asset categories to address continuing changes in technology, competition and the Company’s overall reduction in capital spending and increased focus on more efficient utilization of its existing assets. In the third quarter of 2013, the Company conducted this review and determined that changes to the estimated remaining useful lives for certain asset categories were appropriate. Accordingly, as a result of the changes to the remaining useful lives, depreciation expense in the third quarter of 2013 was approximately $29.0 million less than it would have been absent the changes, resulting in a reduction in net loss of approximately $27.0 million or a benefit of $1.03 per share.

Accounting for Income Taxes

Accounting for Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management determines its estimates of future taxable income based upon the scheduled reversal of deferred tax liabilities and tax planning strategies. The Company establishes valuation allowances for deferred tax assets when it is estimated to be more likely than not that the tax assets will not be realized.

FairPoint Communications files a consolidated income tax return with its subsidiaries. All intercompany tax transactions and accounts have been eliminated in consolidation.

Operating Segments

Operating Segments

Management views its business of providing data, video and voice communication services to business, wholesale and residential customers as one operating segment. The Company's services consist of retail and wholesale telecommunications and data services, including voice and HSD in 17 states. The Company's chief operating decision maker assesses operating performance and allocates resources based on the consolidated results.

Interest Rate Swap Agreements

Interest Rate Swap Agreements

In the third quarter of 2013, the Company entered into interest rate swap agreements. For further information regarding these interest rate swap agreements, see note (7) "Interest Rate Swap Agreements." The interest rate swap agreements, at their inception, qualified for and were designated as cash flow hedging instruments. In accordance with the Derivatives and Hedging Topic of the Accounting Standards Codification ("ASC"), the Company records its interest rate swaps on the condensed consolidated balance sheet at fair value. The effective portion of changes in fair value are recorded in accumulated other comprehensive loss and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Any ineffective portion is recognized in earnings. Both at inception and on a quarterly basis, the Company performs an effectiveness test.

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Earnings Per Share (Details) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Calculation of basic and diluted earnings per common share
Weighted average number of common shares used for basic earnings per share	26,206	[1]	25,993	[1]	26,181	[1]	25,970	[1]
Effect of potential dilutive shares	0	[2]	0	[2]	0	[2]	0	[2]
Weighted Average Number of Shares Outstanding, Diluted	26,206		25,993		26,181		25,970
Anti-dilutive shares outstanding at period-end excluded from the above reconciliation.	5,300	[3]	4,853	[3]	5,300	[3]	4,853	[3]

[1] Weighted average number of common shares used for basic earnings per share excludes 275,188, 242,844, 283,357 and 246,351 weighted average shares of non-vested restricted stock as of the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

[2] Since the Company incurred a loss for the three and nine months ended September 30, 2013 and 2012, all potentially dilutive securities are anti-dilutive for these periods and, therefore, are excluded from the determination of diluted earnings per share.

[3] Anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation include warrants, non-vested restricted stock and stock options issued under the FairPoint Communications, Inc. 2010 Long Term Incentive Plan.

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Interest Rate Swap Agreements Interest Rate Swap Agreements (Details) (Interest Rate Swap, USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Interest Rate Swap
Derivative [Line Items]
Interest rate swap, fair value	$ 908	$ 908
Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion)	$ 542	$ 542

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Long-Term Debt (Details) (USD $)	Sep. 30, 2013		Feb. 14, 2013	Dec. 31, 2012
Long term debt for the Company
Long-term debt	$ 919,030,000			$ 957,000,000
Less: current portion	(6,400,000)			(10,000,000)
Total long-term debt, net of current portion	912,630,000			947,000,000
Term Loan, due 2019
Long term debt for the Company
Secured Debt	636,800,000			0
Discount on New Term Loan (a)	(17,770,000)	[1],[2]	(17,800,000)	0	[1]
Weighted average rate	7.50%
Senior Secured Notes due 2019
Long term debt for the Company
Senior notes, 8.75% Due 2019	300,000,000			0
Stated interest rate	8.75%		8.75%
Old Term Loan Due 2016
Long term debt for the Company
Secured Debt	$ 0			$ 957,000,000
Weighted average rate	7.50%

[1] The $17.8 million discount on the New Term Loan (as defined below) is being amortized using the effective interest method over the term of the senior secured credit facility due 2019.

[2] The carrying amount of the New Term Loan is net of the discount of $17.8 million.

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Long-Term Debt (Maturities of Long-term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Approximate Aggregate Maturities of Long-term Debt
2014	$ 6,400
2015	6,400
2016	6,400
2017	6,400
2018	6,400
Thereafter	904,800
Total long-term debt, including current portion	$ 936,800

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded a tax benefit on the loss from continuing operations for the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012 of $14.2 million, $13.4 million, $61.2 million and $55.9 million, respectively, which equates to an effective tax rate of 61.3%, 26.5%, 35.8% and 31.6%, respectively. For the three months ended September 30, 2013, the effective tax rate differs from the 35% federal statutory rate primarily due to a decrease in the valuation allowance plus state taxes. The decrease in the valuation allowance is due to a change in judgment regarding the realizability of deferred tax assets resulting primarily from the change in the timing of book depreciation due to our depreciation life study. This change in the valuation allowance resulted in $9.6 million of tax benefit during the quarter. For the three months ended September 30, 2012 and the nine months ended September 30, 2013 and 2012, the effective tax rate differs from the 35% federal statutory rate primarily due to an increase in the valuation allowance offset by state taxes. In addition, the Company recorded deferred income tax expense for the nine months ended September 30, 2013 of $6.7 million on the gain on sale of its Idaho-based operations on January 31, 2013, which is reported within discontinued operations in the statement of operations for the nine months ended September 30, 2013.

Deferred Income Taxes

At September 30, 2013, the Company had gross federal NOL carryforwards of $210.7 million after taking into consideration the NOL tax attribute reduction of $581.8 million resulting from the Company's discharge of indebtedness upon emergence from Chapter 11 protection. The Company's remaining federal NOL carryforwards will expire from 2021 to 2033. At September 30, 2013, the Company had a net, after attribute reduction, state NOL deferred tax asset of $9.8 million. At September 30, 2013, the Company had no alternative minimum tax credits. Telecom Group completed an initial public offering on February 8, 2005, which resulted in an "ownership change" within the meaning of the United States federal income tax laws addressing NOL carryforwards, alternative minimum tax credits and other similar tax attributes. The Merger and the Company's emergence from Chapter 11 protection also resulted in ownership changes. As a result of these ownership changes, there are specific limitations on the Company's ability to use its NOL carryforwards and other tax attributes. The Company believes that it can use the NOLs even with these restrictions in place.

Valuation Allowance. At September 30, 2013 and December 31, 2012, the Company established a valuation allowance against its deferred tax assets of $193.8 million and $192.5 million, respectively, which consist of a $158.1 million and $159.5 million federal allowance, respectively, and a $35.7 million and $33.0 million state allowance, respectively. During the nine months ended September 30, 2013, a decrease in the Company's valuation allowance of approximately $1.9 million was allocated to accumulated other comprehensive loss in the condensed consolidated balance sheet.

Unrecognized Tax Benefits. Unrecognized tax benefits are reserves established for probable loss contingencies that could be reasonably estimated. The Company's unrecognized tax benefits totaled $3.8 million as of September 30, 2013 and $3.8 million as of December 31, 2012. The total unrecognized tax benefits that, if recognized, would affect the effective tax rate are $3.8 million. The Company does not expect a significant increase or decrease in its unrecognized tax benefits during the next twelve months.

The Company recognizes any interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, the Company did not make any payment of interest and penalties. There was nothing accrued in the condensed consolidated balance sheets for the payment of interest and penalties at September 30, 2013 and December 31, 2012, respectively, as the remaining unrecognized tax benefits would only serve to reduce the Company's current federal and state NOL carryforwards, if ultimately recognized.

Income Tax Returns

The Company and its eligible subsidiaries file consolidated income tax returns in the United States federal jurisdiction and certain consolidated, combined and separate entity tax returns, as required, with various state and local governments. The Company is no longer subject to United States federal, state and local, or non-United States income tax examinations by tax authorities for years prior to 2008. NOL carryovers from closed tax years may be subject to examination by federal or state taxing authorities if utilized in a year open to examination. As of September 30, 2013 and December 31, 2012, the Company does not have any significant additional jurisdictional tax audits.

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Assets Held for Sale and Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures

Revenue and income before income taxes of the Idaho-based operations for the three months ended September 30, 2012 and the nine months ended September 30, 2013 and 2012 are as follows (in thousands):

	Three Months Ended September 30, 2012		Nine Months Ended September 30,
			2013(a)		2012
Revenue	$	1,984	$	674	$	5,927
Income (loss) before income taxes	$	406	$	477	$	1,075

A summary of assets and liabilities held for sale at December 31, 2012 is as follows (in thousands):

	December 31, 2012
Assets held for sale:
Accounts receivable, net	$	261
Prepaid expenses	37
Other current assets	3
Property, plant and equipment (net of $4.6 million accumulated depreciation)	6,441
Other assets	5,807
Total assets held for sale	$	12,549
Liabilities held for sale:
Accounts payable	$	137
Other accrued liabilities	148
Other long-term liabilities	122
Total liabilities held for sale	$	407

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Employee Benefit Plans (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Employee Benefit Plans (Textual) [Abstract]
Actual return for qualified pension plan assets	4.10%	4.10%	7.00%	7.70%
Weighted average annualized expected return on qualified pension plan assets			7.60%
Qualified Pension
Employee Benefit Plans (Textual) [Abstract]
Expected employer contributions in current fiscal year	$ 22.0		$ 22.0
Employer pension contribution year-to-date			13.2
Expected benefit payments, remainder of fiscal year	8.8		8.8
Post-retirement Healthcare
Employee Benefit Plans (Textual) [Abstract]
Expected employer contributions in current fiscal year	5.1		5.1
Benefit contribution payments to post-retirement healthcare			2.6
Expected benefit payments, remainder of fiscal year	$ 2.5		$ 2.5

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Fair Value Fair Value

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

The Fair Value Measurements and Disclosures Topic of the ASC defines fair value, establishes a framework for measuring fair value and establishes a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value. The Fair Value Measurements and Disclosures Topic of the ASC also expands financial statement disclosures about fair value measurements.

In determining fair value, the Company uses a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Valuations based on quoted prices for similar instruments in active markets or quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company's non-financial assets and liabilities, including its long-lived assets and indefinite-lived intangible assets, are measured and subsequently adjusted, if necessary, to fair value on a non-recurring basis. The Company periodically performs routine reviews of triggering events and/or an impairment test, as applicable. Based on these procedures, the Company did not require an adjustment to fair value to be recorded in the first three quarters of 2013 or in 2012.

The Company's financial instruments, other than interest rate swap agreements and long-term debt, consist primarily of cash, restricted cash, accounts receivable and accounts payable. The carrying amounts of these financial instruments are estimated to approximate fair value due to the relatively short period of time to maturity for these instruments. As of September 30, 2013, interest rate swap agreements are carried at their fair value and measured on a recurring basis as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Long-term interest rate swap liability (a)	$	—	$	908	$	—

(a) The fair value is determined using valuation models which rely on the expected LIBOR based yield curve and estimates of counterparty and the Company’s non-performance risk.  Because each of these inputs are directly observable or can be corroborated by observable market data, we have categorized these interest rate swaps as Level 2 within the fair value hierarchy.

Long-term debt is not carried at fair value, but measured on a recurring basis. The estimated fair values of the Company's long-term debt as of September 30, 2013 and December 31, 2012 are as follows (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
New Term Loan, due 2019 (b)	$	619,030	$	638,392	$	—	$	—
Notes, 8.75%, due 2019	300,000		301,500		—		—
Old Term Loan, repaid February 2013	—		—		957,000		929,500

(a) The Company estimated fair value based on market prices of the Company's debt securities at the balance sheet date, which falls within Level 2 of the fair value hierarchy.

(b) The carrying amount of the New Term Loan is net of the discount of $17.8 million.

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Dividends

9 Months Ended

Sep. 30, 2013

Dividends [Abstract]

Dividends

Dividends

The Company currently does not pay a dividend on its common stock and does not expect to pay dividends in the foreseeable future.

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Condensed Consolidated Statement of Stockholders' Deficit (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Retained deficit	Accumulated other comprehensive loss
Beginning Balance at Dec. 31, 2012	$ (317,813)	$ 262	$ 506,153	$ (568,239)	$ (255,989)
Beginning Balance, Shares at Dec. 31, 2012	26,288,998	26,289,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(99,553)	0	0	(99,553)	0
Issuance of common stock, Shares		178,000
Issuance of common stock	0	2	(2)	0	0
Exercise of stock options, Shares		11,000
Exercise of stock options	53	0	53	0	0
Stock based compensation expense, Shares		0
Stock based compensation expense	4,524	0	4,524	0	0
Interest rate swaps (net of $(0.4) million and $(0.4) million tax expense, respectively, for three months and nine months ended September 30, 2013)	(542)	0	0	0	(542)
Employee benefit adjustment to comprehensive income, Shares		0
Employee benefit other comprehensive loss before reclassifications	(2,429)	0	0	0	(2,429)
Employee benefit amounts reclassified from accumulated other comprehensive loss	9,034	0	0	0	9,034
Ending Balance at Sep. 30, 2013	$ (406,726)	$ 264	$ 510,728	$ (667,792)	$ (249,926)
Ending Balance, Shares at Sep. 30, 2013	26,478,175	26,478,000

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Assets Held for Sale and Discontinued Operations (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012	Jan. 31, 2013 employee	Dec. 31, 2012
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of business		$ 30,452,000		$ 0
Assets held for sale:
Total assets held for sale		0				12,549,000
Liabilities held for sale:
Total liabilities held for sale		0				407,000
Blackfoot Telecommunications Group
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of employees who joined Blackfoot organization					11
Discontinued Operation, Tax Effect of Income (Loss) from Disposal of Discontinued Operation		6,700,000
Discontinued Operations, Gain on Disposal of Assets, GAAP		16,900,000
Discontinued Operations, Gain on Disposal of Assets, Tax Basis		27,100,000
Assets held for sale:
Accounts receivable, net						261,000
Prepaid expenses						37,000
Other current assets						3,000
Property, plant and equipment (net of $4.6 million accumulated depreciation)						6,441,000
Accumulated depreciation						4,600,000
Other assets						5,807,000
Total assets held for sale						12,549,000
Liabilities held for sale:
Accounts payable						137,000
Other accrued liabilities						148,000
Other long-term liabilities						122,000
Total liabilities held for sale						407,000
Income Statement Disclosures:
Revenue	1,984,000	674,000	[1]	5,927,000
Income (loss) before income taxes	$ 406,000	$ 477,000	[1]	$ 1,075,000

[1] Reflects revenue and income before income taxes of the Idaho-based operations for the period of January 1, 2013 through the completion of the transaction on January 31, 2013.

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Accounting Policies Accounting Policies - Other (Details Textual) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013 States	Dec. 31, 2012
Accounting Policies [Abstract]
Deferred revenue	$ 17.2	$ 18.3
Number of operating states	17

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share of the Company is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive, the diluted earnings per share calculation calculated using the treasury stock method includes the impact of stock units, shares of non-vested restricted stock and shares that could be issued under outstanding stock options.

The following table provides a reconciliation of the common shares used for basic earnings per share and diluted earnings per share (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average number of common shares used for basic earnings per share (a)	26,206	25,993	26,181	25,970
Effect of potential dilutive shares (b)	—	—	—	—
Weighted average number of common shares and potential dilutive shares used for diluted earnings per share	26,206	25,993	26,181	25,970
Anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation (c)	5,300	4,853	5,300	4,853

(a) Weighted average number of common shares used for basic earnings per share excludes 275,188, 242,844, 283,357 and 246,351 weighted average shares of non-vested restricted stock as of the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2013 and 2012, respectively. Non-vested restricted stock is included in common shares issued and outstanding in the condensed consolidated balance sheets.

(b) Since the Company incurred a loss for the three and nine months ended September 30, 2013 and 2012, all potentially dilutive securities are anti-dilutive for these periods and, therefore, are excluded from the determination of diluted earnings per share.

(c) Anti-dilutive shares outstanding at period-end that are excluded from the above reconciliation include warrants, non-vested restricted stock and stock options issued under the FairPoint Communications, Inc. 2010 Long Term Incentive Plan.

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Interest Rate Swap Agreements Interest Rate Swap Agreements

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Interest Rate Swap Agreements

Interest Rate Swap Agreements

The Company uses interest rate swap agreements to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows relating to interest payments on a portion of its outstanding debt. The Company's interest rate swaps, which are designated as cash flow hedges, involve the receipt of variable amounts from counterparties in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not hold or issue any derivative financial instruments for speculative trading purposes.

In the third quarter of 2013, the Company entered into interest rate swap agreements with a combined notional amount of $170.0 million with three counterparties that are effective for a two year period beginning on September 30, 2015 and maturing on September 30, 2017. Each respective swap agreement requires the Company to pay a fixed rate of 2.665% and provides that the Company will receive a variable rate based on the three month LIBOR rate subject to a minimum LIBOR floor of 1.25%. Amounts payable by or due to the Company will be net settled with the respective counterparties on the last business day of each fiscal quarter, commencing December 31, 2015.

The effect of the Company’s interest rate swap agreements on the condensed consolidated balance sheet at September 30, 2013 is shown below (in thousands):

	As of September 30, 2013
Derivatives designated as hedging instruments:	Balance Sheet Location	Fair Value
Interest rate swaps	Other long-term liabilities	$	908

The effect of the Company’s interest rate swap agreements on the condensed consolidated statements of operations for the three and nine months ended September 30, 2013 is shown below (in thousands):

	Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion)
	Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
Interest rate swaps	$	542	$	542

There were no amounts reclassified into current earnings due to ineffectiveness during the periods presented. The Company estimates that none of the amount reported in accumulated other comprehensive loss for interest rate swaps is expected to be reclassified to interest expense in the next 12 months as the interest rate swap agreements are not effective until September 30, 2015.

Each interest rate swap agreement contains a provision whereby if the Company defaults on any of its indebtedness, the Company may also be declared in default under the interest rate swap agreements.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

(a) Leases

The Company does not have any leases with contingent rental payments or any leases with contingency renewal, purchase options or escalation clauses.

(b) Legal Proceedings

From time to time, the Company is involved in litigation and regulatory proceedings arising out of its operations. The Company's management believes that it is not currently a party to any legal or regulatory proceedings, the adverse outcome of which, individually or in the aggregate, would have a material adverse effect on the Company's financial position or results of operations. Notwithstanding that the Company emerged from Chapter 11 protection on January 24, 2011, one of the Chapter 11 Cases (Northern New England Telephone Operations LLC - Case No. 09-16365) remains open.

(c) Restricted Cash

As of September 30, 2013, the Company had $2.3 million of restricted cash, of which $0.1 million is reserved for payment of outstanding related bankruptcy issues (the "Cash Claims Reserve"), $1.6 million is reserved for broadband build-out in New Hampshire and $0.6 million is restricted for other purposes.

During the nine months ended September 30, 2013, $0.6 million of the Cash Claims Reserve was released due to favorable resolution of claims, $2.8 million of restricted cash reserved for broadband build-out in Vermont was utilized and $1.7 million of restricted cash reserved for broadband build-out in New Hampshire was utilized.

(d) Magnitude of Bankruptcy Claims

Claims totaling approximately $4.9 billion were filed with the Bankruptcy Court against the Company. As of November 1, 2013, through the claim resolution process, $3.8 billion of these claims have been settled and $1.1 billion of these claims have been disallowed by the Bankruptcy Court. Additionally, $15.2 million of these claims have been withdrawn by the respective creditors. The disallowance of one claim in the amount of $0.2 million has been appealed by the claimant.

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Stockholders' Deficit

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Deficit

Stockholders' Deficit

At September 30, 2013, 37,500,000 shares of common stock were authorized and 26,478,175 shares of common stock (including shares of non-vested restricted stock) and 3,582,402 warrants, each eligible to purchase one share of common stock, were outstanding.

The initial exercise price applicable to the warrants is $48.81 per share of common stock. The exercise price applicable to the warrants is subject to adjustment upon the occurrence of certain events described in the warrant agreement that the Company entered into with the Bank of New York Mellon, as the warrant agent, on January 24, 2011. The warrants may be exercised at any time on or before the seventh anniversary of January 24, 2011.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	FAIRPOINT COMMUNICATIONS INC
Entity Central Index Key	0001062613
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		26,477,975

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Assets Held for Sale and Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale and Discontinued Operations

Assets Held for Sale and Discontinued Operations

On November 28, 2012, the Company entered into an agreement to sell the capital stock of its Idaho-based operations to Blackfoot Telecommunications Group ("Blackfoot") of Missoula, Montana for $30.5 million in gross cash proceeds. The closing of the transaction was completed on January 31, 2013. Eleven FairPoint employees joined the Blackfoot organization at closing. The Company recorded a gain, before $6.7 million of deferred taxes, of $16.9 million upon the closing of the transaction, which is reported within discontinued operations in the condensed consolidated statement of operations for the nine months ended September 30, 2013. Due to differences between the book and tax basis of the Idaho-based operations, the gain reported on the sale for income tax purposes will be $27.1 million.

The Idaho-based operations' assets and liabilities were classified as held for sale and were recorded as single line items in the current asset and current liability sections of the condensed consolidated balance sheet at December 31, 2012. A summary of assets and liabilities held for sale at December 31, 2012 is as follows (in thousands):

	December 31, 2012
Assets held for sale:
Accounts receivable, net	$	261
Prepaid expenses	37
Other current assets	3
Property, plant and equipment (net of $4.6 million accumulated depreciation)	6,441
Other assets	5,807
Total assets held for sale	$	12,549
Liabilities held for sale:
Accounts payable	$	137
Other accrued liabilities	148
Other long-term liabilities	122
Total liabilities held for sale	$	407

The operations of the Idaho-based operations are immaterial to the financial results of the consolidated Company and therefore have not been segregated as discontinued operations in the condensed consolidated statements of operations. Revenue and income before income taxes of the Idaho-based operations for the three months ended September 30, 2012 and the nine months ended September 30, 2013 and 2012 are as follows (in thousands):

	Three Months Ended September 30, 2012		Nine Months Ended September 30,
			2013(a)		2012
Revenue	$	1,984	$	674	$	5,927
Income (loss) before income taxes	$	406	$	477	$	1,075

(a) Reflects revenue and income before income taxes of the Idaho-based operations for the period of January 1, 2013 through the completion of the transaction on January 31, 2013.