What changed in this filing

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Item 1. Business

2021-02-25 compared with 2020-02-26 · 328 added, 292 removed, 184 unchanged (77% of the section changed)

Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”), together with our consolidated subsidiaries, is a provider of a comprehensive range of wireless and broadband communication products and services in the Mid-Atlantic portion of the United States (“U.S.”).

Effective November 30, 2019, we realigned our reporting segment structure to align with how our CEO and chief operating decision maker (“CODM”) allocates resources and evaluates operating performance.

These changes follow an organizational shift during 2019 from a business line to a functional structure, to better delineate between our key products, and better enable peer comparisons by both our CODM and our investors.

As a result of these changes, we have combined our legacy Cable and Wireline segments into a new Broadband segment and also bifurcated a Tower segment from our legacy Wireless segment.

These changes are depicted below:

Each of our new segments is discussed further in the “Description of Business” section below.

All current and prior period financial and operating statistics presented in this Annual Report have been recast accordingly for comparability.

Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”), is a provider of a broad range of diversified communications services through its high speed, state-of-the-art wireless, cable, fiber optic and fixed wireless networks to customers in the Mid-Atlantic United States.

Shentel’s services include:

broadband internet, video, and digital voice;

fiber optic Ethernet, wavelength and leasing;

telephone voice and digital subscriber line;

tower colocation leasing;

and wireless voice and data.

For more information, please visit www.shentel.com.

Description of Business

Our Wireless segment has been an affiliate of Sprint Corporation ("Sprint") since 1995.

Under our affiliate agreement, we are Sprint's exclusive provider of wireless mobility communications network products throughout the Mid-Atlantic region of the U.S., including large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, Kentucky, and Ohio (" Sprint Affiliate Area ").

The Company is licensed to use the Sprint brand names in our Sprint Affiliate Area and we are licensed to operate on FCC spectrum licenses that Sprint owns within the 800 megahertz (MHz), 1900 MHz and 2.5 gigahertz (GHz) bands.

Our current Sprint Affiliate Area covers an estimated population of approximately 6.3 million ("Covered POPS").

Sprint provides the Company significant support services, such as customer service, billing, collections, long distance, national network operations support, inventory logistics support, use of the Sprint brand names, national advertising, national distribution and product development.

Sprint is our customer under the affiliate agreement, and all of the revenue that we earn from providing wireless network service to Sprint is variable based on the amount that Sprint bills its subscribers within our Affiliate Area.

Sprint also retains certain applicable fees from these billings, namely, an 8% Management Fee and an 8.6% Net Service Fee on postpaid revenues and a 6% Management Fee on prepaid wireless revenues.

The Company is also charged for the costs of subsidized handsets sold through Sprint’s national sales channels as well as commissions paid by Sprint to third-party postpaid sales dealers in our Sprint Affiliate Area .

Sprint also charges the Company separately to acquire and

support prepaid customers.

These charges are calculated based on Sprint’s national averages for its prepaid programs, and are billed per user or per gross additional customer, as appropriate.

At December 31, 2019 the Company provided network service to 844,194 postpaid Sprint PCS subscribers and 274,012 prepaid Sprint PCS subscribers, representing increases of 6.2% and 5.9% , respectively, compared with December 31, 2018.

Of the Company's total consolidated revenues, approximately 70% in 2019, 71% in 2018, and 72% in 2017 were generated by our relationship with Sprint.

Our Broadband segment provides broadband, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, and Kentucky, via fiber optic and hybrid fiber coaxial (“HFC”) cable.

The Broadband segment also leases dark fiber and provides Ethernet and Wavelength fiber optic services to enterprise and carrier customers throughout the entirety of our service area.

The Broadband segment also provides voice and digital subscriber line (“DSL”) telephone services to customers in Virginia’s Shenandoah County as a Rural Local Exchange Carrier (“RLEC”).

Broadband Reporting Segment

Our Broadband segment provides broadband internet, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania, and Kentucky, via hybrid fiber coaxial cable under the brand name of Shentel, fiber optic services under the brand name of Glo Fiber and fixed wireless network services under the brand name of Beam.

The Broadband segment also leases dark fiber and provides Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area.

The Broadband segment also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as a Rural Local Exchange Carrier (“RLEC”).

These integrated networks are connected by an approximately 6,800 fiber route mile network.

This fiber optic network also supports our Wireless segment operations and these intercompany transactions are reported at their market value.

This fiber optic network also supports our Wireless segment operations, which are currently classified as discontinued operations, and these intercompany transactions are reported at their estimated market value.

The Broadband segment served 188,275 Revenue Generating Units ("RGUs") at December 31, 2020, representing an increase of 11.3%, from December 31, 2019.

Our Tower segment leases space on 225 owned cell towers to the Company's Wireless segment at market prices and to other wireless communications providers.

Wireless competition

The telecommunications industry is highly competitive.

We compete primarily on the basis of price, network coverage and reliability, quality of wireless data speed service, phone and other device availability, distribution and quality of our customer service.

Our ability to compete effectively depends on our ability to maintain high-quality services at prices competitive with those charged by our competitors.

In particular, price competition in the wireless services markets generally has been intense and is expected to continue.

Our competitors include, among others, larger national facilities-based providers such as AT&T Inc., Verizon Communications Inc.

and T-Mobile USA, Inc.

and regional facilities-based providers such as U.S.

Cellular Corp.

and Mobile Virtual Network Operators ("MVNOs") such as Comcast Corporation and Altice USA.

Our primary competitors have substantially greater infrastructure, financial, personnel, technical, marketing and other resources, and also have larger numbers of established customers and more prominent name recognition than the Company.

Competition is intense in the wireless communications industry.

Competition has caused the market prices for wireless products and services to decrease.

This has resulted in some carriers introducing pricing plans that are structurally different and often more aggressively priced than in the past.

Wireless providers are upgrading their wireless services to better accommodate real-time and downloadable audio and video content as well as Internet browsing capabilities and other services.

Our ability to compete effectively will depend, in part, on our ability to anticipate and respond to various competitive factors affecting the wireless industry.

Tower Reporting Segment

Our Tower segment owns 223 cell towers and leases colocation space on the towers to wireless communications providers, including our Wireless segment which is currently classified as a discontinued operation.

Substantially all of our owned towers are built on ground that we lease from the respective landlords.

The colocation space that we lease to our Wireless segment is priced at our estimate of fair market value.

Discontinued Wireless Operations

Our discontinued Wireless operations have been an affiliate of Sprint since 1999.

Shentel is the exclusive personal communications service ("PCS") Affiliate of Sprint in a multi-state area covering large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, and Kentucky.

On August 26, 2020, Sprint Corporation (“Sprint”), an indirect subsidiary of T-Mobile US, Inc., ("T-Mobile"), on behalf of and as the direct or indirect owner of Sprint PCS, delivered notice to the Company exercising its option to purchase the assets and operations of our Wireless operations ("Shentel Wireless"), for 90% of the “Entire Business Value” (as defined under our affiliate agreement and determined pursuant to the appraisal process set forth therein).

Shortly thereafter, the Company committed to a plan to sell the discontinued Wireless operations.

The final and binding appraisal process was completed on February 1, 2021.

Expected sale proceeds are $1.95 billion based upon the appraisal process and other agreements between the parties.

We expect to enter into a definitive asset purchase agreement with T-Mobile during the first quarter 2021 and expect that the transaction will close during the second quarter 2021, subject to customary closing conditions and required regulatory approvals.

The Company currently expects to use the after-tax proceeds from the sale of Shentel Wireless to, among other things:

• Repay approximately $702 million of outstanding term loans and swap liabilities, as required by our credit agreement and terminate those agreements;

• Issue a special dividend of $18.75 per share to Shentel's shareholders (the "Special Dividend");

• Provide adequate liquidity for growth and potential strategic acquisitions;

• Provide liquidity for general corporate purposes.

Shentel expects to pay the Special Dividend in the second quarter 2021 after the close of the Shentel Wireless transaction, subject to the approval of Shentel’s Board of Directors.

Broadband competition

As the incumbent cable provider passing over 200,000 homes, we compete directly against the incumbent local telephone companies such as CenturyLink, Inc., Frontier Communications Corp.

As the incumbent cable provider passing over 208,000 homes, we primarily compete directly against the incumbent local telephone companies such as CenturyLink, Inc., Frontier Communications Corp.

and Verizon, who are generally provisioning broadband services over hybrid fiber and copper-based networks, and indirectly from wireless substitution as the bandwidth speeds from wireless providers have increased with network upgrades to 4 th and 5 th generation technology.

Our recently launched Fiber to the Home (“Glo Fiber”) service is competing against the incumbent local telephone company such as Verizon with hybrid fiber and copper-based networks and the incumbent cable company such as Comcast utilizing HFC networks.

Our Fiber to the Home (“Glo Fiber”) service passes over 28,000 homes and is competing against the incumbent local telephone company such as Verizon with hybrid fiber and copper-based networks and the incumbent cable company such as Comcast utilizing hybrid fiber coaxial networks.

Our recently launched fixed wireless broadband service (“Beam”) passes over 9,400 homes and is competing against satellite providers, other fixed wireless providers, mobile wireless service providers and in certain cases the incumbent local telephone company with hybrid fiber and copper-based network.

Competition is also intense and growing in the market for video services.

Incumbent cable television companies, which have historically provided video service, face competition from direct broadcast satellite providers such Dish and DirecTV and on-line video services, such as Netflix, Hulu, Disney and Amazon.

Our ability to compete effectively

with our competitors in video will depend, in part, on price, content cost and variety and the convenience of our service offerings.

Incumbent cable television companies, which have historically provided video service, face competition from direct broadcast satellite providers such as Dish and DirecTV and on-line video services, such as Netflix, Hulu, Disney and Amazon.

Our ability to compete effectively with our competitors in video will depend, in part, on price, content cost and variety and the convenience of our service offerings.

A continuing trend toward consolidation, mergers, acquisitions and strategic alliances in the telecommunications industry could also increase the level of competition we face by further strengthening our competitors.

Tower competition

We compete with other public tower companies, such as American Tower Co., Crown Castle International Corp., SBA Communications Corporation, and private tower companies, private equity sponsored firms, carrier-affiliated tower companies, and owners of other alternative structures.

We believe that site location and capacity, network density, price, quality and speed of service have been, and will continue to be, significant competitive factors affecting owners, operators and managers of communications sites.

We compete with other public tower companies, such as American Tower Co., Crown Castle International Corp., SBA Communications Corp., and private tower companies, private equity sponsored firms, carrier-affiliated tower companies, and owners of other alternative structures.

We believe that site location and capacity, price, and leasing terms have been, and will continue to be, significant competitive factors affecting owners, operators and managers of communications sites.

Our operations are subject to regulation by the Federal Communications Commission (“FCC”), the Virginia State Corporation Commission (“VSCC”), the West Virginia Public Service Commission, the Maryland Public Service Commission, the Pennsylvania Public Utility Commission, the Kentucky Public Service Commission and other federal, state, and local governmental agencies.

The laws governing these agencies, and the regulations and policies that they administer, are subject to constant review and revision, and some of these changes could have material impacts on our revenues and expenses.

Regulation of Telecommunication Services

We operate our wireless business using radio spectrum made available by Sprint under the Sprint Management Agreement.

Our wireless business is directly or indirectly subject to, or affected by, a number of regulations and requirements of the FCC and other governmental authorities that apply to providers of commercial mobile radio services (“CMRS”).

Interconnection.

Federal law and FCC regulations impose certain obligations on CMRS providers to interconnect their networks with other telecommunications providers (either directly or indirectly) and to enter into interconnection agreements (“ICAs”) with certain types of telecommunications providers.

Interconnection agreements typically are negotiated on a statewide basis and are subject to state approval.

If an agreement cannot be reached, in certain cases parties to interconnection negotiations involving CMRS providers can submit unresolved issues to federal or state regulators for arbitration.

In addition, FCC regulations previously required that local exchange carriers (“LECs”) and CMRS providers establish reciprocal compensation arrangements for the termination of traffic to one another.

Disputes regarding intercarrier compensation can be brought in a number of forums (depending on the nature and jurisdiction of the dispute) including state public utility commissions (“PUCs”), the FCC and the courts.

The Company does not presently have any material interconnection or intercarrier compensation disputes with respect to its wireless operations.

On December 18, 2014, the FCC issued a declaratory ruling that provides additional guidance concerning how the agency will evaluate the reasonableness of data roaming agreements.

The agency clarified that it will consider the reasonableness of data roaming rates based upon, in part, whether such rates exceed retail, international and resale rates, as well as how such rates compare to other providers’ rates.

The ruling also clarifies other aspects of the FCC’s 2011 data roaming order concerning the appropriate presumptions applied to certain contract terms and the inclusion of build-out terms when considering the reasonableness of roaming rates and terms.

The ruling is expected to provide improved negotiating leverage to Sprint, and other providers, in negotiating new data roaming agreements with AT&T and Verizon.

It is unclear whether such leverage will result in lower data roaming rates for Sprint, or whether such reduced rates will accrue to the benefit of our operations.

There is also a possibility that the ruling could provide a basis for smaller wireless providers to seek more beneficial terms in their roaming agreements with Sprint, which may impact roaming costs in our territory.

Universal Service Contribution Requirements.

Consistent with the terms of our affiliate agreement, Sprint is required to contribute to the federal universal service fund (the “USF”) based in part on the revenues it earns in connection with our wireless operations.

The purpose of this fund is to subsidize telecommunications and broadband services in rural areas, for low-income consumers and for schools, libraries and rural healthcare facilities.

Sprint is permitted to, and does, pass through these mandated payments as surcharges paid by its subscribers.

Transfers, Assignments and Changes of Control of Spectrum Licenses .

The FCC must give prior approval to the assignment of ownership or control of a spectrum license, as well as transfers involving substantial changes in such ownership or control.

The FCC also requires licensees to maintain effective working control over their licenses.

Our affiliate agreement reflects an alliance that the parties believe meets the FCC requirements for licensee control of licensed spectrum.

If the FCC were to determine that the affiliate agreement should be modified to increase the level of licensee control, we have agreed with Sprint to use our best efforts to modify the affiliate agreement as necessary to cause it to comply with applicable law and to preserve to the extent possible the economic arrangements set forth in the affiliate agreement.

If the affiliate agreement cannot be modified, it may be terminated pursuant to its terms.

The FCC could also impose sanctions on the Company for failure to meet these requirements.

Spectrum licenses are granted for ten-year terms.

Sprint’s spectrum licenses for our service area are scheduled to expire on various dates throughout the term of our affiliate agreements.

Pursuant to recently adopted changes concerning wireless license renewals, spectrum licensees have an expectation of license renewal if they can satisfy three "safe harbor" certifications which, if made, will result in routine processing and grant of the license renewal application.

Those certifications require the licensee to certify that it has satisfied any ongoing provision of service requirements applicable to the spectrum license, that it has not permanently discontinued operations (defined as 180 days continuously off the air), and that it has substantially complied with applicable rules and policies.

If for some reason a licensee cannot meet these safe harbor requirements, it can file a detailed renewal showing based on the actual service provided by the station.

All of the PCS licenses used in our wireless business have been successfully renewed since their initial grant.

Construction and Operation of Wireless Facilities.

Wireless systems must comply with certain FCC and Federal Aviation Administration (“FAA”) regulations regarding the registration, siting, marking, lighting and construction of transmitter towers and antennas.

The FCC also requires that aggregate radio frequency emissions from every site meet certain standards.

These regulations affect site selection for new network build-outs and may increase the costs of improving our network.

We cannot predict what impact the costs and delays from these regulations could have on our operations.

The construction of new towers, and in some cases the modification of existing towers, may also be subject to environmental review pursuant to the National Environmental Policy Act of 1969 (“NEPA”), which requires federal agencies to evaluate the environmental impacts of their decisions under some circumstances.

FCC regulations implementing NEPA place responsibility on each applicant to investigate any potential environmental effects of a proposed operation, including health effects relating to radio frequency emissions, and impacts on endangered species such as certain migratory birds, and to disclose any significant effects on the environment to the agency prior to commencing construction.

In the event that the FCC determines that a proposed tower would have a significant environmental impact, the FCC would require preparation of an environmental impact statement, which would be subject to public comment.

In addition, tower construction is subject to regulations implementing the National Historic Preservation Act.

Compliance with FAA, environmental or historic preservation requirements could significantly delay or prevent the registration or construction of a particular tower or make tower construction more costly.

On July 15, 2016, Congress enacted new tower marking requirements for certain towers located in rural areas, which may increase our operational costs.

However, statutory changes adopted by Congress in the 2018 FAA Reauthorization Act may ameliorate or mitigate some of those costs.

In some jurisdictions, local laws or regulations may impose similar requirements.

Wireless Facilities Siting .

States and localities are authorized to engage in forms of regulation, including zoning and land-use regulation, which may affect our ability to select and modify sites for wireless facilities.

States and localities may not engage in forms of regulation that effectively prohibit the provision of wireless services, discriminate among functionally equivalent services or regulate the placement, construction or operation of wireless facilities on the basis of the environmental effects of radio frequency emissions.

Courts and the FCC are routinely asked to review whether state and local zoning and land-use actions should be preempted by federal law, and the FCC also is routinely asked to consider other issues affecting wireless facilities siting in other proceedings.

We cannot predict the outcome of these proceedings or the effect they may have on us.

Communications Assistance for Law Enforcement Act.

The Communications Assistance for Law Enforcement Act (“CALEA”) was enacted in 1994 to preserve electronic surveillance capabilities by law enforcement officials in the face of rapidly changing telecommunications technology.

CALEA requires telecommunications carriers and broadband providers, including the Company, to modify their equipment, facilities and services to allow for authorized electronic surveillance based on either industry or FCC standards.

Following adoption of interim standards and a lengthy rulemaking proceeding, including an appeal and remand proceeding, all carriers were required to be in compliance

with the CALEA requirements as of June 30, 2002.

The FCC extended CALEA obligations to VoIP and broadband services in 2005.

We are currently in compliance with the CALEA requirements.

Local Number Portability .

All covered CMRS providers, including the Company, are required to allow wireless customers to retain their existing telephone numbers when switching from one telecommunications carrier to another.

These rules are generally referred to as wireless local number portability (“LNP”).

The future volume of any porting requests, and the processing costs related thereto, may increase our operating costs in the future.

We are currently in compliance with LNP requirements.

The FCC has selected a new Local Number Portability Administrator, and the transition to a new Local Number Portability Administrator may impact our ability to manage number porting and related tasks, or may result in additional costs related to the transition.

Number Pooling .

The FCC regulates the assignment and use of telephone numbers by wireless and other telecommunications carriers to preserve numbering resources.

CMRS providers in the top 100 markets are required to be capable of sharing blocks of 10,000 numbers among themselves in subsets of 1,000 numbers (“1000s-block number pooling”);

the FCC considers state requests to implement 1000s-block number pooling in smaller markets on a case-by-case basis, and has granted such requests in the past.

In addition, all CMRS carriers, including those operating outside the top 100 markets, must be able to support roaming calls on their network placed by users with pooled numbers.

Wireless carriers must also maintain detailed records of the numbers they have used, subject to audit.

The pooling requirements may impose additional costs and increase operating expenses on us and limit our access to numbering resources.

We are currently in compliance with the FCC number pooling requirements.

Telecommunications Relay Services (“TRS”).

Federal law requires wireless service providers to take steps to enable the hearing impaired and other disabled persons to have reasonable access to wireless services.

The FCC has adopted rules and regulations implementing this requirement to which we are subject, and requires that we pay a regulatory assessment to support such telecommunications relay services for the disabled.

The Company is in compliance with these requirements.

Consumer Privacy.

The Company is subject to various federal and state laws intended to protect the privacy of end-users who subscribe to the Company’s services.

For example, the Communications Act of 1934, as amended (the “Communications Act”), limits our ability to collect, use, and disclose customers’ personally identifiable information for our cable television/video, voice, and Internet services.

We are subject to additional federal, state, and local laws and regulations that impose additional restrictions on the collection, use and disclosure of consumer information.

Further, the FCC, the Federal Trade Commission (“FTC”), and many states regulate and restrict the marketing practices of communications service providers, including telemarketing and sending unsolicited commercial emails.

The FCC also has regulations that place restrictions on the permissible uses that we can make of customer-specific information, known as Customer Proprietary Network Information (“CPNI”), received from telecommunications service subscribers, and that govern procedures for release of such information in order to prevent identity theft schemes.

Other laws impose criminal and other penalties for the violation of certain CPNI requirements and related privacy protections.

As a result of the FCC’s December 2017 decision to reclassify broadband Internet access service as an “information service,” the FTC has the authority to enforce against unfair or deceptive acts and practices, to protect the privacy of Internet service customers, including our use and disclosure of certain customer information.

After the repeal of the FCC’s 2016 privacy rules through the Congressional Review Act, many states and local authorities have considered legislative or other actions that would impose additional restrictions on our ability to collect, use and disclose certain information.

Despite language in the FCC’s December 2017 decision reclassifying broadband Internet access service as an “information service” that preempts state and local privacy regulations that conflict with federal policy, we expect these state and local efforts to regulate online privacy to continue in 2020 .

California’s Consumer Privacy Act, scheduled to take effect in January 2020, will, under certain circumstances, regulate the sale and disclosure of the personal information of California residents, grants California residents certain rights to, among other things, access and delete data about them in certain circumstances, and authorizes enforcement actions by the California Attorney General and certain private class actions.

Proposed rules issued by the California Attorney General are scheduled to go into effect in July 2020.

Compliance with the CCPA may increase the cost of providing our services to customers who may be residents in California.

Additionally, several state legislatures are considering the adoption of new data security and cybersecurity legislation that could result in additional network and information security requirements for our business.

There are also bills pending in both the U.S.

House of Representatives and Senate that could impose new privacy and data security obligations.

We cannot predict whether any of these efforts will be successful or preempted, or how new legislation and regulations, if any, would affect our business.

These efforts have the potential

to create a patchwork of differing and/or conflicting state and/or federal regulations, and to increase the cost of providing our services.

Our operations are also subject to federal and state laws governing information security.

In the event of an information security breach, such rules may require consumer and government agency notification and may result in regulatory enforcement actions with the potential of monetary forfeitures.

In addition, restrictions exist, and new restrictions are considered from time to time by Congress, federal agencies and states, on the extent to which wireless customers may receive unsolicited telemarketing calls, text messages, junk e-mail or spam.

Congress, federal agencies and certain states also are considering, and may in the future consider imposing, additional requirements on entities that possess consumer information to protect the privacy of consumers.

The Company is required to file an annual certification of compliance with the FCC’s CPNI rules.

Complying with these requirements may impose costs on the Company or compel the Company to alter the way it provides or promotes its services.

Consumer Protection .

Many members of the wireless industry, including us, have voluntarily committed to comply with the Cellular Telecommunication and Internet Association ("CTIA") Consumer Code for Wireless Service, which includes consumer protection provisions regarding the content and format of bills;

advance disclosures regarding rates, terms of service, contract provisions, and network coverage;

and the right to terminate service after a trial period or after changes to contract provisions are implemented.

The FCC and/or certain state commissions have considered or are considering imposing additional consumer protection requirements upon wireless service providers, including billing-related disclosures and usage alerts, as well as the adoption of standards for responses to customers and limits on early termination fees.

On December 12, 2013, CTIA filed a letter with the FCC detailing voluntary commitments by large wireless providers, including Sprint, which will permit subscribers and former subscribers to unlock their mobile devices, subject to contract fulfillment time frames for postpaid plans, or after one year for prepaid plans.

The carriers have agreed to fully implement the voluntary commitments within 12 months of adoption.

Subsequently, on February 11, 2014, CTIA-The Wireless Association adopted six standards on mobile wireless device unlocking into the CTIA Consumer Code for Wireless Service.

Finally, on August 1, 2014, the Unlocking Consumer Choice and Wireless Competition Act was enacted to make it easier for consumers to change their cell phone service providers without paying for a new phone.

This new statute reverses a decision made by the Library of Congress in 2012 that said it was illegal for consumers to “unlock” their cell phones for use on other networks without their service provider’s permission.

Adoption of these and other similar consumer protection requirements could increase the expenses or decrease the revenue of the Company's wireless business.

Courts have also had, and in the future may continue to have, an effect on the extent to which matters pertaining to the content and format of wireless bills can be regulated at the state level.

Any further changes to these and similar requirements could increase our costs of doing business and our costs of acquiring and retaining customers.

Broadband Regulation .

For information concerning the FCC’s non-discrimination requirements for wireless broadband providers, see the discussion under “Regulation of Broadband Services”.

Radio Frequency Emission from Handsets .

Some studies (and media reports) have suggested that radio frequency emissions from handsets, wireless data devices and cell sites may raise various health concerns, including cancer, and may interfere with various electronic medical devices, including hearing aids and pacemakers.

Most of the expert reviews conducted to date have concluded that the evidence does not support a finding of adverse health effects but that further research is appropriate.

Courts have dismissed a number of lawsuits filed against other wireless service operators and manufacturers, asserting claims relating to radio frequency transmissions to and from handsets and wireless data devices.

However, there can be no assurance that the outcome of other lawsuits, or general public concerns over these issues, will not have a material adverse effect on the wireless industry, including us.

Accessibility .

The FCC imposes obligations on telecommunications service providers intended to ensure that individuals with disabilities are able to access and use telecommunications services and equipment.

FCC rules require telecommunications service providers, including wireless providers, to be capable of transmitting 911 calls from persons who are deaf, hard of hearing or speech disabled, including through text telephone ("TTY") capability over the public switched telephone network ("PSTN"), various forms of PSTN-based and internet protocol ("IP")-based TRS, and text-to-911 (where available).

The FCC rules allow wireless telecommunications service providers to transition to use of real time text ("RTT") in lieu of TTY technology for communications using wireless IP-based voice services.

In addition, telecommunications services, including Voice over Internet Protocol ("VoIP"), and advanced communications services ("ACS") (such as email and text messaging) must be accessible to and usable by disabled persons, including by ensuring that email and texts are compatible with commonly used screen readers, unless doing so is not achievable.

FCC rules require that customer support for covered telecommunications and ACS services (including website based) is accessible and also imposes extensive recordkeeping for both telecommunications services and ACS, and subject providers to significant penalties for non-compliance with accessibility requirements as well as for falsely certifying compliance with recordkeeping obligations.

Existing FCC rules also require us to offer a minimum number of hearing aid-compatible (“HAC”) handsets to consumers.

The FCC recently adopted rules that update technical specifications for HAC handsets and extend HAC compatibility requirements to VoIP handsets.

911 Services .

We are subject to FCC rules that require wireless carriers to make emergency 911 services available to their subscribers, including enhanced 911 services that convey the caller’s telephone number and detailed location information to emergency responders.

The FCC has also sought public comment to investigate further requirements regarding the accuracy of wireless location information transmitted during an emergency 911 call.

Additionally, the FCC adopted rules requiring all wireless carriers to support the ability of consumers to send text messages to 911 in all areas of the country where 911 Public Safety Answering Points (“PSAP”) are capable of receiving text messages.

Also, in May 2013, the FCC adopted rules which require CMRS providers to provide an automatic “bounce-back” text message when a subscriber attempts to send a text message to 911 in a location where text-to-911 is not available.

In August 2014, the FCC ordered that all CMRS and interconnected text providers must be capable of supporting text-to-911 by December 31, 2014.

Such covered text providers had until June 30, 2015, to begin delivering text-to-911 messages to PSAPs that have submitted requests for such delivery by December 31, 2014, unless otherwise agreed with the PSAP, and six months to begin delivery after any such request made after December 31, 2014.

We are not able to predict the effect that these, or any other, changes to the 911 service rules will have on our operations.

Regulation of Broadband Services

Regulation of Broadband and Cable Video Services

We provide cable and fiber services to customers in franchise areas covering portions of Virginia, West Virginia, western Maryland, and eastern Kentucky.

The provision of cable service generally is subject to regulation by the FCC, and cable operators typically also must comply with the terms of the franchise agreement between the cable operator and the local franchising authority.

Some states, including Virginia and West Virginia, have enacted regulations and franchise provisions that also can affect certain aspects of a cable operator’s operations.

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The 2015 rules also imposed a transparency requirement, i.e., an obligation to disclose all material terms and conditions of our service to consumers.

In December 2017, the FCC adopted an order repudiating its treatment of broadband as a telecommunications service, reclassifying broadband as an information service, and eliminating the 2015 rules other than the transparency requirement, which it eased in significant ways.

In 2017, the FCC adopted an order repudiating its treatment of broadband as a telecommunications service, reclassifying broadband as an information service, and eliminating the 2015 rules other than the transparency requirement, which it eased in significant ways.

The FCC also ruled that state regulators may not impose obligations similar to federal obligations that the FCC removed.

Various parties have challenged the FCC’s December 2017 ruling in court, but we cannot predict how any such court challenges will be resolved.

Moreover, it is possible that the FCC might further revise its approach to broadband Internet access, or that Congress might enact legislation affecting the rules applicable to the service.

Numerous challenges to the FCC’s 2017 reclassification order were filed seeking reinstatement of the FCC’s 2015 rules.

In 2019, the U.S.

Court of Appeals for the District of Columbia upheld the information service reclassification, denied reinstatement of the 2015 rules, but vacated the FCC’s blanket prohibition of state utility regulation of broadband services.

Court of Appeals for the District of Columbia upheld the information service reclassification, but vacated the FCC’s blanket prohibition of state utility regulation of broadband services.

The court left open the possibility that individual state laws could still be deemed preempted on a case-by-case basis if it is shown that they conflict with federal law.

In October 2020 the FCC, responding to the court’s remand order, issued a further decision clarifying certain aspects of its earlier order.

In this decision the FCC re-classified broadband internet access service as an unregulated information service, thus eliminating all federal regulatory "network neutrality" obligations beyond requiring broadband providers to accurately disclose network management practices, performance, and commercial terms of service.

These issues may be revisited by the FCC in the current administration.

At the same time, several states (including California) adopted state obligations replacing the Internet access (“net neutrality” type) obligations that the FCC removed, and we expect that additional states will consider the imposition of new regulations on our Internet services.

California’s legislation has been challenged in court and the litigation is stayed pending a final resolution of the D.C.

Circuit’s 2019 decision, which is subject to petitions for rehearing and possible review in the U.S.

Supreme Court.

California’s legislation has been challenged in court.

We cannot predict how any such state legislation and court challenges will be resolved.

Various governmental jurisdictions are also

considering additional regulations in these and other areas, such as privacy, pricing, service and product quality, imposition of local franchise fees on Internet-related revenue and taxation.

Various governmental jurisdictions are also considering additional regulations in these and other areas, such as privacy, pricing, service and product quality, imposition of local franchise fees on Internet-related revenue and taxation.

The adoption of new Internet regulations or the adaptation of existing laws to the Internet, including potential liability for the infringing activities of Internet subscribers, could adversely affect our business.

Moreover, irrespective of these cases, and as recent history has shown, it is possible that the FCC might further revise its approach to broadband Internet access in the future, or that Congress might enact legislation affecting the rules applicable to the service.

Notwithstanding the reclassification of Internet access service as an “information service,” cable operators that provide Internet services over their cable plant are subject to the privacy requirements of the Communications Act, as discussed separately.

As the Internet has matured, it has become the subject of increasing regulatory interest.

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This action may lead the FCC to adopt additional measures affecting our broadband business.

At the same time, the FCC has ongoing proceedings to allocate additional spectrum for advanced wireless service, which could provide additional wireless competition to our broadband business.

The FCC has ongoing proceedings to allocate additional spectrum for advanced wireless service, which could provide additional wireless competition to our broadband business.

On January 30, 2020, the FCC adopted an order approving the Rural Digital Opportunity Fund (RDOF) to disburse $20.4 billion over the course of ten years to subsidize the deployment of networks for the provision of high-speed broadband internet access and voice services in unserved areas via a reverse auction.

We prevailed as a winning bidder in the RDOF auction of approximately $5.9 million in Virginia and West Virginia to provide broadband and voice service to unserved areas.

Final award of that support is subject to further FCC review of the Company’s long-form application and supporting materials.

In addition, our ability to receive this support is dependent upon satisfying network buildout, service delivery and other obligations under FCC regulations.

The FCC reverse auction will award a total of $9.23 billion in subsidies to competitive providers, some of which may be directed to competitive providers in some of the states in which we operate.

In December 2020, Congress authorized additional funding for grants

administered by the Department of Commerce to fund construction of new broadband facilities.

Competitors that are awarded funds to serve unserved areas near our network may by necessity or choice build new facilities that pass through our existing service territories, which could result in increased competition for our broadband service offerings.

Our Beam Internet service is provisioned over a fixed wireless network using radio spectrum licensed, or available to, the Company.

Beam Internet service is directly or indirectly subject to many of the same regulations discussed in this section, including but not limited to spectrum allocation and licensing, disclosure of network management practices, consumer privacy, cybersecurity, facilities siting, pole attachments, accessibility and various consumer protection requirements.

Pricing and Packaging .

Federal law limits cable rate regulation solely to communities that lack “effective competition,” as defined by federal regulation.

Even in the absence of effective competition, federal law circumscribes the scope of permissible cable rate regulation.

None of our local franchise authorities presently regulate our rates.

Congress and the FCC from time to time have considered imposing new pricing, packaging and consumer protection restrictions on cable operators, including our disclosure and itemization of subscriber fees.

We cannot predict whether or when such new marketing restrictions may be imposed on us or what effect they would have on our ability to provide cable service.

Our cable services are no longer subject to rate regulation and our Internet services have never been rate-regulated.

In December 2020 these services became subject to a federal law requiring itemization of certain charges, and we must also comply with generally-applicable marketing and advertising requirements.

Congress and the FCC from time to time have considered imposing new pricing, packaging and consumer protection restrictions on cable operators.

We cannot predict whether or when any such new marketing restrictions may be imposed on us or what effect they would have on our ability to provide cable service.

Must-Carry/Retransmission Consent.

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The terms and conditions of franchises vary among jurisdictions, but franchises generally last for a fixed term and are subject to renewal, require the cable operator to collect a franchise fee of as much as 5% of the cable operator’s gross revenue from video services, and contain certain service quality and customer service obligations.

A significant number of states today have processes in place for obtaining state-wide

franchises, and legislation and regulation have been introduced from time to time in Congress, the FCC, and in various states, including those in which we provide some form of video service, that would modify franchising processes, potentially lowering barriers to entry and increasing competition in the marketplace for video services.

We believe that our franchise renewal prospects are generally favorable but cannot guarantee the future renewal of any individual franchise.

A significant number of states today have processes in place for obtaining state-wide franchises, and legislation and regulation have been introduced from time to time in Congress, the FCC, and in various states, including those in which we provide some form of video service, that would modify franchising processes, potentially lowering barriers to entry and increasing competition in the marketplace for video services.

Virginia's franchising statute largely leaves franchising responsibility in the hands of local municipalities and counties, but it governs the local government entities’ award of such franchises and their conduct of franchise negotiations.

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Pole Attachments.

The Communications Act requires investor-owned utilities to provide cable systems with access to poles and conduits and simultaneously subjects the rates charged for this access to either federal or state regulation.

The FCC rules do not directly affect pole attachment rates in states that self-regulate (rather than allow the FCC to regulate) pole rates, but many of those states have substantially the same rate for cable and telecommunications attachments.

We provide broadband services in Pennsylvania where the state is in the process of assuming pole regulation jurisdiction from the FCC.

Once Pennsylvania’s self-regulation becomes effective as expected, the state Public Utility Commission will generally apply the same rate and other pole rules as the FCC.

We also operate cable systems and provide broadband services in West Virginia where the state recently assumed jurisdiction from the FCC over pole regulation and the state Public Service Commission adopted rules that generally conform to the FCC’s rate and other pole rules.

In August 2018, the FCC adopted rules to permit a "one-touch" make-ready process for poles subject to its jurisdiction.

The Communications Act requires investor-owned ("IO") utilities and telecommunications carriers to provide cable systems with access to poles and conduits and simultaneously subjects the rates charged for this access to either federal or state regulation.

The FCC rules do not directly affect pole attachment rates in states that self-regulate (rather than allow the FCC to regulate) pole rates, but many of those states have substantially the

same rate for cable and telecommunications attachments.

Kentucky, Pennsylvania and West Virginia, three states in which we operate, self-regulate IO pole attachments but do so in using essentially the same rate formula and other pole attachment rules as the FCC.

The FCC pole attachment rules also do not govern government or cooperatively owned utilities.

States, however, are free to regulate such utilities and some do.

Of the states in which Shentel operates, Virginia and Kentucky currently regulate cooperatively owned pole attachments.

In 2018, the FCC interpreted another federal law governing state and local regulation of public rights of way to impose cost-based limitations on what government entities may charge for pole attachments.

This interpretation was upheld against challenge by the United States Court of Appeals for the Ninth Circuit.

In 2018, the FCC adopted rules to permit a "one-touch" make-ready process for poles subject to its jurisdiction.

The "one touch" make-ready rules allow new attachers to alter certain components of existing attachments for "simple make-ready" (i.e.

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The rules are intended to promote broadband deployment and competition by facilitating communications attachments, although there are concerns regarding potential damage to existing networks by third parties.

Utility pole owners have appealed the rules to the United States Court of Appeals for the Ninth Circuit.

We cannot predict the effect that these rules will have on our business when they ultimately take effect.

As explained above, although West Virginia now self-regulates (with Pennsylvania expected to follow shortly), the FCC’s “one touch” rules have been adopted in West Virginia and should soon take effect in Pennsylvania.

For information concerning the privacy obligations of our Broadband service, see the discussion under “Regulation of Wireless Operations - Consumer Privacy.”

Certain aspects of the rules are still pending reconsideration at the FCC.

Other aspects were upheld against challenge by the United States Court of Appeals for the Ninth Circuit.

Although West Virginia and Pennsylvania self-regulate, both states have adopted the FCC’s “one touch” make-ready rules.

The Company is subject to various federal and state laws intended to protect the privacy of end-users who subscribe to the Company’s services.

We are subject to additional federal, state, and local laws and regulations that impose additional restrictions on the collection, use and disclosure of consumer information.

Other laws impose criminal and other penalties for the violation of certain CPNI requirements and related privacy protections.

Many states and local authorities have considered legislative or other actions that would impose additional restrictions on our ability to collect, use and disclose certain information.

California’s Consumer Privacy Act and associated regulations, which became effective in 2020, under certain circumstances regulate the sale and disclosure of the personal information of California residents, grants California residents certain rights to, among other things, access and delete data about them in certain circumstances, and authorizes enforcement actions by the California Attorney General and certain private class actions.

Compliance with the CCPA may increase the cost of providing our services to customers who may be residents in California and increase our litigation exposure.

We expect continued federal and state efforts to regulate online privacy, data security and cybersecurity to continue in 2021.

We cannot predict whether any of these efforts will be successful, or how new legislation and regulations, if any, would affect our business.

These efforts have the potential to create a patchwork of differing and/or conflicting state and/or federal regulations, and to increase the cost of providing our services.

Our operations are also subject to federal and state laws governing information security.

The Company is required to file an annual certification of compliance with the FCC’s CPNI rules.

Complying with these requirements may impose costs on the Company or compel the Company to alter the way it provides or promotes its services.

Accessibility .

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We cannot predict if or when additional changes will be made to the current FCC accessibility rules, or whether and how such changes will affect us.

VoIP Services .

Voice over Internet Protocol "VoIP" Services .

We provide voice communications services over our cable network utilizing interconnected VoIP technology and service arrangements.

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The FCC and state regulatory authorities are considering, for example, whether certain common carrier regulations traditionally applied to incumbent local exchange carriers (including RLECs) should be modified or reduced, and the extent to which common carrier requirements should be extended to VoIP providers.

The FCC has already determined VoIP providers must comply with requirements relating to 911 emergency services, CALEA, USF contribution, customer privacy and CPNI issues, number portability, network outage, rural call completion, disability access, battery backup, regulatory fees, and discontinuance of service.

The FCC has required VoIP providers to comply with requirements relating to 911 emergency services, the Communications Assistance for Law Enforcement Act ("CALEA"), Universal Service Fund ("USF") contribution, customer privacy and CPNI issues, number portability, network outage, rural call completion, disability access, battery backup, robocall mitigation, regulatory fees, and discontinuance of service.

We cannot predict whether the FCC will impose additional obligations on our VoIP services in the future.

In March 2007, a federal appeals court affirmed the FCC’s decision concerning federal regulation of certain VoIP services, but declined to specifically find that VoIP service provided by cable companies, such as we provide, should be regulated only at the federal level.

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Further, it is also unclear whether and how these and other ongoing regulatory matters ultimately will be resolved.

Prospective competitors of Shenandoah Cable Television, LLC (Shentel Cable), a subsidiary of the Company, may also receive disbursements from the USF.

Some of those competitors have requested USF support under the Connect America Fund to build broadband facilities in areas already served by Shentel Cable.

Although Shentel Cable has opposed such requests where we offer service, we cannot predict whether the FCC or another agency will grant such requests or otherwise fund broadband service in areas already served by the company.

Prospective competitors of our Broadband segment may also receive disbursements from the USF.

Some of those competitors have requested USF support under the Connect America Fund to build broadband facilities in areas already served by our Broadband networks.

Although we have opposed such requests where we offer service, we cannot predict whether the FCC or another agency will grant such requests or otherwise fund broadband service in areas already served by the company.

Other Issues.

Our ability to provide video service may be affected by a wide range of additional regulatory and related issues, including FCC regulations pertaining to licensing of systems and facilities, set-top boxes, and equipment compatibility, program exclusivity blackouts, commercial leased access of video channels by unaffiliated third parties, advertising, public files, accessibility to persons with disabilities, emergency alerts, equal employment opportunity, privacy, consumer protection, and technical standards.

Our ability to provide video service may be affected by a wide range of additional regulatory and related issues, including FCC regulations pertaining to licensing of systems and facilities, set-top boxes, equipment compatibility, program exclusivity blackouts, commercial leased access of video channels by unaffiliated third parties, advertising, public files, accessibility to persons with disabilities, emergency alerts, equal employment

opportunity, privacy, consumer protection, and technical standards.

Further, the FCC is currently considering proposals to reallocate for other purposes certain spectrum currently used by satellite providers to deliver video programming to individual cable systems, which could be disruptive to the satellite video delivery platform we rely upon to provide our video services.

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Interconnection.

Federal law and FCC regulations impose certain obligations on incumbent local exchange carriers (including RLECs) to interconnect their networks with other telecommunications providers (either directly or indirectly) and to enter into ICAs with certain types of telecommunications providers.

Interconnection agreements typically are

negotiated on a statewide basis and are subject to state approval.

Federal law and FCC regulations impose certain obligations on incumbent local exchange carriers (including RLECs) to interconnect their networks with other telecommunications providers (either directly or indirectly) and to enter into interconnection agreements with certain types of telecommunications providers.

Interconnection agreements typically are negotiated on a statewide basis and are subject to state approval.

If an agreement cannot be reached, parties to interconnection negotiations can submit unresolved issues to federal or state regulators for arbitration.

Disputes regarding intercarrier compensation can be brought in a number of forums (depending on the nature and jurisdiction of the dispute) including PUCs, the FCC, and the courts.

Disputes regarding intercarrier compensation can be brought in a number of forums (depending on the nature and jurisdiction of the dispute) including public utility commissions ("PUCs"), the FCC, and the courts.

The Company is working to resolve routine interconnection and intercarrier compensation-related disputes concerning the volume of traffic exchanged between the Company and third parties, appropriate access rates, and terms for the origination and termination of traffic on third-party networks.

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We cannot predict whether, when, and to what extent such refunds may be due.

On October 27, 2011, the FCC adopted a number of broad changes to the ICC rules governing the interstate access rates charged by small-to-mid-sized RLECs such as Shenandoah Telephone.

On October 27, 2011, the FCC adopted a number of broad changes to the intercarrier compensation rules governing the interstate access rates charged by small-to-mid-sized RLECs such as Shenandoah Telephone that have had a material impact on our revenues.

For example, the FCC adopted a national “bill-and-keep” framework, which will result in substantial reductions in the access charges paid by long distance carriers and other interconnecting carriers, possibly to zero, accompanied by increases to the subscriber line charges paid by business and residential end users.

In addition, the FCC has changed some of the rules that determine what compensation voice service providers, including but not limited to wireless carriers, competitive local exchange carriers, VoIP providers and providers of other Internet-enabled services, should pay and receive for originating and terminating traffic that is interconnected with RLEC networks.

The FCC’s changes to the ICC rules have been affirmed by a federal appeals court.

These changes, and potential future changes, to such compensation regulations could increase our expenses and/or reduce our revenues.

The VSCC has jurisdiction over local telephone companies’ intrastate access charges, and has indicated in the past that it might open a generic proceeding on the rates charged for intrastate access, although the scope and likelihood of such a proceeding is unclear in light of the FCC’s overhaul of the intercarrier compensation rules (discussed above), which affect states’ jurisdiction over intrastate access charges.

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Shenandoah Telephone receives disbursements from the USF.

In October 2011, the FCC adopted comprehensive changes to the universal service program that are intended in part to stabilize the USF, the total funding of which had increased considerably in recent years.

In October 2011, the FCC adopted comprehensive changes to the universal service program.

Some of the FCC’s reforms impact the rules that govern disbursements from the USF to RLECs such as Shenandoah Telephone, and to other providers.

Such changes, and additional future changes, may reduce the size of the USF and payments to Shenandoah Telephone, a subsidiary of the Company, which could have an adverse impact on the operating results of the Company.

These rules have resulted in a substantial decrease in intercarrier compensation payments over a multi-year period.

The Company is not able to predict if or when additional changes will be made to the USF, or whether and how such changes would affect the extent of our total federal universal service assessments, the amounts we receive, or our ability to recover costs associated with the USF.

We cannot predict the extent to which such access charges may decrease or change in the future or the effect such access charge increases may have on our ability to provide cable service.

If the Universal Service Administrative Company (“USAC”) were required to account for the USF program in accordance with generally accepted accounting principles for federal agencies under the Anti-Deficiency Act (the “ADA”), it could cause delays in USF payments to fund recipients and significantly increase the amount of USF contribution payments charged to wireline and wireless consumers.

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Congress has from time to time considered adopting a longer term exemption for the USAC from the ADA, but we cannot predict whether any such exemption will be adopted or the effect it may have on the Company.

In February, 2012, the FCC released an order making substantial changes to the rules and regulations governing the federal USF Lifeline Program, which provides discounted telephone services to low income consumers.

In 2012, the FCC released an order making substantial changes to the rules and regulations governing the federal USF Lifeline Program, which provides discounted telephone services to low income consumers.

The order imposes greater recordkeeping and reporting obligations, and generally subjects providers of Lifeline-supported services to greater oversight.

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Due to this requirement, our Company began offering Lifeline-supported broadband in areas where it operates as an ETC.

In 2017, the FCC released a Lifeline

order that included clarifications to the 2016 Lifeline order and proposed reforms aimed at improving program integrity.

In 2017, the FCC released a Lifeline order that included clarifications to the 2016 Lifeline order and proposed reforms aimed at improving program integrity.

As a result of our Company providing Lifeline-supported services, we are subject to increased reporting and recordkeeping requirements, and could be subject to increased regulatory oversight, investigations or audits.

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Other Regulatory Obligations.

Shenandoah Telephone is subject to requirements relating to CPNI, CALEA implementation, interconnection, access to rights of way, number portability, number pooling, accessibility of telecommunications for those with disabilities, protection for consumer privacy, and other obligations similar to those discussed above for our wireless operations.

Shenandoah Telephone is subject to requirements relating to CPNI, CALEA implementation, interconnection, access to rights of way, number portability, number pooling, accessibility of telecommunications for those with disabilities, robocalls mitigation, protection for consumer privacy, and other obligations similar to those discussed above for our wireless operations.

The FCC and other authorities continue to consider policies to encourage nationwide advanced broadband infrastructure development.

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Further, in August 2019 the FCC adopted new 911-related requirements for service providers offering customers multiline telephone system solutions to business and enterprise customers.

These new requirements, which are not yet in effect, will require Shentel to take certain additional action to ensure emergency responders can properly respond to 911 calls, such as the delivery of specific location information and notices.

These new requirements require Shentel to take certain additional action to ensure emergency responders can properly respond to 911 calls, such as the delivery of specific location information and notices.

Long Distance Services .

We offer long distance service to our customers through our subsidiary, Shentel Communications, LLC.

Our long distance rates are not subject to FCC regulation, but we are required to offer long distance service through a subsidiary other than Shenandoah Telephone, to disclose our long distance rates on a website, to maintain geographically averaged rates, to pay contributions to the USF and make other mandatory payments based on our long-distance revenues, and to comply with other filing and regulatory requirements.

We offer long distance service to our customers through our subsidiary, Shenandoah Cable Television, LLC.

Our long distance rates are not subject to FCC regulation, but we are required to offer long

distance service through a subsidiary other than Shenandoah Telephone, to disclose our long distance rates on a website, to maintain geographically averaged rates, to pay contributions to the USF and make other mandatory payments based on our long-distance revenues, and to comply with other filing and regulatory requirements.

In November 2013 the FCC issued an order imposing greater recordkeeping and reporting obligations on certain long distance providers delivering calls to rural areas.

The order imposes greater recordkeeping and quarterly reporting obligations on such providers, and generally subjects such providers to greater oversight.

At December 31, 2019 , we had approximately 1,130 employees.

None of our employees are represented by a union or covered by a collective bargaining agreement.

Regulation of Wireless Services

Our discontinued Wireless operations operate using radio spectrum made available by Sprint under the Sprint affiliate agreement.

Our discontinued Wireless operations are directly or indirectly subject to, or affected by, a number of regulations and requirements of the FCC and other governmental authorities that apply to providers of commercial mobile radio services (“CMRS”), including but not limited to roaming, interconnection, spectrum allocation and licensing, facilities siting, pole attachments, intercarrier compensation, 911 access, consumer protection, disclosure of network management practices, consumer privacy, and cybersecurity.

Interconnection.

Federal law and FCC regulations impose certain obligations on CMRS providers to interconnect their networks with other telecommunications providers (either directly or indirectly) and to enter into interconnection agreements with certain types of telecommunications providers.

Interconnection agreements typically are negotiated on a statewide basis and are subject to state approval.

If an agreement cannot be reached, in certain cases parties to interconnection negotiations involving CMRS providers can submit unresolved issues to federal or state regulators for arbitration.

In addition, FCC regulations previously required that local exchange carriers and CMRS providers establish reciprocal compensation arrangements for the termination of traffic to one another.

Disputes regarding intercarrier compensation can be brought in a number of forums (depending on the nature and jurisdiction of the dispute) including state PUCs, the FCC and the courts.