UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|For the quarterly period ended March 31, 2007.               
|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 333-56365

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FairPoint Communications, Inc.(Exact Name of Registrant as Specified in Its Charter)

|Delaware(State or Other Jurisdiction of
Incorporation or Organization)                                |  | 13-3725229(I.R.S. Employer Identification No.)
|----------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|521 East Morehead Street, Suite 250
Charlotte, North Carolina(Address of Principal Executive Offices) |  | 28202(Zip Code)                               

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(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 ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one)

Large
accelerated filer o            Accelerated filer ý            Non-accelerated
filer 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 ý

As of May 4, 2007, there were 35,234,041 shares of the Registrant's common stock, par value $0.01 per share, outstanding.

Documents
incorporated by reference:None



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INDEX

|                              |  |                                                                                                                     |  | Page
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------------- |  | ----
|PART I. FINANCIAL INFORMATION |  |                                                                                                                    
|Item 1.                       |  | Financial Statements                                                                                                |  | 3   
|                              |  | Condensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006                                    |  | 4   
|                              |  | Condensed Consolidated Statements of Operations for the three months ended March 31, 2007 and 2006                  |  | 5   
|                              |  | Condensed Consolidated Statements of Stockholders Equity for the three months ended March 31, 2007                  |  | 6   
|                              |  | Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2007 and 2006 |  | 7   
|                              |  | Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006                  |  | 8   
|                              |  | Notes to Condensed Consolidated Financial Statements                                                                |  | 9   
|Item 2.                       |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                               |  | 17  
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                          |  | 27  
|Item 4.                       |  | Controls and Procedures                                                                                             |  | 28  
|PART II. OTHER INFORMATION    |  |                                                                                                                    
|Item 1.                       |  | Legal Proceedings                                                                                                   |  | 29  
|Item 1A.                      |  | Risk Factors                                                                                                        |  | 29  
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                         |  | 29  
|Item 3.                       |  | Defaults Upon Senior Securities                                                                                     |  | 30  
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                 |  | 30  
|Item 5.                       |  | Other Information                                                                                                   |  | 30  
|Item 6.                       |  | Exhibits                                                                                                            |  | 30  
|                              |  | Signatures                                                                                                          |  | 31  

2

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PART IFINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

Some statements in this Quarterly Report are known as "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, or the
Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. Forward-looking statements may relate to, among other things:



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 our plans, objectives, expectations and intentions and other factors
discussed in this Quarterly Report and in Exhibit 99.1 to this Quarterly Report. 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 Securities and Exchange Commission, or 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 periodic reports filed with the SEC on Forms 10-K, 10-Q and 8-K and Schedule 14A.

3

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Item 1. Financial Statements.

FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES  Condensed Consolidated Balance Sheets

|                                           |                                                  | March 31, 2007 |         | December 31,
2006 |  
|------------------------------------------ | ------------------------------------------------ | -------------- | ------- | ----------------- | -
|
|
|Assets                                     |                                                  |                |         |                   |  
|Current assets:                            |                                                  |                |         |                   |  
|                                           | Cash                                             |                | $       | 5,550             |  
|                                           | Accounts receivable, net                         |                |         | 28,890            |  
|                                           | Other                                            |                |         | 12,665            |  
|                                           | Deferred income tax, net                         |                |         | 19,182            |  
|                                           | Investment held for sale                         |                |         | 5,403             |  
|                                           |                                                  |                |         |                   |  
|Total current assets                       |                                                  |                | 71,690  |                   |  
|                                           |                                                  |                |         |                   |  
|Property, plant, and equipment, net        |                                                  |                | 241,490 |                   |  
|Investments                                |                                                  |                | 6,211   |                   |  
|Goodwill                                   |                                                  |                | 499,192 |                   |  
|Deferred income tax, net                   |                                                  |                | 43,096  |                   |  
|Deferred charges and other assets          |                                                  |                | 22,456  |                   |  
|                                           |                                                  |                |         |                   |  
|Total assets                               |                                                  | $              | 884,135 |                   | $
|                                           |                                                  |                |         |                   |  
|Liabilities and Stockholders' Equity       |                                                  |                |         |                   |  
|Current liabilities:                       |                                                  |                |         |                   |  
|                                           | Accounts payable                                 |                | $       | 15,867            |  
|                                           | Dividends payable                                |                |         | 13,925            |  
|                                           | Current portion of long-term debt                |                |         | 723               |  
|                                           | Demand notes payable                             |                |         | 312               |  
|                                           | Accrued interest payable                         |                |         | 592               |  
|                                           | Other accrued liabilities                        |                |         | 17,722            |  
|                                           | Liabilities of discontinued operations           |                |         | 485               |  
|                                           |                                                  |                |         |                   |  
|Total current liabilities                  |                                                  |                | 49,626  |                   |  
|                                           |                                                  |                |         |                   |  
|Long-term liabilities:                     |                                                  |                |         |                   |  
|                                           | Long-term debt, net of current portion           |                |         | 616,932           |  
|                                           | Deferred credits and other long-term liabilities |                |         | 7,898             |  
|                                           |                                                  |                |         |                   |  
|Total long-term liabilities                |                                                  |                | 624,830 |                   |  
|                                           |                                                  |                |         |                   |  
|Minority interest                          |                                                  |                | 8       |                   |  
|                                           |                                                  |                |         |                   |  
|Stockholders' equity:                      |                                                  |                |         |                   |  
|                                           | Common stock                                     |                |         | 353               |  
|                                           | Additional paid-in capital                       |                |         | 517,508           |  
|                                           | Accumulated deficit                              |                |         | (311,578          | )
|                                           | Accumulated other comprehensive income, net      |                |         | 3,388             |  
|                                           |                                                  |                |         |                   |  
|Total stockholders' equity                 |                                                  |                | 209,671 |                   |  
|                                           |                                                  |                |         |                   |  
|Total liabilities and stockholders' equity |                                                  | $              | 884,135 |                   | $
|                                           |                                                  |                |         |                   |  

See
accompanying notes to condensed consolidated financial statements (unaudited)

4

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FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES    Condensed Consolidated Statements of Operations    (Unaudited)

|                                     |                                                             | Three months ended
March 31, |       
|------------------------------------ | ----------------------------------------------------------- | ---------------------------- | ------
|
|
|Revenues                             |                                                             | $                            | 69,672
|                                     |                                                             |                              |       
|Operating expenses:                  |                                                             |                              |       
|                                     | Operating expenses, excluding depreciation and amortization |                              |       
|                                     | Depreciation and amortization                               |                              |       
|                                     |                                                             |                              |       
|Total operating expenses             |                                                             |                              | 62,171
|                                     |                                                             |                              |       
|Income from operations               |                                                             |                              | 7,501 
|                                     |                                                             |                              |       
|Other income (expense):              |                                                             |                              |       
|                                     | Net gain (loss) on sale of investments and other assets     |                              |       
|                                     | Interest and dividend income                                |                              |       
|                                     | Interest expense                                            |                              |       
|                                     | Equity in net earnings of investees                         |                              |       
|                                     |                                                             |                              |       
|Total other expense                  |                                                             |                              | (7,137
|                                     |                                                             |                              |       
|Income before income taxes           |                                                             |                              | 364   
|Income tax expense                   |                                                             |                              | (397  
|                                     |                                                             |                              |       
|Net (loss) income                    |                                                             | $                            | (33   
|                                     |                                                             |                              |       
|Weighted average shares outstanding: |                                                             |                              |       
|                                     | Basic                                                       |                              |       
|                                     |                                                             |                              |       
|                                     | Diluted                                                     |                              |       
|                                     |                                                             |                              |       
|(Loss) earnings per share:           |                                                             |                              |       
|                                     | Basic                                                       |                              | $     
|                                     |                                                             |                              |       
|                                     | Diluted                                                     |                              | $     
|                                     |                                                             |                              |       

See
accompanying notes to condensed consolidated financial statements (unaudited)

5

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FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES    Condensed Consolidated Statements of Stockholders' Equity (Unaudited)    (in thousands)

|                                                  |  | Common Stock |  |   |     | Accumulated
other
comprehensive
income (loss) |   |         |   |   |       
|------------------------------------------------- |  | ------------ |  | - | --- | --------------------------------------------- | - | ------- | - | - | ------
|
|
|Balance at December 31, 2006                      |  | 35,218       |  | $ | 352 |                                               | $ | 530,536 |   | $ | 5,376 
|Net (loss)                                        |  |             |  |   |    |                                               |   |        |   |   |      
|Issuance of restricted shares                     |  | 50           |  |   | 1   |                                               |   |        |   |   |      
|Exercise of restricted units                      |  | 4            |  |   |    |                                               |   |        |   |   |      
|Stock based compensation expense                  |  |             |  |   |    |                                               |   | 858     |   |   |      
|Dividends declared                                |  |             |  |   |    |                                               |   | (13,917 | ) |   |      
|Tax benefit from stock based compensation expense |  |             |  |   |    |                                               |   | 31      |   |   |      
|Other comprehensive loss from cash flow hedges    |  |             |  |   |    |                                               |   |        |   |   | (1,988
|                                                  |  |              |  |   |     |                                               |   |         |   |   |       
|Balance at March 31, 2007                         |  | 35,272       |  | $ | 353 |                                               | $ | 517,508 |   | $ | 3,388 
|                                                  |  |              |  |   |     |                                               |   |         |   |   |       

See
accompanying notes to condensed consolidated financial statements (unaudited)

6

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FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES    Condensed Consolidated Statements of Comprehensive (Loss) Income    (Unaudited)

|                                   |                   | Three months ended
March 31,                                                                                                                                                                
|---------------------------------- | ----------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|Net (loss) income                  |                   | $                                                                                                                                                                                           
|                                   |                   |                                                                                                                                                                                             
|Other comprehensive (loss) income: |                   |                                                                                                                                                                                             
|                                   | Cash flow hedges: |                                                                                                                                                                                             
|                                   |                   | Change in net unrealized gain, net of tax benefit of $1.2 million for the three months ended March 31, 2007 and net of tax expense of $2.0 million for the three months ended March 31, 2006
|                                   |                   |                                                                                                                                                                                             
|Comprehensive (loss) income        |                   | $                                                                                                                                                                                           
|                                   |                   |                                                                                                                                                                                             

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

7

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FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Cash Flows  (Unaudited)

|                                                                                                                  |                                                            | Three months ended
March 31,                                   |                  
|----------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | -------------------------------------------------------------- | -----------------
|
|
|Cash flows from operating activities:                                                                             |                                                            |                                                                |                  
|                                                                                                                  | Net (loss) income                                          |                                                                | $                
|                                                                                                                  |                                                            |                                                                |                  
|Adjustments to reconcile net (loss) income to net cash provided by operating activities of continuing operations: |                                                            |                                                                |                  
|                                                                                                                  | Deferred income taxes                                      |                                                                |                  
|                                                                                                                  | Amortization of debt issue costs                           |                                                                |                  
|                                                                                                                  | Depreciation and amortization                              |                                                                |                  
|                                                                                                                  | Income from equity method investments                      |                                                                |                  
|                                                                                                                  | Other non cash items                                       |                                                                |                  
|                                                                                                                  | Changes in assets and liabilities arising from operations: |                                                                |                  
|                                                                                                                  |                                                            | Accounts receivable and other current assets                   |                  
|                                                                                                                  |                                                            | Accounts payable and other accrued liabilities                 |                  
|                                                                                                                  |                                                            | Income taxes                                                   |                  
|                                                                                                                  |                                                            | Other assets/liabilities                                       |                  
|                                                                                                                  |                                                            |                                                                |                  
|                                                                                                                  |                                                            |                                                                | Total adjustments
|                                                                                                                  |                                                            |                                                                |                  
|                                                                                                                  |                                                            |                                                                |                  
|                                                                                                                  |                                                            |                                                                |                  
|Cash flows from investing activities of continuing operations:                                                    |                                                            |                                                                |                  
|                                                                                                                  | Net capital additions                                      |                                                                |                  
|                                                                                                                  | Distributions from investments                             |                                                                |                  
|                                                                                                                  | Net proceeds from sales of investments and other assets    |                                                                |                  
|                                                                                                                  | Other, net                                                 |                                                                |                  
|                                                                                                                  |                                                            |                                                                |                  
|                                                                                                                  |                                                            | Net cash used in investing activities of continuing operations |                  
|                                                                                                                  |                                                            |                                                                |                  
|Cash flows from financing activities of continuing operations:                                                    |                                                            |                                                                |                  
|                                                                                                                  | Loan origination costs                                     |                                                                |                  
|                                                                                                                  | Proceeds from issuance of long-term debt                   |                                                                |                  
|                                                                                                                  | Repayments of long-term debt                               |                                                                |                  
|                                                                                                                  | Proceeds from exercise of stock options                    |                                                                |                  
|                                                                                                                  | Dividends paid to common stockholders                      |                                                                |                  
|                                                                                                                  |                                                            |                                                                |                  
|                                                                                                                  |                                                            | Net cash used in financing activities of continuing operations |                  
|                                                                                                                  |                                                            |                                                                |                  
|                                                                                                                  | Cash flows of discontinued operations:                     |                                                                |                  
|                                                                                                                  |                                                            | Operating cash flows, net provided by                          |                  
|                                                                                                                  |                                                            |                                                                |                  
|                                                                                                                  |                                                            | Net increase in cash                                           |                  
|Cash, beginning of period                                                                                         |                                                            |                                                                | 3,805            
|                                                                                                                  |                                                            |                                                                |                  
|Cash, end of period                                                                                               |                                                            | $                                                              | 5,550            
|                                                                                                                  |                                                            |                                                                |                  

See
accompanying notes to condensed consolidated financial statements (unaudited)

8

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FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED  FINANCIAL STATEMENTS (Unaudited)

(1)    Organization and Basis of Financial Reporting

On February 8, 2005, the Company consummated an initial public offering, or the initial public offering, of 25,000,000 shares of its common stock, par
value $0.01 per share, or common stock, at a price to the public of $18.50 per share. In connection with the initial public offering, the Company entered into a new senior secured credit facility, or
the credit facility, with a syndicate of financial institutions, including Deutsche Bank Trust Company Americas, as administrative agent. The credit facility is comprised of a revolving facility in an
aggregate principal amount of $100 million (less amounts reserved for letters of credit) and a term facility in an aggregate principal amount of $588.5 million (including a
$22.5 million delayed draw facility). The revolving facility has a six year maturity and the term facility has a seven year maturity.

The
accompanying unaudited condensed consolidated financial statements of FairPoint Communications, Inc. and subsidiaries have been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission for quarterly reports on Form 10-Q. Accordingly, certain information and disclosures normally included in annual financial statements
prepared in accordance with accounting principles generally accepted in the United States have been omitted and condensed pursuant to such rules and regulations. In the opinion of the Company's
management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of FairPoint's results of
operations, financial position, and cash flows. The results of operations for the interim periods are not necessarily indicative of the results of operations which might be expected for the entire
year. The unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31,
2006. Management views its business of providing video, data and voice communication services to residential and business customers as one business segment and currently aggregates these revenue
streams under the quantitative and qualitative thresholds defined in Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an Enterprise and Related
Information."

(2)    Certain Transactions

(a)    Dividends

The Company has adopted a dividend policy under which a substantial portion of the cash generated by the Company's business in excess of operating needs, interest
and principal payments on indebtedness, dividends on future senior classes of capital stock, if any, capital expenditures, taxes and future reserves, if any, would in general be distributed as regular
quarterly dividend payments to the holders of its common stock, rather than retained and used for other purposes.

On
March 14, 2007, the Company declared a dividend totaling $13.9 million, or $0.39781 per share of common stock, which was paid on April 17, 2007 to holders of
record as of March 30, 2007.

(b)    Merger

On January 15, 2007, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Verizon Communications Inc. ("Verizon")
and Northern New England Spinco Inc. ("Spinco"), pursuant to which Spinco will merge with and into the Company with the Company continuing as the surviving corporation for legal purposes (the
"Merger"). Spinco is a newly formed wholly-owned subsidiary of Verizon that will own or indirectly own Verizon's local exchange and related

9

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business
activities in Maine, New Hampshire and Vermont.    The Company expects that FairPoint will be the acquiree for accounting purposes. Consequently, merger related costs will be
expensed as incurred in connection with the transaction and FairPoint's assets and liabilities will be recorded at fair value upon acquisition. The Company incurred expenses related to this
transaction of approximately $7.6 million in the three months ended March 31, 2007, which were expensed as incurred and included in operating expenses on the Condensed Consolidated
Statement of Operations. This transaction is subject to regulatory approval.

(3)    Income Taxes

For the three months ended March 31, 2007, the Company recorded income tax expense of $0.4 million, resulting in an effective rate of 109.1%
compared to 39.0% for the three months ended March 31, 2006.

The
Company accounts for income taxes in accordance with Statement of Financial Accounting Standards, or SFAS No. 109, "Accounting for Income Taxes." The Company's effective
income tax rate for the interim periods presented is based on management's estimate of the Company's effective tax rate for the applicable year and differs from the federal statutory income tax rate
primarily due to nondeductible permanent differences. The Company considers projected future taxable income and tax planning strategies in determining an effective income tax rate. However, the
effects of significant or unusual items are not considered in the estimated annual effective tax rate. The tax effect of such events is recognized in the interim period in which the event occurs.

In
2007, the Company considered all estimated expenses related to the Merger and determined that some of these expenses were not deductible for income tax purposes. Based on current
projections the Company believes its annual effective tax rate for 2007 will be approximately 109%. In assessing the ability to realize 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. The Company expects that future taxable income will more likely than not be sufficient to recover net deferred tax assets.

The
Company adopted FASB Interpretation No. (FIN) 48, "Accounting for Uncertainty in Income Taxesan Interpretation of FASB No. 109" on January 1, 2007. FIN 48
requires applying a "more likely than not" threshold to the recognition and de-recognition of tax positions. The Company's unrecognized tax benefits totaled $3.7 million as of
March 31, 2007 and January 1, 2007, of which $3.7 million would impact the effective tax rate, if recognized. There are no amounts recorded for interest and penalties as the
Company has net operating loss carryforwards which would be utilized to offset any actual cash payments. The Company believes that within the next 12 months it is reasonably possible that the
liability associated principally with uncertain expense deductions taken on prior returns may be settled with the IRS, resulting in a decrease in the liability of approximately $2.7 million.
The tax years subject to examination in the U.S. begin in 2001 due to net operating loss carryforwards which generally serve to extend the period of time for examination. Tax years are typically
subject to examination for three years after the filing of the tax return.

(4)    Discontinued Operations

In November 2001, the Company announced its plan to discontinue the competitive communications business operations of its wholly owned subsidiary,
FairPoint Carrier Services, Inc., or Carrier Services.

Net
liabilities of discontinued competitive communications operations as of March 31, 2007 and December 31, 2006 were $0.5 million and $0.5 million,
respectively.

10

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(5)    Interest Rate Swap Agreements

The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected
future cash flows and by evaluating hedging opportunities. The Company maintains risk management control systems to monitor interest rate cash flow risk attributable to both the Company's outstanding
and forecasted debt obligations. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in
interest rates on the Company's future cash flows.

The
Company uses variable and fixed-rate debt to finance its operations, capital expenditures and acquisitions. The variable-rate debt obligations expose the
Company to variability in interest payments due to changes in interest rates. The Company believes it is prudent to limit the variability of a portion of its interest payments. To meet this objective,
from time to time, the Company enters into interest rate swap agreements to manage fluctuations in cash flows resulting from interest rate risk. These swaps change the variable-rate cash
flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate swaps, the Company pays a variable interest rate plus an additional payment if the variable rate payment
is below a contractual rate, or it receives a payment if the variable rate payment is above the contractual rate. The chart below provides details of each of the Company's interest rate swap
agreements.

|Effective Date:  |  | Notional Amount |  | Rate |   | Rate, including
applicable margin |   | Expiration Date  
|---------------- |  | --------------- |  | ---- | - | --------------------------------- | - | -----------------
|February 8, 2005 |  | $130.0 Million  |  | 3.76 | % | 5.51                              | % | December 31, 2007
|February 8, 2005 |  | $130.0 Million  |  | 3.98 | % | 5.73                              | % | December 31, 2008
|February 8, 2005 |  | $130.0 Million  |  | 4.11 | % | 5.86                              | % | December 31, 2009
|April 29, 2005   |  | $50.0 Million   |  | 4.72 | % | 6.47                              | % | March 31, 2012   
|June 30, 2005    |  | $50.0 Million   |  | 4.69 | % | 6.44                              | % | March 31, 2011   
|June 30, 2006    |  | $50.0 Million   |  | 5.36 | % | 7.11                              | % | December 31, 2009

As
a result of these swap agreements, as of March 31, 2007, approximately 88% of the Company's indebtedness bore interest at fixed rates rather than variable rates. Effective on
September 30, 2005, the Company amended the terms of its credit facility. This amendment reduced the effective interest rate margins applicable to the Company's interest rate swap agreements by
0.25% to 1.75%.

These
interest rate swaps qualify as cash flow hedges for accounting purposes. The effect of hedge ineffectiveness on net loss was insignificant for the three months ended
March 31, 2007. At March 31, 2007, the fair market value of these swaps was approximately $5.4 million and has been recorded, net of tax of $2.0 million, as an increase to
accumulated other comprehensive income. Of the $5.4 million,
$4.5 million has been included in other current assets and $0.9 million has been included in other long-term assets.

The
Company entered into two additional swap agreements in November 2006 and January 2007. One swap agreement is for a notional amount of $65 million at a rate of
4.91% (or 6.66% including the applicable margin). This agreement is effective as of December 31, 2007 and expires on December 30, 2011. The second swap agreement is for a notional amount
of $100.0 million at a rate of 5.02% (or 6.77% including the applicable margin). This agreement is effective as of December 31, 2008 and expires on December 31, 2010.

11

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(6)    Investments

The Company had a 7.5% ownership in Orange County-Poughkeepsie Limited Partnership ("OCPLP"), which has been consistently accounted for under the equity method
using a three-month lag due to the timing of the receipt of the partnership financial statements. Summary financial information for OCPLP follows (in thousands):

December 31,
2006

September 30,
2006Current assets

$
11,304

$
13,131Property, plant and equipment, net


38,917


41,078Total assets

$
50,221

$
54,209Total liabilities

$
431

$
1,715Partners' capital


49,790


52,494$
50,221

$
54,209


Three months ended
December 31,2006

2005Revenues

$
40,261

$
50,225Operating income


32,285


40,683Net income


32,296


40,976


On
January 15, 2007, Taconic Telephone Corp., a subsidiary of the Company, entered into a Partnership Interest Purchase Agreement (the "O-P Interest Purchase
Agreement") with Cellco Partnership d/b/a Verizon Wireless and Verizon Wireless of the East LP, pursuant to which the Company has agreed to sell its 7.5% limited partnership interest in OCPLP to
Cellco Partnership (the "O-P Disposition"). The transaction closed on April 10, 2007. As a result, the Company has classified the carrying value of its interest in OCPLP as a
current asset on the Condensed Consolidated Balance Sheet as of March 31, 2007. In the second quarter of 2007, the Company will record a gain on the sale of approximately $45.9 million.
Total proceeds from the sale were $55 million, of which approximately $1.0 million was paid to the Company in the form of a distribution from OCPLP in the first quarter of 2007.

The
Company also has other investments in non-marketable securities which are accounted for using the cost and equity methods of accounting. The Company continually monitors
all of these investments for possible impairment by evaluating the financial performance of the businesses in which it invests and comparing the carrying value of the investment to quoted market
prices (if available), or the fair values of similar investments, which in certain instances, is based on traditional valuation models utilizing multiples of cash flows. When circumstances indicate
that a decline in the fair value of the investment has occurred and the decline is other than temporary, the Company records the decline in value as a realized impairment loss and a reduction in the
cost of the investment.

12

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(7)    Long Term Debt

Long term debt at March 31, 2007 and December 31, 2006 is shown below:

March 31,
2007

December 31,
2006(In thousands)Senior secured notes (credit facility), variable rates ranging from 7.13% to 9.25% (weighted average rate of 7.2%) at March 31, 2007, due 2011 to 2012

$
613,337

$
603,500Senior notes, 11.875%, due 2010


2,050


2,050Senior notes to RTFC, fixed rate, ranging from 8.2% to 9.2%, due 2009 to 2014


2,268


2,436Total outstanding long-term debt


617,655


607,986Less current portion


(723
)

(714
)Total long-term debt, net of current portion

$
616,932

$
607,272


The
approximate aggregate maturities of long-term debt for each of the five years subsequent to March 31, 2007 are as follows (in thousands):

Quarter ending March 31,2008

$
7232009


6232010


2,2032011


25,0002012


588,673Thereafter


433$
617,655


The
Company has a credit facility consisting of a revolving facility in an aggregate principal amount of up to $100.0 million and a term facility in an aggregate principal amount
of $588.5 million.

The
term facility matures in February 2012 and the revolving facility matures in February 2011. Borrowings bear interest, at the Company's option, for the revolving
facility and for the term facility at either (a) the Eurodollar rate (as defined in the credit facility) plus an applicable margin or (b) the Base rate (as defined in the credit
facility) plus an applicable margin. The Eurodollar rate applicable margin
and the Base rate applicable margin for loans under the term facility are 1.75% and 0.75%, respectively, and the Eurodollar rate applicable margin and the Base rate applicable margin for loans under
the revolving facility are 2.0% and 1.0%, respectively. Interest with respect to Base rate loans is payable quarterly in arrears and interest with respect to Eurodollar loans is payable at the end of
the applicable interest period and every three months in the case of interest periods in excess of three months.

The
credit facility provides for payment to the lenders of a commitment fee on any unused commitments equal to 0.5% per annum, payable quarterly in arrears, as well as other fees.

On
January 15, 2007, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Verizon Communications Inc. ("Verizon") and Northern New England
Spinco Inc. ("Spinco"), pursuant to which Spinco will merge with and into the Company with the Company continuing as the surviving corporation for legal purposes (the "Merger"). Spinco is a
newly formed wholly-owned subsidiary of Verizon that will own Verizon's local exchange and related business activities in Maine, New Hampshire and Vermont.

13

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On
January 25, 2007, the Company entered into an amendment to its credit facility which is intended to facilitate certain transactions related to the Merger. Among other things,
such amendment: (i) permits the Company to consummate the O-P Disposition and retain the proceeds thereof up to an amount equal to $55 million; (ii) excludes the gain
on the O-P Disposition from the calculation of "Available Cash", (iii) amends the definition of "Adjusted Consolidated EBITDA" to allow for certain one-time
add-backs to the calculation thereof for operating expenses incurred in connection with the Merger; (iv) amends the definition of "Consolidated Capital Expenditures" to exclude
certain expenditures incurred by the Company in connection with transition and integration expenses prior to consummation of the Merger; and (v) increases the leverage covenant and dividend
suspension test to 5.50:1.00 and 5.25:1.00, respectively.

The
credit facility requires certain mandatory prepayments, including first to prepay outstanding term loans under the credit facility and, thereafter, to repay loans under the revolving
facility and/or to reduce revolving facility commitments with, subject to certain conditions and exceptions, 100% of the net cash proceeds the Company receives from any sale, transfer or other
disposition of any assets, 100% of net casualty insurance proceeds and 100% of the net cash proceeds the Company receives from the issuance of permitted securities and, at certain times if the Company
is not permitted to pay dividends, with 50% of the increase in the Company's Cumulative Distributable Cash (as defined in the credit facility) during the prior fiscal quarter. Reductions to the
revolving commitments under the credit facility from the foregoing recapture events will not reduce the revolving commitments under the credit facility below $50.0 million.

The
credit facility provides for voluntary prepayments of the revolving facility and the term facility and voluntary commitment reductions of the revolving facility, subject to giving
proper notice and compensating the lenders for standard Eurodollar breakage costs, if applicable.

The
credit facility requires that the Company maintain certain financial covenants. The credit facility contains customary affirmative covenants, including, without limitation, the
following tests: a minimum interest coverage ratio equal to or greater than 3.0:1 and a maximum leverage ratio equal to or less than 5.50:1. The credit facility also contains negative covenants and
restrictions, including, among others, with respect to redeeming and repurchasing other indebtedness, loans and investments, additional indebtedness, liens, capital expenditures, changes in the nature
of the Company's business, mergers, acquisitions, asset sales and transactions with the Company's affiliates. The credit facility restricts the Company's ability to declare and pay dividends on its
common stock as follows:



14

---





The
credit facility also permits the Company to use available cash to repurchase shares of its capital stock, subject to the same conditions.

The
Company may obtain letters of credit under the revolving facility to support obligations of the Company and/or obligations of its subsidiaries incurred in the ordinary course of
business in an aggregate principal amount not to exceed $10.0 million and subject to limitations on the aggregate amount outstanding under the revolving facility. As of March 31, 2007, a
letter of credit had been issued for $1.4 million.

The
credit facility is guaranteed, jointly and severally, subject to certain exceptions, by all first tier subsidiaries of the Company. The Company has provided to Deutsche Bank Trust
Company Americas, as collateral agent for the benefit of the lenders under the credit facility and certain hedging creditors under permitted hedging agreements, collateral consisting of (subject to
certain exceptions) 100% of the Company's equity interests in the subsidiary guarantors and certain other intermediate holding company subsidiaries. Newly acquired or formed direct or indirect
subsidiaries of the Company which own equity interests of any subsidiary that is an operating company will be required to provide the collateral described above.

The
credit facility contains customary events of default, including but not limited to, failure to pay principal, interest or other amounts when due, breach of covenants or
representations, cross-defaults to certain other indebtedness in excess of specified amounts, judgment defaults in excess of specified amounts, certain ERISA defaults, the failure of any guaranty or
security document supporting the credit facility and certain events of bankruptcy and insolvency.

(8)    Earnings (Loss) Per Share

(Loss) earnings per share has been computed in accordance with SFAS No. 128,Earnings Per Share. Basic
(loss) earnings per share is computed by dividing net (loss) income 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 common stock and
shares that could be issued under outstanding stock options.

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

Three Months EndedMarch 31,
2007

March 31,
2006(In thousands)Weighted average number of common shares used for basic earnings per share

34,671

34,552Effect of potential dilutive shares



95Weighted average number of common shares and potential dilutive shares used for diluted earnings per share

34,671

34,647Anti-dilutive shares excluded from the above reconciliation

667

1,643


15

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(9)    Subsequent Event

On April 10, 2007, the Company completed the O-P Disposition. In the second quarter of 2007, the Company will record a gain on the sale of
approximately $45.9 million. Total proceeds from the sale were $55 million, of which approximately $1.0 million was paid to the Company in the form of a distribution from OCPLP in
the first quarter of 2007. The remaining proceeds of approximately $54.0 million were received from the purchasers upon closing on April 10, 2007. The Company has historically recorded
equity in net earnings of investees of approximately $9 to $10 million annually and has received annual distributions of approximately $9 to $10 million from OCPLP. Due to the sale, the
Company will not receive distributions from OCPLP after April 10, 2007. The Company records earnings from OCPLP on a three month lag and therefore, will continue to record earnings in investees
in the second and third quarter to reflect the April 10, 2007 disposition.

(10)    Litigation

On June 6, 2005, a purported class action complaint was filed in the General Court of Justice, Superior Court Division, of the State of North Carolina by
Robert Lowinger on behalf of himself and all other similarly situated persons against the Company, the Company's Chairman and Chief Executive Officer, certain of the Company's current and former
directors and certain of the Company's stockholders. The complaint alleges violations of Sections 11 and 12(a)(2) and liability under Section 15 of the Securities Act, and alleges that the
Company's registration statement on Form S-1 (which was declared effective by the SEC on February 3, 2005) and the related prospectus dated February 3, 2005, each
relating to the Company's initial public offering of common stock, contained certain material misstatements and omitted certain material information necessary to be included relating to the Company's
broadband products and access line trends. The plaintiff, who has been a plaintiff in several prior securities cases, seeks rescission rights and unspecified damages on behalf of a purported class of
purchasers of the common stock "issued pursuant and/or traceable to the Company's IPO during the period from February 3, 2005 through March 21, 2005". The Company removed the action to
Federal Court. The plaintiff filed a motion to remand the action to the North Carolina State Court, which was denied by the Federal Magistrate. The plaintiff has objected to and appealed the
Magistrate's decision to the District Court Judge. The Company has contested the appeal and filed a Motion to Dismiss the action. The Magistrate, on February 9, 2006, issued a Memorandum and a
Recommendation to the District Court Judge that the Motion to Dismiss be granted and that the complaint be dismissed with prejudice. The plaintiff has filed a Notice of Objection to the Magistrate's
Recommendation. Both the appeal of denial of the Motion to Remand and the Motion to Dismiss are pending before the District Court Judge. The Company believes that this action is without merit and
intends to continue to defend the litigation vigorously.

From
time to time, the Company is involved in other litigation and regulatory proceedings arising out of its operations. Management believes that the Company is not currently a party to
any legal 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.

16

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

The following discussion and analysis provides information that the Company's management believes is relevant to an assessment and understanding of the
consolidated results of operations and financial condition of FairPoint Communications, Inc. and its subsidiaries. The discussion should be read in conjunction with FairPoint's Consolidated
Financial Statements for the year ended December 31, 2006 included in the Company's Annual Report on Form 10-K for the year ended December 31, 2006.

Overview

We are a leading provider of communications services in rural and small urban communities, offering an array of services, including local and long distance voice,
data, Internet and broadband product offerings. We are one of the largest telephone companies in the United States focused on serving rural and small urban communities, and we are the 14th largest
local telephone company in the United States, in each case based on number of access lines. We operate in 18 states with 310,180 access line equivalents (including voice access lines and high speed
data lines, or HSD, which include DSL, wireless broadband and cable modems) in service as of March 31, 2007.

We
were incorporated in February 1991 for the purpose of acquiring and operating local exchange carriers in rural markets. Since 1993, we have acquired 35 such businesses, 31 of
which we continue to own and operate. Many of our telephone companies have served their respective communities for over 75 years. The majority of the communities we serve have fewer than 2,500
access lines. Most of our telephone companies qualify as rural local exchange carriers under the Telecommunications Act.

Rural
local exchange carriers generally are characterized by stable operating results and strong cash flow margins and operate in supportive regulatory environments. In particular,
existing state and federal regulations permit us to charge rates that enable us to recover our operating costs, plus a reasonable rate of return on our invested capital (as determined by relevant
regulatory authorities). Competition is typically limited because rural local exchange carriers primarily serve sparsely populated rural communities with predominantly residential customers, and the
cost of operations and capital investment requirements for new entrants is high. However, in our markets, we have experienced some voice competition from cable providers and competitive local exchange
carriers. We also are subject to competition from wireless and various other technologies which may increase in the future. If
competition were to increase, the originating and terminating access revenues we receive may be reduced as a result of wireless, VoIP, or other new technology utilization. We periodically negotiate
interconnection agreements with other telecommunications providers which could ultimately result in increased competition in those markets.

Access
lines are an important element of our business. Historically, rural telephone companies have experienced consistent growth in access lines because of positive demographic trends,
insulated rural local economies and little competition. Recently, however, many rural telephone companies have experienced a loss of access lines due to increased competition, the introduction of DSL
services (resulting in customers substituting DSL for a second line) and challenging economic conditions. We have not been immune to these conditions. We have been able to mitigate our access line
loss somewhat through bundling services, retention programs, continued community involvement and a variety of other focused programs.

During
2006, we have completed the conversion of the majority of our access lines to a single outsourced billing platform. The conversion of the remaining companies is expected to be
completed by the middle of 2007.

Our
board of directors has adopted a dividend policy that reflects our judgment that our stockholders would be better served if we distributed a substantial portion of the cash generated
by our

17

---



business
in excess of operating needs, interest and principal payments on our indebtedness, dividends on future senior classes of our capital stock, if any, capital expenditures, taxes and future
reserves, if any, as regular quarterly dividend payments to the holders of our common stock, rather than retained and used for other purposes. However, our board of directors may, in its discretion,
amend or repeal the dividend policy to decrease the level of dividends provided for or discontinue entirely the payment of dividends.

We
are subject to regulation by federal and state governmental agencies. At the federal level, the Federal Communications Commission has jurisdiction over interstate and international
communications services. State telecommunications regulators exercise jurisdiction over intrastate and local communications services.

On
January 15, 2007, we entered into the Merger Agreement pursuant to which Spinco will merge with and into the Company with the Company continuing as the surviving corporation.
Following the Merger, our operations will be more focused on small urban markets and will be more geographically concentrated in the northeastern United States. We expect to face more competition in
our business located in the northeastern United States and we expect to be less dependent on access and Universal Service Fund revenue.

Management
views its business of providing video, data and voice communication services to residential and business customers as one business segment and currently aggregates these
revenue streams under the quantitative and qualitative thresholds defined in Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an Enterprise and Related
Information."

We
face risks that could materially adversely affect our business, consolidated financial condition, results of operations or liquidity or the market price of our common stock. For a
discussion of certain of the risks facing us, see Exhibit 99.1 to this Quarterly Report.

Revenues

We derive our revenues from:



18

---





The
following summarizes our revenues and percentage of revenues from these sources (in thousands):

Revenues

% of RevenuesThree months ended March 31,

Three months ended March 31,2007

2006

2007

2006Revenue SourceLocal calling services

$
17,506

$
16,282

25
%
25
%Universal Service Fund high cost loop


4,616


4,819

7
%
8
%Interstate access revenues


18,398


17,636

26
%
27
%Intrastate access revenues


9,729


8,977

14
%
14
%Long distance services


6,944


5,399

10
%
8
%Data and Internet services


7,842


6,683

11
%
10
%Other services


4,637


4,995

7
%
8
%Total

$
69,672

$
64,791

100
%
100
%


Operating Expenses

Our
operating expenses are categorized as operating expenses and depreciation and amortization.



19

---





Acquisitions and Mergers



Results of Operations

The following tables set forth the percentages of revenues represented by selected items reflected in our consolidated statements of operations. The comparisons
of financial results are not necessarily indicative of future results.

Three Months Ended March 31, 2007 Compared with Three Months Ended March 31, 2006

|                                                        |  | Three months ended March 31, |         | Three months ended March 31, |      
|------------------------------------------------------- |  | ---------------------------- | ------- | ---------------------------- | -----
|
|Revenues                                                |  | $                            | 69,672  |                              | 100.0
|Operating expenses                                      |  |                              | 49,264  |                              | 70.7 
|Depreciation and amortization                           |  |                              | 12,907  |                              | 18.5 
|                                                        |  |                              |         |                              |      
|Total operating expenses                                |  |                              | 62,171  |                              | 89.2 
|                                                        |  |                              |         |                              |      
|Income from operations                                  |  |                              | 7,501   |                              | 10.8 
|                                                        |  |                              |         |                              |      
|Net gain (loss) on sale of investments and other assets |  |                              | 242     |                              | 0.3  
|Interest and dividend income                            |  |                              | 78      |                              | 0.1  
|Interest expense                                        |  |                              | (10,032 | )                            | (14.4
|Equity in net earnings of investees                     |  |                              | 2,575   |                              | 3.7  
|                                                        |  |                              |         |                              |      
|Total other expense                                     |  |                              | (7,137  | )                            | (10.3
|                                                        |  |                              |         |                              |      
|Income before income taxes                              |  |                              | 364     |                              | 0.5  
|Income tax expense                                      |  |                              | (397    | )                            | (0.6 
|                                                        |  |                              |         |                              |      
|Net (loss) income                                       |  | $                            | (33     | )                            | (0.1 
|                                                        |  |                              |         |                              |      

20

---



Revenues

Revenues increased $4.9 million to $69.7 million in 2007 compared to $64.8 million in 2006. Of this increase, $4.8 million was
attributable to companies acquired in the last twelve months and $0.1 million was attributable to our existing operations. We derived our revenues from the following sources:

Local calling services.Local calling service revenues increased $1.2 million to $17.5 million in 2007 compared
to $16.3 million in 2006. Excluding the impact of acquired operations, local calling service revenues decreased $0.3 million compared to the first quarter of 2006. Voice access lines,
including lines acquired, increased 2.5% from the first quarter of 2006 but decreased sequentially from the fourth quarter of 2006 by 1.3%. Voice access lines, excluding acquired lines, decreased 3.8%
from the first quarter of 2006.

Universal Service Fund high cost loop.Universal Service Fund high cost loop receipts decreased $0.2 million to
$4.6 million in the first quarter of 2007 compared to the first quarter of 2006. Excluding the impact of acquired companies, Universal Service Fund high cost loop receipts decreased
$0.6 million compared to 2006.

Interstate access revenues.Interstate access revenues were $18.4 million for the three months ended March 31,
2007 compared to $17.6 million for the three months ended March 31, 2006. Excluding the impact of acquired companies, interstate access revenues decreased $0.7 million compared to
2006.

Intrastate access revenues.Intrastate access revenues increased $0.8 million to $9.7 million in 2007 compared
to 2006. Excluding the impact of acquired companies, intrastate access revenues increased $0.3 million compared to 2006.

Long distance services.Long distance services revenues increased $1.5 million to $6.9 million in 2007 compared
to 2006. This is attributable to the increase in subscribers and minutes related to bundles and packages sold to our existing customers. Interstate long distance penetration as of March 31,
2007 was 50.4% of voice access lines as compared to 45.2% as of March 31, 2006.

Data and Internet services.Data and internet services revenues increased $1.2 million to $7.8 million in 2007
compared to 2006. This increase is due primarily to increases in high speed data customers as we continue to market our broadband services. Our high speed data subscribers increased from 49,270 as of
March 31, 2006 to 61,814 as of March 31, 2007 and represents a 25.0% penetration of voice access lines.

Other services.Other revenues decreased from $5.0 million in 2006 to $4.6 million in 2007. Excluding the
impact of acquired companies, other revenues decreased $0.7 million compared to 2006. This decrease is principally driven by a decrease in directory revenues in 2007.

Operating Expenses

Operating expenses, excluding depreciation and amortization.Operating expenses increased $13.7 million to
$49.3 million in 2007 from $35.6 million in 2006. Approximately $2.4 million of this increase is related to operating expenses of the companies acquired during the last twelve
months. In addition, the primary drivers of this increase were merger transaction related expenses of $7.6 million and increases in employee compensation expenses of $1.2 million, cost
of goods sold of $1.2 million (including $1.0 million related to HSD and long distance services), operating insurance expenses of $0.4 million, advertising and promotion expenses
of $0.2 million and contracted labor expenses of $0.2 million.

21

---



Depreciation and amortization.Depreciation and amortization expense decreased $0.7 million to $12.9 million in
2007.

Income from operations.Income from operations decreased $8.1 million to $7.5 million in 2007. This was driven
principally by the increase in expenses discussed above. Also driving the decrease in income from operations is the increased percentage of lower margin unregulated revenues in our total business mix
due to DSL and long distance revenue growth, which offset higher margin regulated revenues.

Other expense.Total other expense increased $1.0 million to $7.1 million in 2007. Interest expense increased
$0.3 million to $10.0 million in 2007. In addition, equity in net earnings of investees decreased $0.7 million in 2007.

Income tax expense.Income tax expense of $0.4 million was recorded for the three months ended March 31, 2007,
resulting in an effective rate of 109.1% compared to 39.0% for the three months ended March 31, 2006.

Our
accounting policy is to report income tax expense for interim reporting periods using an estimated annual effective income tax rate. However, the effects of significant or unusual
items are not considered in the estimated annual effective tax rate. The tax effect of such events is recognized in the interim period in which the event occurs. In 2007, we considered all estimated
expenses related to the Merger and determined that some of these expenses were not deductible for income tax purposes. Based on current projections, we believes our annual effective tax rate for 2007
will be 109.1%.

As
of December 31, 2006, we had $235.1 million of federal and state NOL carryforwards. As a result, the income tax expense we record is generally greater than the income
taxes we currently pay.

Net (loss) income.Net loss was $33 thousand for the three months ended March 31, 2007 compared to net income
of $5.7 million for the three months ended March 31, 2006. The differences between 2007 and 2006 are a result of the factors discussed above.

Liquidity and Capital Resources

Our short-term and long-term liquidity needs arise primarily from: (i) interest payments primarily related to our credit facility;
(ii) capital expenditures; (iii) working capital requirements as may be needed to support the growth of our business; (iv) dividend payments on our common stock; and
(v) potential acquisitions. Our board of directors has adopted a dividend policy which reflects our judgment that our stockholders would be better served if we distributed a substantial portion
of our cash available for distribution to them instead of retaining it in our business.

For
the three months ended March 31, 2007 and March 31, 2006, net cash provided by operating activities of continuing operations was $11.1 million and
$20.9 million, respectively. The decrease in net cash provided by operating activities in 2007 was primarily due to expenses related to the Merger.

Our
ability to service our indebtedness depends on our ability to generate cash in the future. We are not required to make any scheduled principal payments under our credit facility's
term loan facility prior to maturity in February 2012. We will need to refinance all or a portion of our indebtedness on or before maturity. We may not be able to refinance our indebtedness on
commercially reasonable terms or at all. If we were unable to renew or refinance our credit facility, our failure to repay all amounts due on the maturity date would cause a default under our credit
facility.

Borrowings
under our credit facility bear interest at variable interest rates. We have entered into various interest rate swap agreements which are detailed in note 5 of the
"Notes to Condensed Consolidated Financial Statements" in this Quarterly Report. As a result of these swap agreements, as of March 31, 2007, approximately 88% of our indebtedness bore interest
at fixed rates rather than

22

---



variable
rates. After these interest rate swap agreements expire, our annual debt service obligations on such portion of the term loans will vary from year to year unless we enter into a new interest
rate swap or purchase an interest rate cap or other interest rate hedge. To the extent interest rates increase in the future, we may not be able to enter into new interest rate swaps or to purchase
interest rate caps or other interest rate hedges on acceptable terms.

Based
on the dividend policy with respect to our common stock, we may not have any significant cash available to meet any unanticipated liquidity requirements, other than available
borrowings, if any, under the revolving facility of our credit facility. As a result, we may not retain a sufficient amount of cash to finance growth opportunities, including acquisitions, or
unanticipated capital expenditures or to fund our operations. If we do not have sufficient cash for these purposes, our financial condition and our business will suffer. However, our board of
directors may, in its discretion, amend or repeal the dividend policy to decrease the level of dividends provided for or discontinue entirely the payment of dividends.

Net
cash used in investing activities of continuing operations was $4.5 million and $0.8 million for the three months ended March 31, 2007 and 2006, respectively.
These cash flows primarily reflect capital expenditures of $7.7 million and $5.9 million for the three months ended March 31, 2007 and 2006, respectively, and distributions from
investments of $2.4 million and $3.4 million for the three months ended March 31, 2007 and 2006, respectively. All of these distributions represent passive ownership interests in
partnership investments. We do not control the timing or amount of distributions from such investments.

On
January 15, 2007, Taconic entered into the O-P Interest Purchase Agreement pursuant to which Taconic has agreed to effect the O-P Disposition. The
transaction closed on April 10, 2007 and therefore, we will no longer receive distributions from Orange County-Poughkeepsie Limited Partnership after April 10, 2007.

Net
cash used in financing activities from continuing operations was $4.9 million and $15.7 million for the three months ended March 31, 2007 and 2006, respectively.
For the three months ended March 31, 2007, net proceeds from the issuance of long-term debt were $9.7 million and we paid dividends in the amount of $13.9 million. For
the three months ended March 31, 2006, net repayments from the issuance of long-term debt were $1.9 million and we paid dividends in the amount of $13.8 million.

Our
annual capital expenditures for our rural telephone operations have historically been significant. Because existing regulations allow us to recover our operating and capital costs,
plus a reasonable return on our invested capital in regulated telephone assets, capital expenditures have historically constituted an attractive use of our cash flow. Capital expenditures were
approximately $7.7 million and $5.9 million for the three months ended March 31, 2007 and 2006, respectively.

We
expect that our annual capital expenditures will be approximately $73 to $75 million for fiscal 2007, including $44 million (net of up to $40 million of certain
expenses which Verizon has agreed to reimburse us for in connection with the Merger Agreement) related to the Merger. A portion of these capital expenditures will be paid for with proceeds from the
O-P Disposition, which was completed on April 10, 2007. The remaining capital expenditures are expected to be funded through our cash flow from operations and borrowings under our
credit facility, if necessary. We expect that our annual maintenance capital expenditures will be approximately $160 million to $180 million in the first full year following the closing
of the Merger.

We
expect to fund the Merger through the issuance of approximately 53.8 million shares of our common stock to existing Verizon stockholders at an implied value of $18.88 per share
totaling $1.015 billion in equity and the incurrence of $1.7 billion of new indebtedness. We anticipate that the new indebtedness will consist of bank debt and senior unsecured notes in
proportions that have yet to

23

---



be
determined. We have obtained commitment letters for up to $2.080 billion of bank financing to facilitate the re-financing of our existing bank debt with the bank debt to be
incurred at the time of the Merger.

We
expect to spend approximately $125 million to $140 million following the closing of the Merger primarily on network and system upgrades related to the integration of the
acquired business. We plan to fund these expenditures through cash flow from operations.

Our
credit facility consists of a revolving facility, or the revolver, in a total principal amount of up to $100.0 million, of which $76.8 million was available at
May 1, 2007 and a term loan facility, or the term loan, in a total principal amount of $588.5 million with $588.5 million outstanding at May 1, 2007. The term loan matures
in February 2012 and the revolver matures in February 2011. The revolver has a swingline subfacility in an amount of $5.0 million and a letter of credit subfacility in an amount
of $10.0 million, which will allow issuances of standby letters of credit for our account. Borrowings under our revolver bear interest, at our option, at either (i) the Eurodollar rate
plus 1.75% or (ii) a base rate, as such term is defined in the credit agreement, plus 0.75%.

On
January 25, 2007, we entered into an amendment to our credit facility that is intended to facilitate certain transactions related to the Merger. Among other things, such
amendment: (i) permits us to
consummate the sale of our interest in Orange County-Poughkeepsie Limited Partnership and retain the proceeds thereof up to an amount equal to $55 million; (ii) excludes the gain on the
sale of our interest in Orange County-Poughkeepsie Limited Partnership from the calculation of "Available Cash", (iii) amends the definition of "Adjusted Consolidated EBITDA" to allow for
certain one-time add-backs to the calculation thereof for operating expenses incurred in connection with the Merger; (iv) amends the definition of "Consolidated Capital
Expenditures" to exclude certain expenditures incurred by us in connection with transition and integration expenses prior to consummation of the Merger; and (v) increases the leverage covenant
and dividend suspension test to 5.50:1.00 and 5.25:1.00, respectively.

The
credit facility contains financial covenants, including, without limitation, the following tests: a minimum interest coverage ratio equal to or greater than 3.0:1 and a maximum
leverage ratio equal to or less than 5.50:1. The credit facility contains customary affirmative covenants. The credit facility also contains negative covenants and restrictions, including, among
others, with respect to redeeming and repurchasing our other indebtedness, loans and investments, additional indebtedness, liens, capital expenditures, changes in the nature of our business, mergers,
acquisitions, asset sales and transactions with affiliates. Subject to certain limitations set forth in the credit facility, we may use all of our Cumulative Distributable Cash (as defined in the
credit facility) accumulated after April 1, 2005 to declare and pay dividends, but we may not in general pay dividends in excess of such amount. On March 11, 2005, April 29, 2005
and September 14, 2005, we entered into technical amendments to our credit facility.

Our
credit facility requires us first to prepay outstanding term loans under the credit facility and, thereafter, to repay loans under the revolver and/or to reduce revolver commitments
(or commitments under the delayed draw facility) under the credit facility with, subject to certain conditions and exceptions, 100% of the net cash proceeds we receive from any sale, transfer or other
disposition of any assets, 100% of net casualty insurance proceeds and 100% of the net cash proceeds we receive from the issuance of permitted securities and, at certain times if we are not permitted
to pay dividends, with 50% of the increase in our cumulative distributable cash during the prior fiscal quarter. Reductions to the revolving commitments under the credit facility from the foregoing
recapture events will not reduce the revolving commitments under the credit facility below $50.0 million. Our credit facility provides for voluntary prepayments of the revolver and the term
loan and voluntary commitment reductions of the revolver (and the delayed draw facility), subject to giving proper notice and compensating the lenders for standard Eurodollar breakage costs, if
applicable.

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In
2003, the Company issued $225.0 million aggregate principal amount of the 117/8% notes. These notes were to mature on March 1, 2010. These notes are
general unsecured obligations of the Company, rankingpari passuin right of payment with all existing and future senior debt of the Company, including
all obligations under our credit facility, and senior in right of payment to all existing and future subordinated indebtedness of the Company. On February 9, 2005, we repurchased
$223.0 million principal amount of the 117/8% notes tendered pursuant to the tender offer for such notes. $2.1 million principal amount of the 117/8% notes
remains outstanding.

We
believe that cash generated from operations will be sufficient to meet our debt service, dividend, capital expenditure and working capital requirements for the foreseeable future, and
to complete the back office and systems integration in connection with the Merger. Subject to restrictions in the agreements governing our indebtedness, we may incur more indebtedness for working
capital, capital expenditures, dividends, acquisitions and for other purposes. In addition, we may require additional financing or may be required to reduce our dividend payments if our plans
materially change in an adverse manner or prove to be materially inaccurate. There can be no assurance that additional financing, if permitted under the terms of the agreements governing our
indebtedness, will be available on terms acceptable to us or at all.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Summary of Contractual Obligations

The tables set forth below contain information with regard to disclosures about contractual obligations and commercial commitments.

The
following table discloses aggregate information about our contractual obligations as of March 31, 2007 and the periods in which payments are due:

|                         |                                    | Payments due by period
|------------------------ | ---------------------------------- | ----------------------
|
|
|Contractual obligations: |                                    |                       
|                         | Debt maturing within one year      |                       
|                         | Long term debt                     |                       
|                         | Fixed interest payments            |                       
|                         | Variable interest payments         |                       
|                         | Operating leases                   |                       
|                         | Unrecognized tax benefits          |                       
|                         | Minimum purchase contract          |                       
|                         |                                    |                       
|                         | Total contractual cash obligations |                       
|                         |                                    |                       

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The following table discloses aggregate information about our derivative financial instruments as of March 31, 2007, the source of fair value of these instruments and their
maturities.

|                      |                                     | Fair Value of Contracts at Period-End
|--------------------- | ----------------------------------- | -------------------------------------
|
|
|Source of fair value: |                                     |                                      
|                      | Derivative financial instruments(1) |                                      
|                      |                                     |                                      

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Critical Accounting Policies

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported in consolidated financial statements. Changes in these estimates and assumptions are considered reasonably possible and may have a material effect on the
consolidated financial statements and thus actual results could differ from the amounts reported and disclosed herein. The Company's critical accounting policies that require the use of estimates and
assumptions were disclosed in detail in the most recent Form 10-K and have not changed materially from that discussion.

New Accounting Standards

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." SFAS No. 157 is definitional and disclosure oriented and
addresses how companies should approach measuring fair value when required by generally accepted accounting principles, or GAAP; it does not create or modify any current GAAP requirements to apply
fair value accounting. SFAS No. 157 provides a single definition for fair value that is to be applied consistently for all accounting applications, and also generally describes and prioritizes
according to reliability the methods and inputs used in valuations. The new measurement and disclosure requirements of SFAS No. 157 are effective for the Company in the first quarter 2008. The
Company does not expect a significant impact from adopting SFAS No. 157.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As of March 31, 2007, approximately 88% of our indebtedness bore interest at fixed rates or effectively at fixed rates. Our earnings are affected by
changes in interest rates as our long-term indebtedness under our credit facility has variable interest rates based on either the prime rate or LIBOR. If interest rates on our variable
rate indebtedness (excluding variable rate indebtedness which has its interest rate effectively fixed under interest rate swap agreements) outstanding at March 31, 2007 increased by 10%, our
interest expense would have increased, and our income before taxes would have decreased, by approximately $0.1 million for the three months ended March 31, 2007.

We
have entered into interest rate swaps to manage our exposure to fluctuations in interest rates on our variable rate indebtedness. The fair value of these swaps was a net asset of
approximately $5.4 million at March 31, 2007. The fair value indicates an estimated amount we would have received to cancel the contracts or transfer them to other parties.

We
use variable and fixed-rate debt to finance our operations, capital expenditures and acquisitions. The variable-rate debt obligations expose us to variability
in interest payments due to changes in interest rates. We believe it is prudent to limit the variability of a portion of our interest payments. To meet this objective, we enter into interest rate swap
agreements to manage fluctuations in

26

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cash
flows resulting from interest rate risk. These swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate
swaps, we pay a variable interest rate plus an additional payment if the variable rate payment is below a contractual rate, or we receive a payment if the variable rate payment is above the
contractual rate. The chart below provides details of each of our interest rate swap agreements.

|Effective Date:   |  | Notional Amount |  | Rate |   | Rate, including
applicable margin |   | Expiration Date  
|----------------- |  | --------------- |  | ---- | - | --------------------------------- | - | -----------------
|February 8, 2005  |  | $130.0 Million  |  | 3.76 | % | 5.51                              | % | December 31, 2007
|February 8, 2005  |  | $130.0 Million  |  | 3.98 | % | 5.73                              | % | December 31, 2008
|February 8, 2005  |  | $130.0 Million  |  | 4.11 | % | 5.86                              | % | December 31, 2009
|April 29, 2005    |  | $50.0 Million   |  | 4.72 | % | 6.47                              | % | March 31, 2012   
|June 30, 2005     |  | $50.0 Million   |  | 4.69 | % | 6.44                              | % | March 31, 2011   
|June 30, 2006     |  | $50.0 Million   |  | 5.36 | % | 7.11                              | % | December 31, 2009
|December 31, 2007 |  | $65.0 Million   |  | 4.91 | % | 6.66                              | % | December 30, 2011
|December 31, 2008 |  | $100.0 Million  |  | 5.02 | % | 6.77                              | % | December 31, 2010

Our
Annual Report on Form 10-K for the year ended December 31, 2006 contains information about market risks under "Item 7A. Quantitative and Qualitative
Disclosures about Market Risk."

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 Chief Executive Officer and
Chief 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 Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) are effective to ensure that
information required to be disclosed by us in this Quarterly Report has been timely recorded, processed, summarized and reported within the time periods specified in the rules of the SEC and
(b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

We continue to update our internal control over financial reporting as necessary to accommodate any modifications to our business processes or accounting
procedures. During the quarter ended March 31, 2007, there have been no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.

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PART IIOTHER INFORMATION

Item 1. Legal Proceedings.

On June 6, 2005, a purported class action complaint was filed in the General Court of Justice, Superior Court Division, of the State of North Carolina by
Robert Lowinger on behalf of himself and all other similarly situated persons against the Company, the Company's Chairman and Chief Executive Officer, certain of the Company's current and former
directors and certain of the Company's stockholders. The
complaint alleges violations of Sections 11 and 12(a)(2) and liability under Section 15 of the Securities Act, and alleges that the Company's registration statement on
Form S-1 (which was declared effective by the SEC on February 3, 2005) and the related prospectus dated February 3, 2005, each relating to the Company's initial public
offering of common stock, contained certain material misstatements and omitted certain material information necessary to be included relating to the Company's broadband products and access line
trends. The plaintiff, who has been a plaintiff in several prior securities cases, seeks rescission rights and unspecified damages on behalf of a purported class of purchasers of the common stock
"issued pursuant and/or traceable to the Company's IPO during the period from February 3, 2005 through March 21, 2005". The Company removed the action to Federal Court. The plaintiff
filed a motion to remand the action to the North Carolina State Court, which was denied by the Federal Magistrate. The plaintiff has objected to and appealed the Magistrate's decision to the District
Court Judge. The Company has contested the appeal and filed a Motion to Dismiss the action. The Magistrate, on February 9, 2006, issued a Memorandum and a Recommendation to the District Court
Judge that the Motion to Dismiss be granted and that the complaint be dismissed with prejudice. The plaintiff has filed a Notice of Objection to the Magistrate's Recommendation. Both the appeal of
denial of the Motion to Remand and the Motion to Dismiss are pending before the District Court Judge. We believe that this action is without merit and intends to continue to defend the litigation
vigorously.

From
time to time, we are involved in other litigation and regulatory proceedings arising out of our operations. Management believes that we are not currently a party to any legal
proceedings, the adverse outcome of which, individually or in the aggregate, would have a material adverse effect on our financial position or results of operations.

Item 1A. Risk Factors

During the quarter ended March 31, 2007, there were no material changes to the risk factors disclosed in "Item 1A. Risk Factors" of our Annual Report on
Form 10-K for the year ended December 31, 2006.

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

Unregistered Sales of Equity Securities

We did not sell any unregistered equity securities during the quarter ended March 31, 2007.

Restrictions on Payment of Dividends

Under Delaware law, our board of directors may declare dividends only to the extent of our "surplus" (which is defined as total assets at fair market value minus
total liabilities, minus statutory capital) or, if there is no surplus, out of our net profits for the then current and/or immediately preceding fiscal year.

Our
credit facility restricts our ability to declare and pay dividends on our common stock as follows:



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Our
credit facility also permits us to use available cash to repurchase shares of our capital stock, subject to the same conditions.

See
"Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsDescription of Certain IndebtednessCredit Facility" in our
Annual Report on Form 10-K for the year ended December 31, 2006 and note 7 of the "Notes to Condensed Consolidated Financial Statements" in this quarterly report for a
more detailed description of our credit facility and these restrictions.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

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 Section 13 or 15(d) 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, and the undersigned also has signed this Quarterly Report in his capacity as the Registrant's Executive Vice President and Chief
Financial Officer (Principal Financial Officer).

|                  |  | FAIRPOINT COMMUNICATIONS, INC.
|----------------- |  | ------------------------------
|Date: May 9, 2007 |  | By:                           
|                  |  |                               
|                  |  |                               

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EXHIBIT INDEX

|Exhibit
No. |  | Description                                                                                                                                                                                                                                                                                                                                     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Agreement and Plan of Merger, dated September 13, 2006, among FairPoint, MJD Ventures, Inc., FairPoint Germantown Corporation and The Germantown Independent Telephone Company.(1)                                                                                                                                                              
|2.2         |  | Agreement and Plan of Merger, dated as of January 15, 2007, by and among Verizon Communications Inc., Northern New England Spinco Inc. and FairPoint.(2)                                                                                                                                                                                        
|2.3         |  | Amendment No. 1 to Agreement and Plan of Merger, dated as of April 20, 2007, by and among Verizon Communications Inc., Northern New England Spinco Inc. and FairPoint.(3)                                                                                                                                                                       
|3.1         |  | Eighth Amended and Restated Certificate of Incorporation of FairPoint.(4)                                                                                                                                                                                                                                                                       
|3.2         |  | Amended and Restated By-Laws of FairPoint.(4)                                                                                                                                                                                                                                                                                                   
|4.1         |  | Indenture, dated as of March 6, 2003, by and between FairPoint and The Bank of New York, relating to FairPoint's $225,000,000 117/8% Senior Notes due 2010.(5)                                                                                                                                                                                  
|4.2         |  | Supplemental Indenture, dated as of January 20, 2005, by and between FairPoint and The Bank of New York, amending the Indenture dated as of March 6, 2003 between FairPoint and The Bank of New York.(4)                                                                                                                                        
|4.3         |  | Form of Initial Senior Note due 2010.(5)                                                                                                                                                                                                                                                                                                        
|4.4         |  | Form of Exchange Senior Note due 2010.(5)                                                                                                                                                                                                                                                                                                       
|10.1        |  | Credit Agreement, dated as of February 8, 2005, by and among FairPoint, various lending institutions, Bank of America, N.A., CoBank ACB, General Electric Capital Corporation and Deutsche Bank Trust Company Americas.(4)                                                                                                                      
|10.2        |  | First Amendment to Credit Agreement, dated as of March 11, 2005, among FairPoint, various lending institutions, Bank of America, N.A., CoBank ACB, General Electric Capital Corporation and Deutsche Bank Trust Company Americas.(4)                                                                                                            
|10.3        |  | Second Amendment and Consent to Credit Agreement, dated as of April 29, 2005, among FairPoint, various lending institutions, Bank of America, N.A., CoBank ACB, General Electric Capital Corporation and Deutsche Bank Trust Company Americas.(6)                                                                                               
|10.4        |  | Third Amendment to Credit Agreement, dated as of September 14, 2005, among FairPoint, various lending institutions, Bank of America, N.A., CoBank ACB, General Electric Capital Corporation and Deutsche Bank Trust Company Americas.(7)                                                                                                        
|10.5        |  | Fourth Amendment and Waiver to Credit Agreement, dated as of January 25, 2007, among FairPoint, various lending institutions, Bank of America, N.A., CoBank ACB, General Electric Capital Corporation and Deutsche Bank Trust Company Americas.(8)                                                                                              
|10.6        |  | Pledge Agreement, dated as of February 8, 2005, by FairPoint, ST Enterprises, Ltd., FairPoint Broadband, Inc., MJD Services Corp., MJD Ventures, Inc., C-R Communications, Inc., Comerco, Inc., GTC Communications, Inc., Ravenswood Communications, Inc.,
Utilities, Inc., FairPoint Carrier Services, Inc. and St. Joe Communications, Inc.(4)
|10.7        |  | Subsidiary Guaranty, dated as of February 8, 2005, by FairPoint Broadband, Inc., MJD Ventures, Inc., MJD Services Corp., ST Enterprises, Ltd. and FairPoint Carrier Services, Inc.(9)                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                 

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|10.8  |  | Form of Swingline Note.(4)                                                                                                                                                                                                            
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.9  |  | Form of RF Note.(4)                                                                                                                                                                                                                   
|10.10 |  | Form of B Term Note.(4)                                                                                                                                                                                                               
|10.11 |  | Transition Services Agreement, dated as of January 15, 2007, by and among Verizon Information Technologies LLC, Northern New England Telephone Operations Inc., Enhanced Communications of Northern New England Inc. and FairPoint.(2)
|10.12 |  | Distribution Agreement, dated as of January 15, 2007, by and between Verizon Communication Inc. and Northern New England Spinco Inc.(2)                                                                                               
|10.13 |  | Master Services Agreement, dated as of January 15, 2007, by and between FairPoint and Capgemini U.S. LLC. (2)                                                                                                                         
|10.14 |  | Employee Matters Agreement, dated as of January 15, 2007, by and among Verizon Communications Inc., Northern New England Spinco Inc. and FairPoint.(2)                                                                                
|10.15 |  | Partnership Interest Purchase Agreement, dated as of January 15, 2007, by and among Verizon Wireless of the East LP, Cellco Partnership d/b/a Verizon Wireless and Taconic Telephone Corp.(2)                                         
|10.16 |  | Joinder Agreement, dated as of April 5, 2007, by and among Warwick Valley Telephone Company, Taconic Telephone Corp., Cellco Partnership d/b/a Verizon Wireless and Verizon Wireless of the East LP.(10)                              
|10.17 |  | Tax Sharing Agreement, dated as of January 15, 2007, by and among FairPoint, Verizon Communications Inc. and Northern New England Spinco Inc.(2)                                                                                      
|10.18 |  | Amended and Restated Tax Sharing Agreement, dated as of November 9, 2000, by and among FairPoint and its Subsidiaries.(11)                                                                                                            
|10.19 |  | Affiliate Registration Rights Agreement, dated as of February 8, 2005.(3)                                                                                                                                                             
|10.20 |  | Employment Agreement, dated as of March 17, 2006, by and between FairPoint and Eugene B. Johnson.(12)                                                                                                                                 
|10.21 |  | Change in Control and Severance Agreement, dated as of March 14, 2007, by and between FairPoint and Walter E. Leach, Jr.(13)                                                                                                          
|10.22 |  | Change in Control and Severance Agreement, dated as of March 14, 2007, by and between FairPoint and Peter G. Nixon.(13)                                                                                                               
|10.23 |  | Change in Control and Severance Agreement, dated as of March 14, 2007, by and between FairPoint and Shirley J. Linn.(13)                                                                                                              
|10.24 |  | Change in Control and Severance Agreement, dated as of March 14, 2007, by and between FairPoint and John P. Crowley.(13)                                                                                                              
|10.25 |  | Letter Agreement, dated as of March 23, 2007, by and between FairPoint and Patrick T. Hogan.(3)                                                                                                                                       
|10.26 |  | FairPoint Amended and Restated 1998 Stock Incentive Plan.(14)                                                                                                                                                                         
|10.27 |  | FairPoint Amended and Restated 2000 Employee Stock Incentive Plan.(15)                                                                                                                                                                
|10.28 |  | FairPoint 2005 Stock Incentive Plan.(4)                                                                                                                                                                                               
|10.29 |  | FairPoint Annual Incentive Plan.(4)                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                       

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|10.30 |  | Form of February 2005 Restricted Stock Agreement.(16)                                                                                
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------
|10.31 |  | Form of Director Restricted Stock Agreement.(17)                                                                                     
|10.32 |  | Form of Director Restricted Unit Agreement.(17)                                                                                      
|10.33 |  | Form of Non-Director Restricted Stock Agreement.(18)                                                                                 
|21    |  | Subsidiaries of FairPoint.(19)                                                                                                       
|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.*
|99.1  |  | Risk Factors.*                                                                                                                       

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