1041858--3/11/2008--RCN_CORP

related topics

{cost, operation, labor}

{system, service, information}

{debt, indebtedness, cash}

{product, market, service}

{condition, economic, financial}

{customer, product, revenue}

{stock, price, share}

{competitive, industry, competition}

We depend on third party suppliers and licensors, and in some cases, a single vendor in order to obtain economics of scale for the cost of procuring equipment; thus, if we are unable to procure the necessary equipment, software or licenses on reasonable terms and on a timely basis, our ability to offer services could be impaired, and our growth, operations, and financial results could be materially adversely affected. In the event of a substantial failure of our information systems or loss of key facilities or personnel, our disaster recovery plans may not enable us to fully recover our services for an extended period, which would adversely affect our revenues or capital resources. Programming costs have risen in past years and are expected to continue to rise, and we may not be able to pass such programming costs through to our customers, which could adversely affect our cash flow and operating margins. Our markets are highly competitive. Our revenue is highly susceptible to changes in general economic conditions, and any significant downturn in the U.S. economy as a whole, or in any geographic market in which we provide services, could substantially impact our sales, customer churn, bad-debt and collections, and overall results of operations. Our inability to respond to technological developments and meet customer demand for new products and services could limit our ability to compete effectively. We experience turnover among our experienced and trained employee base, which could result in our inability to continue performing certain functions and completing certain initiatives in accordance with our existing budgets and operating plans. There are risks of network failure and disruption. We may be unable to successfully integrate the network and operations of NEON Communications Group, Inc. into our business, which would negatively impact our anticipated revenue and cost synergies. Future sales of our common stock could adversely affect the price of our stock and our ability to raise capital. We rely on a number of outsourced service providers for key operational functions; if we are unable to maintain quality performance from our outsourced service providers, our ability to offer services could be impaired, and our brand, growth, and results of operations could be materially adversely affected. Risks Related to Our Indebtedness We and our subsidiaries have had, and may in the future incur, a significant amount of indebtedness, including secured debt, which could adversely affect our financial health and our ability to react to changes in our business. The covenants in our credit agreement restrict our financial and operational flexibility.

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1041858--3/11/2008--RCN_CORP_/DE/