1041954--3/29/2007--ITC_DELTACOM

related topics

{product, market, service}

{system, service, information}

{debt, indebtedness, cash}

{regulation, government, change}

{property, intellectual, protect}

{acquisition, growth, future}

{operation, natural, condition}

{stock, price, share}

{personnel, key, retain}

{financial, litigation, operation}

{customer, product, revenue}

Our ability to comply with the financial covenants in our debt agreements depends primarily on our ability to generate substantial operating cash flow. Our substantial level of indebtedness could adversely affect our financial health and ability to compete. Affiliates of Welsh, Carson, Anderson Stowe own securities representing a majority of our voting power, which gives them the ability to exercise significant or controlling influence over major corporate actions by us. The FCC may restrict our ability to provide local services and may increase the costs we incur to provide these services. We are subject to a significant number of legal proceedings that could result in our payment of substantial monetary damages and could adversely affect our ability to provide services. Our integrated communications services business is subject to significant competitive pressures that could restrict our ability to achieve or sustain operating profitability. Our wholesale services, including our broadband transport services, continue to be adversely affected by pricing pressure, network overcapacity, service cancellations and other factors. Our operating performance will suffer if we are not offered competitive rates for the access services we need to provide our long distance services. Our inability to maintain our network infrastructure, portions of which we do not own, could adversely affect our operating results. If we are unable to interconnect with AT T following its acquisition of BellSouth and other incumbent carriers on acceptable terms, our ability to offer competitively-priced local telephone services will be adversely affected. We may not be able to retain the few large customers on which we depend for a significant percentage of our revenues. The local and long distance industries are subject to significant government regulation, which may change in a manner that is harmful to our business. Our failure to maintain adequate billing, customer service, information systems and data security could limit our ability to increase our services and, in some cases, expose us to potential liability. We may be subject to damaging and disruptive intellectual property litigation. We are subject to risks associated with rapid changes in technology. Our success depends on our ability to attract and retain key personnel. Our network or other ground facilities could be damaged by natural catastrophes or terrorism.

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1041954--3/29/2007--ITC_DELTACOM_INC