For Discussion Purposes Only Leveraging Digital 395 Broadband Workshop Michael Ort May 12, 2015

Digital 395 Post-Construction Direction For Discussion Purposes Only  Market Strategy: Be Disruptive  Wholesale Model (GEM Anchors & Last Mile)  Flood the region with broadband to stimulate application use and development  Establish metro or better pricing and product offering  Many points of interconnection, shareable assets  Last Mile Channel Strategy  Adopt model of “Cooperation, not Competition”  Symbiotic relationship – Mutual Benefit  Last Mile Providers will stimulate demand  Encouraged expansion of Last Mile solutions  Status  Strategies Implemented  Region presently is under utilizing this Asset  Sustainability Challenges

Example: “Be Disruptive” Proprietary and Confidential 3 ILEC Solution Digital 395 Solution 100 Mbps Ethernet $400 Per Site Net Local Cost: $40 $ 4 per Mb (40¢ local) 1 Gig Ethernet $2, Per Site Net Local Cost: $200 $ 2 per Mb (20¢ local)

Sustainability: Weak Adoption Number of Anchors

Sustainability: Under-Subscription Avg. Monthly Revenue Average Revenue (By Agency Type)

Sustainability: Revenue Shortfall Proprietary and Confidential 6 Ed $30.2K Medical $17.4K Public Safety $3.5K Cities $2.9K Utilities $2.8K State $160 Communities $819 Monthly Service Provider Revenue $120K Counties $2.0K Monthly CAI Revenue Contribution

Anchor and Public Agency Role For Discussion Purposes Only  Subsidized External Funding  Setting the Bar  Promoting Applications  “Branding the Region”  Broadband Adoption

Economic Development For Discussion Purposes Only  “State-of-the-Art” Broadband Asset  An Opportunity to Re-Brand Region  Hospitality and Recreation  Platform Infrastructure to Attract  Quality of Life: Changing Patterns  Healthy Lifestyle AND Advanced Healthcare  Education is on-going  Baseline expectations  Security  Vulnerability of Narrow Economic Base  Vulnerability of Environment

Transformative Infrastructures For Discussion Purposes Only Los Angeles Aqueduct Digital US 395 – 1910 to 1940

Barriers to Adopt For Discussion Purposes Only  Tangible Barriers  Cost to Connect  Not Pushing Service Providers Enough  Intangibles  “T-1” mentality : Need to Lead, Not Follow  Planning for Today, not Tomorrow  Local, not Global Focus  Broadband Low among Expenditure Portfolio  Don’t be a “Crab in a Barrel”

Thank You For Discussion Purposes Only