The American Recovery and Reinvestment Act of 2009 Mary Ferguson LaFave Director Public Policy – Qwest May 5, 2009

ARRA -- Broadband Provisions Two Agencies Will Disperse Federal Funds –Department of Agriculture – RUS –Department of Commerce – NTIA –The FCC will coordinate with these agencies and provide guidance on definitions Timing –All funds must be dispersed by September 30, 2010 –Funded projects must be completed within 2 years of receipt of the award –NTIA – NOFA on 6/1/09 and first grants 9/09 –RUS – No Announced Dates

RUS $2.5B in Grants, Loans and Loan Guarantees –At least 75% of area targeted by a project must be rural without sufficient access to high speed broadband service to facilitate economic development –No area of a project funded by RUS may receive NTIA funds Identified Priorities –Broadband systems that will deliver end users a choice of more than one service provider –Projects that provide service to the highest proportion of unserved rural residents –Borrowers or former borrowers under the Rural Electrification Act of 1936 –All project elements will be fully funded –Projects that can be completed –Projects that can begin promptly

NTIA $4.7B for Broadband Technology Opportunities Program –$350M for developing and maintaining a broadband inventory map –$200M to expand public computer center capacity –$250M for “innovative programs to encourage sustainable adoption of broadband service BTOP Goals –Provide broadband access in unserved areas –Provide improved broadband access in “underserved” area –Improve access to broadband by various segments of the community thereby stimulating job growth Funds –Competitive grants will be awarded –Absent a waiver, an successful applicant must fund 20% of the project’s cost

NTIA Selection Guidance: –If practicable, at least one award in each State –Grant should increase the affordability and subscribership to broadband to the greatest population of users in the area –Technology Neutral –Avoid unjust enrichment –Projects that can be started and completed expeditiously Eligible Grant Applicants –States, political subdivisions, Indian Tribes and non-profit organizations –Any other entity, including a broadband service or infrastructure provider, that the Asst. Secretary finds to be in the public interest

Qwest’s Advocacy and Analytical Approach Advocacy –Focus on Unserved, Rural Areas –Use existing rules –Look to existing providers to deploy, maintain and sustain the broadband infrastructure Qwest Analysis –Where are unserved areas in our territory Of those, identify those that are rural Of those, identify whether there is a fixed line, facilities based provider –Result If Qwest were to pursue grants, for approximately $500M, Qwest can deploy broadband service to approximately 600,000 new living units

Open Issues Reporting and Accounting Requirements Imposed on Grant Recipients Cost of facilities relocation associated with massive transportation improvement projects Definitions Broadband Unserved Underserved Non Discrimination Open Access Role of the States Mapping Other Issues