Management Report: 2009 Contract Negotiations September 29, 2009 CLNPC Proprietary and Confidential

Outline Negotiating Committee (NC) role Summary of Management’s Strategic Objectives and Negotiating Strategy Review of NeuStar and Telcordia proposals Comparison of proposals Current status Management and NC recommendations CLNPC Proprietary and Confidential2

NC and Management Roles Management is the primary contact with both NeuStar and Telcordia. The NC acts as strategic advisor and “voice of the Shareholders”. Management provides regular reports to the NC and seeks their support and guidance as negotiations progress. As the negotiations mature, NC participation “at the table” may be required and/or desirable. CLNPC Proprietary and Confidential3

Management’s Report A.STRATEGIC OBJECTIVES In Management's Strategic Objectives and Negotiating Strategy (“Management’s Report”), the following are identified as the Primary Objectives of renewal of the Master Agreement: –Satisfactory resolution of vendor neutrality; and –Value to the Shareholders of a 4 to 7 year, or other, term. CLNPC Proprietary and Confidential4

Management’s Report - cont’d A number of additional Strategic Objectives are also identified, including: pricing of SOWs (Management continue to explore alternatives to the 1/8 th formula historically imposed by NeuStar); currency conversion (Management have completed an assessment of the impact of the current currency conversion regime with NeuStar and have delivered a report and preliminary recommendation to the NC); sizing and responsiveness of the NPAC to unique Canadian requirements (Management believes that the Shareholders have, generally stated, historically benefited from economies of scale through alignment with the US NPAC, however this has, from time to time, required the Canadian Shareholders to implement unnecessary changes and incur costs related thereto);and CLNPC Proprietary and Confidential5

Management's Report – cont’d –delivery of an evolving multi-functional NPAC (Management believes that consideration should be given to anticipated usage of the NPAC outside of commercial porting and the utility of such usage to the Shareholders). Management are of the view that the Strategic Objectives can be quantified financially, and reflected in negotiations with the NPAC vendor. CLNPC Proprietary and Confidential6

Management’s Report – cont’d B.NEGOTIATING STRATEGY 1. Forecast of Porting Volumes - Management believe that a forecast is essential to the CLNPC’s ability to assess the value of any NPAC vendor proposal. - Management have discussed forecast strategy with the NC and, on the basis of that discussion, Management have prepared a forecast for 2012 through 2018 on the basis of 4M transactions in 2009, increasing annually at 5%, 10%, 15% and 20%. - This forecast strategy will be used to conduct a sensitivity analysis in the pricing of both the NeuStar and Telcordia proposals. CLNPC Proprietary and Confidential7

Forecast volume based on 4M in 2009 CLNPC Proprietary and Confidential 5%10%15%20% ,

Forecast Considerations Management have identified that the following, any of which could drive significant volume, should be considered in the context of the forecast: –Several new wireless entrants are expected to begin porting in 2010; –Shareholders may embrace the use of URI fields and alternate data fields –Mergers, acquisitions, network grooming and migration to new technology; –Numbering resources could exhaust earlier than anticipated and demand implementation of pooling as a solution; and –Geographic portability may be introduced. Management believe that a forecast of 10-15% growth in porting volumes is reasonable for the purposes of pricing negotiations with both Telcordia and NeuStar. Management have included, in such 10-15%, certain volumes that may result from some of the events described above. CLNPC Proprietary and Confidential9

Management’s Report – cont’d 2. Elements of Leverage With Vendors: - Term of Renewal – Management believe there is significant value to each of NeuStar and Telcordia to secure a longer term of what is likely exclusive service to the Canadian region; such value should be capable of quantification; - Neutrality – Management believe that “relaxing” the rigorous regulatory and legal neutrality regime to which NeuStar (as incumbent NPAC provider) is subject, and offering similar relief to Telcordia with respect to NPAC provider neutrality, is of significant value to NeuStar and Telcordia; and - All NPAC Revenue Incremental Revenue to Telcordia – Given Telcordia’s status as a new “entrant” into NPAC provisioning, all revenue from Canada is incremental revenue. Telcordia has also indicated that the Canadian region is viewed independently from the Telcordia US opportunities, and as a strategic market to assist Telcordia in the US market in the future. CLNPC Proprietary and Confidential10

Management’s Report – cont’d Regulatory “Risk” - There is considerable regulatory activity in the US regarding: (a) evolution of the US NPAC; (b) competition in the delivery of NPAC services; and (c) the authority of the NAPM LLC. Telcordia has filed two petitions with the FCC specific to the last two contract amendments between the NAPM and NeuStar. The FCC issued Public Notice ; comments have been received and reply comments due September 28. Telcordia has also filed a dispute with the NANC regarding evolution of the NPAC beyond number portability. –Management are monitoring these proceedings closely. Management believe that there is minimal regulatory risk to the CLNPC, however, have cautioned both NeuStar and Telcordia that the CLNPC is mindful of this activity, the risk it presents to the CLNPC and that the potential for any regulatory risk to the CLNPC must be factored into any negotiations. CLNPC Proprietary and Confidential11

NeuStar Proposal 1 NeuStar has delivered two proposals to Management. 1. January 2009 Extends agreement from Dec 2011 to Dec Builds on current pricing by adding additional rate “tiers”. Immediate reduction of $0.02 for the remaining tiers in the current contract (maximum 17.6M ports) and adds new tiers at 4.4M intervals with reductions of 0.02 per tier to a cumulative maximum of 39.6M ports over the renewal term (Currently, contract tiers are at 2.2M intervals and $0.04). Increases the annual volume credit from $125K to $200K. Seeks authority to add new “incubator” fields for “user services” into the TN record. Seeks an expedited process to confirm neutrality compliance on ancillary services. CLNPC Proprietary and Confidential12

NeuStar Proposal 2 2. May, 2009 Management had requested that NeuStar deliver an alternate proposal using a fixed pricing model similar to US Amendment 70, executed by the NAPM in January. This proposal was delivered May 4, and contained two related proposals, each of which proposes to: (i) extend the current NeuStar Master Agreement to December 2015; (ii) permit NeuStar to add new URI fields to the Canadian NPAC (which are the subject of regulatory proceedings in the US);and (iii) incorporate an expedited process to confirm NeuStar neutrality relative to the offering of NPAC ancillary services in the Canadian region. CLNPC Proprietary and Confidential13

NeuStar Proposal 2 – cont’d May, 2009 Proposal A: a fixed transaction price proposal at $1.07/port, subject to volume based escalating credits. The escalating credits proposed are measured annually (cumulative within each year) and incremented at 500K transactions to a maximum of 7M transactions in any year. –Credits escalate: $100K (2010), $105K (2011), $110k (2012), $115 (2013), $120 (2014) and $125K (2015). This model yields an effective transaction rate range of $1.07 to $.88 (in 2015 if Canadian volumes exceed 7.0M transactions). CLNPC Proprietary and Confidential14

NeuStar Proposal 2 – Cont’d May, 2009 Proposal B: a fixed annual price proposal with a fixed annual price of $3.9M escalating at 5.5% annually and which assumes transaction growth also at 5.5%, with annual volume ceilings. Transactions over the annual ceiling are charged at $1.07/port subject to volume based escalating credits described in Proposal A, above. Given the structure of the initial offer with no “floor”, the CLNPC is not able, at this point, to articulate a range of per port prices under this model. In addition, the initial NeuStar proposal relative to the “ceiling” (which tracks escalating price to escalating volume, equally) could operate to the detriment of the Shareholders where volumes increase annually by less than 5.5%. CLNPC Proprietary and Confidential15

Telcordia Proposal In April, Telcordia delivered a high level outline of their technical assumptions for Management’s confirmation. Following further discussions with Telcordia over the months of May and June, Telcordia delivered a proposal to the CLNPC on June 25: A stand alone, Canadian region next generation (multi-functional) NPAC, not tied to success or failure of their US initiative. Telcordia suggests the solution will have minimal impacts on existing systems and processes in an effort to protect existing service provider investments; all features are backward compatible with no SOA or LSMS impact. Scalable to satisfy annual volume of up to 10M transactions. Telcordia assumes up front development cost. No charges for system enhancements of low to medium level of effort for the life of the contract; high level of effort requirements (for example, pooling) would be negotiated individually. CLNPC Proprietary and Confidential16

Telcordia Proposal – cont’d No separate fees for test bed/help desk/reports/NPAC connectivity. Enhanced user support through the use of “dashboard” technology. Transition and contingency plan proposed that suggests, at a maximum, a 12 month implementation; this could be accelerated if testing accelerated and/or Telcordia assists service providers in testing. Telcordia assume 10% growth annually. Initial offer of 7 year term; fixed price $58M includes porting transactions, connectivity, test bed, support, reports. CLNPC Proprietary and Confidential17

Comparison of Telcordia (June 25) and NeuStar (May 4) Offers In order to compare the NeuStar (May 4) and Telcordia (June 25) proposals, Management have developed an “effective rate” for the NeuStar proposals over a 7 year term by factoring in the costs of incremental services including, for example, SOW, VPOP, helpdesk and test bed. Management have developed a preliminary sensitivity analysis using projected porting growth at 5, 10, 15 and 20%. This analysis of the cost comparison between the proposals was delivered to the Board as a separate document. CLNPC Proprietary and Confidential 18

Management Consultation with NC August 4 Management met with the NC and had detailed discussion of the foregoing. The NC directed Management to clarify transition costs with Telcordia and, in addition, directed Management to return to the vendors with the following comments: –Telcordia were advised of the necessity to reduce their pricing by at least $12M, and to quantify the potential costs to the CLNPC for transition to their platform. –NeuStar were advised to reduce their price generally, adjust their “ceiling”, introduce a “floor” and factor in all other system costs for an “all in” system cost. CLNPC Proprietary and Confidential19

NeuStar status August 10: Management advised NeuStar that the NC had found their previous proposal unresponsive on price, and required that NeuStar introduce a “floor”, increase the “ceiling” and aggregate an annual “all in” system cost. NeuStar indicated that they would consider the CLNPC’s feedback and provide a response within two weeks. A revised proposal was not received in such timeframe. However, Management met with NeuStar on September 18, and NeuStar indicated that they anticipate delivery of a proposal the week of October 12. CLNPC Proprietary and Confidential20

Telcordia status August 10: Management advised Telcordia that their initial proposal must be reduced by not less than $12M over the proposed term, and solicited from Telcordia an estimate of costs of implementation of a Telcordia standalone NPAC. Telcordia notified Management that a response would be provided not later than August 17. August 17: Telcordia agreed to a price reduction of $12M. August 20: Management met with senior representatives of Telcordia and discussed the CLNPC’s request that Telcordia assess and provide input on transition costs. Telcordia’s response on transition costs was received August 21. CLNPC Proprietary and Confidential21

Management Consultation with NC September 11 Management delivers a status report to the NC. NC members agreed to use Telcordia’s transition assessment and “quantify” their individual transition costs. These costs will be provided to Management, in confidence, in order to calculate a generic transition cost factor for the region. Management have been directed by the NC to focus on the Primary Strategic Objectives (including, most importantly, price) and utilize the balance of the Strategic Objectives to secure satisfactory resolution of such Primary Strategic Objectives. CLNPC Proprietary and Confidential22

Timing Management believe that the effective competitive bidding regime created by engaging in parallel bona fide negotiations is of significant benefit to the CLNPC, provided that such negotiations are carried out on a relatively contemporaneous basis. There are more than 2 years remaining in the current contract. Management are of the opinion that timing is presently in our favour. Telcordia has indicated that NPAC development and deployment could occur within 12 months or less. Accordingly, Management believe that there is sufficient and reasonable time to permit maximum leverage to be applied to both NeuStar and Telcordia to yield the best result for the CLNPC Shareholders. CLNPC Proprietary and Confidential23

Management Recommendations Management believe that a two step approach, as outlined below, is the most effective strategy to maximize CLNPC leverage with both vendors. –Management will develop a detailed list of material issues which will form the basis for requirements of a Canadian NPAC business model beginning January –Once such requirements have been approved by the NC, such requirements will be delivered to the Shareholders Board, and thereafter to both vendors. –Communication to the vendors will indicate the CLNPC requirements for receipt of responses. Each vendor will also be advised that they will be given a fair opportunity to provide NPAC services in Canada commencing January CLNPC Proprietary and Confidential24