We’re Talking Fiber Optics, Baby! Things, they are a changing

Tularosa Basin Telephone replacing copper with FTTP and FTTN – Press Release July 12, 2006 “…we can build a network that provides our subscribers with a full range of advanced communications services today and feel comfortable that this same network will enable us to meet future subscriber demands."

Tularosa Basin Telephone replacing copper with FTTP and FTTN – Press Release July 12, 2006 "TBTC is dedicated to bringing the same advanced services typically found in large metropolitan areas to the people of New Mexico's smaller, rural communities."

Tularosa Basin Telephone replacing copper with FTTP and FTTN – Press Release July 12, 2006 "This new…network provides us with the opportunity to offer our subscribers bundled service packages that include high-speed data, voice, and video at very affordable rates."

Investment in the Community TBTC is making a substantial investment ($16 million) to totally rebuild our existing network. We are investing for the future of our customers and our community. We are working to Keep Our Customers Connected!

Keeping Customers Connected! We're upgrading with:  Fiber to the Node (FTTN)  Fiber to the Premise (FTTP)

Why Now? Single Source Provider – Triple Play... Grand Slam Response to competition Financial health of TBTC Aging copper cable Undersized copper cable

Responding to Competition Cable TV providers  High speed internet, LD & POTS Satellite Providers  High speed internet Wireless Providers  High speed internet, LD & POTS Voice over Internet Protocol (VoIP)  LD

Responding to Competition New sources of revenue  Bundled services Gains in efficiency mean bigger profit margins Maintain customer base New subscribers Win back customers

TBTC is committed to providing our customers with new products and services – so we can all keep connected as technology changes!

Customer Service Issues Expect to field a lot of questions from our customers We want to make this upgrade as painless as possible TBTC will start notifying customers in early August  Bill insert  Frequently Asked Questions mailer

Questions Anyone? Who's paying for this?  TBTC will make equipment upgrades to the customer's property at the company's expense  TBTC will cover all construction costs associated with upgrades to the customer's property  Subscription to upgraded services is optional  TBTC will release a new price list/tariff for upgraded services closer to the completion of construction and service roll-out

Rates will NOT increase Enhanced services are OPTIONAL

The Details Services Network Upgrades Engineering and Construction Customer Impact Timeline

New Services! Higher speed data (internet) Video  Broadcast  Video on Demand (VOD)  Local content Service Convergence

Network Upgrades Fiber to the Premise (FTTP) ADSL2+ (Copper)

What's the difference? Fiber  Standard ethernet based network, just like what all computers use today  Gigabit speeds Copper  Faster version of familiar DSL technology  20+ megabits

What's the same? Quality of service  We are committed to maintaining the same quality and reliability we are known for today Availability of service  We are striving to making all services available to all customers, regardless of the access technology

Construction New cable placement  Local streets  Highways  Aerial and buried Some customer premises will require on-site construction

Construction Crews TBTC Crews Contract Crews  Licensed  Bonded  Insured

Engineering Fiber vs. Copper 60% of customer base will require fiber optlic loop connections 40% of customer base will remain on short copper loops  Copper loops already capable of handling all that big data

Fiber Factors There are a few factors that determine new fiber placement  Age and condition of existing copper distribution cable  Distance from customer to TBTC switching equipment  Other engineering and construction specifications

Engineering Challenges: Fiber New service entrance cable  Aerial or buried  In some cases, new entrance cable may disturb customer's landscaping... TBTC will take pains to minimize any construction effects on customer property New wiring to computer for data connections

Customer Impact Construction Service Disruptions Cool New Services!!!

Customer Premise Construction Tailored to the unique requirements of each customer's property TBTC will schedule meetings with individual customers to discuss required construction on their property  Comprehensive on-site assessment  Minimize impact to landscaping  Aesthetics are important too – NID, UPS, Cabling

Customer Premise: Copper No construction on customer property No new wiring Possibly new DSL modem

Customer Premise: Fiber Access to the customer's property required New UPS unit to be mounted on wall inside the building New house wiring for current DSL customers may be required

UPS Uninterruptible Power Supply Locations with 100% fiber optic cables require a UPS because there will no longer be copper wires to carry low-voltage power from TBTC's equipment to the customer's equipment Low-voltage power is necessary to power electronics in the new Optical Networking Terminal (NID) and enable continued service operation during power outages

UPS Enables continued service for 8 to 10 hours in the event of an electrical power outage Manufacturer estimates power consumption for 30 days at 24 hours per day of continuous heavy load to cost about 61 cents Monthly power consumption for a typical household is expected to be less than this estimate Actual power consumption will vary based on actual usage

UPS Needs to be plugged into an outlet inside the building with a wire ultimately connecting to the new NID on the outside of the building Replacement NID will ideally be located in the same location as the existing NID

Timeline Cloudcroft Exchange  Starts within the next 30 days  Phase I should be finished by the end of 2006  Phase II should be finished during 3Q 2007 Tularosa Exchange  Starts by the beginning of 2007  Should be finished by 4Q 2007 Carrizozo Exchange  Early 2007  Early 2008

Have we missed anything... Contacts:  Nathan - Project Manager  Jerimiah - Access Platform  Lance - External Communications  Eddie - Turn-up  Mary Beth - Customer Service  Richard Suggs - NID installation Voic at 585-FTTP (3887)