02/19/14 REVIEW AND UPDATE FLOWCHART AND TIMING

Goals Finish going through the process flowchart listing the steps and various options for each. Develop options (choices) for each step, such as defender priority, ability to meet/exceed, match by changing start and/or stop date, etc. and give recommendation to each. Develop a proposal on the sandbox (or something like the presubmittal workspace) and develop the recommendation. This needs to be settled because a lot of issues/decisions will vary depending upon what we do here.

Options being discussed Options Being Discussed Opt out flags Challenger REBID Binding the Defender Remaining Items Timing rules for TP evaluation of Matching Items to be frozen (A-Defender and TP Eval) “Issues and Requirements for ROFR Defender Assignment” worksheet Review finalized process for additional timing implications

Opt Out Flags 2 flags Opt-out from consideration as a challenger Opt-out from identifying one’s own TSRs as defenders Option 1 The opt out flag(s) will be a part of the transrequest template and must be elected at the time of submission. Option 2 The opt out flag(s) will be available after the TSR is identified as a challenger with ROFR defenders. Option 3 There should not be any opt out flags

Opt out flags Option 1 Option 1 The opt out flag(s) will be a part of the transrequest template and must be elected at the time of submission. Customers do not like having to opt out without detailed PC information. This is a complex decision that cannot be made up front. The sentiment is that it is important to have this decision available mid-stream after PC is identified. Changes will be needed for the transrequest and transstatus templates. This is a straightforward solution. Minimal complexity is added. There are no timing implications to consider.

Opt out flags Option 2 Option 2: The opt out flag(s) will be available after the TSR is identified as a challenger with ROFR defenders. This option provides customers with the most detailed PC information available. Customer notification must be sent once they are identified as a challenger with ROFR defenders. There will be a provider time limit for this notification.

Opt Out Flags Option 2 (cont.) Customer will have some time to respond. The customer response will be embedded in the provider evaluation time limit (similar to REBID). This will effectively reduce the provider evaluation time limit by the time it takes the customer to respond. This will delay queue processing for the time it takes the customer to respond. A provision will be needed to prevent providers from violating the provider evaluation time limit for later queued TSRs while the queue is frozen. This only appears to be applicable to Non-Firm Challengers. Service Customer Opt out NF Hourly 5 min NF Daily 5/10 min NF Weekly 1 hr NF Monthly 4 hr Firm Daily <24 2 hr Firm Daily 2 hr Firm Weekly 2 hr Firm Monthly 4 hr *This is an example only

Binding the Defender Pro-Binding Modify Motion 20 such that final action may be taken on defenders prior to confirmation of challenger with ROFR Pros This option offers the lowest complexity and greatest transparency Pro-Binding resolves the question “Is it equitable that defenders that did not match get the same unwinding benefit as defenders that did match?” Eliminates the risk of repeated competitions since nothing changed if do no harm is applied. The game Motion 20 was put in place to prevent is partially mitigated due to Defender option to match or walk away Fast resolution to competition. Complete once all matching decisions are received.

Binding the Defender Pro-Binding (cont.) Cons A challenger may enter into P&C with the sole intent of disrupting service. This could result in lost service with no obligation to confirm. There is potential lost revenue for the TP if binding is implemented and the challenger walks. This is due to defenders electing a low remaining profile that outweighs the requested extensions by defenders that elect to match There is a lack of equity between challenger and defender as the challenger may walk away and the defenders are left in the same position as if the challenger had confirmed

Binding the Defender Do No Harm Unwinding of P&C actions will be mandatory. Defenders do not get a choice to keep their match. This only applies where the challenger counteroffer > 0. This does not apply if all defenders elect to match Pros Fully prevents the game Motion 20 was designed to prevent No change to existing motions required Provides equity to defenders vs. challengers Timing impact is limited to specific conditions

Binding the Defender Do No Harm (cont.) Cons More complex due to the need to undo sandbox actions and creation of an additional “path” to completion of P&C. Slower completion of P&C. Competition ends once challenger decisions has been made. Potential modification to table 4-2 to reduce challenger confirmation time limit in cases of ROFR competition Potential challengers can avoid the reduced confirmation time limit by opting out There is a risk of repeated identical competitions as the unwind action effectively resets the conditions. No mitigation will be developed. This is an acceptable risk.

Challenger REBID (1) The NT assignment recommended offering partial service to NITS challengers. The discussion held was based on the premise that NITS customer should either take the counteroffer or walk away Options 1-3 are for NITS challengers Option 1: Challenger REBID removes the challenger from P&C. An inventory only counteroffer will be offered. Low complexity to implement and no timing implications Concern is that this is not equitable treatment of customer options

Challenger REBID (2) Option 2: Re-evaluate the challenger after REBID to determine the updated list of defenders and recommended actions This seems to be the most equitable and consistent treatment of REBID There are technical hurdles to implementation if the initial eval is used Challenger may lose their status as a challenger if the initial eval is not used There are no timing implications due to existing standards for REBID timing This really comes down to a question of whether the implementation and complexity is worth the value gained.

Challenger REBID (3) Option 3: Explore modification of Motion 20 REBID requests can be processed normally Minimum delay to queue Is there any possible mitigation to the game Motion 20 was designed to prevent? Challengers with ROFR Defenders This must be addressed after a decision is reached for binding the defender

QUESTIONS?