1. 11 IT Expo West 2010 General Session: Cloud Computing Nigel Williams SVP Sales

2. 22 2009 Annual Revenue: $3.7B Employees: 5,200 Legacy and pedigree in support of wholesale customers with a pure IP fiber optic network Supporting mission critical applications for 000’s of enterprise customer Majority of Tier 1 cloud providers & SI’S on-net with Level 3 TODAY Level 3 Today  53,000 intercity route miles and more than 27,000 metro route miles  More than 100,000 buildings lie within 500 feet of the Level 3 network  Network and telephone numbers in rate centers serving over 85% of U.S. households  CLEC provider in all 50 US States

3. 33 Industry Dynamics – The IT Managers Nightmare Customer Expectation Tolerance OPEX Regulatory ISV Model = Capacity Planning Nightmare Loyalty Real-Time

4. 44 How do you plan for so many variables? Application Capacity/Scalability DR and Replication Data Center Capacity Private or Hosted Server Capacity Virtualization Processing Capacity Network Capacity

5. 55 ON DEMAND SERVICES FLEXIBLE PRICING MODELS LOWER COSTS RESOURCE POOLING IMPROVED SLA’S So What Enterprise IT Managers Want…. again ELASTIC CAPACITY DELIVERY OF SOFTWARE APPLICATION DATA STORAGE, RETREVAL AND MANIPULATION ON DEMAND PROCESSING CAPACITY

6. 66 Cloud Adoption Today Non Mission Critical Application Success primarily in SMB Network Connectivity thru Public Internet Security Implications Regulatory Compliance Application Sensitivity Enterprise SLA’s ???

7. 77 Application Sensitivity Impacts Cloud Adoption Would ISV PaaS PUBLIC INTERNET OPEN/ INTERACTIVE WEB BASED APPLICATION

8. 88 Network Access Methodology Impacts Application Performance and Customer Experience Public Shared Software Shared Computing Shared Network Delivery Private Dedicated Software Dedicated Computing Dedicated Network

9. 99 Leveraging the Level 3 infrastructure to deliver differentiated access Level 3 Adaptive Cloud Cloud Services Business Users Cloud providers will offer services differentiated by application sensitivity, criticality, QoS and performance Access methodology varies by segment and application sensitivity One size does not fit all The cloud must deliver the right quality of service and security SMB Finance & Healthcare Retail & Manufacturing Large Enterprise Consumer PaaS BUSINESS CRITICAL SECURITY SENSITIVE LATENCY SENSITIVE Private Line (SONET) NON CRITICAL Private VPN (MPLS) IaaS Wavelength (DWDM) The Internet SaaS

10. 10 Tier 1 Cloud Service Providers Tier 2 Cloud Service Providers Communities of Interest Financial Services Providers Healthcare Solution Providers Entertainment and Media Solutions Mid-Market and state/local gov. Large Enterprise Communities of Interest Financial Services Organizations Healthcare Providers Media and Entertainment Industry Level 3 – Delivering the Adaptive Cloud Leveraging the scale of our network to connect enterprise customers to multiple cloud providers

11. 11 IBM and Level 3 at NAB – Media Workflow

12. 12 Level 3 Approach to Cloud Services All the components are complex but exist today - business models need to adapt Alliances and partnerships are key to enterprise flexibility and innovation Focus on core business and not compete with solution providers and VAR’s Enable SI’s, VAR’s, and Agents that wish to sell and deliver cloud services Continue to expand network footprint directly to cloud providers and enterprise customers

13. 13 Summary Bringing together buyers and sellers over a network optimized for cloud delivery Industry trends and complex capacity planning driving cloud services Enterprises demand differentiated access based on application sensitivity Level 3 will leverage network infrastructure and strategic partnerships to meet enterprise demand Level 3 creates an opportunity for agents/VAR’s that want to play in this market