1. 1 EXTENDED SERVICE AREAS Chapter 261 - H.F. No. 2151 Minnesota Session Laws

2. October 7, 2004 Page 2MART Annual Meeting EXTENDED SERVICE AREAS OUTLINE Provisions of the Law Provisions of the Law How to Implement How to Implement Small, Medium and Large Geographic Areas Small, Medium and Large Geographic Areas Technical Issues Technical Issues Other Issues Other Issues

3. October 7, 2004 Page 3MART Annual Meeting EXTENDED SERVICE AREAS Provisions of the Law Optional, can be bundled, and need NOT be unlimited flat rate Optional, can be bundled, and need NOT be unlimited flat rate File Tariffs on area, price, and quantity File Tariffs on area, price, and quantity Price must exceed variable cost of bundle Price must exceed variable cost of bundle 30 day notice for rate increase, change in terms or to terminate the plan 30 day notice for rate increase, change in terms or to terminate the plan Clearly identify difference from local service calling area Clearly identify difference from local service calling area

4. October 7, 2004 Page 4MART Annual Meeting EXTENDED SERVICE AREAS Provisions of the Law Obtain Transport and Switching Obtain Transport and Switching Construct Construct Purchase Purchase Lease Lease Rent Rent Petition the PUC if agreement cannot be reached Petition the PUC if agreement cannot be reached

5. October 7, 2004 Page 5MART Annual Meeting EXTENDED SERVICE AREAS Provisions of the Law Termination Agreements Termination Agreements Intrastate Access rates for either company Intrastate Access rates for either company Any mutually agreed to rate Any mutually agreed to rate Bill and keep Bill and keep Imbalance provisions Imbalance provisions File Termination agreement with the PUC File Termination agreement with the PUC Publicly disclosed Publicly disclosed Available to other carriers Available to other carriers

6. October 7, 2004 Page 6MART Annual Meeting EXTENDED SERVICE AREAS How to Implement Switching Switching Translations Translations Tandem Tandem Transport Transport Purchase Toll Minutes for resale Purchase Toll Minutes for resale Termination Agreements Termination Agreements Tariff Tariff Additional Billing Requirements Additional Billing Requirements

7. October 7, 2004 Page 7MART Annual Meeting EXTENDED SERVICE AREAS Geographic Areas Small Small 2 to 5 companies in small part of 1 NPA (Area Code) 2 to 5 companies in small part of 1 NPA (Area Code) Direct facility connections for transport Direct facility connections for transport No third party tandem switching No third party tandem switching Translations and recording provided at each originating switch Translations and recording provided at each originating switch Agreement to pay only for imbalance between originating and terminating traffic Agreement to pay only for imbalance between originating and terminating traffic

8. October 7, 2004 Page 8MART Annual Meeting EXTENDED SERVICE AREAS Geographic Areas Medium Medium 2 to 10 companies serving a county or up to an entire NPA 2 to 10 companies serving a county or up to an entire NPA Both direct and shared transport facilities Both direct and shared transport facilities Tandem switching provided by one or more partners Tandem switching provided by one or more partners Translations and recording provided at each originating switch Translations and recording provided at each originating switch Agreement to pay only for imbalance between originating and terminating traffic in the pool Agreement to pay only for imbalance between originating and terminating traffic in the pool

9. October 7, 2004 Page 9MART Annual Meeting EXTENDED SERVICE AREAS Geographic Areas Large Large More than 1 NPA up to entire state or nation More than 1 NPA up to entire state or nation Mostly shared or leased transport facilities Mostly shared or leased transport facilities Tandem switching provided by third party Tandem switching provided by third party Recording provided at each originating switch, but translations do not include entire area Recording provided at each originating switch, but translations do not include entire area Agreement to pay only for imbalance between originating and terminating traffic in the pool Agreement to pay only for imbalance between originating and terminating traffic in the pool

10. October 7, 2004 Page 10MART Annual Meeting EXTENDED SERVICE AREAS Technical Issues 10 Digit dialing required for local calling in some Area Codes 10 Digit dialing required for local calling in some Area Codes 7 digit translations required for some areas that have 1000 block pooling (NPA-NXX-Xxxx) 7 digit translations required for some areas that have 1000 block pooling (NPA-NXX-Xxxx) May allow 7D, 10D, or 1+10D if feasible May allow 7D, 10D, or 1+10D if feasible Any plan that is not unlimited for even a short period of the day will require local measured recording (not 1+toll recording) and data processing for billing Any plan that is not unlimited for even a short period of the day will require local measured recording (not 1+toll recording) and data processing for billing

11. October 7, 2004 Page 11MART Annual Meeting EXTENDED SERVICE AREAS Technical Issues Calls that are not in the ESA area should be blocked at the originating switch unless dialed as 1+10D permissive Calls that are not in the ESA area should be blocked at the originating switch unless dialed as 1+10D permissive N-1 LNP dip requirement probably at originating switch N-1 LNP dip requirement probably at originating switch

12. October 7, 2004 Page 12MART Annual Meeting EXTENDED SERVICE AREAS Other Issues May be potential for cherry picking terms and conditions from agreements filed May be potential for cherry picking terms and conditions from agreements filed “in whole in part for technically similar services” “in whole in part for technically similar services” How do minutes get allocated for cost separation? How do minutes get allocated for cost separation? What are the marginal cost components? What are the marginal cost components? Transport and switching Transport and switching Tandem switching?, termination?, rating?, administration?, maintenance?...... Tandem switching?, termination?, rating?, administration?, maintenance?...... Company wide calling Company wide calling Terminating Agreement? Terminating Agreement?