Overview of telecommunications

SUBJECT: ROIF/Coalition Telecommunications Committee OVERVIEW. PURPOSE of the OVERVIEW is to assist in summarizing "…what telecommunications improvement choices are available…"

RE: Red Oak Community Telecommunications Assessment Report, dtd 07 JUN 01

Legend:

"k" = 1,000; kbps = kilo bits per second; "m" = million; "M" = thousand; Mbps = mega bits per second.

(1) = 623 exchange area (3,550 residences + 350 organizations = 3,900). For purposes of this discussion, farms and ranches are considered residences. Organizations include small (e.g. Travel Place) and large (e.g. MINSA) businesses, and governmental (e.g. public library).

(2) = Terrestial wireless (fixed, portable, and mobile) can support video, text data, voice,and can be of two general technology types: 1) optical (laser based), and 2) radio frequency based.

(3) = xDSL (Digital Subscriber Line) typically users copper phone lines, but can operate over fiber optic lines. Maximum symmetric bandwidth is 26,000 kbps to 0.5 km, using VDSL. Each xDSL circuit uses a dedicated line to the ISP. Qwest prefers an ISP to offer xDSL over Qwest lines,

although Qwest will consider offering xDSL itself (using MSN as the ISP, as Qwest is transferring all existing Qwest ISP customers to MSN), provided there are 650 subscribers for 18 months, at $40/month. Qwest has terminated xDSL as far as 5.5 km from other COs,

depending upon line quality, & reports the Red Oak lines as "excellent". Qwest reports that 3567of the 5290 lines are xDSL ready. The estimated cost to install and test xDSL for 650 users is $390k - $520k. "ReachDSL" can provide 1,000 kbps data service to 9 km.

By installing Digital Loop Carriers linked to a CO, ReachDSL can be extended another 9 km, etc (one installation is providing DSL to a subscriber 55 km from the CO). "Etherloop" is an IP based transmission technology providing Ethernet & voice over phone line DSL. There are 3 main

approaches to boosting bandwidth over twisted pair copper: 1) inverse multiplexing over ATM (IMA) ; 2) multi-link point-to-point protocol & multi-link FR (MLPPP/MLFR); 3) multi-loop DSL (MLDSL). All three methods use multiple spare copper pairs & multiplex data across those pairs.

(4) = CABLE MODEM max speed is 36,000/31,000 kbps down/upstream (over a 6 MHz channel) when connected to coaxial cable, and 155,000 kbps+ when connected directly to fiber optics. Lines are shared with other modems prior to reaching the ISP, similar to a LAN Ethernet interface device.

That is, as more users login to a 'neighborhood' during peak hours, performance dips for each user in the neighborhood (although systems are available allowing cable providers to monitor bandwidth & reallocate resources as necessary). Cable modems cannot communicate directly with each

other, rather they pass signals thru the headend system. Cable modems essentially operate over a tapped 10Base5 bus Ethernet configuration, with no security (a protocol analyzer can view all data) unless the data is specifically encrypted. An exception to shared modem architecture

is the hardware & software system offered by Advent Networks, providing dedicated cable modem connections to each subscriber, up to 40,000 kbps downstream & 31,000 kbps upstream, over HFC. Some (JUN 02) cable modem access including ISP pricing: COX - $24/month for

128 down/64 up kbps; $27/month for 256 down/128 up kbps; $35/month for 3,000 down/256 up kbps. Charter - $25month for 384 down/256 up kbps; $35/month for 768 down/512 down kbps; $55/month for 1,500 down/128 up kbps. Rogers - $25/month for 128 down/64 up kbps;

$45 for 1,500 down/192 up kbps. Several cable providers (cable MSOs - Multi-System Operators) are now offering multiple ISP choices in several markets, including AT&T/Comcast, Charter, Cox, Time Warner AOL.

(5) = VPN (Virtual Private Network) is a private network configured within a public network, and is applied via either software or hardware. Uses of VPN: remote access, site-to-site connectivity (such as for SAN [Storage Area Network] data storage at remote sites up to 500 km apart,

over 1,000,000 kbps to 10,000,000 kbps connections). VPN allows for rapid circuit changes, centralized management, scalability, & security. An alternative to VPN are secure web servers, sending data via traditional HTTP and SSL, and "clients" access web accessible servers via any browser.

Unlike VPN, no software changes are required on the clients nor the corporate servers. Appliance access devices (such as from Neoteris), containing all necessary software, are installed behind the corporate firewall.

(6) = Unless Iowa Code is amended to allow the ICN to lease lines & facilities to private firms (there was such a bill in the 2001 Session, and "The Digital State: [ATS] in Iowa...." from the the Iowa Technology Department recommends such), or the ICN is privatized (as CA did in 1998).

Telecommunications networks serving only government institutions 'disaggregates' demand, especially harmful in rural areas, which do not have sufficient demand for ATS, without the government 'anchors'.

(7) = HFC (Hybrid Fiber Coaxial) refers to a network that uses a combination of fiber optic cable for the 'backbone' & coaxial cable to individual premises. Coaxial cable is comprised of a metal core, transmitting electronic analog signals for analog TV,

and electronic digital signals for digital TV/cable modems. Currently the maximum frequency possible over HFC systems is 870 MHz (sufficient for 80 analog & 320 digital TV channels), although Narad Networks can extend that to 2,000 MHz. HFC nodes connect

between 200 - 1500 coaxial cables to a fiber junction (average is 500), & cascades 4-6 amplifiers. An exception is RCN Corp, connecting 125 subscribers to junctions, & cascading amps two deep. RCN also serves each junction with 12 fiber optic strands, 10 of those for future use (e.g. VOD).

Maximum distance between an HFC node (fiber optic cable and coaxial cable junction) and a customer premises is 1 km (using coaxial cable over that distance). With existing HFC technologies providing up to 7 bits of data carrying capacity/Hz, for a total capacity of 5,000,000 kbps (5 Gbps)

per 750 MHz node. With each node serving 500 premises, this equates to 10,000 kbps (10 Mbps) of available downstream bandwidth to each premise. Cable modem systems typically provide a shared 6MHz channel among up to 2000 subscribers. A 6 MHz channel is a common unit of

measurement for revenue generation. Analog broadcast TV generates the least revenue/channel, as each analog broadcast channel uses 6 MHz. Shared residential high speed data generates much higher revenue/channel, as 100 or more subscribers share just 6 MHz of spectrum.

"Narad Networks" uses the typically unused 860 MHz - 2.5GHz portion of a coax cable to provide up to 1,000,000 kbps Ethernet connectivity. The Oak Hill Consulting report for the ROIF, dtd APR 02, provides 1 - 6 MHz channel for each of 15 nodes on a fiber loop. Each channel provides

a total of 10,000 kbps for all cable modem subscribers connected to a node. Bandwidth available to any one subscriber is variable, dependent upon activity of other users on the node. That is, no subscriber is assured of any minimum bandwidth. The system can support multiple voice and

data providers, but only one CATV provider. Data continually passes in both directions on the fiber ring. In the event of a fiber cable cut, data transfer resumes throughout the remainder of the ring in a matter of milliseconds.

Fiber optic cable strands are comprised of glass core, transmitting digital light pulses, and a cable can compise at least 864 strands. Qwest has installed at least 41,000 km of fiber optic cable and OC-192 IP switches in cross-country US routes, and 1,000,000 kbps MANs.

Qwest often installs conduit, allowing for easier future cable additions. The longest any (outside) fiber has been in service is 20 years, and it is still within performance standards, with performance life tested to 40 years. Performance life of (outside) copper cable is typically 15-20 years.

The cost of fiber optic cable and related materials is approx 20% of the total cost of installing a new cabling infrastructure - the remainder primarily being installation labor and equipment to install the cable, but also easements, project management, etc.

An all photonic infrastructure is 'passive', containing electronics at the headend and subscriber premise. HFC infrastructure is 'active', containing electronics at the headend, intermediate hubs & nodes, and subscriber premise. Copper cable infrastructure, from headend to subscriber premises,

is dependent upon electrical power only at the headend. An HFC network requires power at the headend, and hubs & nodes. An all fiber optic network requires power at the headend and subscriber premises. The USDA Rural Utilities Service reports that rural areas have annual downtime

of 105 minutes (99.9998% uptime) for telephone system headends, and 300 minutes (99.9994% uptime) of power outages at subscriber premises. Two general types of fiber optic cable: single-mode for MANs and WANs, and multi-mode for LANs. Throughput of (thick) copper coax is

actually faster than fiber (0.77c vs 0.66c), but fiber capacity is much greater. "Dark fiber" is optical fiber infrastructure (cabling & repeaters) that is currently in place but not being used. Dark fiber can be purchased or leased by organizations in order to circumvent the traditional carrier managed

services, and install & manage their own electronics, thereby controlling their own costs, security, and redundant paths. Typical payback for dark fiber as opposed to purchasing managed bandwidth is 12 to 18 months.

Typical bit error rates: 10 -12 for fiber; 10 -10 for twisted pair copper; 10 -8 for coax copper; 10 -5 for unlicensed wireless. Note: 10 -12 is 100 times more reliable than 10 -10.

Cost comparison of a fiber to premises vs HFC network, prepared by Optical Solutions. Assumptions: a) 'typical' 1000 premises passed (residences and small businesses); b) 100% 'take' of at least one service; c) tree & branch topology; d) HFC has 4 active nodes;

e) the fiber net provides sustained bandwidth of 40,000 kbps, burstable to 100,000 kbps, to each subscriber; f) date of this estimate: Q402.

FIBER TO PREMISES HFC

AGGREGATION: each passed premises $470 $470x1000 = $470,000 $850 $850 x 1000 = $850,000

SUBTOTAL COST $470,000 $850,000

ACCESS: terminal $1170 POTS-NIU $390

drop $120 drop $75

labor $120 labor $120

cable modem $95

SUBTOTAL COST $1410 x 1000 = $1,410,000 $680 x 1000 = $680,000

TOTAL COST $1,880,000 ($1,880 per premises) $1,530,000 ($1,530 per premises)

(8) = INS (privately owned, statewide, fiber optic net). INS owns a 7,200 km fiber optic cable system which serves 133 independent phone companies. Some of the services offered: two types of switchable network technologies (ATM and Frame Relay), "SS7" services for 250,000 landlines

ISDN, ISP service thru subsidiary NETINS, 175 broadband video channels from a digital headend (analog channels also available), and access to regional/national carriers in Des Moines, Omaha, Sioux Falls, Sioux City, and Quad Cities. Line capacity leasing (lit fiber only, not dark)

is offered, from 1,500 kbps, using OC-48 SONET and DWDM, via 30 network POPs (Points Of Presence). There are also 290 LEC CO POPs - the nearest to Red Oak is at FMTC (Stanton). Long Distance services, and wireless switching services for member carriers, are also offered.

(9) = ICN (State owned, statewide, fiber optic net). The 4,800 km fiber optic system serves all 99 counties. FY 2000: budget of $48M, loss of $21M (includes $7M State appropriations).

(10) PACKET SWITCHING = network data transmission technique that involves splitting information into "packets" of data that are then re-routed independently through the network, often over different routes, to the final destination. Data which can withstand delays in transmission

(e.g. email and web sites) are best suited for packet switching. Packet switching protocol examples include Ethernet and Frame Relay.

(11) = Technology types: TEXT (e.g. email, fax); GRAPHICS (e.g. web surfing, interactive games); AUDIO (e.g. television, streaming); VIDEO (e.g. interactive learning, television, streaming); VOICE (e.g. telephone).

(12) PRICES FOR QWEST TELEPHONE SERVICE in Red Oak (as of Q402):

BUSINESS

RESIDENTIAL

LINE 1

$27.30

$10.71

Exchange 623: 1000 business lines x $27/line = $27,000/month; 4300 residential lines x $11/month = $47,000/month. Total annual charge: $888,000 for all lines combined.

Centrex services are regular business lines, discounted on a term contract to $23.72, which include feature groups: Call Management, Dialing, & Routing/Forwarding.

Qwest DEX subsidiary subsidizes Iowa Qwest users $17M/year, or about $1.50/month/line.

EACH ADDITIONAL LINE

$26.52

$10.71

HUNTING/line (optional)

$6.00

Exchange 623: 800 hunting x $6/line = $4,800/month. Total annual charge: $57,600.

3-Way Calling/line (optional)

$4.50

$3.50

Call Management Group

Call Rejection/line (optional)

$4.50

Call Waiting/line (optional)

$5.50

Caller ID/line (optional)

$7.95

$6.95

Priority Call/line (optional)

$3.50

Continuous Redial/line (optional)

$3.50

Dialing Group

Last Call Return/line (optional)

$4.00

Speed Calling 30/8 (optional, per line)

$3.00/$2.50

$3.00/$2.00

Call Forwarding/line (optional)

$5.00

$3.00

Routing & Forwarding Group

Selective Call Forwarding/line (optional)

$3.50

PAK (line+caller ID+call waiting+call forwarding + 3 Way)

$25.00

FEDERAL ACCESS CHARGE/line

$5.00

Optional fee charged by LECs (including Qwest) to maintain their specific LEC infrastructure. FCC sets a maximum cap (currently $5.00/line, set to increase to $6.50 in 2003).

Exchange 623: 5300 lines x $5/month x 12 months = $318,000. Long distance firms are also charged the fee by Qwest for long distance calls terminating or originating in exchange 623.

E911 TAX/line

$1.00

Mandatory

UNIVERSAL SERVICE FUND TAX

7.28% of invoice

6.8% of invoice

Mandatory Federally administered fund to subsidize telco services in four general areas (with the amount they received in 3Q01): 1,300 rural exchanges ($646M); schools & libraries ($305M);

low-income individuals ($143M); rural health ($2M). Total amount disbursed in US during 2000: $4.4 billion. Amount disbursed in IA during 2000 (totaling $52M): rural exchanges ($30.7M);

schools & libraries ($21M); low income individuals ($750k); rural health ($90k). Examples: Year 2001 - Red Oak School District ($17,847.63), covering 68% of their telecom and internet access

charges; Osceola Hospital ($11,859.12); Sprit Lake Medical ($11,007.36). Year 2000 - Dundee County (NE) Medical ($71,413.14); Osceola Hospital ($11,859,12); Spirit Lake Medical ($11,007.36).

Year 1999 - Dundee County (NE) Medical ($66,035.03); Osceola Hospital ($3,606.72); Spirit Lake Medical ($2,770.63); FMTC (Stanton LEC) approx $180k; Southwest (Emerson LEC) approx $160k.

The tax/line fluctuates according to approved requests for subsidies submitted by users in the four areas, and in 2000, approx 45% of submitted request amounts were approved. All telco carriers

(local, long distance, cellular) are required to pay the fee, although they are not required to passthru the fee to end-users (carriers can charge customers more than the FCC fee). Assuming the

entire fee is passed thru, exchange 623 ratepayers are currently submitting $127,000 to the FCC fund annually. This is based upon 6.5% of the amount exchange 623 ratepayers annually pay Qwest

($888,000 + $57,600 + $318,000 = $1.3M), plus LD & cell carriers ($650,000), for a grand annual total of $1,950,000, for services rendered. Qwest is not qualified to receive USF in IA.

Other telco related grants from the Federal government general fund include the Technology Opportunities Program which gave the Harlan Municipal Utilities $199,936 in 1995

to assist in establishing their HFC system, and $129,600 to Luther College in 1995 to establish a videoconferencing system for nursing students to gain access to training at Mayo Clinic.

The USDA Rural Utilities Service granted $63,000 in 2000 to Health Partners of SW Iowa of Red Oak for a telemedicine and videoconferencing system for portions of SW Iowa,

and $743,669 in 2001 to 16 south central Iowa school districts, plus Graceland College, to connect to the ICN, providing advanced courses in math and science across all districts.

USDA offers their Rural Telework Project, and the 2002 farm bill offers the Rural Telework Program and grants for rural telecommunications infrastructure.

NUMBER PORTABILITY FEE/line

$0.40

Optional fee charged by LECs, including Qwest. Will expire 5 yrs from date fee was first assessed.

SCHOOL INFRASTRUCTURE TAX/line

$0.30

$0.10

Mandatory

FEDERAL/STATE/LOCAL TAXES

10% of invoice

Mandatory

(13) = Red Oak City corporate limits (10 sq km) + immediate environs.

(14) = TELLULAR is a 'package' comprised of an analog or digital cellular phone, dial-tone interface device, & RJ-11 jack interface, which together gives a 'fake dial-tone' for use by fax machines and small key (immediate access to outside phone lines without going thru an attendant) phone systems.

(15) = 'Industry standards' recommends that dialup ISPs do not have more than 5.5 subscribers/modem, and not more than 55 modems per 1,500 kbps access between the modem bank & carrier backbone. This equals not more than 303 subscribers/1,500 kbps circuit.

(16) = A "Jupiter Research" survey of consumers found that 54% would not pay as much as $40/month for broadband access + ISP service. Reported in "Services and Applications In the Internet Era: Emerging Trends" by E. Fife, Marshall School of Business - USC, 2001. "Forrester Research"

finds that 72% of dial-up net access customers would not pay more than $25/month for broadband. Reported by Robert D. Hof in 03 SEP 01 "Business Week". A 2001 IDED report finds that 84% of IA businesses, and 34% of IA residences have a dedicated line for dialup internet access.

A SEP 01 survey of potential residential broadband users reports that 33% of dialup subscribers would pay $25/month for broadband access + ISP, 20% would pay $30/month, 15% would pay $35/month, and 10% would pay $40/month. Willingness to pay more for

broadband increased by 50% after potential subscribers were advised of some advantages of broadband: high definition audio & video (movies, games), at-home training & education (distance learning), work-at-home, increased range of healthcare services (telemedicine).

Average monthly US residential telecommunications related expenditures for 2000 (per FCC): cell phone $45; CATV $38; local phone $35; dialup internet ISP $22; long distance $18.

(17) AMERICAN RELAY (ARC) = terrestial mobile & fixed wireless network expanding into Western Iowa (ARC owns the Coburg tower and premises), using fiber & licensed wireless backbone, & unlicensed wireless to premises. Mesh networked 'Microcells' are erected to provide final service to

premises. Speeds range from 256 kbps ($35/month including ISP) to 45,000 kbps. At a Glenwood ARC 256 kbps site, a file downloaded at 160 kbps, while the same file from the same internet site, at the same time, downloaded at 40 kbps at a Red Oak Heartland dialup site. Representative

business services: 1,500 kbps ($250/month); small office multi-user internet connections (unique workstation channels at $80/month); secured internet connections (firewall, secure VPN, etc). Mobile access will be available after sufficient number of microcells are installed in a community.

(18) HDTV (High Definition TV) = digital TV, supporting 2 million pixels vs 211,200 pixels for SDTV (Standard Definition TV), simultaneous internet access, and Dolby sound. TV programs must be produced or converted to HDTV format. All of the DBS & some of the CATV carriers now transmit

digital & HDTV programs. As of MAY 02, 421 of 1,315 US commerical broadcast TV stations are capable of sending digital (including HDTV) signals. Effective JAN 03, the top 10 CATV operators will carry 5 digital channels at no extra cost, in the top 100 US markets.

(19) WEBCASTING = video and audio content streaming (continuous transmission) over the internet or private network, e.g. real-time and on-demand access to broadcast "unlimited" number of broadcast TV, radio programs, e-learning, busines seminars, sales conferences, online training.

"Multicast" is when organizations 'push" content to users. Related is PVR (Personal Video Recorder), such as TiVo, which is essentially a VCR containing a harddrive, allowing for easier program recording/playback. Another PVR, available late 2002, is the Moxi Media Center device, combining

a digital cable/satellite receiver, CD/DVD downloading recorder/player, TV recorder/player, cable/xDSL modem, and 80 GB harddrive. Integrated software includes a firewall, Macromedia & Realmedia audio/video streaming software, & audio/video library collection management software package.

The device can networked with home entertainment and information devices, and serve different applications, simultaneously. "SonicBlue" device allows users to forward digital copies of recorded shows over broadband connections. Finally, "network PVR" is where the PVR hardware and software

is located at the 'headend' or some other site remote from the end-users. PVR hardware & software upgrades and maintenance is managed by the service provider, plus additional functionality (and simplicity) is available to subscribers, due to the PVR being 'server' based.

VOD (Video On Demand) subscription webcasting allows users to customize desired content into one channel, then "pull" that channel from nay web-enabled device. VOD provided by cable vendors is available in at least 36 US cities. Related to VOD is "audio on demand",

an example being South Dakota Public Broadcasting which broadcasts live audio of the SD House, Senate, and all 24 standing committee hearings, to broadband and dialup users. The audio is archived, then available as audio on demand. Another example is from the City of Seattle WA

web site where they stream and achive public meetings & hearings, conferences of general interest, informational and instructional audio-videos. "www.growingdigital.net" streams local VA school and social events, while "www.bev.net" streams public meetings.

VOD is an enhanced form of PPV, and for residential users, that currently means primarily entertainment.

The typical CATV system offers 40-50 PPV channels & 40-50 premium or dedicated movie channels. DBS users can use a DVR (Digital Video Recorder) to download and archive movies for later VOD viewing. Mediacom is implementing VOD in Mobile AL, with other cities later in 2002.

GENERAL Acronyms & Glossary:

NA = Not Applicable.

TBD = To Be Determined.

ECONOMICALLY FEASIBLE: Some common metrics used to measure returns on investments:

ROI (Return On Investment). Amount of net revenue or operating cost savings exceeding cost of investment. ROI = (net income or profit/sales) x (sales/total assets) x (net income/total assets)

PAYBACK ANALYSIS. When the discounted projected cash flows equals the initial investment. Payback period = (NPV of gains/total number of years in the planning horizon) / initial investment

NET-PRESENT VALUE. (investment cost) - (current value of future cash flow)

IRR (Internal Rate Of Return). IRR determines whether the yield of the investment exceeds the regular investment yield rate.

ECONOMIC VALUE ADD.

WEIGHTED AVERAGE COST OF CAPITAL vs RETURN ON INVESTED CAPITAL.

CPE = Customer Premises Equipment.

ISP = Internet Service Provider (e.g. Heartland.net). US dialup (56 kbps) ISP rates range between $6.50 - $25/month. Locally and regionally based ISPs typically deliver 99% availability, 200ms latency, and 1% dropped packets. Nationwide ISPs, due to controlling most of the network over

which their customers' data traverses, can guarantee 99.99% availability, 75ms latency, and no dropped packets.

SERVICE PORTALS = retail storefront, delivering services from providers such as ASPs and NSPs, to subscribers. Service Portals bundle those services for subscribers, providing first line of technical support, customer service, billing & settlement management.

NSP (Network Service Provider) = provides network-connectivity services between subscribers and the Service Portals, or ASPs. Services include network security and Quality of Service. NSPs manage the distribution component, which might include managing CPEs for the ASPs.

NSPs are typically wholesale providers, selling their services to Service Portals, although NSPs might also sell network services directly to 'larger' end-use (subscriber) organizations.

ASP (Application Service Provider) = third party entity that manage & distribute software-based services & solutions to customers across a WAN from a central data center. Types of ASPs: 1) Enterprise - high end business applications, e.g. Apseon Inc;

2) Local/Regional - wide variety of application services for smaller businesses, e.g. DataServ Inc;

3) Specialist - applications for specific needs, such as web site hosting, human resources, VoIP, collaboration, project management, videoconferencing, CRM (Customer Relationship Managment), e.g. Copernio Inc;

4) Vertical Markets - support to a specific industry such as healthcare, construction, hospitality, retail, manufacturing, training & education, e.g. Amec Inc;

5) Volume business - furnish small/medium business with prepackaged application services in volume, e.g. Aspect Communications.

ASPs focus their core competence on providing applications, delivered wholesale to Service Portals, or retail directly to subscribers.

CARRIERS = data transport entity, e.g. Cable & Wireless Inc.

MANAGED SERVICE PROVIDER = entity offering services such as voice, data, and video switching, e.g. Qwest Corp.

CONTENT PROVIDER = entity developing applications in-house, for resell, e.g. Siebel Systems.

WIRELESS IOWA = a State project supporting fixed wireless and mobile wireless services throughout Iowa. This is to allow users to access information networks in a seamless transition among the office, campus, and WAN environment (anywhere, anytime access). The project will

establish standards, & coordinate requirements & procurement among the various state, county, and city subdivisions. Implementation is planned during the 2005-2007 timeframe. This project is significantly different from the ICN in that the private marketplace will construct, own,

& manage the infrastructure, including interoperability between systems. Also, public and private entities are encouraged to share any infrastructure. The project might include 2.5G and 3G wireless technologies, although it is anticipated there will be no single solution to all requirements.

Utilization of the ICN may or may not be included as part of any solution.

CATV (Community Access TV) = Cable TV. Per FCC JUL 01, 6% of CATV operators were in competitive markets. For FY ending 01 JUL 01, average CATV rate rose 7.5% (compared to CPI increase of 3.2%), to $37. 60% of the rate increase due to higher content costs.

"BASIC" (15 channels) rose 2.1% to $12.82, "MAJOR" (45 channels) rose 10.8% to $20.91, "EQUIIPMENT (set-top boxes) was $3.24. Per "Strategis Group" report MAY 98, "…typically CATV & cable modem overbuilds are not financially viable…"

(telephony overbuilds were not analyzed). CATV and DBS operators typically pay well-established content providers, e.g. Discovery or CNN, $0.30 - $0.50 per subscriber/month. New digital channel providers are "lucky" to get $0.10 per subscriber/month.

Average US CATV system sale price in 2000: $5,900/subscriber. Since the reproduction costs were $1,300 - $1,500, the sale price premium was due to entry barriers preventing competition from driving the price down. In 1999, the average sale price was $4,000, while the reproduction

cost was $500-$700 (for basic) and $2,000 (for two way systems). Sale prices in 1994 averaged $1,900, while reproduction costs ranged from $500 to $800. Sale prices in 2001 ranged from $3,500 to $4,300, while reproduction costs are expected to be about 1/2 of those sale prices.

An 80,000 subscriber CATV system in NJ was sold in AUG 02 for $3,100/subscriber (11 times the running-rate cash flow of $280/subscriber). The system generates $55/month/subscriber in revenues ($26/month/subscriber in operating cash flow). The buyer committed an additional

$550/subscriber to rebuild the system over the next few years.

In mid-2002, Verizon sold 4,350 (and 9,500 passings) of their multiple dwelling unit CATV systems for $575/subscriber. Currently, 1/2 of new 'digital' CATV subscribers drop the service within a year, although "Insight" CATV company reports that such drops are halved when VOD is offered.

INS provides broadband TV (can be transmitted over fiber/coax/copper) from their digital headend. 175 channels (including audio only channels) are offered; a package of 90 channels are sold to INS members for $28/month/subscriber, plus $3.50/month/subscriber for transport to a POP.

DBS (Direct Broadcast Satellite) = 1st generation satellite based TV services. That is, direct digital broadcast from satellites to recipient's dish. CATV is 2nd generation (received by cable vendor, then rebroadcast to final recipient, via cable) reception from satellite broadcasts. Example of DBS:

4DTV (519 digital channels & HDTV compatible). Ka-Band satellite transmission technology is being deployed, with 100,000 kbps (over a 6,000,000 kbps beam) internet download speed, supporting ATM, Frame Relay, VoIP, & point-to-point connections. There are 20M US DBS subscribers

compared to 100M (21% have digital TV service) CATV subscribers. In IA, 67% of residences have CATV, and 20% have DBS. RE/MAX (real estate franchise) has a proprietary satellite network among its 1,200 offices, with applications including 100 hours/month of business programming.

According to a Consumer Federation of America APR 02 study, 75% of subscribers selected DBS rather than CATV due to larger number of channels typically offered on DBS. Per FCC, JAN 03, 2/3 of new TV subscribers choose DBS over CATV.

ANALOG = system based upon CONTINUOUS (modulating) data or events.

DIGITAL = system based upon DISCONTINUOUS data or events (0 and 1).

PROTOCOL = agreed upon format for transmitting data between two devices. The protocol determines, for example, the type of error checking used and data compression, if any; and how the transmitting device signals the receiving device the message is finished.

Some protocols: ATM, Ethernet, Frame Relay, FTP, HTTP, IP, MPEG, NetBios, PPP, SMS, Telnet, TCP, Token Ring, X.25, H.323, SIP, MGCP & MEGACO, SCTP, Q.931.

TOPOLOGY = geometric arrangment of a computer or telecommunications system, e.g. bus, star, ring.

ARCHITECTURE = there two general types of networks: peer-to-peer, and client/server.

SONET (Synchronous Optical NETwork) = fiber optic management ring architecture which automatically redirects traffic in case of a line failure, & QoS is supported. The spare strand which receives the redirected traffic may or may not be in the same physical sheath as the failed strand.

SONET is best suited for voice, not non-voice data. SONET was not designed to transmit IP data, and not designed to transmit more than one data type simultaneously (125 ms interval between data types is required).

DWDM (Dense Wavelength Division Multiplexing) = technology which combines & transmits multiple signals simultaneously at different wavelengths on the same optic fiber. Therefore, a single stand can transmit data to at least 400 Gbps, in IP (Ethernet), ATM, & SONET. A single strand can

physically connect multiple premises, with individual wavelengths uniquely serving each premises. DWDM is protocol agnostic, thereby allowing LANs and WANs to be defined by logical architecture rather than physical or geographical locations. DWDM offers 50 ms protection switching.

OFDM (Orthogonal Frequency Division Multiplexing) = a technique for transmitting large amounts of digital data over a radio wave, by splitting the radio signal into sub-signals. OFDM reduces the amount of crosstalk.

OPTICAL WAVELENGTH = fully managed, point-to-point, multiplexing on optical fiber between sites. A substitute for dark fiber or SONET services, for intra-MAN connectivity among service provider POPs, interconnection facilities, and network access points.

Because wavelengths are managed, NSPs are able to offer SLAs to a degree not typically offered for dark fiber. Wavelengths also offer a high degree of scalability and rapid provisioning. Multiplexing is the modulation each of several data streams into a different part of the light spectrum.

DATA SPEED NOMENCLATURE: Category 5 = 100,000 kbps capable LAN cable.

ISDN = 128 kbps digital data transmisson over phone lines.

T is a digital carrier facility used to transmit a DS (Digital Signal). DS-0 = 64 kbps; DS-1 (T-1) = 1,500 kbps; DS-2 (T-2) = 6,000 kbps; DS-3 (T-3) = 45,000 kbps.

OC (Optical Carrier) specifies bandwidth of an optical network conforming to SONET standard. OC-1 (50,000 kbps), OC-3 (155,000 kbps), OC-9 (470,000 kbps), OC-12 (620,000 kbps), OC-24 (1,200,000 kbps), OC-36 (1,900,000 kbps), OC-48 (2,500,000 kbps), OC-192 (9,600,000 kbps),

OC-255 (13,200,00 kbps), OC-768 (40,000,000 kbps).

QoS (Quality of Service) = ability of a network to assign priority service levels to different types of traffic. For example, real-time voice & video, over IP, is given a high priority, while email assigned a low priority. This provides better service, at lower network infrastructure cost.

CO (Central Office) = telecommunications facility centralized in a specific locality to process the voice calls for that locality, including calls between the local exchange and long distance. Telephone lines are connected to the CO via a 'local loop'.

The Red Oak CO switch is a 'remote' to the Council Bluffs CO switch. The former switches local calls, while the latter, long distance calls. The Qwest exchange 623 CO switch is located at 5th & Hammond.

ILEC (Incumbent Local Exchange Carrier) = The dominant exchange dial tone provider. For exchange 623, Qwest is the ILEC. From 1995 thru 2000, phone companies spent 30% of their revenues on equipment and broadband capacity, compared to a more typical 15%. As of MAY 02, the US

wireless industry spent 40% of revenue on "improving its networks" (e.g. towers, enhanced software). Per BusinessWeek 12 NOV 01, ILEC gross margins in localities with no CLECs, was 45%. EBITDA for SBC Communications (SW Bell, Ameritech, etc) was 42% of sales in 2001.

According to the North Dakota PUC, Qwest earned 26.7% equity return on their ND systems, in 2001. Per Forbes, 12 AUG 02, some PUC require RBOCs (Regional Bell Operating Company) to rent lines & services to CLECs at 40% of what the RBOC charge retail; RBOCs often obtain

95%+ operating margins on optional call features (which are unregulated). When the RBOCs lose a wireline customer, typically $19/month in operating income is lost, while $4-$6 is picked back up, due to lower wireless margins, and complete loss of the customer to competitors.

CLEC (Competitive Local Exchange Carrier) = ILECs are required to allow CLECs access to their facilities (for a fee), including the wirelines to customers. There are three general types of CLECs: 1) RESALE, a firm buys services from the ILEC, at wholesale prices, and resells them at retail

prices to customers. 2) FACILITIES BASED: a firm provides its own switch (installed in the ILEC CO or elsewhere) & leases wirelines from the ILEC, or the CLEC provides both its own switch and wirelines to customers. 3) LEASING OF UNE from the ILEC. CLECs require an interconnection

between the ILEC & CLEC, to transfer calls. Regarding cable-modem service providers, as of 14 MAR 02, the FCC directed they are not subject to common carrier regulations, therefore not required to allow competitors access to their lines, and local jurisdictions cannot charge a franchise fee.

Some long distance carriers will not provide services to CLECs. For instance, Federated Telephone Coop, a CLEC in Morris MN, is unable to resell services from AT&T long distance plus other tier one and some regional long distance carriers. MCI offers (in some markets) bundled local CLEC

dial tone service + unlimited US long distance service for $50/month. Iowa Telecom (IT), owned by INS, owns & manages 300 exchanges in Iowa & provides voice/data/video service to 400 towns. IT is also a CLEC in some Qwest towns, such as Oskaloosa, where they resell Qwest services

(voice & data). IT prices voice service @ 15% less than Qwest & has 72% take rate. They plan to colocate a switch in the Qwest CO, install a redundant line to INS (& for long distance switching), and offer xDSL (8 Mbps). Later, install fiber lines to businesses & new copper lines to homes.

UNE (Unbundled Network Elements) = the minimum pieces of the network that ILECs are required to offer on an unbundled basis. For example, a loop that connects to a DSLAM or voice switch (or both) that allows facilities based customers to deliver service without laying network infrastructure.

UNE-Platform (UNE-P) is a of loop + port + switching which is purchased per minute from the ILEC. Example of a UNE-P provider is Z-Tel, serving 46 states, which provides some phone features from its own headend, including web technology. Some ways CLECs differentiate themselves

using UNE-P: 1) packaging calling plans uniquely tailored to the customer's needs, and different from the ILEC; 2) variations on billing, such as offering real-time billing; 3) custom features packages, in different combinations from the ILEC; 4) innovative add-on services. The pricing structure for

UNE is called TELRIC (Total Element Long Run Incremental Cost). As per sections 251 & 252 of the 1996 Federal Telecom act, TELRIC pricing varies from state to state, ranging between 40% to 60% less than the ILEC retail rates. The pricing structure for CLECs just "reselling" ILEC

services are typically 20% less than ILEC retail rates.

DSLAM ( Digital Subscriber Line Access Multiplier ) = a mechanism in the CO which links many xDSL lines to a backbone.

OPEN ACCESS = an infrastructure allowing for unlimited integration of 3rd party service providers into a single physical infrastructure, yet maintaining vital functionality such as: 1) IP Addressing: ability to dynamically allocate a public or private IP address to one or several service providers;

2) Multi-service deployment, self registration & deployment: capable of processing virtually unlimited number of services, meet service requirements with bandwidth management, latency, multicast access, bandwidth allocation; 3) Security: supporting trustable & controlled synchronous routing.

iTV (interactive TV) = an internet connected receiver which in turn connects to a TV, game console, or dedicated email terminal. Those devices can access the internet with some limitations such as .pdf (Adobe) and Java files cannot be opened, and limitation on sending & receiving

attachments. One brand of iTV is MSN TV (formerly WebTV), which requires ISP (dialup or broadband) from MSN. Two major iTV providers in the UK are "BSkyB" (the UK's largest pay-TV provider) and "Canal Satellite". For both, their largest source (50%+) of iTV revenue is from on-line betting.

MEDIA TECHNOLOGY = copper phone cable, coaxial cable, fiber optics cable, HFC, terrestial wireless (including microwave, radio, optical, spread spectrum, and PCS - fixed and mobile), satellite wireless.

CHANNEL = a communication path between two computers or devices. It can refer to the physical media technology or a set of properties that distinguish one channel from another.

PEERING = when two or more ISPs create a direct link among themselves, rather than using the internet backbone. Peering creates faster connections, and saves expense of using internet Network Service Providers

BROADBAND = a type of data transmission in which a single media technology can carry several channels simultaneously, e.g. CATV, voice, & data, all perhaps from independent network carriers, all transmitted at the same time.

BASEBAND carries only one signal at a time. LANs are typically baseband, carrying Ethernet or token ring, as examples.

BANDWIDTH = 1) A range within a band of frequencies (or wavelengths) OR 2) Amount of data that can be transmitted in a fixed amount of time. For digital devices, bandwidth is measured in kbps, Mbps, Gbps, etc. For analog devices, bandwidth is measured in cycles/sec (Hz).

The FCC defines ATS capable bandwidth as least 200 kbps both upstream and downstream, & defines "high-speed" capable bandwidth as at least 200 kbps in one direction. The Iowa Infrastructure Investment Program recommends 1,200 kbps downstream & 600 kbps upstream.

384 kbps (symmetric) is often used as the minimum for ATS capable bandwidth as that is the bandwidth spec for H.323 videoconferencing (and telemedicine, distance learning). The Texas Public Utility Commission recommends these bandwidths: 7,000 kbps for telework, distance learning,

telemedicine, near VOD, movies on demand, (low-end) HDTV; 2,000 kbps for electronic newspapers; 800 kbps for videoconferencing; 700 kbps for audio on demand; 600 kbps for telegaming; 400 kbps for electronic banking. High-end HDTV typically requires at least 20,000 kbps.

Bandwidth greater than dialup can generally be categorized as "broadband". Applications such as voice & video converencing work best with symmetric bandwidth speeds. Current practical maximum bandwidth which browsers can support is 600 kbps. File transfers (FTP), not thru browsers,

can use as much bandwidth as available. As of NOV 01, 8% of Mediacom data ready customers nationwide were cable modem subscribers. As of SEP 01, 11% of all US residences with access (excluding satellite) to broadband were subscribers. As of 4Q01, the approx breakdown of

broadband subscribers: cable modem = 7.2M (as of MAR 02, 17% of passed premises); xDSL = 3.2M; iTV = 1.2M; wireless (satellite & terrestial) = 0.2M; other (e.g. Frame Relay, X.25, T1) = 1.5M (note: especially for business subscribers, there may be many users of a single subscribed service).

ATS (Advanced Telecommunications Services) = any transmission media or technology which enables users to send and receive high-quality audio, video, & text data. At a minimum, ATS complies with the FCC "high-speed" definition. A wider definition includes with examples:

ELECTRONIC MEDIA CONTENT (three general types of content traffic:

1. Human to Human - real time voice & video, tele-medicine, etc. QoS required - sensitive to jitter & delay, symmetric bandwidth required.

2. Human to Computer - web, voice mail, video servers, call centers, fax, etc. Some QoS required. Bursty traffic and asymmetric bandwidth utilized.

3. Computer to Computer - email, IP appliances, application servers, etc. No QoS required, extremely bursty traffic);

BACKGROUND (radio, TV);

LIVE DRAMA (breaking news story);

COMMUNITY(government services, e.g. meeting agendas and minutes, budgets, ordinances, forms & permit applications, contact and emergency procedure information);

EXPLORATION (search databases, internet browsing);

CONTACT (email);

ALERT/SURVEILLANCE (to be notified when a certain event occurs);

ANALYSIS (study what some data means);

LEARNING (provide training to students via video conferencing, health care information);

DECISION (reviewing event updates);

EMOTION (a live concert broadcast);

TRANSACTION (online purchasing and selling by business and residential);

GUIDANCE (ag producers using GPS - Global Positioning System);

SERVICES (end-user support & training, community planning, R&D);

END-USER DEVICES (LAN equipment, telephony equipment, computer and peripherals, broadcast receivers & TVs, media recorders and players);

VOICE (enhanced services such as voice mail, cellular, PCS, long distance, call center, business and residential service);

AUDIO/VIDEO (HDTV, streaming digital, stored digital & analog):

DATA (voice, Ethernet, video, ATM, xDSL, SAN (Storage Area Network - used for 1) data backup & restore; 2) business continuance; 3) high availability; 4) server and storage consolidation). As of SEP 02, the AT&T network carried 5 times more data than voice traffic; voice traffic

volume dropped 12% in Q202 while IP traffic increased 26% in the same quarter. Four major classes of service required by business:

1) PURE PRIORITY - data communications requiring fixed bandwidth, zero packet loss, fixed delay, and negligible jitter. Example usage is voice traffic, and financial institution records transfer.

2) REAL-TIME - data communications requiring very low packet loss, bounded delay & jitter. Examples include videoconferencing, VoIP, SAN protocols over IP.

3) ASSURED DELIVERY - data transfer requiring variable bandwidth accommodating bursts, low packet loss, moderate delay & jitter. Examples include extranet & E-commerce, LAN-to-LAN connectivity (Frame Relay is typically used for this requirement), SNA protocols.

4) BEST EFFORT - data transfer not requiring any SLAs. Example is internet traffic.

INTERNET (e-commerce, broadband for business & residential, national carrier access). The 62M dialup subscibers spend 16 hrs/week online (primarily email, interactive messaging, consumer transactions, and websurfing). Residential broadband users spend 21 hours/week online,

with the increase spent primarily in entertainment (gaming). Per "Sage Reseach" report dtd FEB 02, the following are internet based services, with corresponding % of consumers (not necessarily business) willing to pay (the report conservatively reports percentages as only 1/2 of

those consumers who say they would pay for such services) :

Entertainment 44% - music libraries, VoD, gambling.

Communications 42% - videoconferencing, email.

Education 39% - language training, music, cooking.

Personal/Professional 35% - home/auto care, investment advice, onlinle photo editing/printing/storage, legal advice.

Hobbies 30% - 'how-to' video archives, online religious services, interior design services.

Medical/health 24% - video monitoring of child's daycare, home health montoring.

The internet economy is comprised of four layers:

1) INFRASTRUCTURE (creating and maintaining the network itself). Examples - fiber optics makers such as Corning, networking hardware such as Cisco, backbone providers such as Qwest, server makers such as Sun. ISPs such as AOL.

2) APPLICATIONS (providing products & services making ecommerce possible). Examples - web development software such as Adobe, resource management software such as Peoplesoft, online computer training such as Assymetrix, multimedia software such as RealNetworks.

3) INTERMEDIARIES (facilitating the meeting and interaction of buyers & sellers). Examples - Portals such as Yahoo, ad brokers such as Doubleclick, content aggregators such as ZDNet, market makers in vertical industries such as PCOrder.

4) COMMERCE (selling products & services to consumers or business). Examples - E-tailers such as Amazon, airlines such as United, entertainment firms such as Disney , fee/subscription services such as WSJ, education such as Phoenix University.

PHYSICAL TRANSPORT (category 5 cable, coaxial, fiber, satellite, terrestial wireless);

SEGMENT/CONDUIT SPECTRUM (node to building cabling, WAN, LAN, community to regional access point);

TO WHOM (selected businesses, government, retired persons, low income persons, government);

WHERE (region, rural, state); Rural communities typically require more bandwidth than urban counterparts to substitute for physically delivered services such as tele-work, tele-education, e-commerce, & tele-health.

PURPOSE (government information, e-business, quality of life, education, telework - according to an APR 02 AT&T report, the major reason more employees do not telework is lack of sufficient bandwidth between home and business. Among teleworkers, 71% state it improves productivity);

Entertainment does not readily translate into economic development; that is, the creation of new wealth in local communities. A community economic development framework might include the following:

ATTRACTION: The process of encouraging new enterprise to the community/region to provide jobs.

CAPTURE EXTERNAL DOLLARS: Capturing funds that are not now "in" the local economic base through tourism, shopping malls, festivals, retirement centers, etc.

IMPORT SUBSTITUTION: Find opportunities to substitute locally-based products and services for those purchased elsewhere, e.g. local ISPs, CLECs.

NEW BUSINESS CREATION: Enterprise creation, small business counseling, venture capital programs incubating new business from local entrepreneurs.

RETENTION & EXPANSION OF EXISTING BUSINESS: Keeping current businesses productive lowering their cost of doing business, removing obstacles to their success, assisting them with product or market development or financing expansions.

WHO PAYS (ratepayer. taxpayer, customer);

HOW TO PAY (Universal Service Funds, private investment, lower prices from competion, tax credits);

WHO PROVIDES (ISP, CATV providers, ILEC, CLEC, municipal, power companies). MANs having a non-discriminatory, open access, & provider neutral "pipe" for subscribers provides competition among providers on the MAN, therefore encouraging providers to offer higher quality,

lower priced service & content. Subscribers benefit due to larger variety of ATS, and the MAN operator will benefit from increased subscriber traffic. Such MANs currently exist in markets, with competitive data, voice, and TV providers.

BROADBAND MULTIMEDIA = ATS can be summarized into four key components:

1) Multimedia Aggregation: content created by specialist companies, e.g. movie or news production, games, financial services. That content is uploaded as channel content (like a TV program) to the distribution system (Multimedia Broadcast). Content can also be as simple as email.

An example of a content company is Viacom (entertainment content producer for cable and broadcast, outdoor advertising, radio, video rentals). Their average 2000-2001 free (operating) cash flow as $ of EBITDA was 40%, and for 2002, estimate is 50%. EBITDA for cable division was 37%,

(compared to AOL of 21%). Free cash flow = net income + (amortization + depreciation) - (capital expenditure + dividends). US cable viewer preferences: 36% entertainment (comedy, drama, movies), 21% childrens' programming, 14% news, 11% nature & education,

7% womens' programming, 6% music, 5% sports.

2) Multimedia Broadcast (or Services): network operator, managing bandwidth, security & services to customers, while distributing Multimedia Aggregation. An email server and a web server are examples of broadcast, comprised of hardware and software.

4) Multimedia Infrastructure: the cables, towers, and network electronics required by Multimedia Broadcast (Services) to transfer content along the system (among people).

3) Multimedia Consumption: end-user selecting & filtering the information provided by Multimedia Aggregation, distributed thru Multimedia Broadcast.

P-LAN (Public-Local Area Network) = P-LANs integrate the functionality of all three of the Internet's architectural components while limiting the distance, or area, in which they operate. Unlike the internet, P-LANs are geographically limited and geographically relevant.

Those three Internet architectural components are 1) Local Access Network - providing access to the network.

2) Backbone providing global connectivity enabling users to reach virtually any site worldwide. Internet backbone providers struggle with the challenge of managing quality and performance across multiple interconnected networks.

3) Virtual Cities emulate cities or communites of interest, providing original content and special events. The limitation of these virtual cities is that they are usually remote from the actual cities they are trying to emulate, with the average Internet packet roundtrip being 1,000 km.

Internet virtual cities are suited for mass markets, not the specific needs of individual communities.

CHARACTERISTICS P-LANs INTERNET

Markets served: Local (city/regional) Global (national/international)

Price performance: High-perforamance, high capacity local interconnectivity Thousands of networks with global reach

Architecture tailored to: Broadband distribution of content Performance issues across Internet nodes

Content: Tailored to local/regional audiences (targeted markets) Wide market appeal

e-Commerce and Advertising: Leverage integrated high-touch attributes (voice, video, graphics) Wide user distribution

Portals: Community portal to local/regional content Global portals

Search Engines: Geographically oriented and integrated with real-time sales and tracking Content-oriented

Business Economics: Contributes to local economy Contributes to national & global businesses

MSAP (Multimedia Service Access Point) = a local or regional facility-based service providing carrier interchange and colocation capability. MSAP examples include the Avoca IA colocation facility of 10 sq m, containing regional carrier and local network cross connects, and equipment racks.

Another is the ARC interchange facility in downtown Omaha, connecting to Qwest, Sprint, WCON/UUNET, Cox, Exanium. There is the "Axion Integration" colocation facility in Omaha, with 15 employees serving 50 clients. Their target market is firms with annual revenues $2M - $200M.

Their downtown facility has connectivity at 2,500,000 kbps, with Qwest, NTT/Verio, and Worldcom. In downtown Omaha is located the "First Technology Solutions" colocation facility, a subsidiary of First National Bank of Omaha. Omaha also has a 900 sq m Level 3 colocation facility.

"Optic Fusion", in downtown Tacoma WA, a 5,500 sq m carrier neutral colocation facililty, is served by Qwest & the municipal telecommunication utility. Tenants include ISPs, ASPs, storage service providers, disaster recovery service providers, IP backbone providers, wireline & wireless

providers. ARC is implementing the pilot "RuralCrossroads" interconnection and colocation center in Avoca. Such centers are scaled for rural communities, and provides a common point of presence for carriers, local commerical customers, and community participants.

Qwest has at least 14 "CyberCenter" MSAPs in the US, offering access to the Qwest national backbone at 10,000 kbps to 10,000,000 kbps. "IPrevolution" provides a MSAP, including managed services, in Omaha. Characteristics of MSAPs:

1) Hub providing exchange and access points for community and regional carrier interchange service and service/content providers. The hub contains the Multimedia Broadcast (Services) hardware and software, and the interface to the Multimedia Infrastructure.

2) Disaggregates local & regional information services from Internet access, thereby reducing traffic on and fees paid to national carriers, while increasing traffic speed among local and regional users (e.g. packet latency for a MSAP user dropped from 500 to 50 ms, number of router hops

dropped from 16 to 4, and an ISP's load on the national carrier backbone dropped 90%).

3) Allows for entrepreneurs to market new information services and content to local customers without incurring cost of a backbone internet feed.

4) Reduce costs to establish & maintain data and telecommunications services by providing facilities & trained personnel for management of (content & service servers, directory & routing services, voice & data switches, mail servers, security, etc), and 'exchange' infrastructure connecting to

regional and backbone carriers.

5) Facilitates fees paid for hosting services, remaining in the community, rather than remote hosts, due to customers preferring transmission speed advantage of local services.

MANAGED SERVICES = some of the telecommunications products provided by vendors which can be any or all of the following: hosting, network services, access, intelligent CSU/DSUs, VoIP/VoATM, PBX, routers, LANs. All telecom services are "managed". Management is a matter of degree.

Examples of managed services: 1) Setting and revising the configuration and having exclusive, remote access to the operating software in CPE - such as PBXs, routers, soft switches, and multifunction CPE having firewall and VPN capabilities. 2) Remote access to the CPE is provided thru a

telecom line other than thru the transmission service connecting the customer location to the customer's MAN and/or WAN. 3) Monitoring the CPE, detecting troubles, notifying the customer, determining the trouble or fault source, i.e. in the CPE, the access circuit, or the MAN/WAN service,

notifying the customer, addressing the problem, restoring the service, and providing status reports to the customer until service is restored. 4) Service restoration activities include remote adjustments to the operating software or CPE resets, hareware maintenance dispatch, and contacting the

telecom or Internet access service provider. 5) Providing periodic reports (typically on-line) on CPE or overall network performance for defined parameters and at agreed upon intervals.

TERMINAL SERVICES = running applications residing on a 'server' computer, accessed from another computer at a remote location. The remote computer could be a desktop, laptop, PDA, or any such 'terminal'.

COOPERATIVE = Three types - PRODUCER (e.g. owned by farmers, small businesses), CONSUMER (e.g. owned by purchasers of health services, utilities, housing, insurance), WORKER (owned and controlled by employees). Key attributes of coops: non-profit, but pay all taxes,

members contribute to capital (part of which is common property of coop), one-man, one-vote (not based on number of shares owned), typically locally owned. Electric coops set own rates, unlike investor owned utilities which have their rates controlled by State Utilities Board,

earnings are distributed according to patronage, not equity investment, although interest (dividends) can be paid on shares.

MPEG (Moving Pictures Experts Group) = electronic signals transmitted in an abbreviated format which reduces the amount of frequency bandwidth required without substantially degrading the quality of the received audio and/or video. Bandwidth requirements for the widely used MPEG-2:

typical video conferencing - 120 to 250 kbps; stereo sound - 500 kbps, movies (VHS quality) - 1,200 kbps, news/entertainment - 3,500 kbps, live sports - 4,600 kbps, wide screen TV - 5,800 kbps, HDTV - 14,000 to 18,000 kbps (uncompressed HDTV requires 1,200,000 kbps).

MPEG-4 supports transmissions using 60% of the bandwidth (often only 40 kbps) of MPEG-2, & supports a wider range of bandwidth (5 - 60,000 kbps). Competing compression technologies: RealMedia by RealNetworks, Quicktime by Apple, & Windows Media Technologies by Microsoft.

Preliminary specifications for MPEG-7 and MPEG-21 indicate expanded support for transmissions incorporating digital libraries, broadcast usage, publishing, music & video releases, asset management, trade transactions, content filtering, publication cataloging.

MPEG-2 supports two TVs per home, while MPEG-4 initially supports three TVs, with future support for up to six TVs.

INTERNET CALL DIVERSION = port wholesalers which possess, display, and manage large quantities of dialup internet access ports and modems. These wholesalers provide those resources, for a fee, to downstream service providers.

CIRCUIT SWITCHING = the original and currently most common form of telephone call handling, with a circuit connection being setup between caller and called party. This connection is held open even when no data is being transmitted. Best for live audio and live video.

SWITCH = a device that swaps (directs & routes) network traffic between interfaces called ports.

TIME-DIVISION MULTIPLEXING (TDM) = two or more apparently simultaneous channels are derived from a given frequency spectrum, that is, bit stream, by interleaving pulses representing bit from different channels. What distinguishes TDM from packet switching is that the former pre-allocates

time-slots to channels, rather than arbitrated on a per-time slot basis, as the latter does.

PUBLIC SWITCHED TELEPHONE NETWORK (PSTN) = term for the public circuit-switched telephone networks.

PLAIN OLD TELEPHONE SERVICE (POTS) = term for PSTN available on analog telephones.

VoPN (Voice over Packet Network) = phone calls transported thru packet networks, such as IP (Internet Protocol), ATM, & Frame Relay. Circuit switching of voice supports a frequency to 3,400 KHz, while VoPN implementing the wideband speech coding standard AMR-WB

supports the human voice frequency to 7,000 KHz, providing for more natural sounds. Packet switching technology increases efficiency of bandwidth for voice by 800% (compared to circuit switching), provides enhanced voice services, and integrates IP telephony with customer LANs,

WANs, as well as analog, digital, and IP PBX phone systems. VoIP saves carriers 40% in operational costs and 60% capital savings, compared to non-packetized infrastructure. For instance, while 24 voice calls can be carried over a 1,500 kbps circuit, 100 calls can be carried over the

same circuit, using packet switching. International calls are now often carried VoIP. VoIP can be implemented over the public internet or private networks. VoPN savings also derive from avoiding access charges and settlement fees (which are subject to regulatory change).

As of MAR 02, the cost to transmit a voice call between New York & San Fransciso was $0.03/minute via circuit switching, and $0.003/minute via VoPN. In both cases, it cost carriers an additional $0.03/minute for 'overhead' (administrative costs indirectly related to the network infrastructure).

As of JUL 02, www.worldxchange.com offers US inter/intrastate IA long distance @ $0.059/minute or $0.049/minute with 10 minute minimum call. Other rate plans available. Prepaid calling domestic US (inter/intrastate) rates: "USA" $0.022/minute; "Love" $0.005/minute + $0.89/connect;

"Penny Saver": $010/minute + $0.59/connect; "USA": $015/minute + $0.49/connect. Evolution of VoIP: 1) replace PBXs; 2) provide transport, toll-bypass, & unified messaging; 3) provide voice functionality for personal computers, laptops, palmtops, etc. Voice over private packet nets

provide clearer voice calls, compared to VoIP, due to the former establishing a path thru the net between the source and destination stations, prior to completing the call. VoPN can be implemented over technologies such as VoCABLE, VoDSL, VoVPN, VoATM, & IP Centrex.

Issues with VoPN: dropped packets, latency, security, delay (echo and talker overlap), jitter. All those issues can especially affect faxing, although the challenges can be ameliorated with private nets, and various software & hardware packages. AOL-Time Warnet cable provides all their

telephony over IP, while Mediacom, COX, AT&T Broadband, Comcast, & Charter Communications cable companies are all testing IP telephony, to perhaps replace their current circuit switched VoCABLE systems. VoIP is typically installed as regionally based switches, as the financial model

requires at least 70,000 subscribers. As of FEB 03, Cox states it costs $600 to add a new customer to their TDM based VoCABLE network, while Net2Phone (a VoPN vendor) claims it costs them $200 maximum. Vonage, a VoPN provider, offers unlimited local & LD calling for $40/month,

or $26/month for unlimited local + 500 minutes/month of LD. A portable adapter ($25) is required, which connects to any broadband connection, to which a POTS phone and/or computer is connected, to make/receive calls. Verizon will offer VoPN in 2Q2004, as a "non-QOS service"

(therefore not required to support "life-line" service).

FRAME RELAY (FR) = type of packet networking which enables each node (network site), using a single access link, to communicate with many other sites through a shared public network "cloud" while retaining privacy.

PRIVATE LINE = original method of transporting digital communications in a deterministic fashion (each pair of communicating sites requiring a separate private line).

SS7 = Signaling System 7 is an international standard defining the procedures & protcol by which network elements in the telephone network exchange information. Call management & digital signaling is separated from the voice channel. Signaling has traditionally been carried over

circuit based networks, although IP can also be used as a carrier.

P2P (Peer to Peer) = a type of network in which each workstation has equivalent capabilities & responsibilities. P2P allows the sharing of computing resources across networks. Allot Communications estimates that P2P traffic consumes 50%-70% of the capacity on cable broadband networks.

LAN (Local Area Network) = data communications network limited to 1 km radius.

MAN (Metropolitan Area Network) = data communications network, encompassing a town, city, or metro area. MANs are typically rings, while (long-haul) WANs are point to point. MANs are comprised of three components:

1) ACCESS which is an interface terminal (the CPE) between the customer's requirements (e.g. POTS [Plain Old Telephone System], ISDN, Ethernet [including private networks over leased strand or wavelengths], Frame Relay, leased carrier managed line capacity, VPN, CATV,

security, AMR) and the carrier.

2) AGGREGATION which combines traffic from a campus or neighborhood or large building, and communicates with the carrier.

3) CORE which combines traffic from aggregation devices onto a common multi-service network, or separate networks, e.g. for PSTN (Public Switched Telephone Network), Frame Relay, IP, ATM.

SERVICE PARAMETERS which can affect all three of the above components: raw bandwidth, class of service & QoS, time of day provisioning, protection, metering, measurement, spot capacity, etc.

WAN (Wide Area Network) = data communications network of greater than 1 km radius. WANs are often IP (Internet Protocol) based, the largest WAN in exististence being the internet.

ETHERNET (e.g. 10BaseT [10,000 kbps], 100BaseT, 1,000BaseT, 10,000 BaseT) = a shared (packet) network access method, over any transmission media. Ethernet characteristics for transmitting data: switches and ports are 1/4 to 1/10 cost of SONET boxes, and operating costs several times

lower; lines can be leased with the exact amount of bandwidth, rather than leasing in 1,500 Kpbs increments as with SONET; quicker (minutes) to reconfigure compared to SONET (typically days). Ethernet can run on LANs, and WANs (up to 70 km), and packet rings, similar to SONET rings.

Occam Networks offers "packet wrapping", meaning that data travels in opposite direction on a ring, in case of a cable cut. The automatic switching time takes 50ms. Some carriers offering WAN and MAN thernet service, up to 10,000,000 kbps: WCOM, SBC, BellSouth. WCOM pricing for

Ethernet (e.g. 10BaseT [10,000 kbps], 100BaseT, 1,000BaseT, 10,000 BaseT) = a shared (packet) network access method, over any transmission media. Ethernet characteristics for transmitting data: switches and ports are 1/4 to 1/10 cost of SONET boxes, and

$7,000/month for 5,000 kbps, $200,000/month for 500,000 kbps. There are 3 general types of Ethernet services: 1) Ethernet Internet Access (internet access); 2) Transparent LAN Service (LAN interconnection or for site-to-site data center connectivity at native LAN speeds; 3) Ethernet Private

Lines (point-to-point or point-to-multipoint service). Physical mediums (OSI Layer 1): 100Base-TX requires two pair of CAT 5 UTP (unshielded twisted pair copper); 100Base-T4 requires four pair of CAT 3, 4, or 5 UTP; 100Base-FX requires one pair of optical fiber strands. Specific types of Ethernet

services: Private Line Service (P2P) which is an OSI L2 service, with no QOS needed; Wire Service (EWS) which is OSI L2 emulated private line, which needs QOS; Relay Service (ERS) which is an OSI L2 service, works like FR, and which needs QOS; Multipoint Service (EMS) which is an

OSI L2 service, and needs QOS; L3 VPN with separate L3 multicast domains (MP2MP), which needs QOS. Ethernet typically replaces TDM-based T1, T3, ATM, and FR links. Some applications for Ethernet:

Enterprise and wholesale internet access, public/private peering.

LAN interconnections, storage, video, wholesale bandwidth, hosting, security.

PBX interconnections, access to PSTN, point-to-point bandwidth pipes.

Collocation interconnections, DSL/cable/wireless backhaul, metro interconnections.

Cost comparisons as of MAY 03. Total cost of ownership, for a single site: FR/OC3 $63k for 45,000 kbps ($1.40/kb/year); ATM/OC3 $101k for 155,000 kbps ($0.60/kb/year); Dedicated Ethernet $21k for 100,000 kbps ($0.20/kb/year).

Per "Electronic Engineering Times" 14 JUN 04: "Today's Ethernet lacks such carrier-grade features as quality-of-service, provisioning, fault-tolerant and self-healing specs, and what the telecom community calls "operations, administration, and maintenance" features.".

OSI LAYERS: L1 - PHYSICAL. Bit stream (flow control - passes bits to and from the wires). Includes electrical, light (optical), or radio signal.

L2 - DATA LINK. Ethernet frames. Typically has little filtering or intelligence, but also requires little intial setup. Responsible for validity and integrity of transmission from node to node. Difficult to troubleshoot as number of nodes increase. Routers work at this level.

L3 - NETWORK. IP packets. Addresses structuring, management, routes protocols, but initial implementation more involved than L2. Good scaling, fault isolation, control, & traffic engineering.. Establishes the route between sending & receiving stations. Switches work at this level.

L4 - TRANSPORT. Handles end-to-end validity and integrity of transmissions.

L5 - SESSION. Coordinates communications.

L6 - PRESENTATION. Negotiates and manges the way data is represented.

L7 - APPLICATION. Top layer defining the language which programs use to communicate with each other.

PON (Passive Optical Network): sharing the CO equipment and the feeder fibre among as many end units as possible within the physical and bandwidth constraints. PON flavors: APON (ATM PON) - based upon ATM as the bearer protocol. EPON (Ethernet PON) - based upon Ethernet as the

bearer protocol. GPON (Gigabit PON) - based upon Transmission Convergence layer.

HIPPI-6400 (6,400,000 kbps) = a shared network access method, over any transmission media (an alternative to Ethernet).

ATM (Asynchronous Transfer Mode) = LAN and WAN transmission technology for all data technology types. ATM switches can process data internally to at least 450,000,000 kbps and connect externally to at least 9,600,000 kbps . ATM provides a virtual channel which the application

sees as a dedicated connection, over which can be run any protocol. ATM combines circuit switching (constant transmission delay, guaranteed capacity) & packet switching (flexibility, efficiency for intermittant traffic).

PROTOCOL = Agreed upon format for transmitting data between two or more devices. Examples: SONET, IP Ethernet (se MPLS), xDSL, Frame Relay, ATM, ISDN, telnet, FTP, HTTP, PPP, SNA, SS7.

MPLS (Multi-Protocol Label Switching) = Technology which allows utilization of packet based networks, in an ATM-like QoS environment. MPLS supports traffic engineering, eliminating multiple network layers. ATM is a connection oriented network, while IP is a connectionless protocol,

although TCP (in TCP/IP) does setup a guaranteed connection between two hosts. MPLS brings the connection oriented properties to IP networks, thereby providing QoS control similar to ATM. MPLS is much more scalable for VPN implementation that either ATM or Frame Relay.

In a broader sense, MPLS supports multiple protocols (e.g. Frame Relay, ATM, IP, private lines, IP, protocols in native format) in one platform, thereby reducing overhead of multiple systems. MPLS supports eight QoS priority levels. IP/MPLS combines the speed of Layer 2 switching with

the scalability (meshing) benefits of Layer 3 routing.

VIDEO CONFERENCING (VC) = full motion video images between 2 more sites. Can be one-way (point to multi-point) or two-way simultaneous broadcast between 2 more sites. Good for distance learning, telemedicine, employee training, government and business conferencing.

Three types of VC: in-house (desktop computer based or dedicated studio facility); hosted in a public studio (e.g. a KINKO shop); and managed service (setup and maintained by a third party, inside the customer facility).

Minimum bandwidth required is 128 kbps, preferably at least symmetric 384 kbps (512 kbps is often optimum).

SMART HOME = additional microprocessor based technologies and enhanced automation functionality added to existing home devices - typically thru a converged networked infrastructure. Examples, iTV, streaming media players, game consoles, data enabled mobile devices, PVR, VOD,

security and utility/appliance management. Some of the data transfer can remain within the home LAN, and some transferred externally, over the always-on data connection. "Phonex" offers a data networking system using existing premises electrical power circuits,

to transfer data on a LAN at 14,000 kbps. Price for each powerline device at an electrical outlet is $130. Computer equipment (modems, computers, printers, iTV devices, etc) are then connected to the powerline device(s). The Toshiba Magnia SG20 (list $1,440) includes

(7) Ethernet ports for WAN and LAN connectivity, web caching, remote access (VPN) capability, ports for 4 cameras (local & remote viewing/recording), digital photo album, wireless LAN interface, cross-platform file sharing. Includes two harddrives and up to 512MB RAM.

AUTOMATED METER READING (AMR): for gas, electric, water - decrease meter reading labor, decrease estimated meter reads, allow for on-demand meter reads, allow for remote (dis)connections, automated system disturbance diagnosis, automatic leak detection. Philadelphia PA installed AMR

on 400K water meters in 1997, eliminated 60 meter reading positions, & forecasts a net-present-value savings of $25M over the 20 year project life. Montana Power installed AMR on 435K gas and electric meters, reducing meter reading positions from 79 to 12. Missouri Gas Energy installed

AMR on 500K meters, reducing meter reading positions from 72 to 6. Xcel Energy (Denver) installed AMR on 1.5M gas and electric meters, at cost of $115M, reducing meter reading positions from 185 to 7, saving $16-18M/yr. Chester County (SC) Natural Gas installed AMR on all their

7,500 gas meters in 1996. Accumulated savings were positive by 2002, with estimated savings of $919K by 2007. "Itron" supplies the handheld units and software For MidAmerican Energy (MAC) into which meter reader personnel enter meter data. At the office, the data is uploaded to the

MAC billing software. While MAC has installed radio based AMR on gas meters in Sioux Falls SD, they would prefer to use broadband based system on both electric and gas meters to: a) on-demand meter reading; b) outage/restoration reporting; c) rereads & party transfers.

Itron has a pilot site in Grant County WA, during 2002-2003: "ERT" reader installed on electric & water meters (gas in the future), which communicates with a "Gateway". The Gateway collects data from the meters, and bi-directionally communicates with the utility, via the internet.

East Central Energy in Braham MN installs AMR equipment for their 40,000 residential & business customers, offering up to 59% electric rate reduction, by using automatic peak time load reduction programs. South Sioux City NE is testing AMR at customer sites.

TDD (Time Division Duplexing) = usage of only one bandwidth channel with different time slots for both upstream and downstream transmissions.

FDD (Frequency Division Duplexing) = usage of two bandwidth channels - one dedicated to upstream and one dedicated to downstream transmissions.

SLA (Service Level Agreement) = required degree of system performance, such as relating to uptime or downtime, customer support, enforcement and penalties. One set of examples is from Qwest, with their three SLA options: 99.0%, 99.7% and 99.9% minimum uptime for their ASP services.

Another example is the SLA offered by "Telseon" for Ethernet data transfer on their various MANs: minimum 99.9% availability, maximum 0.0004% packet loss ratio, & maximum 2.5ms packet delay

VOICE TELECOMMUNICATION = Voice calls can be implemented over networks ranging from public voice (circuit switching) to public data (packet switching). That is, ranging from a) voice over TDM (the PSTN); b) voice over FR & voice over ATM;

c) voice over IP; d) voice over public intenet. Variations of those networks include private networks, which are typically subsets of public networks. The integration of voice over packet switches and SS7 is a key issue for the convergence of the PSTN and IP networks.

WIRELESS systems =

PCS (Personal Communication Services) = integrated cellular phone, data (including fax) transmission, 'terminal services', short text messaging, video, paging. PCS uses "C" band and higher. Two types of PCS: 1) Public Radio Network - PCS carrier operated base stations in

geographically located "cells", communicating with mobile handheld PCS units and fixed antenna sites. 2) Private Radio Network - a 'sub-base' station located on any premises, communicating with a type 1 PCS via an antenna, & redistributing PCS services throughtout the premises.

Examples of type 1 carriers are Sprint in Omaha, Sioux City, and Des Moines metro areas, and Farmers Mutual Coop Telephone in Harlan and rural Shelby County. Another type 1 example is "Soma Networks", offering a non-line of sight system combining voice and internet access,

providing a total of 12,000 kbps service to each subscriber. Soma fixed site premises do not need external antennas, and hardware & software for each subscriber is $1,200, which includes base station, switches, backbone, and CPE.

1G = analog mobile cellular systems. Analog cellular uses "A" and "B" bands. Bandwidth: 10 kbps (mobile).

2G & 2.5G = digital mobile cellular systems. Digital cellular uses "A" & "B" bands. Bandwidth: 100 kbps (mobile), 150 kbps (fixed). AT&T "mlife" (AOL Instant Messaging) service (available in metro & interstate areas) provides short text messaging, news, & travel/entertainment information.

Sprint supports 2.5G throughout its PCS network nationwide. The Sprint network, in Iowa, is along all interstates, the eastern 1/3 of Highway 34, Highway 71 north from I-80 to Carroll, & south from Maryville. Sprint, AT&T, & Cingular networks will interoperate for short text messaging.

3G = wireless technology (beyond PCS), supporting bandwidth of 144 kbps while mobile, 384 kbps at walking speed, & 2,400 kbps in stationary mode. A 3G data (e.g. net-ready mobile devices) & phone user can roam & handed off automatically among in-house phone systems,

terrestial wireless, cellular, satellite, etc. 3G 'sites' can be mailbox size units attached to utility poles. 3G, supporting VoIP, allows users to input data using speech or keyboard, keypad, mouse, stylus, & produce output data as synthesized speech, audio, plain text, video & graphics.

Current non-business users of 2.5/3G primarily utilize the following integrated, on-line features, from most to least used: address book, instant messaging, email, voice calls and display of person's face on the other end of the phone call, map function, scheduling, accessing web sites.

3G hardware, software, and installation cost is currently approx $1,200 sq km + $300 for each CPE.

4G = next generation wireless, supporting mobile data at a minimum of 2,000 kbps, and fixed location sites at 20,000 kbps.

BWA = Broadband Wireless Access. Some characteristics of BWA: 1) Buildout is demand based - the majority of the physical plant cost (except for possible acquisition of phone switches and TV broadcast distribution center) is in CPE, which is installed only after individual customer order

is placed. 2) Maintenance cost issues: less buried wireline, more CPE (e.g. antennas). 3) BWA supports fixed and mobile users. Example of a BWA provider: "Cambridge Broadband" provides up to 60,000 kbps to each subscriber (typical thruput is 50,000 kbps), to a range of 20 km

non-line of sight, and ATM is supported to the subscriber, including 3G services. Another provider, "Redline Communications" offers a system up to 72,000 kbps, line of sight to 50 km, and non-line of sight (using reflected signals) to 10 km (obstacles can include trees, buildings, rolling hills).

DATA ENABLED MOBILE DEVICES = portable computing device capable of storing and, optionally, transmitting and receiving data via wireline or wireless. Examples are PDA (Personal Digital Assistant for scheduing and address book), Palmtop (for accessing email and databases),

handheld and laptop computers perhaps running Microsoft Pocket PC 2002 Operating System (which can include word processors, spreadsheets, wireline and wireless connectivity, browser, 'terminal services' and VPN). Commonly used Operating Systems for portable devices include

Palm, Pocket PC, Linux, Symbian, Java, Stinger (Microsoft), BREW (Binary Runtime Environment for Wireless - by Qualcomm). Business mobile device applications, from most to least used: email, calendar, data collection, general information access, inventory management,

customer-relationship management, sales (order entry). Per W-H, 22 JUN 02, some users of the (wireless or wireline connected) mobile data devices: salespeople obtaining updated pricing; real estate agents retrieving listings & take/send listing photos; email for all users.

Wireless vendors are promoting the use of their system as a replacement for the landline broadband and dialup providers connecting (primarily residential) personal computers

MESH NETWORKS = wireless routed unlicensed radio frequency based IP network. The system is comprised of a headhead unit connected to a backhaul (wireline or wireless) link, & dispersed (up to 1 km apart) nodes (router) units with antennas. Each node transmits & receives, so only

one node need be in line of sight to the headend, the remainder in line of sight to any node. Pricing for a Nokia "Rootop" kit is $7,500 for 1 headend, 6 nodes, software, installation & software management training. "Radiant Networks" mesh system offers subscribers access bandwidth

between 256 kbps & 25,000 kbps. Mesh networks significantly overcomes the line of sight issue, and no tower is used (a node serves as the headend). Broadband is available in vehicles, as transmissions can 'hop' down the road, up to 16 km, thru other vehicles, equipped with a node.

LMDS (Local Multipoint Distribution System) = terrestial radio frequency wireless system which is line of sight (point to point & point to multipoint), with speeds to 1,000,000 kbps (1 Gbps), extending to 8 km radius, and supports ATM. LMDS installation cost is $150/premises passed

(excluding CPE). Typical CPE cost for LMDS residential 35,000 kbps - 58,000 kbps is $900, while CPE cost for LMDS business 52,000 - 155,000 kbps is $4,000.

MMDS (Multichannel Multipoint Distribution Service) = terrestial radio frequency wireless system (non-line of sight), supports 120+ TV channels, data, & phone, with speeds between 1,000 & 27,000 kbps (unlicensed), & between 1,000 & 1,000,000 kbps (licensed), with range to 55 km.

WIRELESS LAN supports bandwidth of 11,000 kbps to 54,000 kbps, depending upon distance and whether fixed or mobile.

CELLULAR PHONE = 110M owned a cell phone (58% of a potential 190mm); 70% have access to at least 5 cell phone "home" providers; 18% of cell phone users consider it as their primary phone. Statistics are from end of 2001, for US residents above age of 12. Carriers' gross margin is 35%,

per BusinessWeek 12 NOV 01. According to the WSJ, 02 JUL 02, landline long distance carriers are losing 12% of ther revenue annually to cellphone operators. Average wireless subscriber uses 441 minutes/month according to one study, as of SEP 02 (up 50% from 18 months earlier).

As of OCT 02, 38% of access lines in NE were wireless service. For $21/year, Qwest will add a cellular user's phone # to their database, with the number then being published in phone directories such as DEX, McCleod, Hanson, online services, etc

EDACS = terrestial wireless system for mobile operations such as field service techs, customer service, and dispatchers. Coverage includes 90% of IA, eastern SD, southern MN, eastern NE. Customers include MidAmerican Energy (350 field techs using the system for order management,

gas leak response, and electronic mapping), Peoples Natural Gas, Central Iowa Rural Water, John Deere, Qwest, Rockwell International, Pella Corp, Lincoln NE, Polk County IA, Sioux City IA, Dubuque IA, Grundy County IA, Cheyenne County NE.

SPACEDATA = wireless repeaters which will be launched with weather balloons. 69 units will provide complete US coverage for other vendor products, such as two-way "Skytel" messaging, plus data & cellular voice services from other providers.

Notes regarding various telecommunications providers:

Sioux City, Waverly, Clinton, Waterloo IA: Central Iowa Power Coop & RACOM Electronics (of Marshalltown) offers terrestial internet wireless - $40/month for 256 kbps (includes ISP). Speeds to 1,280 kbps and VPN available. Wireless service also available in Decorah, Cedar Rapids,

Marshalltown, Newton, Carroll, Pella IA, and Norfolk NE. The service is line-of-sight, effective 5 km from a tower. Downstream bandwidth tests in Pella, mid-day weekday, resulted in 445 kbps and 525 kbps, using the 256 kbps service.

Hartley IA: the municipal utility has a 300 MHz (installed 1982) CATV system. They recently installed an Evertek wireless internet system. A municipal phone system is planned.

Pocahontas IA (population 2,000; 900 premises): The municipal utility furnishes to 125 premises non-line of sight wireless internet access (512 kbps) + ISP for $30/month. Installation is $40. The system is also being used for remote monitoring of the water well lift stations, water treatment plant,

and electric system. Remote AMR is planned. The wireless system is from "NextNet Wireless", installed and maintained by Evertek. NextNet MMDS can provide 3,200 kbps to each subscriber, with a range of 8 km to indoor desktop antennas, and 32 km to outdoor antennas.

As of MAY 02, 19% of the premises used the wireless internet 512 kbps access service, five months after first offered.

Traer IA: Traer Municipal Utilities is furnishing internet access via unlicensed spectrum wireless to a 1,000 sq km area, with bandwidth of 800 kbps, for $35/month (speeds to 1,500 kbps available). Hardware & installation cost two years ago was $170/sq km plus CPE.

Northwest Communications: consumer owned coop furnishing dialup & broadband internet access + ISP to 60 NW Iowa towns. Unlicensed wireless internet access + ISP to 23 NW Iowa towns - $45/month for 128 kbps, $100/month for 256 kbps. xDSL to some areas - $50/month for 128 kbps,

$65/month for 256 kbps. 8,600 dialup and 400 broadband customers (residential and small businesses user are resisting $40+ broadband fees) (16) . Wireline services: CATV (500 subscribers) in 5 towns - $27/month for 44 analog channels, phone service (1200 subscribers) in 4 towns -

$18/month residential. Cellular phone service, video conferencing, web hosting/design/management, and computer hardware/software installation, training, and support also offered. Northwest provides free installation of their CATV, internet, and phone services, because that eliminates

improperly installed CPE. 40% of Northwest's phone revenues are from access fees. In some towns they are the ILEC, in others, the CLEC. Where they are the CLEC, they offer phone service for $2/month less than the ILEC.

Alberta: By 2005, "Alberta Supernet" will be complete - newly constructed 6,000 km of fiber optic cable & 800 km of wireless connectivity, and related electronics, paid by Province of Alberta (US$235M over 10 yrs) plus US$65M private investment, comprising a backbone thruout the province.

A private company "Axia" is designing & managing the backbone, to which 4,700 facilities (government offices, libraries, health care facilities, schools) will connect directly, up to 100,000 kbps. All businesses and residences in the province will be able to connect to the backbone, thru any ISP,

directly to the fiber, or indirectly via wireless, xDSL, cable modem, Ethernet, etc. Axia charges ISPs the same thruout the province, for connecting to the backbone. Prior to the backbone, a typical 6,000 kbps leased line cost US$6,500/month, while a 20,000 kbps line thru the Supernet

costs US$455/month. Wherever available and appropriate, Axia is leasing existing fiber strands, incorporating them into the Supernet. "Platinum", in southern Alberta, offers wireless (24 km radius line of sight, 10 km non-line of sight) internet access + ISP for US$25-$32/month for 2,300 kbps.

At one Platinum site, 96 subscribers share a 11,000 kbps wireless access link, each subscriber paying US$6.50/month. Platinum offers wireless access bandwidth to 45,000 kbps, and where wireless is not yet installed, 56 kbps dialup access + ISP for US$10/month.

Cedar Falls IA: the municipal utility installed a 750 MHz HFC system. CATV: $11/month for 23 channels, $29/month for 67 channels. Internet access + ISP: $30/month for 4,000 kbps. The infrastructure also supports an Ethernet MAN of 10,000 kbps among

any and all users. Mediacom offers CATV: $10/month for 17 channels, $18/month for 49 channels, $27/month for 76 channels, $35/month for 135 channels. Mediacom offers cable modem internet access + ISP for $30/month. Phone service provided by Qwest.

St Peter MN: Mediacom offers CATV; also cable modem 3,000 kbps access + ISP: $30/month. Hickory Tech of Mankato MN offers: CLEC phone service for $15/month (residential), DSL 512 kbps internet access + ISP for $40/month, CATV - 23 channels for $25/month, 71 channels

for $30/month, 101 channels for $60/month (all packages include 40 music and 10 PPV channels).

Stanton IA: Farmers Mutual Telephone Company (FMTC) furnishes - 450 CATV subscribers ($18/month for 30 analog channels [includes regional stations]), 1,300 phone customers, xDSL internet access + ISP - 128 kbps @ $50/month, 256 kbps @ $65/month, 512 kbps @ $105/month,

786 Kpbs @ $165/month, 1,000 kbps @ $265/month (1,500 kbps to 10,000 kbps available). FMTC promotes broadband service by stating that a second phone line (if used for dialup internet access), plus the dialup ISP charge, can often be eliminated. FMTC is a Cellular29 (voice & paging)

reseller. FMTC is installing a fiber optic ring in rural areas, to within 5.5 km of customers, then copper to customers (for DSL). The overbuild replaces a 30 year old twisted pair copper plant, and is required by the Iowa Utilities Board, to maintain service quality. With additional electronics,

broadcast TV can be transmitted over xDSL. FMTC is a corporation, with 350 shares outstanding (no individual may own more than five shares & no shares are currently available for purchase). Eight employees. FMTC receives money from the USF.

Jackson MS: An unlicensed terrestial wireless system was installed by Air2Lan Company, providing 2,000 kbps (bursting to 3,200 kbps) for fixed business users. Access speed will increase to 20,000 kbps by mid-2002. The system took 14 months to be cash-flow positive. Air2Lan is now

upgrading the BWA system for mobile business users, and access points for the general public, with bandwidth to 6,000 kbps.

Rapid City SD: Golden West Telecommunications Coop installed two AIRSPAN brand terrestial wireless cells, providing fixed and mobile service. Each cell has a 16 - 32 km radius, providing 500 - 1,500 kbps (eventually 6,000 kbps) service. Service available to the 70,000 residents and 2,200

businesses includes access to data (internet and VPN), and VoIP.

Atlantic IA: Phone service by Qwest. GCTC is offering DSL over Qwest lines to businesses: 500 - 700 kbps. GCTC pays Qwest $72/month for each copper pair to a business. GCTC bought and maintains their own DSL hardware. If GCTC installed DSL hardware which utililized the same wireline

being used for voice, monthly cost would be less. Marne-Elkhorn Telephone is offering unlicensed wireless (access + ISP) to city and rural subscribers: $60/month for 128 kbps, and higher fees for up to 1,500 kbps.

AMU (Atlantic Municipal Utilities) offers unlicensed wireless broadband service to city subscribers: $40/month for 128 kbps and higher fees for up to 1,500 kbps.

Buffalo MN: Municipal utility offers unlicensed mobile and fixed wireless internet access + ISP for $29/month (128 kbps) and $49/month (325 kbps). The system reaches customers to 1.5 km non-line of sight, and 7 km line of sight.

Grand River Mutual Telephone Company (service area includes Bethany MO, & Decatur County IA): provides xDSL service over copper phones lines - 1,000 kbps @ 7.5 km, using Etherloop.

Panora Cooperative Telephone Association (serving Bayard, Linden, Panora IA): provides xDSL service over copper phone lines - 4,000 kbps currently, future upgrade to 10,000 kbps, using Etherloop. Residential phone rates: $7 basic rate + $6 Federal access fee = $13/month.

The coop returns 60% of the patronaged-sourced income back to customers/coop owners (e.g. $8 of the $13 charge for home phone service is returned). 70% of gross operations revenue is from access fees which Panora Coop charges LD carriers.

Guthrie Center IA: ILEC is ITS. The CLEC, Guthrie Center Communications, overbuilt the town with Optical Solutions PON (fiber to the subscriber), currently 10,000 kbps, upgradable to 100,000 kbps. Residential phone rates $10 basic + $6 Federal access fee = $16/month.

Business basic rate is $18. DSL 128 kbps access + ISP = $35/month; 256 kbps = $50/month; 512 kbps = $70/month. TV: analog only offered - 38 channels for $25/month (3 premium channels also available). Dialup internet access + ISP = $20/month.

Lisco ISP: provides ReachDSL + ISP to Fairfield, Mt Pleasant, Pella, and Knoxville IA - $35/month for 256 kbps, $40/month for 384 kbps, $70/month for 512 kbps, $100/month for 768 kbps.

Omaha, Bellevue NE: Qwest is the ILEC, offering xDSL for $38/month for 256kbps, $48/month for 640 kbps, $120/month for 1,200 kbps (all rates include ISP). Also, "Choice" (serving 20,000 subscribers in western Omaha as of APR 02) over an HFC system: fiber is run to at least 2.5 km of a

neighborhood & one 'gateway' box installed in each premises. ATM & MPEG-2 signals are transferred thru the system, providing up to 250 TV channels, 10,000 kbps internet access (typical thruput is 3,000 - 4,000 kbps), & voice service. Omaha prices are $32/month for 59 TV channels

other packages available), & internet access + ISP for $40/month. Similar "Choice" systems are available in Denver CO and Phoenix AZ, except they are provided over xDSL. Residential phone rates: $18.15 + $6.00 = $24.15/month + taxes. Qwest has 300,000 lines in Omaha.

As of APR 03, Qwest had two major network types: one carrying ATM and FR, the other carrying IP VPN traffic. Over the next 5 yrs, Qwest will merge the two networks, offering IP-enabled ATM and FR services via MPLS.

Various CLECs, including COX: residential phone (100,000 lines); 3,000 kbps rated bandwidth (200 kbps actual thruput to each subscriber) cable modem (50,000 subscribers) access + ISP: $35/month; CATV (180,000 subscribers): $13/month for 26 analog channels,

$35/month for 71 analog channels. Also available: digital (79 TV, 33 PPV, 6 HDTV, 45 music); phone services: Centrex (Basic, Attendant, Call Center), DID, T1 & T3 PBX connections, ISDN, CO trunks, long distance @ $0.10; broadband services: 512 kbps, 1,500 kbps, 3,000 kbps,

10,000 kbps (fiber to premises), hosting, VPN (3,200 kbps for remote users); analog & digital video conferencing. Cox has a local 2,500,000 kbps fiber optic loop. Cox, by Q103, will offer VOD in 40% of their markets - for $4.00, new release titles can be viewed anytime within a 24 hr period.

A subscription service will be forthcoming. As of APR 03, Cox has a 23% subscriber penetration among all phone-ready premises, and as of OCT 02, they have 50,000 commercial voice accounts, most taking high-speed data. Per Amy Cohn of Cox: "We've found that circuit-switched [voice]

offering has been hugely profitable for us…". Cox has VoIP trials in Oklahoma City OK. For Cox customers which purchase two services, churn rate is 23% lower than single product customers, and three service customers churn 53% less. Residential phone: $16 + $6 = $22/month + taxes.

Palm.net", "Motient", & "Cingular" are wireless infrastructures encompassing the metro area, allowing data enabled mobile devices to function.

Seven cell phone carriers serve Omaha: Boomerang (by Alltel), AT&T, Cricket, Nextel, Qwest, Sprint, and Verizon.

Griswold Coop Telephone Company (GCTC): Consumer owned coop. ILEC in Griswold, Elliot, Lyman, Lewis, Griswold. Fiber optic loop around those towns (coax to premises), providing CATV (analog head-end in Lyman) . DSL broadband provided to same towns - $50/month for 256 kbps.

Minimal profit margin made on CATV, due to competition from satellite TV. GCTC acquired a wireless PCS license for Cass and Montgomery counties, but decided to not pursue building PCS towers and related infrastructure, rather allow their partners Cellular29 and Verizon to proceed.

DTN Speed.NET: offers unlicensed terrestial line of sight wireless broadband in 120 towns in NE, KS, IL, IN, OH, OK, TX. $50/month for 256 (burst to 500) kbps. Plans to expand service to smaller towns and rural areas in 14 states.

Prairie iNet: Offers wireless broadband access currently in 110 (expanding to 400) rural and suburban towns in IA, NE, IL, MO, KS. 128 kbps for $40/month, 256 kbps for $50/month, 512 kbps also available. No plans to expand into SW Iowa thru 2002.

Mankato, Faribault, Luverne MN: MidWestWireless offers 256 kbps terrestial wireless for $45/month (includes ISP); 512 kbps for $60/month. In Faribault, Qwest offers xDSL access - 128 kbps thru 768 kbps, with various ISPs.

Paxton IL: Illicom Telecommunications Coop offers unlicensed mobile and fixed terrestial wireless internet access - 1,400 kbps at 1.6 km non-line of sight. Cost of the system, capable of serving 3,000 premises, was $8/passed premises, plus $600 for each CPE. Tower access cost was extra.

Ft Worth/Dallas TX, Houston TX, Phoenix AZ: AirBand Company installed a non-line of sight, fixed and mobile terrestial wireless system. Bandwidth from 1,500 kbps to 620,000 kbps.

Microlnk: Firm offering terrestial fixed wireless in Council Bluffs IA, and Omaha, Fremont, Yutan, Mead, Wahoo, Weston Ceresco, Ashland, Waverly, and Lincoln NE. 256 kbps access + ISP for $30/month. 512, 768, 1024 kbps, and dedicated wireless circuits available. Line of sight, but

deciduous trees with foliage do not affect reception, while conifers do. Burst bandwidth: users with 256 kbps service do report 1,000 kbps during off-peak hours. Size of CPE antennas vary - antenna for 640 kbps is 30x30x10cm deep. System supports VPN and point-to-point nets.

Abingdon VA: installed fiber to home & business, currently in downtown area, expanding to residential areas. $35/month for 10,000 kbps (Ethernet) and $70/month for 100,000 kbps.

Des Moines IA: Qwest is the ILEC. Mediacom offers CATV; also internet access + ISP for $55/month (10,000 kbps rated bandwidth, with typical actual thruput to each subscriber of 250 kbps) for 16,000 subscribers, including 300 businesses, some using VPN. Hickory Tech is a CLEC offering

business phone service for $30/month (includes 1 hr of long distance). Qwest offers internet xDSL 256 kbps access + ISP for $40/month, 640 kbps for $50/month, 1,000 kbps for $105/month, 4,000 kbps for $185/month, 7,000 kbps for $295/month (all packages have a choice of 11 ISPs).

Some of the Mediacom CATV packages: $11/month for 17 channels; $33/month for 48 channels; $40/month for 115 channels. All packages have PPV and premium channels for extra cost.

Waukee, Ottumwa, North Liberty, Maquoketa IA, Prior Lake, Savage MN: Mediacom offers CATV and internet access. Mediacom is not tariffed to offer leasable data lines, at any of their facilities ( just cable modem services).

INVISIMAX: terrestial wireless company, serving Grand Forks ND, and Hallock, Humboldt, Kennedy, Northcote, Argoyle MN, and rural areas (a total of 12,800 sq km). Residential service (including ISP): 64 kbps for $20/month, 128 kbps for $25/month, 2,000 kbps for $50/month.

Norfolk, Fremont, Wayne NE: Qwest xDSL $42/month (includes ISP) for 256 kbps; $120/month for 1,200 kbps.

Aberdeen SD: Northern Valley Communications offers xDSL for $40/month (includes ISP). Also, residential phone line for $15/month.

Cedar Rapids, Coralville, Ely, Fairfax, Solon, Tiffin, Walford, North Liberty IA: South Slope Coop offers xDSL - $35/month for 128 kbps, $40/month for 386 kbps, $60/month for 512 kbps (all rates includes ISP).

Cedar Rapids IA: Mediacom and McLeod offer CATV.

Platte River Power Authority: a 96 strand fiber optic cable was installed connecting Longmont, Loveland, and Ft Collins CO. Each city installed a MAN, and in the case of Longmont (population 72,000), the municipal utility installed a 27 km long, 144 strand single mode fiber optic line,

incorporating SONET OC-12 electronics, in JAN 98. By APR 00, 36 strands were in use by municipal offices (voice, data, and video communications) and the municipal power stations, 12 strands leased to ICG Communications for 20 yrs, and the remaining 96 fibers leased

to Adesta of Omaha @ $170/km/yr + 6% of Adesta-Longmont gross revenues, to extend and manage the network to every premises with a combination of 'fiber to the curb', coaxial, and copper cable. Applications planned include local & long distance phone switching,

DID/DOD phone service, ISDN, ATM, LAN & WAN access, video conferencing, utility load monitoring at premises, and CATV.

Loveland and Ft Collins have already implemented their MANs - services include 45,000 kbps ATM, & 1,000,000 kbps Ethernet circuits, with guaranteed latency of not more than 10ms over the MANs & not more than 75ms nationwide. Also, colocation services.

Wellington NZ: single-mode fiber optic cable serves a 34 sq km area, offering 1,000,000 kbps (which will be upgraded to 10,000,000 kbps [10 Gbps] ) Ethernet connectivity. QoS not a problem, due to substantial network capacity and speed - latency is 4ms (video typicallly requires

not more than 50ms and VoIP typically requires not more than 200ms latency). 1,000 kbps wireless 'mesh' system, serving the downtown area, is connected to the fiber net, with transmitters on light and power poles. The wireless backbone is 11,000 kbps, to be upgraded to 54,000 kbps.

Mobile device receiver adapters are US$200, and access fees are US$20-$45/month.

Tacoma WA: The municipal utility (power, water, light rail) installed a 1,000 km HFC system (Click! Net) in 1999 for $64M. From the headend, fiber optic cable serves 7 distribution hubs, from which neighborhood nodes are served. All hubs & nodes are on a SONET ring, with physically separate

redundant cables to all locations. Between nodes and premises is quad-shielded RG/6 coaxial cable. The net allows the power utility to remotely control distribution substations & lines, including diagnostics, plus remote AMR at consumer premises. Organizations are offered

network capacity leasing from 1,500 kbps thru 2,500,000 kbps. Several ISPs offer cable modem service over Click! Net, and typical access + ISP rates are: $25/month for 1,000 kbps downsteam & 128 kbps upstream, and $65/month for 2,000 kbps downstream & 256 kbps upstream.

Click! Net offers CATV: basic service $6/month for 22 analog channels (including local stations, PBS, public access/government, education); $24/month for 72 analog TV + 45 digital music; $35/month for 102 analog & digital TV + 45 music; additional higher-end packages available.

Click! Net also offers iTV for $7.50/month, allowing subscribers to access basic CATV + internet (128 kbps) for $13.50/month, no PC needed. Expense/revenue ratio for 2000 was 96.3%, for Click! Net. The primary reason for the municipal utility to install the network was for electric system

management, with the HFC network oversized to offer telecommunications services to consumers and organizations. Competing xDSL access + ISP is offered over Qwest lines, starting at $39/month for 256 kbps up and downstream.

AT&T offers competing CATV: basic package of 94 analog & digital TV channels + PPV + digital music for $40/month; higher-end packages available.

Kutztown PA (population 5,100): During 2001, the municipal utility installed a multi-strand fiber optic cable to each premises. One strand for BPON (Broadcast Passive Optical Network) for text data, video (includes digital CATV), and audio transfer (currently up to 1,000,000 kbps). Two strands

for VPON (Video Passive Optical Network) for currently utilized analog (& digital) CATV transmissions. The net is used to manage remotely the municipal electric system (transmission, distribution, remote AMR), water system (pumping, purification, collection, distribution), and

wastewater system (treatment, collection). Current applications also include switched phone service, CATV, line capacity leasing, VPN. Future uses include VoIP, & remotely located data backup/storage/mirroring. Internet access + ISP: $15/month for 1,000,000 kbps down/64 kbps up,

$20/month for 1,000,000 kbps down/128 kbps up, $25/month for 1,000,000 kbps down/256 kbps up, $30/month for 1,000,000 down/768 kbps up, $40/month symmetric 1,000,000 kbps. Landline phone service provided by Conestoga Telephone Co: $11/month residential, $24/month business

(add FAC in both cases). Analog TV: $16/month for 30 channels, $30/month for 88 channels.

Winthop, Lafayette, New Ulm, Klossner, LeSueur, Norseland, Traverse, Nicollot MN: Terrestial wireless, covering 11-16 km line of sight radius around each town. Access speed 500 - 800 kbps, with actual thruput to subscribers 480 - 960 kbps, bursting to 1,200 kbps. Access+ISP = $30/month.

Sacramento CA: "WINfirst" installed fiber optic cable and coaxial cable to each premises. Services include iTV, VOD, 'nCUBE' (device providing enhanced broadband streaming), video (150 digital CATV, 75 premium CATV, 29 international CATV, 400 VOD titles/month),

voice (local, and long distance @ $0.06/minutes flat rate), and 10,000 kbps data access.

Huxley, Kelley, Slater, Cambridge, Maxwell, Collins, Mingo, Elkhart, Alleman, Colo IA: Huxley Communications Coop (Huxcomm) installed fiber optic cable to greenfields & overbuilds, using Optical Solutions PON technology. Huxcomm offers landline phone, cellular, internet, CATV. Internet access

+ ISP: 65 kbps @ $34/month, 128 kbps @ $40/month, 256 kbps @ $50/month, 512 kbps @ $60/month, 1,500 kbps @ $100/month. Phone (add $6/line for Federal Access Charge): residential line 1 $12.50/month; business line 1 $18, call waiting $1/month, call forwarding $1/month, 3-way

calling $1/month, 8/30 speed dial $2/$3 per month, caller ID $4-$5 per month, domestic long distance $0.08/minute flat rate. TV: total of 52 analog only channels including PPV & premium; $27/month for expanded basic service. Packages: $65/month for 64 kbps internet + phone + TV, $70/

month for a 128 kbps package, $75/month for a 256 kbps package, $85/month for a 512 kbps package, $125/month for a 1,500 kbps package. When Huxcomm calculated projected revenues for the fiber cable installations, late 2000, they assumed zero revenues from long distance access fees.

As of SEP 02, Huxcomm is not being paid by long distance carriers per agreements (0% of usual fees from AT&T, 10% from Qwest, etc). Huxcomm is providing voice/TV/data over the fiber. Data is provided via xDSL, as they had limited success with cable modems, although Mediacom does

offer cable modem (and CATV) in some of the Huxcomm markets. Huxcomm is installing fiber to premises in order to be able offer bandwidth in the future, greater than that which twisted pair and HFC will provide. Pricing for the optional phone features has been determined

to generate more revenue than at higher rates, and minimal switch management is required to offer those services. Customers receive the xDSL bandwidths as paid for (on the MAN). Huxcomm TV competes against satellite and Mediacom by offering a local channel dedicated

entirely to programming by the local community (specifically by high school staff and students), and by providing Des Moines/Ames local channels. When satellite offers local channels, satellite will be much more competitive. There are five cell carriers in the area, and residential users

are increasingly using those services for local and long distance, rather than landlines. Huxcomm also resells a cell service. ITS provides ILEC service in Alleman, Slater, and Cambridge.

NW Kansas (Lenora, Hill City, Norton, etc): Rural Telephone Coop provides 12,000 phone access lines, LD, internet access, CATV. The obtain 5% loans from the RUS, and recommend presubscriptions prior to overbuilds. Where they are a CLEC, they obtain 90+% take rate for local service,

a high LD take rate, and 10% high-speed internet access take rate. Where they have installed a PON (Passive Optical Network) from Optical solutions, they can provide 10,000 kbps up/down bandwidth to residences, and 45,000 kbps to businesses. They have a central CATV headend,

and while they have a high take rate, their customer satisfaction level is challenged due to customers wanting more/different services. In mid-2002, they are starting to overbuild Osborne (with aerial lines) at cost of $3,500/passed premises with a PON from Optical Solutions.

Long Lines Inc (LL) (division of Pioneer Holdings Corp): installs and maintains telecommunications infrastructure, and switching systems. Services can either be wholesaled to communities (as with HMU) or sold directly to consumers (as in Sergeant Bluff). LL can be an ILEC or CLEC,

depending upon the location. Their lines are primarily located in NW Iowa & NE Nebraska, with switching facilities in Sergeant Bluff IA. They own lines to POPs in Omaha, Sioux Falls, Des Moines, with interconnections to SDN (South Dakota Networks), INS, & MCIW (MCI Worldcom).

Their Nortel switch is currently configured to process 5,000 access lines plus 300 T-1s (7,200 lines), for a total of 12,200 lines. They provide a total of 1,350,000 kbps (1.35 Gbps) dedicated circuits to IBM, Gateway Compter, & MCIW. Additionally, some clients have replaced all their

ICN circuits with LL circuits. LL is planning to migrate their circuits to include ATM, and they state that the amount of buried fiber cable is not a bottleneck, as upgraded electronics continually expands the bandwidth of existing cable.

Representative LL services & rates:

Sergeant Bluff IA (retail provider): residential phone - $12/month + Federal access fee, 2nd line - $6 + fee; business phone - $16 + Federal access fee, 2nd line $20 + fee. Residential internet cable modem access + ISP: $40/month for 256 kbps (competing CableOne offers

400 kbps for $35/month, other rates for up to 1,500 kbps). LL offers dialup access + ISP is offered for $20/month. No CATV is offered by LL, rather, by CableOne (50 analog channels). No additional channels available.

Sloan IA (retail provider): residential phone - $10/month + Federal access fee, 2nd line - $5/month + fee; business phone - $14/month + Federal access fee, 2nd line $18/month + fee. Residential internet (cable modem) access + ISP: $40/month, other rates for up to 1,000 kbps.

CATV: 38 analog channels for $20/month + $8/month for 4 premium analog channels. No additional channels available. Dialup internet access + ISP for $20/month.

Coon Rapids IA (wholesale provider to municipal utility): A 750 MHz HFC system was installed. 540 internet dialup access customers @ $20/month, 60 cable modem subscribers @ $30/month for 512 kbps + ISP (higher rates for up to 1,500 kbps). Residential phone -

$14/month + Federal access fee, business phone - $27/month + fee. CATV: $21/month for 40 analog channels + $26/month for 2 analog premium channels (no other channels available). Iowa Telecom provides phone service to 5% of the market @ $14/month (residential).

Laurens IA (wholesale provider to municipal utility): a 750 MHz HFC system was installed (including a SONET fiber ring) around the town, offering cable modem 512 kbps internet access + ISP for $40/month (80 subscribers); dialup acccess + ISP for $20/month; CATV (565 subscribers):

$23/month for 54 analog channels + $27/month for 10 premium channels (no additional channels available). The utility locally determines CATV content. Phone (825 subscribers) for residential $11/month + Federal access fee, business $25/month + fee. The utility derives 40% of phone

revenues from long distance access fees. 85% of phone customers use long distance from the utility (flat $0.13/minute). Laurens & surrounding area is also provided wireless internet access + ISP from Northwest Communications, and ILEC phone service ($11/month residential) from Qwest.

Spencer IA (retail provider for dialup and wholesale provider for highspeed ISP to Spencer Municipal Utility - SMU, which installed 35 km of fiber optic cable, 530 km of coaxial cable, and a 120 m tall antenna tower for CATV):

SMU: Cable modem - 500 kbps access line: $13/month + $12/month for ISP from: Pioneer, Northwest, Iowaone, or Evertek, for total of $25/month. CATV - 16 analog channels for $10/month; 59 analog channels for $28/month; 59 analog channels + 21 digital channels + 40 digital music

channels for $30/month. 27 premium channels also available. Residential phone is $10.50 + $3.50 Federal access fee = $15/month before taxes (no universal service fee nor number portability fee charged).

Mediacom: Cable modem - 500 kbps access line, including ISP for $20/month. CATV - 16 channels for $6/month, 59 channels for $28/month.

Qwest: residential phone service is $17.52/month + taxes.

Denison IA (wholesale dialup and xDSL internet): phone service provided by Frontier & Westside Independent Telephone. Mediacom furnishes CATV (1,100 subscribers), and is upgrading to full duplex and cable modem facilities in 2002. xDSL is offered by Frontier (Citizens Communications):

$35 - 50/month + ISP ($10 - 15/month, from LL) for total of $45 - 65/month. Western Iowa Power Cooperative, with offices in Denison and Onawa, provides power to nine surrounding counties, plus CATV, phone, and internet (dialup - from LL, & broadband) in some areas (e.g. Onawa, Whiting,

Sloan, Salix). 40% of phone revenues are generated by access fees terminating inbound long distance calls (including from cellular phone users). CATV provides minimal earnings due to numerous small "head ends" (requiring substantial maintenance), which will be consolidated.

Whiting and Onawa IA (retail provider CATV and wholesale provider to WIPCO for ISP): LL offers dialup internet access + ISP ($20/month). Also, CATV ($27/month for 38 analog channels) - 4 premium channels also available. Qwest phone service.

LL recently upgraded Whiting cabling infrastructure with dual (HFC/copper) overbuild.

Carroll IA (retail provider for dialup ISP): Qwest is the ILEC. Western Iowa Networks is the CLEC, offering Etherloop at 4,000 kbps. They collocated their equipment in the Qwest CO to reduce Qwest facility charges. Dialup access + ISP for $23/month.

Harlan IA (population 5,300; 2,400 premises) (wholesale provider to HMU for phone service): a 750 MHz HFC system with a 15 km long - 60 strand fiber optic cable loop (running ATM at 155,000 kbps) plus 55 km coaxial cable, with 60 power supplies & battery backup. There are four

distribution nodes, each connecting 600 premises. Services include CATV ($10/month for 11 channels, $19/month for 39 analog channels, and 10 premium analog channels also available); & residential internet access (1,500 kbps + ISP for $35/month & 10,000 kbps + ISP for $45/month).

Their MAN supports Ethernet, & capacity leasing of 1,500 thru 45,000 kbps is available. HMU offers CLEC phone VoCABLE service (residential: $15 including FAC; business: $17.32 + $4.35 = $21.67); long distance flat fee of $0.14/minute; expanded calling area (33 surrounding towns) for

$0.83/month + $0.09/minute. 950 phone customers. No dialup ISP offered. HMU has 1,370 CATV subscribers (an HMU committee selects the channel options), 600 broadband subscribers, and the telecommunications division has five full time employees. HMU constructed a 135m tall tower

for CATV. HMU performs and/or supervises the video & audio taping of local events, for viewing on their public access channel. HMU credits that service in retaining a substantial portion of their CATV subscribers. Events shown are either live or taped: church services, high & middle

school sporting & band concert events, career fairs, city council & county supervisor meetings, school board meetings, public forums of all types, and furnished tapes such as Iowa State Fair/Cancer Society/US Armed Forces. A streaming banner on the access channel notifies subscribers

as to the viewing schedule. HMU has unsuccessfully attempted to get the local school district involved in taping events. Iowa Telecom is the phone ILEC, & offers xDSL. Mediacom furnishes CATV to 400 customers and is now upgraded to a full duplex system, including cable modem.

Farmers Mutual Coop Telephone is a CLEC in Harlan, & offers ILEC phone service, broadband & dialup internet (1600 subscribers), and CATV (500 subscribers) to rural Harlan, Corley, Earling, Hancock, Irwin, Jacksonville, Kirkman, Redline, Tennant, & Westphalia. In that area, they installed a

260 km 2,500,000 kbps fiber optic loop (running SONET), 800 km coax, and copper lines. All three services are available to all 2,200 customers (2 customers/km of passed cable). CATV: $20/month for 37 channels; internet access (cable modem and xDSL) + ISP: 128 kbps @$35/month,

256 kbps @ $45/month, 768 kbps @ $65/month, 1,500 kbps @ $85/month, and other rates up to 8,000 kbps. PCS cellular ($5/month for 30 minutes, $10/month for 75 minutes, $20/month for 200 minutes, & $40/month for 600 minutes, roaming agreement with Sprint PCS), paging, & long

distance services are also sold. Yr 2000 revenues $4.6mm, assets $12.6mm, earned $1.1mm (up 13% from 1999). 1999 expenses: 52% CATV programming fees, 16% depreciation, 13% plant, 9% corporate, 5% 'customers', 3% tax. Yr 2000 shareholders dividend $100k. 14 employees.

Orange City IA: Frontier/Citizens is the ILEC. Orange City Comm (owned by LL, NW REC, Orange City) is constructing an overbuild; as of DEC 02, fiber to business provides voice, dialup & highspeed data access (all from LL switch in Sergeant Bluff). Planning to extend overbuild into

residential area during 2003. Orange City Comm also provides internet access + ISP via wireless.

Le Mars IA: Frontier/Citizens is the ILEC. Le Mars Comm (owned by LL, NW REC, City of Le Mars) provides non-line of sight wireless access + ISP for 8 km radius around Le Mars: 512 kbps for $35/month, 1,000 kbps for $50/month. As of DEC 02, Le Mars Comm is reviewing how

CLEC phone service might be provided, likely initially to businesses. Frontier offers 144 kbps thru OC3, GbE, and xDSL data services.

Manning IA: the municipal utility installed an HFC system. 600 CATV subscribers ($21/month for 49 channels; 5 premium channels for additional fee) and 475 phone subscribers (residential $10/month + Federal Access Charge). Internet access includes ISP (Pioneer): 375 subscribers

($25/month for dialup; $30/month for 500 kbps cable modem). The phone switch for the utility is in Sergeant Bluff IA. Iowa Telecom also provides phone service & xDSL ($35/month for 128 kbps, $40/month for 256 kbps, $70/month for 512 kbps, $100/month for 768 kbps, $170/month for

1,000 kbps). Manning completed the overbuild in JAN 01, for $3.5M, which included a CATV headend. Population 1500, and assuming number of premises 750, and CATV headend $1.6M, overbuild cost was $1.9M. $1.9M / 750 = $2,550 / passed premises for the HFC overbuild.

For Red Oak IA, LL recommends: twisted pair copper to residences providing voice, data (xDSL), video; and for business, twisted pair copper and fiber cable. LL states that such dual plant is less expensive to install and support than HFC (LL has staff experienced in dual plants, not HFC).

Muscatine IA: Qwest (ILEC) & McLeod (CLEC) offer telephone service. The municipal utility - Muscatine Power & Water (MP&W) installed (in 1998) three HFC rings, totalling 86 powered (with backup system) nodes (each connecting 125 premises), for total of 10,750 passed premises. MP&W also

purchased the Mediacom network in DEC 02 for $9m. Services include analog & digital CATV, from a MP&W headend, cable modem speeds to 4,000 kbps, capacity leasing (including direct fiber connections), Frame Relay, ATM, xDSL (Qwest lines + MP&W ISP), dialup, hosting & web site

design, computer network installation, support, and training. Representive MP&W rates: cable modem ($40/month for 512 kbps downstream & 256 kbps upstream); CATV (BASIC - $13/month for 23 analog channels; EXPANDED BASIC - $35/month for 68 analog channels; DIGITAL -

$48/month for 68 channels + 25 digital channels). 83 premium + 25 music channels also available, for total of 216 channels. Qwest residential phone rates: $10.71 thru $12.65 + $5.00/month for Federal Access Charge = $15.71 thru $17.85/month + tax. McLeod residential phone rate:

$17.18/month total + tax. The initial MP&W pro forma assumed 65% gross margin on video, but when TCI lowered prices, MP&W had to compete on price, with gross margin reducing to an unacceptable 42%. After MP&W purchased Mediacom, they raised prices. MP&W now regrets it did

not implement phone service also (currently they offer video, internet, business ATM data). Current (SEP 03) gross margin on video is 45%, internet 84%, business data 95%. Muscatine Community College manages the local access channel for MP&W. 2002 gross revenue was

$4.5m for video, $2.5m for internet + data. The ROI on the overbuild investment is less than expected, based on the pro forma.

San Diego CA: The Chamber of Commerce literature promotes their branding for the downtown area as "Bandwidth Bay", and highlights that 114,000 km of fiber optic strand is located there. Assuming each cable contains 144 strands, that is 790 km of cable. The Chamber also promotes their

online (accessible with a browser) GIS (Geographic Information System), with route maps of fiber optic cable, connected buildings, and telecommunications services available for those buildings. Other infrastructure items are also available on the GIS, such as roads and parks.

Cox is offering 1,000,000 kbps Ethernet data services over four backbone rings, running SONET, and 10,000/100,000 kbps to premises, in addition to voice services.

Seattle WA: AT&T has placed all graphical and textual data pertaining to their cabling, electronics, buildings, and all assets in general, on an on-line system. It is accessible, by all AT&T staff, and subcontractors, such as engineering, customer service, sales.

Houston, Austin TX: "Clearworks.net" is installing, in new subdivisions, four fiber strands to the home, and provides phone service (they are a CLEC in those two markets), TV, internet access (100,000 kbps to each subscriber) + ISP, and a connection to their security company. Clearworks

charges homeowners $1,000 for cable installation, which includes cabling from the neighborhood distribution point to the house, & (copper) wiring to each room. Customers typically pay Clearworks $140/month for local and long distance phone usage, TV, internet access + ISP, and security.

NOANet: has constructed and operates a 6,000 km regional "wholesale only" fiber optical cable backbone, serving mainly rural areas of WA, OR, ID, & MT, with IP (including MPLS) transport, GbE (Ethernet) other SONET, and SONET based TDM transport OC3 thru OC48.

Grant County WA: The Public Utility District (GCPUD), serving 36,000 premises in the 7,000 sq km district, initially installed a fiber optic backbone connecting PUD office, power plants, and substations, for monitoring and control. They are now 1/3 (out of 75,000 km) the way thru extending fiber to

each premises, capable of providing symmetric 1,000,000 kbps bandwidth. Various private providers offer content & service; typical residential access is 500 kbps (burst to 1,000 kbps) + ISP + 10,000 Kb web space for $18/month. Applications include VoIP, HDTV, video streaming & VOD

(VIB.tv offers access to their movie library via a 4,000 kbps stream). As of mid-2002, 20 premises using some ("Itron") AMR functions on a trial basis. GCPUD connects to NOANet, up to 9,600,000 kbps, to which GCPUD commercial/industrial customers have access.

As of FEB 03, their "open access" network includes 15 ISPs, 2 digital video (TV with > 280 channels, & VOD) providers, 2 voice providers - using VoIP, & 1 security service provider. Penetration rate of passed premises for data (broadband ISPs) was 42%.

Mason County WA: The Public Utility District (28,000 customers over 1,450 sq km) installed a 1,000,000 kbps fiber network, connecting the PUD offices and substations, for SCADA (Supervisory Control & Data Acquisition), and video surveillance. The net is connected to NOANet. The PUD

is now extending fiber to each premises in the district, with speeds to 100,000 kbps. Typical (among at least 10 ISPs) symmetric 2,500 kbps access + ISP, including 15,000 Kb disk space, is $40/month. Eight port 10,000/100,000 kbps Ethernet devices are installed in residences &

small businesses, which includes battery backup. The ports can connect to, e.g. AMR devices (gas, electric, water), internet, point to point data lines, security, video over IP, & additionally two POTS (Plain Old Telephone Service) ports. The same devices are installed in Grant County WA.

Okanogan County WA: The PUD constructed and maintains a 130 km "open access" fiber network, connected to the NOANet backbone. Services: Ethernet, TCM, colocation, SONET. Retail providers include: NCIData, NVINet, North Central ESD School District, OBHC Healthcare.

Douglas County WA: the PUD constructed and maintains an "open access" fiber network, connected to the NOANet backbone. Wholesale services include colocation, dark fiber, and lit fiber (Ethernet, TDM).

Chelan County WA: The PUD provides an "open access" fiber net, connected to NOANet, for "retail" providers. As of DEC 02, 14 such providers are offering various data & voice services to 225 homes & businesses. The PUD is expanding the network to pass 2,500 premises in 2003.

CPEs are installed, by the PUD, according to user requirements: residential/small business bandwidth up to 10,000 kbps, 4 POTS lines, point-to-point VLAN. Large organizations: bandwidth to 100,000 kbps, 2 - T1s, 24 POTS lines, 12 xDSL, point-to-point VLAN.

The "retail" service providers pre-market within each node service area to help the PUD decide where to expand the network, and the service providers must commit to a set number of customers for six months in each of those zones selected for construction.

Responsibilities of "retail" service providers: branding, pricing, marketing, all end-user communication, needs assessment, delivery commitments, advising the PUD as to their (the "retailer") network requirements, end-user training, and first line of support to end-users.

Ashland OR: The municipal utility installed an "open access" fiber MAN, connecting residences via coax (cable modem) or copper (xDSL), and fiber directly to businesses. Several ISPs offer service, including browser based email (no access to the internet) for $5/month, or cable modem access

(3,000 - 5,000 kbps) + ISP for $24/month. Residences can have fiber installed to premises if desired. CATV is offered: 11 channels for $7/month, 26 channels for $11/month, 122 channels for $26/month, 142 channels for $35/month.

Palo Alto CA (population 62k): The municipal utility (CPAU) installed a fiber MAN, and only leases dark fiber - no bandwidth limitation. Rate is $300/km/year for each strand, minus various discounts (bulk strands, contract length, etc). Customers can custom configure fiber optic pathways

(e.g. point-to-point, star, loop). The fiber can be obtained either directly from CPAU, or thru a 3rd party on the "open access" network, of which there are 100+ ISPs, 12 CLECs (some providing both voice and data, and some only data services), and 3 (business services) broadband providers.

Burnsville MN: "Infinetivity" offers 256/256 xDSL for $22 (Qwest) + $15 (ISP) = $37/month. xDSL 640/256 is $52/month total. Dialup 56 kbps internet access + ISP, including 100,000 KB (100 MB) web space is offered for $13/month.

Morris MN: Federated Telephone Coop (FTC), is a CLEC in Morris (population 5,600). Qwest is the ILEC, and Mediacom offers CATV. FTC installed a fiber ring in 1999, and connected businesses, taking some of the business from Qwest. In 2000 and 2001, FTC connected all premises

(1,500) to the fiber ring, and as of FEB 02, 320 premises (mostly residences) had active service, supplied with hardware from "Optical Solutions" (OS). Services offered are: voice (FTC has a voice switch serving other towns) & had 400 voice access lines in Morris as of FEB 02;

data (100 customers, and the fastest any residential customer requested is 1,500 kbps); and TV (from a FTC headend serving other towns also). The most profitable service is voice (rates are 10% less than Qwest), followed by data, then TV (due to competition from Mediacom).

FTC selected fiber to all premises due to bandwidth available, and expected performance life in the ground, compared to copper (twisted pair and coax). Fiber connections to businesses do not use OS (which uses a shared bandwidth technology). Bandwidth offered over

the OS net is asymmetrical, because FTC prefers that, to conserve bandwidth. Customers can request symmetric bandwidth. 85% of local dial tone customers also use Federated long distance. The OS FP402 are not yet installed, therefore fiber modems are used.

Glasgow KY: The nonprofit municipal utility installed an HFC system in the city of 14,000, in 1989. 2,500 premises are connected, for CATV, telephone service, data access, power load management. Typical rates: $21/month for symmetric 1,000 kbps data access (ISP extra, from 3rd party),

$9/month for 15 analog CATV channels, $19/month for 62 analog channels, $16/month for 62 digital channels. The infrastructure is provider neutral, and more than one provider uses the system for data, TV, and voice. The system serves the rural county, at higher rates (about 30%).

Stockholm Sweden: The municipal MAN "STOKAB" leases redundant dark fiber to clients. JUN 02 rates: US$1,000/month/km per one pair of strand. Customer provides electronics & "manages" their own fiber, while STOKAB provides fiber maintenance. Typical payback for dark fiber vs

purchasing managed bandwidth is 12-18 months. A Swedish national goal is to connect all premises with fiber optic cable by 2005, with an initial bandwidth of 5,000 kbps and "...annual doubling of capacity....". The infrastructure will be competitively neutral and be open access based.

Winnipeg MB: Fiber optic cable (AUG 2000) prices, to connect to the 864 strand fiber ring: US$2,000 - $4,000/km to install aerial fiber; US$5,000 - $7,000/km to install fiber into existing conduit; US$25,000/km to install conduit and cable (cable is 10% of cost).

US$700 to provide a FTTCab (Fiber To The Cabinet) connection. Annual maintenance costs: 5% of initial cost

San Antonio TX: STIC.NET is an ISP which buys wholesale internet access from AOL over their cable modem system, for $35/subscriber, and resells the service at retail, including ISP, for $45/month.

Atlanta GA & Phoenix AZ: AGL Networks installs 8 - 40 cm diameter conduit, install fiber in some of it, for "open-access" dark fiber leasing, with the remainder of the conduit available for customer owned cable. AGL also provides colocation & inside customer premises cabling and management.

Ottawa Canada: "Telecom Ottawa" installed a 250 km fiber backbone, lit with Ethernet switches, offering 4,800,000,000 kbps (4.8 Tbps) switching capacity, double switching redundancy, MAN latency of 10-20 ms. Customers can connect point-to-point or point-to-multipoint, from 10,000 kbps

to 10,000,000 kbps, compatible with various protocols.

Baldwin WI: "Baldwin Telecom" is a stock company serving Baldwin and surrounding communities with CATV, long distance, Nextel wireless, web hosting and development, phone system sales and service, and internet access + ISP (cable modem 128 kbps up/down for $30;

512 kbps up/down for $40; 764 kbps up/down for $100/month).

East Central PA: "PPL Telcom" built a 1,120 km route with 216 strand fiber cable. Services they offer: DWDM OC192 SONET, Ethernet 10,000 kbps - 1,000,000 kbps, 99.999%+ reliability, colocation. Primary customers: business.

New York NY: "Fibernet" company at 60 Hudson St is a carrier neutral MAN, supporting TCM/SONET, Video, Fiber Channel/ESCON, packet/native IP. ATM, Frame Relay. Bandwidths: DS1 to OC192.

Waverly IA: The municipal light & power utility (WLP) installed a 227,000 kbps fiber optic network, in 1995, among their offices & substations (using SCADA), and connects businesses as requested. A study to extend that system (Ethernet over fiber) to residences & small businesses concluded on

21 MAY 02 "…Case 2 is feasible..." which included the overbuild and sharing headends with Cedar Falls, offering voice/data/video. Qwest is the ILEC and Mediacom offers CATV & cable modem service. Wartburg College uses ICN for data access. A voice (reseller) CLEC is McLeod.

Comments received include the realization that WLP has not performed a satisfactory job of marketing the fiber loop, so it is underutilized; new approaches are now (OCT 02) being examined. The current approach for ATS in general, by the Economic Development Group, is to encourage

new and existing providers to expand their services. RACOM (thewebunwired, now called Dynamic Broadband), installed a wireless system in JAN 02: 5.7 GHz, symmetric bandwidth, and VPN. Bandwidths from 256 kbps thru 1280 kbps, for $40/month thru $250/month.

As of NOV 02, WLP provides only dark fiber to businesses, and is generating $64k annually in revenue from that service. Initial cost of the overbuild is not known.

Emerson IA: Southwest Telephone Exchange (SWT) has an 'access point' (in their CO) to the INS fiber line, & leases dark fiber from INS, to the INS POP in Stanton; they have a Mitel voice/data switch in Emerson, & are part of 'Interstate-35', which owns 2,100 access in Emerson & Truro IA area.

Ainsworth NE: Three River Telco Coop had a cost/revenue/technology study done by TELEC Consulting, with the report indicating that a fiber to curb, copper to premises (not greater than 500 m) overbuild, with initial cost of $2.6M is a "solid proposal". There would be an additional $250k

in expenses annually. The Coop will vote on the proposal in SEP 02. The ILEC in Ainsworth in Qwest. The report indicated that the first CLEC in an exchange usually has a great advantage over subsequent CLECs.

Keokuk IA: One of the three IDED "Telecommunications Assessment" grantees. As of OCT 02, per Jeff Hanan of Keokuk Community Development Dept, there has been no further substantial discussions regarding the implications of the assessment results, and none is anticipated.

Per Lowell Junkins of Lee County Economic Development (Keokuk, Ft Madison, and the rural areas), the approach has been to show vendors that a demand exists, and encourage them to expand ATS deployment. With that approach, everyone in the county will have access to 1,500+ kbps

broadband by Q103 via xDSL, or wireless, or cable modem. Issues such as competitive vendors for capacity leasing, line redundancy, voice switching, etc, are still being addressed. Vendors include Mediacom, Iowa Telecom, wireless providers, Qwest, etc.

Kalona IA: Kalona Coop Telephone serves 2,000 access lines. As of OCT 02, they are completing a $6 million, 5 year fiber cable installation to the curb, then copper twisted pair to the home (for xDSL), supplying 3 video streams + programming for 3 TVs, + 2 data streams + several phone lines.

Findlay OH: private investor group funded a new POP and MSAP in NW Ohio, then founded in JUN 01 the for-profit company "centracomm.net" which operates the open access facility, and resells services from various wireline, wireless, and technology providers.

Iowa County IA: One of the three IDED "Telecommunications Assessment" grantees. As of OCT 02, the County Development Group approach was to use the results of the survey to show the seven LECs in the county that demand for broadband exists, and it would be profitable to meet that

demand. There was more residential and business demand for broadband than the LECs had presumed, prior to the survey. At this time, xDSL is offered in the towns, and the LECs are even competing (and keeping rates down) in each other's areas which was not done previously.

Rural areas are not yet served by wireless, but new xDSL technologies are extending further into those areas.

Albia IA (population 4,200): The Economic Development Group meets with providers, encouraging them to meet the demand for broadband. Recently (OCT 02), these providers have exanded their services: Rural Water District with wireless to towns and farms; Mediacom with cable modems;

Iowa Telecom with xDSL ($40 for 512 kbps).

Farmers Telephone Company (FTC - Essex): Their analysis of telco overbuilds indicates that generally the larger a voice switch is, the more income they generate by 'hauling' toll calls, therefore justifying maintenance of the switch & facility; economics of scale is important. Also, the positive

ROI for an overbuild they designed (for Shen), assumes a 75% take rate for voice traffic after 30 months, must be achieved. Voice traffic information for ILECs can be obtained from the IUB, but data traffic is not available. FTC uses a line between Essex & Clarinda to access the INS POP.

FTC installed a new switch in Essex in 1997. FTC is concerned that Qwest may sell Red Oak/Shen exchanges in 2003-2004 due to having to upgrade switches to meet Federal security requirements, and doing so may introduce a new ILEC with new switches & overbuilds.

Southeast Nebraska (Lincoln and surrounding area - 50 towns): Alltel provides voice ILEC service, cell phone, and xDSL service. xDSL access + ISP: $35/month for 256 kbps, $50/month for 768 kbps.

Kansas City: Everest Communications is overbuilding KC, & providing voice/data/video to business and residences, achieving a 45% initial take rate of passed residences, increasing to 55% after one year. The typical residential subscribers takes 2.7 services. Typical rates: $50/month

for local phone service + 70 analog TV channels + 45 music channels; $75/month for phone + 70 analog TV channels + 40 digital channels + 45 music channels + 256 kbps internet access + ISP; $100/month for same services as $75 package + 1,500 kbps internet + premium TV selections;

$130/month for phone + 70 analog TV channels + 45 music channels + 40 digital channels + 58 premium channels + 3,000 kbps broadband access + ISP. There is a total of 290 TV channels available on the network. Maximum upstream bandwidth for broadband is 256 kbps.

Summerside PE Canada (population 15k): the municipal utility installed an interconnected "open access" fiber network to all premises within the metro area, offering up to 1,000,000 kbps symmetric IP broadband. Outside the MAN, IP wireless is offered, to 12,000 kbps, over a 25 km radius.

Clear Lake IA: ILEC is Clear Lake Telephone Company (CLTel) offering voice, data, & video (from the INS digital headend). CLTel recently upgraded their infrastructure to a FTTC, connecting to existing twisted pair copper to subscribers. Their Basic TV package is $40/month for 99 channels +

9 PPV + 45 music. The $58/month residential pak includes 1 phone line including several calling features, 99 TV channels, local weather channel, 45 music channels, 9 PPV, 1 premium channel package, & 3 set top boxes. The $90/month package includes the $58/month pak + 256 kbps

internet access (VDSL) + ISP. Mediacom offers CATV & cable modem. Their $65/month residential package includes cable modem access + ISP, 60 analog channels, 35 digitial channels, 35 music, 12 Encore, PPV, and 3 set top boxes. An approximately equivalent Mediacom Pak in

Red Oak is $115/month. The Clear Lake Medicom Enhanced Basic Pak is $32/month, while the equivalent Pak in Red Oak is $38/month.

Brandon, Garretson, Howard, Ramona, Oldham SD: Splitrock Telecom is upgrading their coax cable facilities to all fiber + twisted pair copper to premises, over which they offer voice, data, video.

Willmar MN: En-Tel offers voice, data, digital video over fiber loop + twisted pair copper to premises. 60% of their TV subscribers also take DSL data service. TV rates (all include 35 music channels): $30/month for 61 channels; $40/month for 84 channels; $50/month for 84 channels + 8 premium;

$60/month for 84 channels + 29 premium. Internet access + ISP: $21/month for 128/64 kbps down/upstream, $31/month for 256/128 kbps down/upstream, $41/month for 512/256 kbps down/upstream.

Bimidji MN: Paul Bunyan Telephone Coop offers voice, data, digital video, all over fiber + twisted pair copper to premises. 65% of their 3000 TV customers subscribe to the DSL data service. Local content channels include School District, local weather, local radar, airport status.

Alexandria, Canova, Salem, Spencer, Winfred SD: McCook Coop Telephone Co offers voice/data/video all over twisted pair copper. They state "…nearly half of our new TV subscribers have also subscribed to DSL internet services.".

Louisville & Lexington KY, Evansville IN, Columbus OH: AT&T is a CLEC, & provides voice switching equipment. AT&T pays the MSO (Insight Communications) a monthly per line access fee for the local HFC loop to subscribers. Insight co-brands the AT&T service as part of the MSO bundle.

Progress Telecom constructs and operates an "open access" fiber WAN and MAN fiber network in the eastern US (between NY and FL), offering wholesale services such as T1 thru OC-192, SONET, optical wavelengths, colocation, GbE. 16,130 km network.

FiberTech Networks constructs and operates "open-access" fiber MANs in (currently) 14 US cities. They provide "carrier-ready" fiber networks for corporate, education, healthcare, colocation and data centers, & government agency customers. 2,720 route km of fiber cable, 75 employees,

founded 2000, cash flow positive for all of 2003, expects to be pretax profitable in 2004.

FPL FiberNet constructs and operates a 3,900 km "wholesale, open-access" fiber network throughout FL. They offer dark fiber leasing, bandwidth capacity from T1 thru OC-192 for telco carriers, ISPs, ASPs, large corporate and government agencies. They also maintain colocation facilities.

OnFiber: provides MAN infrastructure and services in 12 US metro areas: 1) optical LAN - extends campus networks to multiple sites with in a MAN, using Ethernet at bandwidths 3,000 kbps to 1,000,000 kbps. 2) optical wavelength - point-to-point optical connection within a MAN, using

DWDM, at bandwidths to 2,500,000 kbps. 3) optical Ethernet - combines traffic from multiple LANs, onto a single Ethernet connection to (regional/national) service providers. 4) SONET - point-to-point connectivity up to OC-192. All four technologies are offered in varying degrees

of path diversity, switch redundancy, protection, management, and restoration features. Optical wavelength is typically positioned between dark fiber & SONET based services, where protected broadband capacity is not required. OnFiber is "open access" (vendor and technology neutral).

TWT (Time Warner Telecom): operates national IP backbone, and MANs in 44 markets.

"Most wired" US cities: according to Yahoo Internet Life JUL 01, based upon penetration of broadband connections among residences and businesses, locally produced content, and internet usage. Ranked highest to lesser: San Jose CA, San Franciso CA, Austin TX, Washington DC,

Orange County CA, Las Vegas NV, Oxnard-Ventura CA, Raleigh-Durham-Chapel Hill NC, Seattle WA.

Notes regarding some current and planned telecommunications choices in Red Oak & exchange 623:

VENDOR

MEDIA & TECHNOLOGY (11)

MAXIMUM POSSIBLE

CURRENTLY

PHONE

DATA SPEEDS AND

VPN (5)

DATA BACKBONE

POINT TO POINT

COMMENTS

PASSED

ACTIVE

(base rates)

RATES

SPEED

ACCESS

PREMISES

LINES

American Relay (17)

data - terrestial wireless (2)

3,900 (1)

none

Residential: 256 kbps

YES

108 Mbps backbone,

YES

ARC is testing service near Coburg tower.

3,100 (13)

(burst to 1,000 kbps):

& OC-12 (620 Mbps)

Access to subscribers could be achived utilizing

$35/month. Business

redundant total

a combination of the ROCOMM MAN and wireless

45,000 kbps ethernet

capacity

to rural subscribers.

American Relay (17)

voice (VoIP) - terrestial wireless (2)

3,900 (1)

none

TBD

YES

Installation date TBD

3,100 (13)

Cellular

voice, fax, data - wireless A and B

3,900 (1)

approx ?

varies

YES

Analog data transfer capability. IM and picture

(e.g. US Cellular,

band (analog and digital, not PCS)

3,100 (13)

transfer capability.

Cellular 29)

cellular.

EchoStar

TV - satellite

3,900 (1)

approx ?

$22/month for 50

HDTV (18) compatible.

(DishNetwork)

3,100 (13)

channels.

$30/month for 100

channels.

$70/month for 170

channels.

65 other channels

also available.

Heartland

data - dialup

3,900 (1)

5,300

1,500

56 kbps: $20/month

YES

1,500 kbps frame

780 of the 1500 subscribers are "willing to pay for

3,100 (13)

relay (15) (10)

improved internet service".

Heartland

data - terrestial wireless (2)

3,900 (1)

approx 22

256 kbps: $65/month

YES

1,500 kbps.

YES

Includes static IP.

3,100 (13)

756 kbps: $95/month

Will be upgrading to

1,500 kbps: $175/month

15,000 kbps.

Heartland

data - xDSL (3)

3,900 (1)

approx 2

YES

3,100 (13)

Hughes DirecPC

data - satellite

3,900 (1)

approx ?

600-1200 kbps: $70/month

YES

3,100 (13)

(typical max speed for

residential is 2,000 kbps,

for business: 30,000 kbps)

Hughes DirecTV

TV - satellite

3,900 (1)

approx ?

$22/month for 50

HDTV (18) compatible.

3,100 (13)

channels.

$30/month for 100

channels.

$95/month for 176

TV + 31 music +

70 PPV.

ICN (9)

video, data, voice

-6

Active premises: SWCC, Tech Center, Armory

Mediacom

CATV - HFC (7)

3,900 (1)

2,600

2,100

$17/month for 18

Completed 01 JUL 02: upgrade from half to full

3,100 (13)

(81% take

analog channels.

duplex, on an 870 MHz coax system.

rate)

$46/month for 64

Includes 38 PPV digital channels.

analog channels.

HDTV (18) compatible. Currently testing VOD (19)

$54 for 45 analog

in Des Moines, for possible availability in Red Oak

+41 digital chan-

Q205. The upgrade is costing $500k+, in IA.

nels+45 audio.

Mediacom

data (cable modem) (4) - HFC (7)

3,900 (1)

none

Maximum download speed

YES

Business rate: $80/month for 2,500 kbps down/

3,100 (13)

2,500 kbps for $40/month.

256 kbps up. Other plans available, including

(residential)

sticky IP.

Mediacom

voice (VoIP) - HFC (7)

3,900 (1)

none

TBD

YES

Anticipated availability in Red Oak mid 2005.

3,100 (13)

As of OCT 02, testing in MI, & starting DEC 02,

technical trials in Des Moines IA.

Qwest

voice - fiber/copper

3,900 (1)

5,300 (1)

residential: $11/month

YES

see (12) for more detailed rate structure

3,100 (13)

4,200 (13)

business: $28/month

Qwest

data (xDSL) (3) - fiber/copper

3,900 (1)

256 kbps: $15/month +

YES

Higher speeds available. Static IP for $6/month.

3,100 (13)

$7/month for ISP

Bandwidth is typically symmetric.

Qwest

data, voice (VoIP) - fiber/copper

3,900 (1)

none

TBD

YES

Qwest is swapping out their CO switches

3,100 (13)

with VoIP equipment, in some exchanges.

Skycasters

data - satellite

3,900 (1)

approx ?

384 kbps downstream:

YES

Uses Hughes satellites

"Direcway"

3,100 (13)

$100 - $250/month

Starband

data - satellite

3,900 (1)

approx 3+

200-600 kbps: $64/month

YES

3,100 (13)

(burst to 1,500 kbps)

Tachyon

data - satellite

3,900 (1)

approx ?

up to 2,000 kbps:

YES

3,100 (13)

$800-$1,300/month

Tellular (14)

voice, cellular, fax

3,900 (1)

approx 1

3,100 (13)

various vendors

video, data, phone

3,900 (1)

approx 350

varies

YES

varies

YES

180 of the 350 users are "willing to pay for

(e.g. INS (8),

3,100 (13)

improved internet service"

corporate nets)

Z-Tel

voice (UNE)

3,900 (1)

approx ?

$58/month line 1

"Iowa Home Edition" includes local calling, call

3,100 (13)

$35/month line 2

forwarding, caller ID, call waiting, 3-way calling,

speed dial, unlimited LD to other Z-Tel users,

200 minutes/month of LD to non Z-tel users.

MCI uses Z-Tel wholesale services to offer

"MCI Neighborhood", currently available in

portions of US (not Red Oak).

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

01 OCT 2006

This document ( telecomm01.htm ) is located at:

http://redoakcoalition.250x.com

http://redoakcoalition.250x.com/roif/telecomm01.htm

To download this file:

a) at a command prompt. ftp://redoakcoalition@ftp.250x.com

b) at the FTP prompt. open ftpserver.250x.com

c) user ID. redoakcoalition

d) password. 1905

e) at the FTP prompt. dir ( to see file listing )

f) at the FTP prompt. get filename ( to download a file, e.g. get telecomm01.htm )

g) at the FTP prompt. quit ( after completing all downloads, to exit from the FTP site )

==============================================================