Leveraging our copper infrastructure in a next gen world. Patrick Murphy, Sr. Director of Engineering, FairPoint Communications

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1 Leveraging our copper infrastructure in a next gen world. Patrick Murphy, Sr. Director of Engineering, FairPoint Communications

2 Where are we Today? Pots Legacy TDM Broadband - mixed ATM and Ethernet IP Video MPEG 2 98% copper to the home < 2% Fiber to the home

3 Where are We Going? In order to answer this we must know what our customers want and need

4 Identify the GAP (Home User) Need Cell Phone Broadband access Social Networking Music (MP3 / Streaming) (hotmail/gmail) Mobility Streaming Video (YouTube) Video (Netflix) Flexibility Cost savings Don t Need LAN Line (POTS) Dial up Internet Access ISP based Cable TV??????

5 Identify the GAP (Business) Need Voice (TDM / SIP) Broadband access Unified Messaging Cell Phone IM (hosted domain) Mobility Flexibility Cost savings Don t Need Video Dial up Internet Access POTS?

6 Build the Network Ethernet Copper Fiber

7 LOAD ONBATT BYPASS FAULT 7x 8x 9x 10x 11x 12x 7x 8x 9x 10x 11x 12x C A x 2x 3x 4x 5x 6x 1x 2x 3x 4x 5x 6x A B ESC PWR OK LOAD ONBATT BYPASS FAULT ESC WIC0 ACT/CH0 ACT/CH1 WIC0 ACT/CH0 ACT/CH1 ETH ACT COL Copper Plant Design to 5k loop (utilizing existing copper) Fiber Feed Remotes (minimize costs, take advantage of external triggers) 10 Gbps Ethernet Ring(s) (EPS) Ethernet Network Internet ELBG1-ELB2 GR303 / SIP / MGCP to Switch ELBG3-ELBG4 Bridge Traffic VLAN 6 Cisco Router Ethernet Edge Router Switch PPPoE Server PPPoE Traffic VLAN 4 Management VLAN 2 GigE Ring 1 ELBG1 ELBG2 Occam ADSL Equipment ELBG3 ELBG4 GigE Ring 1

8 Utilize flexible platforms GPON (Home and Business) Active Ethernet (Business)

9 What to Expect Video from everyone and everywhere TV habits will continue to change Voice will become a commodity Broadband speeds of 10 Mb Minimum On demand for music, video, content, etc Convergence - LAN, WAN, CELL, POTS, SIP, VOIP, VOD, etc (anywhere anytime)

10 What Can We Do? Provide the goods and services our Customers want at a competitive price. We are no longer the only game in town If we do not compete our customers will walk away.

11 Residential Broadband Only (Naked DSL) Gen X and Y (30 or younger) Needs Cell phone Lap Top/Desk Top Broadband Social Networking Music (MP3 s) (hotmail/gmail) Mobility (PDA) VOD Don t Need LAN Line Dial up

12 Business Grade Ethernet (Metro E) Pros: Less Trouble Dedicated Circuit No Filtering $100 + Satisfied Customer T1 Alternative Cons: May Cannibalize T1 Internet

13 Business Options Options: ADSL 2+ ANNEX M Capable of up to 3.8 Mbps Symmetric MAX 3.8 Mbps up, 16 Mbps down Capable of loop bonding Sub $100 CPE cost Use existing Equipment (DSLAM/Modem) G.SHDSL Capable of up to 3 45 Mbps Symmetric Capable of loop bonding Fiber GPON up to 100 Mbps Active True Ethernet up to 1 Gbps Legacy Circuits T1, DS3, OC3, etc

14 Soft Switch Unified Messaging

15 Softswitch Business Features Unified Messaging LAND Line and Cellular Convergence One # Virtual PBX Long Distance via SIP trunking Web Convergence

16 Focus on the Pipe Offer what our customers are asking for Retain Customers Reduce Churn Future is Broadband Own the Pipe Compete where it makes sense Partner

17 The only thing we control is the connection to the Customer

18 Competition Today and Tomorrow Voice Cable TV, Wireless Video Internet, Cable, Dish, Data Cable, Wireless, Cellular, Satalite

19 New Video Competition Boxee HULU VUDU NetFlix APPLE TV XBOX / Play Station ABC, NBC, CBS, FOX, Disney New players MP3 file sharing is a perfect example of where the industry is heading..

20 Our VoIP Competition Vonage 2.5 M + customers $ Long distance 3.9 cents to unlimited. Skype 25 million registered users Free (basic PC phone) Partnered with Motorola for mobile skype $13 for 10 hours of skype out (PC to phone) AT&T Advantage $29.99 per month Google voice (Beta) One # (currently free, similar to Gmail model) Home Brew Build your own softswitch

21 Summary Own the network Bandwidth is King Leverage Copper Strategically move to Fiber Partner and or Provide Questions????

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