BIT Wireless Broadband Opportunities

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1 BIT Wireless Broadband Opportunities Presentation to Globecomm Techforum 2010 Conference October 5, 2010 Mickey L. Sims General Manager Buggs Island Telephone Cooperative

2 Wireless Opportunities Act now; The challenges of attempting to catch up after missing a step in deploying technology; Think Long Term The inescapable trends to wireless strong and growing The foreseeable end to the telephone business and long distance ; Questionable future for the concept of universal service Trend to ubiquitous Broadband, IP-based (Internet Protocol) technology and Ethernet connections and transport Customers want quality communication services and products that are easy to understand and simple to use

Questionable future for the concept of universal service Trend to ubiquitous Broadband, IP-based (Internet Protocol) technology and

3 Buggs Island Telephone Cooperative Established in 1951 as a part of Mecklenburg Electric Cooperative; Spun-off in 1962 at behest of Rural Electrification Administration (REA) REA is the most successful federal government program ever and clearly the best economic development success story on the federal level Telephone (voice) local exchange service, Long distance service, Internet (data) service, Broadband, Computer sales and repair services, Security, & Wireless Services Still regulated for Interstate services such as DSL (Digital Subscriber Line) Broadband Services Not Regulated by the State Corporation Commission in Virginia Member of National Exchange Carrier Association (NECA) as required by law at the breakup of AT&T in Rate of return as a regulated utility was the maximum and the minimum that could/would be earned Telecom Act of 1996 opened local exchange telephone service business to competition but never anticipated the effects of the Internet and the trend to delivery of services via the Internet Nine Member Board of Directors elected by the members of the Cooperative each serves staggered three-year terms Based in Bracey, Virginia in the heart of south central Virginia near the North Carolina border and serving around beautiful Lake Gaston Mickey L. Sims hired as General Manager in March, 2004

(data) service, Broadband, Computer sales and repair services, Security, & Wireless Services Still regulated for Interstate services such as DSL (Digital Subscriber Line) Broadband Services Not

4 700 Megahertz Auction in 2008 Last ticket to the dance? Beachfront property of the spectrum available in the United States Federal Communications Commission Auction BIT s purchase of three (3) Cellular Market Areas--$849,000 net $1,250,000 Gross Price (15 counties) 297,375 pops, 111,462 households, 14,497 businesses, 1,600 community anchor institutions The Big Guys AT&T and Verizon & Their Market Power & Strategies Watch out for the big guys! The capabilities of the spectrum to deliver latest generation technology via LTE (Long Term Evolution)

three (3) Cellular Market Areas--$849,000 net $1,250,000 Gross Price (15 counties) 297,375 pops, 111,462 households, 14,497 businesses,

5 BIT Wireless Broadband Start-up Company with Buggs Island Telephone Cooperative contributing their FCC Wireless Licenses and other in-kind contributions and services as the Cooperative s equity to the new start-up U.S. Department of Commerce s NTIA Grant to BIT of $18.9 million dollars in conjunction with the American Recovery and Reinvestment Act (ARRA) Virginia Tobacco Indemnification and Community Revitalization Commission grant to BIT of $3.9 million dollars for the additional 20% of the infrastructure costs Buggs Island Telephone as the Operating General Partner and our ability to earn when the partnership earns a profit; Potential profits returned to Members of the Cooperative BIT Wireless Broadband, LLC is a wholly-owned for-profit limited liability company and subsidiary of Buggs Island Telephone Cooperative Subscribers of BIT Wireless Broadband will not be members of the Buggs Island Telephone Cooperative Challenges of Building a Broadband Network and then adding a Cellular type system with mobile capabilities where significant demand exists Challenge of accessing Human Resources & Access to Capital 62 new jobs being created with average salary of $40,000 plus benefits, including but not limited to group health insurance coverage

9 million dollars in conjunction with the American Recovery and Reinvestment Act (ARRA) Virginia Tobacco Indemnification and Community Revitalization Commission grant to BIT of $3.

6 BIT Wireless Broadband s Focus Voice & Broadband in Underserved & Unserved Rural Markets Fixed (1 st Quarter 2011) and Mobile (3 rd Quarter 2011) Building a highly-reliable broadband and mobile voice network with excellent coverage and a minimum of dropped calls Future Services Video and Video on Demand if more spectrum becomes available Meeting the demand today and positioning for the next generation of users with 4G (Fourth Generation) Wireless Services Build out requirement is substantially complete by March 31, months after having accepted the NTIA grant in April, 2010 Offer is non-discriminatory, with open access availability and BIT s network adheres to principles of net neutrality and is fully compliant with all federal, state and local laws and regulations South Hill and the Buggs Island Telephone Cooperative traditional local access serving area are being built with BIT money and not grant money thus are not subject to the open access requirement but Mecklenburg and Brunswick County Residents will be afforded the same pricing and services as other residents and businesses in the 15 county area (except that the wireless service is not offered in the Buggs Island Telephone Cooperative traditional service area as DSL is available to all subscribers already)

generation of users with 4G (Fourth Generation) Wireless Services Build out requirement is substantially complete by March 31, 2012 24 months after having accepted the NTIA grant in April, 2010 Offer

7 BIT Wireless Broadband LTE Technology the same as Verizon Wireless & AT&T Wireless as well as T-Mobile and Sprint Still Awaiting NTIA Approval for Re-purposing the grant to LTE 97 cell sites 85 of which are existing towers/sites 100% of the geographic area of all 15 counties Vendor Selection Environmental Assessment commencing again missed the due date October 1, 2010 Use of a Project Manager Experiment

of which are existing towers/sites 100% of the geographic area of all 15 counties Vendor Selection

8 Partnerships & Creating New Jobs Citizen s Community Bank (CCB) as Primary Financial Institution Partnering with Mid-Atlantic Broadband Cooperative for towers and fiber optic transport facilities Southside Planning District as BIT s grant administrator Having partnered with the Southside Virginia Community College and the telecommunications certificate program NeoNova for back office support and technical support Local Contractors and Suppliers Resellers and wholesale opportunities 62 new jobs being created most of those located in Mecklenburg County technical, network operations, retail, sales, support Retail stores in South Hill, South Boston, Farmville, Blackstone, Emporia, & Smithfield

certificate program NeoNova for back office support and technical support Local Contractors and Suppliers Resellers and wholesale opportunities 62 new jobs being created most

9 Service Offering $32.95-$36.95 with Minimum of 1.5 mbps and 3.0 available for a nominal additional monthly charge of $10.00 ARPU of $42.00 Business service prices slightly higher Customized service offerings Offering up to 10.0 mbps for businesses and larger users Unlimited Long Distance and Voice Calls Calling features, etc. BIT Backhaul, LLP (managed by Buggs Island Telephone Cooperative but not owned by BIT) supplying most of the backhaul communications facilities from the cell sites to the BIT wireless and broadband switch near Bracey, Virginia

0 mbps for businesses and larger users Unlimited Long Distance and Voice Calls Calling features, etc.

10 Trends Commoditization of telecommunication and communication services voice, broadband, video, wireless In capitalism consumers move to less costly, more efficient technologies and means of delivery every time Technology drives our business, but in reality technology drives every business The next generation of customers wants/needs to do business with a company that is relevant, exemplifies convenience, provides mobility (& thus perceived) freedom, and offers unfettered quality all of the time

but in reality technology drives every business The next generation of customers wants/needs to do business with a company

11 Any Questions or Comments or Suggestions? Mickey L. Sims General Manager Buggs Island Telephone Cooperative Bracey, Virginia

Best Practices from BTOP & Key Implications for Bidding & Sustainability New NY Broadband Program: Bidders/Stakeholders Forum

Best Practices from BTOP & Key Implications for Bidding & Sustainability New NY Broadband Program: Bidders/Stakeholders Forum Liverpool, NY February 9, 2016 Objectives Discuss key lessons learned and best