Broadband Status Update

Addressing the Bandwidth Challenge External drivers are stimulating demand Movement towards more symmetry and less oversubscription

External drivers are stimulating demand

Movement towards more symmetry and less oversubscription

Wireline Technologies Hybrid Fiber Coax RF Video DOCSIS Twisted Pair ADSL2+ VDSL2 Fiber-to-the-Premises P2P Ethernet BPON---->GPON

Hybrid Fiber Coax

RF Video

DOCSIS

Twisted Pair

ADSL2+

VDSL2

Fiber-to-the-Premises

P2P Ethernet

BPON---->GPON

Residential Internet Access

HFC Architecture Voice Switch Data Router/ IP Switch Video DFB Laser Optical Node Coax RG6 Headend Home RF MUX RF RF RF RF RF RF RF RF Optical Distribution Node 100 - 2000 Households Passed 4 coaxial branches typical l 4-20 spare fibers “ extra fiber simplifies node splitting” 6kft max Distribution Coaxial Cable P/S

DOCSIS Capacity Roadmap 30Mbps (U) DOCSIS 2.0 (symmetric services ) 40Mbps (D) DOCSIS 3.0 (channel bonding) Spec Release Service Available 160Mbps (D) 120Mbps (U) 2002 2004 2006 2008 2010 Spec Release Service Available

30Mbps (U)

40Mbps (D)

160Mbps (D)

120Mbps (U)

2002

2004

2006

2008

2010

ADSL2+ Technology Competitive Broadband Architectures: BBDLC, MSAP Technologies: ADSL2+ (VDSL2 Long Reach) Drivers: Brownfields, retrofits, low/medium competition, basic IPTV, competitive HSD Competitive Broadband <15 Mbps Advanced Broadband 20-30 Mbps Ultimate Broadband >30 Mbps 3.5kft 6kft 12kft ADSL2+ Beyond

Competitive Broadband

Architectures:

BBDLC, MSAP

Technologies:

ADSL2+ (VDSL2 Long Reach)

Drivers:

Brownfields, retrofits, low/medium competition, basic IPTV, competitive HSD

VDSL2 Advanced Broadband Architectures: FTTN Technologies: VDSL2 Drivers: Brownfields, high competition, advanced IPTV Competitive Broadband <15 Mbps Advanced Broadband 20-30 Mbps Ultimate Broadband >30 Mbps 3.5kft 6kft VDSL2 18kft Beyond

Advanced Broadband

Architectures:

FTTN

Technologies:

VDSL2

Drivers:

Brownfields, high competition, advanced IPTV

DSL Rate / Reach Graph (downstream) Bandwidth (Mbps) Loop Length (26 AWG) VDSL2 Profile 8d ADSL2+ / ADSL2 VDSL2 / ADSL2+ Cross-over Point

Fiber-to-the-Premises Ultimate Broadband Architectures: FTTP Technologies: GPON, P2P Drivers: Greenfields, overbuilding existing copper plant, high competition areas Competitive Broadband <15 Mbps Advanced Broadband 20-30 Mbps Ultimate Broadband 30-100+ Mbps 3.5kft 6kft GPON 18kft Beyond

Ultimate Broadband

Architectures:

FTTP

Technologies:

GPON, P2P

Drivers:

Greenfields, overbuilding existing copper plant, high competition areas

FTTP Standards Standards bodies that have specified FTTP protocols International Telecommunications Union (ITU-T/FSAN) Institute of Electrical & Electronics Engineers (IEEE) ITU-T/FSAN BPON (G.983) GPON (G.984) IEEE EPON (aka GEPON or 802.3ah P2MP) Point-to-Point Ethernet (aka Active Ethernet or 802.3ah pt-to-pt)

Standards bodies that have specified FTTP protocols

International Telecommunications Union (ITU-T/FSAN)

Institute of Electrical & Electronics Engineers (IEEE)

ITU-T/FSAN

BPON (G.983)

GPON (G.984)

IEEE

EPON (aka GEPON or 802.3ah P2MP)

Point-to-Point Ethernet (aka Active Ethernet or 802.3ah pt-to-pt)

North American FTTP Deployments Deployed Technology 87% 4%

Fiber-to-the-Premise Projections

FTTP Deployments in Minnesota Total FTTP homes in Minnesota (as of 9/30) ~ 18 to 20,000 2007 FTTP deployments in Minnesota (through 9/30) Homes 5,610 Up 75% year over year Percent RF Video 50% Declining over the next few years Percent with GE interfaces 17% Likely to exceed 80% in 2008 Percent GPON 53% Likely to exceed 80% in 2008 as BPON fades

Total FTTP homes in Minnesota (as of 9/30) ~ 18 to 20,000

2007 FTTP deployments in Minnesota (through 9/30)

Homes 5,610 Up 75% year over year

Percent RF Video 50% Declining over the next few years

Percent with GE interfaces 17% Likely to exceed 80% in 2008

Percent GPON 53% Likely to exceed 80% in 2008 as BPON fades

Minnesota Rate of Adoption of FTTH Over half of Minnesota’s Independent Telephone Companies are now deploying FTTH

Thank You