1. Broadband ? Bob Loube bobloube@earthlink.net NASUCA 2011 Thanksgiving Loube NASUCA 2011

2. Where has all the money gone? • Net Investment 1996 2007 • ATT $58.8b $25.0b • Verizon $46.7b $23.7b • Qwest $14.8b $8.6b Loube NASUCA 2011

3. When will they ever learn? • We will build broadband if: • You give us the Yellow Pages Profits – Opportunity New Jersey • Accelerate copper depreciation – BellSouth Florida • Allow the merger to go through – Project Pronto –SBC buys Ameritech • Eliminate UNEs for fiber and advanced networks – TRO • Set terminating rates at approximately zero – the NEW ORDER Loube NASUCA 2011

4. The ARC • Is it a SLC? Is it a PICC? Is it SLC SLC? • Will it be part of the Lifeline Program? • If so, how does it fit into the $4.5 billion budget? • If not, what happens to low-income consumers? Loube NASUCA 2011

5. Distributing the Price Cap Carrier Money • Year One: based on a regression line that no one has reviewed • Year Two: based on a model that no has seen Loube NASUCA 2011

6. The quality of service standard • ATT’s U-verse can provide 6mbps downstream and 1.5 mbps upstream • Verizon’s FiOS can be provide service at very high speeds – I have 25mpbs in both direction • DSL can provide 6mbps downstream and 768 kbps upstream • Rumor has it that the order will require 4mbps downstream and 1 mbps upstream Loube NASUCA 2011

7. The quality of service standard and the model • The model will build fiber to the home. • What happens if model investment is $1000 per line and investment to meet the required service quality is $50 per line – a new mini-DSLM • The difference is profit to the carrier • The difference limits the total number of customers that can be supported given a budget constraint. Loube NASUCA 2011

8. Wireless v. Wireline • Should we support two separate networks? • Should we push for an integrated network? • -fiber to the premise • -micro cells that minimize the need for spectrum • Should state funds provide support to pilot projects that promote an integrated network? Loube NASUCA 2011

9. What to do about the Intercarrier Compensation Regime? • See you court? • Enlarge all local calling areas to be equal to the wireless MTA areas in each state • Set transit and tandem rates to zero if one of the parties to the call is a customer of the carrier that owns the tandem • Set transit and tandem rates to $0.0007 per minute if the call is between customers of carriers that do not own the tandem • Investigate wholesale long distance service Loube NASUCA 2011

10. Wireless MTA MAP Loube NASUCA 2011

11. Moving to an IP network • Wyoming • Century Link: 0 of 41 offices have IP switches • Rural Carriers: 12 of 53 offices have IP switches • When the FCC encouraged the move to 1-plus dialing it allowed carriers to increase access charges to recover unamortized balances in the old technology • Suggestion: retain LSS if the carrier purchases an IP switch Loube NASUCA 2011

12. Other ways to encourage broadband build-out • Finance municipal ownership of fiber infrastructure • Reduce the SLC by 50 cents per year for each year a reasonable standard is not met • Reduce the local rate by 50 cents per year for each year a reasonable standard is not met Loube NASUCA 2011