Corporate Rewards and Virtual Flat Rate Overview

1. Corporate Rewards and Virtual Flat Rate Overview October 2009

2. Corporate Rewards • Corporate Rewards is a tariff optional calling plan in WV • Available with 1,2, or 3 year term • It is based on a tiered discounting structure. Tiers 2,3,4 offer reduced local and toll usage rates and access line discounts. Tiers 1 and 5 receive no access line discounts and usage is similar to tariff rates. • The plan encompasses all of a customers eligible usage and lines within a jurisdiction to maximize discounts and simplifies a customers calling services into one easy to understand plan. • Customers can add or remove services ,BTN’s while on the plan without penalties • It is the only tariffed plan that discounts both usage and access lines. No need for multiple agreements • Customers sign an application for service to enroll in the plan. The application includes term length, starting tier, and all BTN’s that the customer wants enrolled in the plan.

3. Corporate Rewards How it works • The plan aggregates all of a customers usage utilizing a Main Billing Telephone number (MBTN) hierarchy. Each location receives a separate bill every month and a summary for the entire account is provided on the MBTN account. • When a customer subscribes to the CR plan, a starting tier is established based on historical data. The starting tier is used for the first 2 months to allow time for all of the separate locations with different bill periods to cycle through. Beginning in the third month and each month after, the tier is determined by using the previous months qualifying usage. The customers tier can change in any given month depending on the qualifying revenue. • Customers can move locations in and out of the plan based on their business needs during the life of the agreement. • At the end of the initial term period, the plan will auto renew unless cancelled by the customer.

4. Corporate Rewards • Usage - Qualifying usage includes local, regional toll and toll free • Access Lines - Access lines that are eligible for discounts include Business lines and trunks, PRI and Flexgrow services - In order for a customer to receive access line discounts the services must be billing tariff rates, or shortest term available. If a customer is receiving discounts on these services from another plan arrangement, they will not receive additional discounts under the Corporate Rewards plan.

5. Corporate Rewards Centrex Additive • Customers who are on the Corporate rewards plan and also subscribe to Centrex service receive a Centrex additive each month. • $25 for each installed Centrex line is added to the customers qualifying revenue each month. As a result some Centrex customers may qualify at a higher tier and receive lower usage rates and higher access line discounts. • Customers do not receive any additional discounts for their Centrex lines. It only raises their qualifying revenue under the plan.

6. Corporate Rewards • Tier 1 0 – 999.00 No discounts • Tier 2 1,000- 4,999 Reduced usage rates and access line discounts • Tier 3 5,000- 15,999 Reduced usage rates and access line discounts • Tier 4 16,000-149,999 Reduced usage rates and access line discounts • Tier 5 150,000- and up No discounts Customers who qualify for tier 1 or 5 should not be on the plan

7. Virtual Flat Rate

8. Virtual Flat Rate-(VFR)What is it? • Access line/Usage bundle solution that provides the flexibility to charge a monthly recurring access line rate which includes a pre defined amount of usage minutes. • If at the end of the contract year the average monthly minutes per line has exceeded the threshold the excess minutes will be rated at pre defined rate as specified on the contract. • If the customer selects the Flat Rate option and they do not exceed the usage threshold, the customer will not be charge for any excess minutes during the remaining years of the contract. • Available via Customer Specific Pricing. • Not a tariffed offering • Virtual Flat Rate (VFR) name for internal use only • Eligible Access Lines • PRI, Centrex, POTS (1MB, Business Dial Tone Lines) FlexGrow, FlexPath. • Eligible ILEC Voice Usage: Local Usage, IntraLATA Toll, Toll Free. • Targeted to customers at risk of going to competitor’s flat rated offers.

9. VFR - Options • There are three options available for Virtual Flat Rate today: • Virtual Flat Rate – Standard. Customer selects one type of access line under VFR. The usage is averaged among like lines on all the locations within a state. • Virtual Flat Rate – Enhanced. Allows the aggregation of usage from a variety of access lines to contribute to the usage threshold of a primary VFR line. Example: ABC Corp is entering a PRI VFR contract with local usage threshold of 40,000 minutes of usage (MOUs) per month per PRI line. The usage generated by ABC Corp’s 1MB lines will be part of the threshold allotment associated with their PRI VFR lines. • Virtual Flat Rate -Flat Rate Option. Allows a customer who selects VFR – Standard to have the VFR become a true flat rate on the first anniversary of the contract. At the time of signing, the customer selects the flat rate option. If the customer does not exceed the annual threshold in the first year, the contract becomes a true flat rate for the remainder of the contract. The customer will no longer be charged for any MOUs above the threshold. This option is not available on VFR – Enhanced.

10. VFR-Benefits • Predictable monthly costs. • Set price per month includes: all access lines under contract usage minutes that can be shared across all lines within the same state. • Allows the customer to budget their telecom by providing a monthly Virtual Flat Rate for their access lines. • Ability to become a true flat rate based on the customer’s actual usage pattern • Flexibility to meet the seasonal demands and fluctuations of your business. • Sharing minutes among all lines gives you the ability to get a great rate on all lines – no matter which are most active in any given month. • The monthly allowance is based on average monthly minutes of use. You won’t lose ”unused” minutes or be charged for going over your monthly limit as long as the average monthly use falls within the threshold. (If needed, a true-up won’t occur until the end of the contract year). • User friendly billing statement • Displays number of access lines and average usage minutes on monthly and contract year to date for all lines under contract within a state. • Potential Savings • Usage minutes are based on “real” time usage, potentially immediately reduce your minutes by approximately 15%. • When permitted by regulatory Non-recurring charges are waived. • Lower rates based on aggregated usage across all access lines in the state.

11. Virtual Flat Rate - Key Take Aways • Allows sales to develop bundle proposals to meet the customer’s unique set of requirements. • VFR, Verizon’s usage/access line bundle solution, is the competitive weapon to use when faced with Flat Rate offerings from the competition or for customers who want the easy budgeting aspects of predictable rates. • Competitors tend to offer “flat rated” deals on high capacity lines not focusing on the small locations. Virtual Flat Rate looks at the customer as a whole. • VFR offers the customer the opportunity to have their usage averaged among lines that have the same class of service or among a variety of access lines. • This feature is not offered by the competition • Great for budgeting. Customer will know exactly what their monthly bill will be for their bundled lines. • With the Flat Rate Option, customers can have the best of both world • Not paying for unneeded minutes • True flat rate on the first anniversary of the contract.