LightSquared 4G State of ND

Capabilities Update Better “DCN wireless” idea?

Current Issues Objectives

Strategy

Capabilities Update

FCC New USF get support for DSL replacement Own netowrk like DCN

PSST Support PSST will support LTE technology PSST

North Dakota Influence We can meet Governors Staff

Proposal Development

No Duplicate Funding Issues

Duplicate funding rules Grant Programs Public Safety only networks are middle Mile,

not last mile Coops can apply for last mile funding without

duplication apply as a group for a BTOP Public Safety

waiver, circumventing the funding restrictions as defined by (Served, Un-served & Underserved) Flows PS & Commercial, is considered Middle & Last

mile Governor establishes priority for BTOP Grants

Review Objective

Initial Objectives Win the Grant & Prevent Flow from getting

funds Build network that we control Service Public Safety initially Eventually commercial in your territory

Problems with Initial objectives Flow Mobile has achieved:

General Sprynczynatyk (Nat Guard) signed agreement with Flow

Governor has publicly supported Flow NENA & APCO local chapters support Flow General Sprynczynatyk filed a second waiver to the FCC Demonstrated the 700 MHz to the Governor (Coops

None) Project cost estimated at $35 million (Coops $~50

Million) Significant ND Governmental inertia

Coop Objections to Objective Don’t want to compete with Verizon Will request funds for own FTTH or Wireless projects Don’t want to be subject to Duplicate Funding Rule

Revised Objectives

Oppose at PSST & FCC (Good Chance) Beat the waiver for spectrum allocation

(Narrow Band) Beat the waiver for spectrum use (Commercial) Beat the D block request

ND Governor Get the Governor to publically agree to a

beauty content The beauty contest needs to go beyond the

14th

Our individual ILEC submission must be in on the 14th

Strategy Discussion

Initial Proposal Build a new network $50 Million, 141

towers

Alternative Proposal Partner with Verizon Pay for the Public Safety Radios and CPE on

Verizon’s 4G network, at an estimated cost $12 million

Beauty Contest

Get the Governor to publicly agree to a beauty contest that will push us beyond the 14th. Verizon is credible Coops are credible Only Public Safety, Middle mile only No adverse waivers needed, PSST will support PSST Inter-Operable $12 million, cheaper than either of other

proposals.

Now What!

Fight the Waiver Oppose at PSST Delay the Governor’s support

What do we propose to the Governor?

Who is onboard ?

Proposal ComparisonILEC Build Flow Build ILEC/Verizon

Availability

2H2010 - 1H2011, Interim

cdma alternative

Experimental-now; FCC certified & mass

production -likely 1H2010

2H2010 - 1H2011, Interim interoperable

cdma alternative

Start-up Investment$47.5 mm

($52 mm w/ State CPE)$35 mm

(CPE likely not incl.)$7.7 mm

($12.2 mm w/ State CPE)

DemonstrationSame as Vendors/Major

Carriers1 custom unit on 1 experimental AP

Ericsson/TeliaSonera 1st Commercial LTE

Deployment - Stockholm launched this month;

Vendor Interop Network in Texas; VzW - 10 US market trials in 2009,

already underway

Technology Risk

Low/None - 4G standard adopted by all Major Carriers & Now PSST

High (Proprietary), Likely inferior using WiFi WLAN (Fixed/Nomadic)

technology

Low/None - 4G standard adopted by all Major Carriers & Now PSST

Proposal ComparisonILEC Build Flow Build ILEC/Verizon

Inter-operabilityYes, Nationwide on PSST-

identified technology

Unproven, Unlikely - would require

dual-mode networks & dual-mode devices with

SIMs, very diffi cult TDD-FDD interference

resolution

Yes, Nationwide on PSST-identified technology

Cutover to LTE Not Required!

Hot Cutover, New/Additional

Infrastructure for LTE-MIMO, Complete

Device Replacement

Not Required!

Likelihood of Future Significant Cost to State

Low/None High, per all above Low/None

Operational Experience

50+ years State wide; fixed line, wireless, cellular, broadband,

DCN, Verizon and TV; Experienced ISP's since

Internet

6 yrs, 3 towns served with WiFi;

< 1 yr with proposed technology

Most reliable National network in the US

Proposal ComparisonILEC Build Flow Build ILEC/Verizon

Mobile operations capabilities

Proven Unproven Proven

Staff 1,000 5 250,000

Customers 70,000 1,100 85,200,000

Financial Resources $ 1 Billion invested $2.5 mm equity $94.2 B Market Cap

Business Model Risk Medium

High BWA via WiFi has largely failed everywhere tried; Examples San Francisco, many others; Palo Alto

Low

Manufacturing Support Yes (Global 4G focus) Small, Proprietary Yes (Global 4G focus)

FCC Waiver Success Chance

Very High "Waiver" is only to help

PSST accelerate their plans & technology

Commercial Use & NB Spectrum Waivers - Low

probability of success

Very High "Waiver" is only to help

PSST accelerate their plans & technology

Proposal ComparisonILEC Build Flow Build ILEC/Verizon

BTOP Grant Probability Medium

Low Requires BTOP Waiver

for PS; Spectrum unlikely

High

Build without BTOP Grant Possible No Yes

Popular Support

High Citizen-owned (CoOp)

incumbent ILECs covering 97% of State

Legacy of Failure; Naveen Jain's history

CoOp support + VzW Reputation; Good press

will result which VzW will Promote

Would Verizon Participate?

We would request early deployment of 4G We would make it financially attractive Why would Verizon consider it?

Would move the build forward, ahead of the ATT conversion of ALLTEL to GSM

Prevent the funding of a Verizon Competitor using Grant money

Guarantee the state broadband agreement worth $1.9 mm & bundle with voice agreement of similar value

City of Fargo uses ALLTEL, not Verizon Growth of state subscribers would increased USF Demonstrate a great model for them to duplicate