Copyright 2015 FairPoint Communications Municipal Broadband - Economic Development & Community Planning Bar Harbor Program Overview 1

Copyright 2015 FairPoint Communications Municipal Broadband - Economic Development & Community Planning FairPoint has worked with many municipalities, community, county, and regional economic development groups Interests and outcomes vary, but the message is consistent: It is important to work in a collaborative manner Clarifying the Objective Knowing What Assets & Facilities Exist Exploring Funding Sources Exploring Partner Options Additional recommendations and tips A comprehensive approach – addressing both residential and business Finding the right solution Goals vs. Needs Not a “one size fits all” approach Don’t duplicate existing facilities Avoid becoming a service provider Build a collaborative planning relationship 2

Copyright 2015 FairPoint Communications How FairPoint Delivers Broadband Service FairPoint is continuously adding next generation equipment that supports higher speeds and more features (like bonding or VDSL) With earlier generation, the maximum speeds were 3M or 7M Now maximum speeds are higher than 25M New emerging technologies are likely to increase copper-loop based service speeds by an order of magnitude but will require even shorter distances Base technology DSL is an overlay on copper lines with asymmetrical service, built on copper infrastructure that exists to nearly every home and business Served from the FairPoint Central Office (CO) in almost every downtown From the CO, there is a radius of service of about 4 route miles. The IP signal degrades over distance on copper. Those further away have a lower maximum eligible speed To reach more customers, we build Remote Terminals (RTs) in a community, and typically build fiber from the CO to the RT’s so the DSL distance measurement starts deeper into the community

Copyright 2015 FairPoint Communications Improving and Extending Broadband Service Consider how many miles of road are in your community Inventory the infrastructure the community already has. Copper infrastructure exists to just about all residences. Can it be leveraged? Where there is existing plant, it can be used to deliver service. With newer equipment and shorter loop lengths, these facilities can deliver speeds greater than most homes & small businesses presently use. Fiber and Copper together form the most efficient solution Current copper solutions being deployed can support bandwidth up to 15M within 1.3 miles of a CO or RT and 25M at that distance when bonded. IP signal does not degrade over distance on fiber. Fiber can support almost unlimited bandwidth dependent on the equipment that is used to deliver service over fiber. By extending fiber and upgrading or deploying new RTs, service often can be delivered over a greater area and/or available speeds increased using both technologies. Fiber alone costs about $25,000 per mile to build, not including all the electronics needed or on-going operations and maintenance.

Copyright 2015 FairPoint Communications “Nobody can match the extensive northern New England fiber footprint that FairPoint has,” -Brian Washburn, Current Analysis FairPoint’s Focus: Fiber & Ethernet Presence in NNE $900 million invested since 2008 Over 17,000 fiber route miles in NNE 3,000 fiber lit buildings 32+ markets with Ethernet access up to 10 Gbps

Copyright 2015 FairPoint Communications Carrier-Class Business Products: CES & BBE FairPoint offers carrier-class Ethernet services with symmetrical up and down-load speeds from 5 Mbps to 1 Gbps * Business Broadband Elite (BBE) – A bonded copper based access solution that is ideal for small- businesses with speeds up to 20 Mbps (symmetrical) 6 * Full 1 Gbps speeds are not available in all FairPoint CES eligible service areas. Additionally, speeds up to 10 Gbps may be available under a custom arrangement in select locations. Carrier Ethernet Service (CES) – FairPoint’s feature-rich flagship data solution for businesses and enterprises. Availability may depend on access build costs / proximity to fiber infrastructure CES & BBE are enablers for FairPoint’s Hosted PBX and SIP services as well as private IP solutions for interconnecting multi-site business locations and connectivity to a Data Center. FairPoint's network configuration is redundant and robust.

Copyright 2015 FairPoint Communications Broadband Eligibility in Bar Harbor FairPoint’s impact on Bar Harbor: 95% of the locations in BH qualify for FairPoint Broadband 75% of the locations in BH qualify for speeds 7Mbps or better 62% of the locations in BH qualify for speeds 15Mbps or better In addition, bonded speeds (25/2Mbps) are available to 43% of the locations FairPoint has 25 fiber route miles in Bar Harbor This fiber is used to provide CES service to businesses & schools and connectivity between the Central Office & Remote Terminals or cell tower locations 60% of businesses in BH qualify for BBE CES is available to all businesses in BH pending any access build costs 7

Copyright 2015 FairPoint Communications Subscription Analysis in Bar Harbor Many of the current FairPoint subscribers in BH are “under- subscribed” – that means they are eligible for a higher speed than what they have chosen: 75% of businesses that qualify for 7Mbps or more are under-subscribed More than a third (38%) of residential customers that qualify for 7Mbps have something less. Over 80% of residential customers that qualify for speeds of 15 Mbps are eligible for a higher speed than what was purchased These statistics were taken in February prior to the launch of even higher speeds - 20 Mbps and 25 Mbps – were made available to a large population in Bar Harbor. 8

Copyright 2015 FairPoint Communications New Federal Program – CAF II Connect America Fund Phase II (CAF II) requires companies accepting funding over six years to provide broadband to high-cost unserved & underserved locations within census blocks Replaces Federal High Cost Support for telephone CAF II requires: Broadband internet with speeds of 10/1 Mbps Specific latency, usage, and reporting requirements Pricing that is reasonably comparable to pricing in urban areas FairPoint is designing, engineering and developing an implementation plan to connect approximately 105,000 locations in rural, high-cost areas across 14 states, including 35,500 locations in Maine Bringing broadband to these high-cost locations is no small task

Copyright 2015 FairPoint Communications  There are 10 CAF II associated census blocks in Bar Harbor (shaded areas) 10 CAF II Areas in Bar Harbor, ME