Public and Private Capital Sources

Disruptive Technology / Innovation Bandwidth: Nielson’s Law Processing: Moore’s Law Disruptive Technology is a natural process to produce efficiency in the user experience. Users no longer need services from incumbents. Technological Paradigm Shifts cut out the middle man thereby minimizing profit centers for incumbents. Disruptive Technology is a simpler solution to a traditionally complex model. Technology follows the Laws of Physics Very expensive capital costs for physical infrastructure – GOOGLE example Operating Margins Most technological developments cut out the middle man (such as broadcasters, advertising, wholesalers, brokers/dealers, etc… impacted across all industries. Teleco’s and Cable have limited CAPEX… Debt capacity is focused on improving profit centers, not expansion. Leaves open the door for serving lower served Bandwidth is all you need: TV – 4K UHD – 25 Mbps, HD Netflix - 5Mbps Phone – 4K - 2Mbps Phone – 480 – 194Kbps Economic – Production, Direct Jobs, Indirect Jobs, higher labor income National Policy - Out of Date (driven by Telecom and Cable), CO is unique Social Changes - Increase of better paying jobs (skilled labor), decrease unemployment (job searching), online careers, increase Quality of Life

Digital Convergence through Applications Entertainment Education Government – Smart City Utilities Healthcare / EMS Real Estate Energy Transportation Network Infrastructure Application Wireless – PCS 5G Telecom - xDSL Cable – Docsis3 Satellite – GEO 12 GHz FiberX The Disruptive, Innovation, and Progress… The term of disruptive innovating applies to how a company (smaller, nimble) would focus on a more simple service versus an incumbents more complex margin... As an open access network is easier to integrate, it allows for digital convergence and the necessary application layer to integrate into the system. Complex profit driven models are historically more difficult to integrate and lack vision to see new disruptive technologies. Fits well within the paradigm that is Vermont Fiber… Disruptive works within lower end markets where incumbents can’t boost profitability Origin and Cost of content Bandwidth Needs for TV (fiber/Copper) versus Phone (wireless) based on frequency

Traditional Risks Competition / Churn: Comcast/Charter, Wireless Too much debt too fast: Utopia, Crawfordsville, Burlington, etc. Marketing: Lack of… 10%+ Technical Obsolescence: Copper/Wireless Make Ready: Kentucky Wired, Crawfordsville, etc. Efficient Operations: O&M, OPEX, Call Centers, etc.

Traditional Funding (investment grade) Corporates / Muni’s (Same scales - Different Rates – Tax Status. Corp. Muni BBB- or Baa3: 4-6% 2-3.5% “Junk” 6-10%+ 4-8% Investment Risk, Asset Valuation, ability to pay (sources) Junks: variable structures (ownership component) Debt Service Difference on $1MM between corp debt and muni debt = $44MM and $88MM

Revenue Sources Subscriber Revenues: (residential / commercial) Utility Revenues (electric/water/sewer) Fort Collins, COOPs, WEP, etc. Taxes - GO, Subordinated (Capital Appreciation, Zeros), Optional Assessment Bonds other operator lease agreements, Wireless DAS - 5G and other carrier services P3’s - Network solutions

Capital Sources Equity: CAPEX, Subordinated Debt, etc. Subscriptions ONLY: East Central Vermont and Dallas – Oregon Municipal/Utility Debt: Leverage Subordinated Debt: High Yield, Zero’s, Capital Appreciation Bonds, etc.

Four Models Traditional Operator Model - Equity (Cable) P3’s with Operator: both share risk, costs, and operations - Make Ready, Right of way, share CAPEX, share revenues, Free Office Space, Free backhaul Special Tax Assessment – Petition (Ammon) Non- π – Revenues Only (East Central Vermont) Traditional – Equity P3’s – Equity and Debt - Split assets between both parties (wireless, backhaul)