Non-Service Initialized Phones and Michigan 2009 Fall Forum on Next Generation and Other Emerging Technologies November 3, 2009

- TCS Confidential - 2 Agenda Introduction What is an NSI phone? The Challenge of NSI phones

- TCS Confidential - 3 Established in 1987 –Annapolis HQ, Seattle, Tampa, London –Data Centers in WA, AZ, MD –NOCs in Seattle and Annapolis –NASDAQ: TSYS Strategic Offers –Wireless Location & Messaging Solutions –Satellite Services and Deployable Systems –Homeland Security –Professional Services Industry Relations –Founding Member: SMS Forum, PAM Forum, IN Forum –Member: 3GPP, CTIA, ETSI, GSM, NENA, APCO, OMA, TIA, ESIF, NRIC VII, IETF TCS Fast Facts

- TCS Confidential - 4 Meets wireless E9-1-1 Phase I and Phase II FCC requirements Provides standards-based VoIP i2 E9-1-1 service (Owns the original i2 patent) Displays caller location to police, fire and emergency personnel (life- saving information) Supports 24/7 monitoring and operations Operates 2 fully redundant data centers Serves over 100 million subscribers Processes over 125,000 calls/day Has completed over 100,000,000 E9-1-1 calls to date Operates the only TL9000 certified NOC in the 911 industry TCS E9-1-1 Solutions

- TCS Confidential - 5 Seattle Network Operations Center Seattle Data Center Backup NOC & Data Center Phoenix, AZ TCS Facilities/NOC/Data Center

- TCS Confidential - 6 What is an NSI Phone? –Every cell phone is unique and must be positively identified via an electronic “handshake” with the wireless switch before service is activated. –An NSI phone is one that has not completed the handshake, or has failed the handshake. Discarded (failed) Newly purchased (failed) Power –up (not complete) Service lost/restored (not complete)

- TCS Confidential - 7 Why are NSI Phones Capable of 9-1-1? Congressional pressure (Eshoo, D-Ca) –FCC Mandate Similar to “warm dial tone” for landline For calls, carriers skip the handshake The road to hell…..

- TCS Confidential - 8 How do NSI Phones Work? Call routing based on cell sector (same as normal wireless call) PSAP receives ESRK, but no CBN The CBN is typically digits of Electronic Serial Number Location info is provided (assuming capability of phone and PSAP) –Accuracy not adequate to pinpoint user (same as normal Phase 2)

- TCS Confidential - 9 NSI Phones Are Perfect Harrassment Tools No phone number=no CBN, in exact location, not traceable Many children find amusement by playing with their NSI phones Older users are malicious No good deed goes unpunished

- TCS Confidential - 10 Consequences Dispatcher in Chicago, victimized by one too many prank calls, chastised child for playing with the phone. The call was legitimate, however, with tragic results and lawsuits. Numerous anecdotal reports of false reports of serious crimes causing responders to kick in the doors of innocent, sleeping, unsuspecting victims Intentional misdirection of police away from a crime in progress.

- TCS Confidential - 11 Statistics Tennessee –2% of NSI calls are legit –Oct-Dec ‘06: 54 different callers dialed from an NSI phone more than 10 times (max=140) –Of these 54 people, 8 were children

- TCS Confidential - 12 More Statistics Florida –12-county survey for one month –4% of all NSI calls were legit Michigan –2-month survey –.05% of 1000 NSI calls were legit (5 calls) Washington –Snohomish County-6 week survey –2% of 553 NSI calls were legit

- TCS Confidential - 13 What is Being Done About NSI Phones? FCC has amended the NSI mandate to allow carriers to block harassment calls Carriers are reluctant to block calls due to liability concerns and cost considerations –Who has authority to identify a harasser? –No existing technology to block specific NSI calls.

- TCS Confidential - 14 What is Being Done About NSI Phones? Petition to FCC –NENA, APCO, NASNA, several states –Petition called for FCC Notice of Inquiry FCC Notice of Inquiry (Nov 3, 2003) –70+ Respondants with various recommendations: Block all NSI Phones; terminate NSI requirement Block specific NSI Phones using various technologies –NENA submitted reply response

- TCS Confidential - 15 NENA Response to FCC Notice of Inquiry –Opposed termination of NSI requirement and supported blocking of individual calls –Called for Advisory Working Group for negotiated rule making –Identified issues to be resolved What technology to be used to block calls? How to define a harassment call; what triggers blocking? Liability How long should blocking persist on any one phone? Funding/Cost Recovery

- TCS Confidential - 16 Options –Terminate all service for NSI phones (if the phones don’t work for regular calls, why should there be an expectation for 9-1-1?) Or, –Block Harassment Calls from specific phones

- TCS Confidential - 17 Technology for Blocking Individual NSI Calls Block at the PSAP –Recommended by carriers –Assuages liability concerns –Places burden for blocking on the entity that wants the calls blocked –Does hardware/software exist to block NSI calls? –Can calls be routed to recording?

- TCS Confidential - 18 Technology for Blocking Individual NSI Calls Block at the MSC/MPC –Development work required –How to communicate block order? –Automated timer on blocks –Calls can be routed to recording –Possible call processing delays for all 911 calls

- TCS Confidential - Potential issues if all NSI wireless handsets are blocked The carrier processing the call may not be able to distinguish a handset that has no active account with any carrier from a handset subscribed to a carrier with whom the carrier processing the call does not have an automatic roaming agreement. A carrier may block a 911 call due to billing errors or disputes or a simple case of a check lost in the mail. Immediately and for several seconds after power on, MSC to MSC handoff, recovery from loss of service in a tunnel etc, system "reboots", and other normal network events a handset will appear to be non-initialized and be blocked from making 911 calls. 19

- TCS Confidential - Potential Issues if we block individual wireless handsets Each suspect handset will have to be blocked on every carrier with a compatible air interface or the handset will simply roam to another compatible network. Bad actors will simply get another NSI handset at a yard sale or thrift store. There is a virtually unlimited supply of such handsets. Bad actors may donate the blocked handset to a thrift store which could prevent a decent citizen from making a 911 call to request help for someone else who really needs it. Call processing can be delayed or complicated as the telephone’s electronic serial number on every 911 call will have to be compared to a list of blocked serial numbers. Because it is extremely difficult, perhaps impossible, to uniquely identify NSI handsets even using the ESN of the handset, the wrong handset may be blocked when attempting to block a harassing caller or other inappropriate 911 calls. 20

- TCS Confidential - 21 Thank you Dick Dickinson Sr. Director, Public Safety TeleCommunication Systems, Inc