To: FISPA Board of Directors From: ATT DSL Committee Subject: Motion to Approve 22-State Business DSL Program Date: February 15, 2013 Exhibit A to March 7, 2013 Special Board Meeting

ATT DSL Committee Seimitsu Technology Solutions ACS/Globalvision Computer Sales & Service Igloo Kampung Snappy DSL Net2Atlanta VPNtranet Computer Technologies Digital Agent Exhibit A to March 7, 2013 Special Board Meeting

Why Last Mile Access to Small- and Medium-sized businesses T1 Replacement Deliver bundled services Data and Voice Data and managed services Custom bundles leveraging Backup Expand FISPA’s value to potential members in 22 states Exhibit A to March 7, 2013 Special Board Meeting

Process 2012 JuneATT presented to Board AugustMembership Webinar AugustMembership wiki & posts to NovemberMembership webinar & ATT negotiations DecemberAgreement tendered to FISPA 2013 FebruaryCommittee proposal to Board MarchBoard approval Q1-13Launch Exhibit A to March 7, 2013 Special Board Meeting

What Naked/Dry Loop DSL called “Business DSL” by ATT Layer 3 (routed) IP DSLAMs (aka U-verse) 22-States (plus some Out of Region - Covad) ADSL (also includes IP IDSL, multiple IP IDSL/SDSL of little interest) Discounts 9 – 22% (50% on equipment) to FISPA Net Discounts 6 – 19% to Members after FISPA Fees Term Agreement: 36 months Term DSL: 12 months Member Billing/Payment Relationship is Direct with ATT (no FISPA rebill) Exhibit A to March 7, 2013 Special Board Meeting

Discounts - Pricing Type of Purchased Equipment PriceDiscount Percentage+++ ADSL Modem or ADSL Router $10050% IDSL/SDSL Router $4500.0% Broadband Modem/Router $10050% Maximum Bandwidth* (Downstream /Upstream) Broadband Dynamic IP Monthly Price Discount+++ FISPA Cost Member Cost Net Discount to Member Up to 768 Kbps / Up to 384 Kbps $ % $35.00$ % Up to 1.5 Mbps / Up to 384 Kbps – single static IP N/A Up to 1.5 Mbps / Up to 384 Kbps** $ % $40.00$ % Up to 3.0 Mbps / Up to 512 Kbps** $ % $45.00$ % Up to 6.0 Mbps / Up to 768 Kbps** $ % $55.00$ % Up to 12Mbps / Up to 1Mbps$ % $60.00$ % Up to 18M / Up to 1.5Mbps$ % $90.00$93.606% Up to 24M / Up to 3Mbps$ % $100.00$ % FISPA Markup4% Exhibit A to March 7, 2013 Special Board Meeting

Risk #1of total sites (not subscribers) required by the end of 36 months (term begins with first order ) or FISPA will be billed for the discounts received. Quoted term from Agreement “Discounts are set forth in Rates and Charges Tables below. If the Customer does not meet its Site Commitment by the Site Commitment Date specified above, Customer shall not be eligible for any further discounts specified in this Pricing Schedule and AT&T reserves the right to bill Customer retroactively for all the Discounts received hereunder.” Sample Numbers No sites = No Risk /year (no ramp) = $54,000-$76,500* /year (no ramp) = $36,000-$51,000* /year (no ramp) = $18,000-$25,500* *Higher number includes discount on equipment* Exhibit A to March 7, 2013 Special Board Meeting

Risk #2 of 2 Non-paying members DSL was the highest risk, poorest paying program FISPA has ever administered December 2008 average DSL member was165 days past due August 2009 average DSL member was 97 days past due (6M implementation) December 2011 average DSL member was under 60 days past due Traditionally, the ISP industry has an overall 15% default rate (leasing companies assessment/rate factor element) Exhibit A to March 7, 2013 Special Board Meeting

Forecast (1/31/13) Most Likely Forecast shows that 250 sites will be ordered during year 2; Best Case in year 1 Most LikelyBest Case Y1Y2Y3 M M M M M M M7 Total Exhibit A to March 7, 2013 Special Board Meeting

Risk Assessment Risk #1 (Commitment) does not appear to be a large factor (10%) Risk #2 (non-paying) FISPA appears to manage to a lower than industry average default rate and because this is a layer 3 program subscribers can more easily be transferred (7.5%) Recommendation: Create a program and creates a minimum income to FISPA => (17.5%) of the maximum risk /year (no monthly ramp) = $54,000- $76,500 requires Risk Pool of $13,400 (17.5% of $76,500). Exhibit A to March 7, 2013 Special Board Meeting

Risk Pool Funding Recommendation: Risk Pool of $13,400 required. Most Likely Forecast generates FISPA fees of $20,248 by the end of the 2 nd year. Risk Pool matches Forecast Most Likely Sites Y1Y2Y3 M M21510 M325 M49920 M524 M624 M7 Total Set Up Fees $600$500 Total Fees $ 7, $ 12, $ 19, $20, $ 40, Exhibit A to March 7, 2013 Special Board Meeting

Program Proposal for Approval Member must be in ‘Great’ standing (zero days past due) to participate or continue to order Members at 60 days past due may have their subscribers moved or terminated Member must have a Special Price Agreement on file with FISPA Program requires pre-payment or a credit card on file to pay all fees to FISPA Order form B-X will include all items in this proposal DSL Program Fees paid into FISPA general income fund (which contributes to Bad Debt account) $100 One-time fee Recurring 4% of each members monthly current invoice amount, billed monthly Recurring fee may be subsequently evaluated by the then- current Board of Directors (increase/decrease, terms) FISPA makes operating profit by exceeding forecast Exhibit A to March 7, 2013 Special Board Meeting

Reference Documents ATT Business DSL Internet Service Wholesale Pricing Schedule (The Agreement) ATT Business Service Guide for ATT Business DSL Internet Service ATT Business DSL Internet Service Agreement (Expectations Document) FISPA Special Price Agreement ATT FISPA 22-State DSL spreadsheet (show calculations used in this proposal) Exhibit A to March 7, 2013 Special Board Meeting

Motion A motion was made by Jason and seconded by Brian Y. that the ATT 22-State Business DSL program as presented by the ATT DSL committee via power point presentation on the 7th day of March, 2013 be approved. The motion passed (6 aye, 2 nay, 2 absent) with Clay and Dane as nays and Greg absent. Exhibit A to March 7, 2013 Special Board Meeting