FTTH/FTTP UPDATE October, 2006 Copyright 2006 RVA www.RVALLC.com

Vendor/Expert interviews Provider interviews Random segment interviews Methodology Background research Vendor/Expert interviews Provider interviews Random segment interviews Consumer interviews

Is It Growing?

FTTH Homes Passed (Cumulative – North America) Source: RVA Render & Associates, LLC 2006

FTTH Homes Marketed (Cumulative – North America) Source: RVA Render & Associates, LLC 2006

And The Big News…

FTTH Homes Connected (Cumulative – North America) Over 1 Million Connected! Source: RVA Render & Associates, LLC 2006

FTTH Homes Connected (Cumulative – North America) FCC Triennial Review Council Formed Source: RVA Render & Associates, LLC 2006

Are We There Yet?

Current Status of Fixed Connectivity Source: RVA Render & Associates, LLC 2006

Years to Reach 90% of Americans ??

Year-to-Year Growth in Homes Connected Source: RVA Render & Associates, LLC 2006

Approximate Annual Growth in FTTH Subscribers World’s Fastest Growing Major FTTH Market! Source: RVA Render & Associates, LLC 2006

What About Take Rates?

Overall Take-Rate for FTTH (Cumulative – North America by Year) Source: RVA Render & Associates, LLC 2006

Overall Take-Rate for FTTH Non-RBOC (Cumulative – North America by Year) Source: RVA Render & Associates, LLC 2006

Do Customers Value FTTH?

Percent Satisfied With Type Of Service (Somewhat or Very Satisfied)

New Home “Price Premium” Estimates of the FTTH New Home “Price Premium” Source: RVA Render & Associates, LLC 2006

Does It Really Matter?

Source: RVA Render & Associates, LLC 2006

Advanced Broadband Has Significant Implications Growth of GDP and Societal Empowerment Relates to Spurts In Private Technology Investment (1920s, 1950s, 1960s, 1980s…) AND… Paradigm Changes in Two-Way Human Connections

Does FTTH Spur Other Purchases?

FTTH Drives Other Purchases CONSUMER ELECTRONIC SALES DRIVEN BY FTTH:   PERCENTAGE AVG PRICE TOTAL HD televisions 15% x $1,400.00 = $210.00 Wireless networking equip. 10% $200.00 $20.00 Computers 6% $1,000.00 $60.00 Inside home wiring 4% $2,000.00 $80.00 Video conferencing cameras 1% $50.00 $.50 Total Average Per User $370.50 Source: RVA Render & Associates, LLC 2006

FTTH Generates Billions in Economic Activity (Estimated One-Year Activity, Spring 2005-Spring 2006) $1.2 Billion for Infrastructure Installation $169 Million in Electronics Sales (Estimated Total Activity, by 2010) $21 Billion for Infrastructure $4.5 Billion in Electronic Sales

Does FTTH Create Economic Development?

Traditional Business Attracted Because of FTTH PLACE POPULATION TYPE COMPANY   Bristol, VA 17,271 (MUNI) Northrop Grumman Fort Wayne, IN 203,369 (RBOC) Raytheon Macon, MO 5,283 (ILEC) Onshore Mason County, WA 53,000 (PUD) Louisville Slugger, Sims Quincy, WA (Grant County) 5,326 MSN (Microsoft) Salem, IL 7,569 (CLEC) Midwest Ag Energy Ethanol Plant Wenatchee, WA (Chelan City) 28,515 Yahoo

FTTH Micro Business Development (In home / Small business) Video Editing Market Consulting Game Development and Serving Engineering / Drafting Scientific Sample Analysis Software Development Independent Content Creation Source: RVA Render & Associates, LLC 2006

Does FTTH Change Paradigms?

Number of Days Worked From Home Per Month Source: RVA Render & Associates, LLC 2006

The Future Will Be Exciting!

Our Report…

Why The Report? Third party validation Deeper understanding… better strategy Equipment Vendors FTTH Service Providers Content and Applications Providers More accurate forecasting

And critical market information helps you gain more FTTH customers. The 2006 RVA report is now available! www.RVAllc.com

FTTH/FTTP UPDATE October, 2006 Copyright 2006 RVA www.RVALLC.com