1. Broadband Authority Program and Project Update March 17, 2005

2. March 20051 Mission and Lending Criteria Mission—attract investment to underserved communities and encourage competition and more affordable broadband services across the state in all markets Tool for the above—loans made to broadband providers and grants combined with loans in limited areas (using bond sale proceeds and NO general fund dollars for this purpose) Lending Criteria—adequate cash flow, solid business plan, sufficient borrower equity, guarantees and other security requirements as necessary

3. March 20052 Typical Loan Terms & Conditions Terms—Senior lender with term loans ranging from 5 to 7 years and 12 to 24 month interest-only draw periods if necessary Interest Rate—8 percent fixed (also have limited availability of a variable rate currently pegged at less than 5 percent) Equity—100 percent project financing available but net equity on company balance sheet should equal 20 percent (at a minimum) of loan request. Guarantees—Typically required but usually NOT collateralized. Operating deficit reserves and other alternatives to personal guarantees utilized on occasion

4. March 20053 $17.7 M Approved Projects ISP Wireless PCS Broadband M-33 Access Appia Communications ACD.net ACD.net WEST SpeedNet Michigan Lightwave Merit Networks UPLink Services Inc. (seed) LDMI Lighthouse Broadband $10M in Applications UPLink Services, Inc. OneWorld AriaLink Endless Journey $10M Near-Term Applications Additional DDIP Applications VoEx Lucre.Net Emmet Wireless Grid 4 T2 Communications NBD Communications First Step Michwave QIC $6-10M in likely loan applications Fiber and wireless projects in underserved areas 2 nd RFP for Digital Divide Investment Program Area Served—in dark Borrower MBDA is achieving its vision and making an impact

5. March 20054 ISP Wireless Project $341,836 loan for the expansion of fixed wireless broadband service in seven low-to-moderate income communities Purchase of tower antenna and customer premise equipment Status ISP Wireless is expanding customer base Internet Service Provider (ISP) business since 1995 Stable business and revenues

6. March 20055 PCS Broadband Project $510,000 loan for the expansion of fixed wireless broadband service in areas where small-to-medium enterprises (SMEs) are underserved Purchase of tower antenna, routers and customer premise equipment Status Premise cabling company since 1992 and enterprise phone systems sales since 2000

7. March 20056 M-33 Access Project Expanding contract service to community college and school districts Refinancing of existing debt and purchase of equipment (towers, antennae, customer premise equipment) $1.3 million loan Status Largest wireless broadband network grid of its kind in the US New contract saving schools nearly $1 million and provide higher speed services Note: Illustrative only – wireless coverage does not blanket entire counties

8. March 20057 ACD.net Project Facilities-based carrier expands DSL service to new markets and within existing areas Re-financing of existing debt New financing for expansion into new markets, new fiber routes and new equipment $1.2 million loan Status Expansions in mid-Michigan complete SBC mirroring activity

9. March 20058 ACD.net WEST Project Acquisition of Quantum Connections assets and expansion of broadband service $1,681,139 loan Project will provide broadband service for business and residential customers Status Nearing completion of acquisition and transition

10. March 20059 Appia Communications Project $758,000 loan to Traverse City- based INSORS, Inc. (dba Appia Communications) Expansion and upgrades of network operations centers to expand service and provide redundancy Enhanced converged voice and data network services for small and medium-sized enterprises Status Currently offers service in Kalamazoo, Detroit, Traverse City, Chicago and Indianapolis Loan expanding footprint into Lansing and Grand Rapids

11. March 200510 SpeedNet Project $1.5 million to finance the purchase of non-line-of-sight tower equipment and customer premise equipment and expansion in Tri-City area (Saginaw, Midland, Bay City) Status SpeedNet LLC, with headquarters in Saginaw Uses licensed 2.1 GHz, 2.5 GHz and 2.6 GHz MMDS spectrum to provide fixed wireless broadband service Currently serves the Alpena, Saginaw and Mount Pleasant areas

12. March 200511 Michigan Lightwave Project “Dark” fiber network in Macomb County Michigan Lightwave partnered with Macomb ISD and county government on network $826,327 loan for completion and purchase of dark fiber network New network will provide high- capacity, low-cost circuits for large enterprises Status Michigan Lightwave, LLC Operates successful dark fiber network in Kalamazoo County Project serves 25 new communities in Macomb County and extends into St. Clair and Oakland Counties

13. March 200512 Merit Networks Project $4.1 million loan approved Acquisition of fiber IRUs and construction of laterals to improve their backbone network Borrower Provider of high-speed data services to numerous universities and other public institutions throughout the State of Michigan Currently determining whether tax exempt financing possible

14. March 200513 LDMI Project Softswitch and broadband gateways $5 million loan to build out IP network Integrated voice and data services to Southeastern Lower Michigan Expand facilities-based infrastructure Borrower Southfield-based Competitive Local Exchange Carrier (CLEC) 300 Plus Michigan employees

15. March 200514 UP Link Project $815,000 loan requested Purchase of tower antennae, customer premise equipment and construction of wireless tower $50,000 Seed Loan recipient Underserved Upper Peninsula market MBDA Board consideration in March Borrower UpLink Services, Inc. Purchased earlier this year by several Marquette investors with strong technology and finance background

16. March 200515 Lighthouse Broadband Project $500,000 loan for capital build-out costs to deploy Broadband Over Powerline (BPL) Initiative CMS Partnership Approved in February Borrower Shpigler Group (dba Lighthouse Broadband) Management consulting firm for communications and technology Operating two other BPL pilots across the country Selected by Consumers Energy to pilot BPL initiative in Grand Ledge and likely St. Johns.

17. March 200516 MBDA current portfolio of approved projects Total number of counties at least partially impacted by approved loans: 45 Total number of cities impacted by approved loans once networks are built and lit: 150 Total number of loan applications received in last 12 months: 25 Total $ amount of approved projects: $17.7M Total $ amount in project “pipeline” (approved, received and expected ’05 applications): $35 to $40M

18. March 200517 For More Information: www.broadbandauthority.org