1. Gigabit Communities Summit Kansas City, Missouri January 13, 2015 Jim Baller The Baller Herbst Stokes & Lide, PC Washington, DC 20036 (202) 833-1144 Jim@Baller.com Seven Important Next Steps for Gigabit Communities

2. Disclaimer This presentation does not constitute legal advice and should not be interpreted as such. For advice on federal, state or local law, please consult qualified legal counsel.

3. Overview 1.Protect Yourself from State Barriers to Entry 2.Comply With All Regulatory Requirements 3.Take Advantage of E-Rate and Other Funding Options 4.Use Innovative PPPs to Extend Your Services 5.Make Most of New Infrastructure Developments 6.Consider New Opportunities to Acquire Content 7.Break Into Multi-Tenant Buildings and Developments

4. 1. Protect Yourself From State Barriers to Entry About 21 states currently have restrictionsAbout 21 states currently have restrictions New barrier proposed in Missouri, others possibleNew barrier proposed in Missouri, others possible Barriers often follow first or significant fiber projectBarriers often follow first or significant fiber project New proposed barriers may affect PPPs – e.g. KansasNew proposed barriers may affect PPPs – e.g. Kansas Chattanooga and Wilson proceedings before the FCCChattanooga and Wilson proceedings before the FCC Please file comments!Please file comments! Join/Support Coalition for Local Internet Choice (www.localnetchoice.org)Join/Support Coalition for Local Internet Choice (www.localnetchoice.org)www.localnetchoice.org

5. 2. Comply With Regulatory Requirements Depending on services provided, GC’s must comply with numerous federal and possibly State requirementsDepending on services provided, GC’s must comply with numerous federal and possibly State requirements BHSL Federal Communications Law Compliance MemoBHSL Federal Communications Law Compliance Memo Key requirements:Key requirements: Universal Service Fund – up to 16.8% of end user revenues at risk! Also, Enforcement Task ForceUniversal Service Fund – up to 16.8% of end user revenues at risk! Also, Enforcement Task Force CALEACALEA Special Access Data CollectionSpecial Access Data Collection PrivacyPrivacy

6. 3. Take Advantage of Funding Opportunities $7.2 Billion in Federal Broadband Stimulus funding no longer available, but there are many other funding opportunities$7.2 Billion in Federal Broadband Stimulus funding no longer available, but there are many other funding opportunities Examples:Examples: FCC: Recently expanded E-Rate Program for Schools and Libraries, Health Care Support, Connect America FundFCC: Recently expanded E-Rate Program for Schools and Libraries, Health Care Support, Connect America Fund USDA Community Connect Broadband Grants ($100,000 -$3 million) (Feb 17, 2015)USDA Community Connect Broadband Grants ($100,000 -$3 million) (Feb 17, 2015) Department of Commerce economic development grantsDepartment of Commerce economic development grants

7. 4. Consider Public-Private Partnerships Many private entities are eager to explore partnerships with GC’s, creating opportunities to expand services, footprintMany private entities are eager to explore partnerships with GC’s, creating opportunities to expand services, footprint PPPs come in many shapes and sizesPPPs come in many shapes and sizes Examples: Google/KC, Provo, Austin, etc.; C- Spire/Mississippi Communities; UC2B/iTV3; Macquarie/Kentucky; OnLight Aurora/City of Aurora, IL; Ting/Westminster, MDExamples: Google/KC, Provo, Austin, etc.; C- Spire/Mississippi Communities; UC2B/iTV3; Macquarie/Kentucky; OnLight Aurora/City of Aurora, IL; Ting/Westminster, MD Key issues:Key issues: Impact of state laws (including special PPP laws)Impact of state laws (including special PPP laws) Allocation of financial obligations, risks, rewardsAllocation of financial obligations, risks, rewards Allocation of operating responsibilitiesAllocation of operating responsibilities Enforcement of commitments and remediesEnforcement of commitments and remedies Exit strategiesExit strategies

8. 5. Consider Potential Benefits of New Developments Concerning Infrastructure Pole attachmentsPole attachments Federal law provides access rights and rate protection only to “telecommunications carriers” and “cable television systems” – not to pure Internet access or fiber providers Result: covered beneficiaries get faster, cheaper make ready and far lower ratesFederal law provides access rights and rate protection only to “telecommunications carriers” and “cable television systems” – not to pure Internet access or fiber providers Result: covered beneficiaries get faster, cheaper make ready and far lower rates If FCC reclassifies Broadband Internet Access Service as a Title II “telecommunications service,” providers may qualify for pole attachment benefitsIf FCC reclassifies Broadband Internet Access Service as a Title II “telecommunications service,” providers may qualify for pole attachment benefits Also new FCC rules on tower siting and wireless small cells and distributed antenna systems – multiple impactsAlso new FCC rules on tower siting and wireless small cells and distributed antenna systems – multiple impacts

9. 6. Explore New Options For Access to Video Programming and Other Content Today, fiber system operators acquire video content in 2 main ways: (1) for broadcast signals, enter into must carry/retransmission consent agreements with broadcast stations, and (2) for other video programming, contracts with programming distributors via co-ops (NCTC), content aggregators, or individual negotiationsToday, fiber system operators acquire video content in 2 main ways: (1) for broadcast signals, enter into must carry/retransmission consent agreements with broadcast stations, and (2) for other video programming, contracts with programming distributors via co-ops (NCTC), content aggregators, or individual negotiations In STELAR, Congress recently expanded an FCC ban on joint negotiations by broadcastersIn STELAR, Congress recently expanded an FCC ban on joint negotiations by broadcasters FCC currently considering giving non-cable systems programming access rightsFCC currently considering giving non-cable systems programming access rights

10. 7. Break Into the Multi-tenant Market Multi-tenant buildings and developments often constitute 25-33% of a potential market – or even moreMulti-tenant buildings and developments often constitute 25-33% of a potential market – or even more Incumbent service providers often attempt to tie up multi- tenant environments through exclusive agreements of various kinds – e.g., exclusive right to market, exclusive right to provide service, exclusive use of inside wiring, exclusive easements, take-or-pay bulk service agreements, etc.Incumbent service providers often attempt to tie up multi- tenant environments through exclusive agreements of various kinds – e.g., exclusive right to market, exclusive right to provide service, exclusive use of inside wiring, exclusive easements, take-or-pay bulk service agreements, etc. The FCC has prohibited exclusive cable service agreements and exclusive easements, but it has upheld other forms of exclusivityThe FCC has prohibited exclusive cable service agreements and exclusive easements, but it has upheld other forms of exclusivity State laws, including unfair competition laws, may helpState laws, including unfair competition laws, may help

11. Thanks! Jim Baller Baller Herbst Stokes & Lide, PC 2014 P Street, NW Washington, DC 20036 (202) 833-1144 Jim@Baller.com