VoIP Integrated Access Agent Training

1. VoIP Integrated AccessAgent Training June 2005

2. Table of Contents • Service overview • Sales methods and customer screening • Pricing • The Future

3. Overview • First member of Enterprise VoIP Services family • Business telephony over integrated voice/data T1 • Local • LD • Inter-office • Internet access • Lowers network and telephony costs for branch offices of large corporations • General availability: June 6—NOW!

4. Key features & options 12-24 voice line equivalents New or ported DIDs Unlimited local calling LD and international usage Unlimited inter-office calling w/ customized dial plan Hunt group E911, directory listing T1 Internet access with dynamic bandwidth allocation Cisco 2431 integrated access device (IAD) PRI or CAS interface for connection to PBX or digital key system Configured and shipped by NextiraOne Technician dispatch option Optional UPS available Availability Full package including local available in 23 markets around the U.S. Long-distance and inter-office package available nationwide Services

5. Service Availability • Local Package • Local presence in top 23 Tier 1 markets • Represent 95%+ of theaddressable business lines in all served LATAs • Provides rate center coverage acrossthe LATA • Facilities-based, transport diverse carrier • Long Distance Services • Available nationwide **Note--Some area codes may cross LATA boundaries which may result in off-market billing

6. Caveats / Limitations • Single T1 provided by Broadwing is only access supported • Cisco 2431 IAD is only CPE supported • Unmanaged service • Customer responsible for configuration and performance of IAD post-install • Break/fix available from NextiraOne • No user features • Designed to work with a PBX or key system providing the features • No CLASS or Centrex, no voice mail • No portal • Very little to manage through it, so little value here

7. Network overview Aggregates T1 connections from customer sites for delivery to and from Broadwing’s IP core network. Terminates T1 access line and provides access to the customer’s LAN and telephony equipment. Packetizes and prioritizes voice traffic. Broadsoft Feature Server Provides call-control intelligence and calling features. Provides trunking between the Broadwing IP network and the PSTN. Connects calls to local or long-distance voice networks at closest possible point to customer. Local switch connects calls to the PSTN, including 911.

8. Bandwidth Allocation • Bandwidth dynamically assigned to voice as calls are in progress • If no calls in progress, full T1 available for data • G.729a codec uses ~27K per call • Fully-utilized PRI (23 calls + d channel) = ~648K – leaving 852K for data • Fax • Uses T.38 codec • Fax translated to .gif by IAD/gateway and impacts bandwidth like e-mail or FTP – no ongoing bandwidth hit after .gif sent • Modem • Modem use G.711 – ~ 87K per call • If using a lot of modems, expect larger IP bandwidth hit

9. Why we built it this way • Why did we pick Broadsoft? • Easily the leader in the feature server space • Best feature set, most stable platform • Open interfaces – for internal development and third-party innovation • Why Cisco? (5850s, 10Ks, IADs) • Stable, familiar platforms • Internal Cisco testing reduced our development time • Will add new gateways, routers, CPE over time • Why aren’t we just me-too? • Broadsoft is table stakes – will not be a differentiator for us, any more than the DMS platform is • Differentiators: • Packaging and pricing • Integration with other BWNG capabilities (MPLS, Multiconnect, etc) • Execution – service delivery speed, voice quality, etc.

10. SLA and QoS • Standard Grand SLAm SLA applies • 100% network availability • Guaranteed installation intervals (for T1 circuit) • 4 hour time-to-repair • Chronic service remedy • Toll quality voice expected • Network designed for MOS of ~ 4 • Alpha and beta trials have shown no noticeable difference in VoIP vs. TDM quality • Two techniques to ensure QoS • Packet prioritization – if network congestion, other packets within the Broadwing IP backbone will be dropped prior to VoIP packets being dropped • Near-end hop-off for PSTN calls (i.e. Off-net calls move to PSTN at nearest VoIP POP) – from that point performance is equivalent to any other TDM call

11. VoIP and IVAD

12. Table of Contents • Service overview • Sales methods and customer screening • Pricing • The Future

13. VoIP marketplace • IP Centrex / Hosted PBX • PBX replacement service • Handsets signal directly to softswitch owned by service provider • Example: • Covad iPBX • MCI Advantage • Integrated Access • Integrated voice and data • Works with existing PBX, key systems, phones • Example: • XO Xoptions Flex • Cbeyond BeyondVoice • SIP Trunking • PSTN access via native IP connection to IP PBX • SIP signaling • Examples: • Broadwing PSTNConnect SIP • Cbeyond SIPConnect • Residential VoIP • Low-price VoIP over consumer broadband connections • Variable quality • Robust residential feature set & all-you-can-eat calling plans • Examples: • Vonage • AT&T CallVantage

14. Target market: enterprise branches • Branch office networking typically very painful and costly for enterprises • Low user density = high per-seat costs for bandwidth, telephony, and equipment • Typically wildly over-provisioned or under-provisioned • Typically missing key features compared to headquarters – e.g. extension dialing to other offices • Branch office needs easier to meet than headquarters • Fairly Cookie-Cutter IP speed and DSO needs • Low-end CPE needs • Obvious pain point for customers that we can address • Broadwing has experience with these applications

15. Key differentiatorsvs. other Integrated Access • Enterprise-focused – competitors targeting SMBs • Designed to meet enterprise capabilities • Interfaces with PBX • CPE sold & unmanaged – no premium for management or leasing • Features optimized for multi-location businesses – voice VPN with customized dialing plan • Future enhancements address entire gamut of enterprise needs – WAN service, high speed circuits, high port densities • Nationwide • 23 major markets for local (Cbeyond only has 5) • LD-only available everywhere

16. Key selling points Value • One circuit for voice and Internet • Shared bandwidth to reduce overall network costs • Unlimited local and site-to-site VoIP calling Simplicity • One provider, one bill • Works with current LAN and telephone system Power • Voice VPN with customized dialing plan • First step to advanced VoIP applications

17. Overcoming common objections - 1 • It’s the Internet – it should be free, like Skype! or • With Vonage, for $25 I get a line with unlimited local and LD. Why is yours so expensive? or • VoIP is too risky. It goes over the Internet, so it’s not secure and quality will be poor. And it can’t do 911! • Answers: • Not using “the Internet” – our service use Broadwing’s IP and TDM networks, with full 911 support • Service uses dedicated IP circuit – not BYOB like Vonage or Skype • Vonage not suitable for Fortune 1000 businesses • Can’t be used for trunking / PRI replacement • No extension dialing capability • Only “911-like” capabilities

18. Overcoming common objections - 2 • <Competitor> is offering unlimited LD usage. Can I get that? • Answers: • Multiple Fortune 1000 enterprise customers indicated that “unlimited” plans were not acceptable • They felt exposure to “breakage” was too high, and that they would pay more on average than with per-minute billing • Check the fine print - “unlimited” is rarely truly unlimited • Just an arithmetic exercise - how much LD did they use the last few months X our proposed rate compared to unlimited product • Most likely “unlimited” isn’t any savings, or is trivial • If demand is there, we can respond

19. Customer screening – good application • Because it targets branch offices, VoIP Integrated Access will almost always be only part of an enterprise’s voice solution • Will need to find other solutions for larger sites • Sample application: • 17 site enterprise • Three types of sites: • Headquarters • Nortel PBX, 500 stations, 6 PRIs, IP DS-3 • 3 large regional offices • Nortel PBX, 50-75 stations, 1 PRI, IP T1 • 13 small branch offices • Miscellaneous KTS and PBX, 12-30 stations, DSL/Cable modem Bad fit – need too much bandwidth and too many PRIs Good fit – sell cost reduction from consolidating circuits Good fit – sell bandwidth improvement & increased # of stations with cost parity

20. Bad Applications - 1 Future Solution? • I want my IP Centrex! • The lease on my PBX is up, do you have a service that makes it so I don’t need to renew it? • Large site needs • I have a GigE of IP and 6 PRIs of voice that I want to integrate. Can you help? • POTS replacement • I’ve got an office with 4 users and Bell POTS lines. What can you do for me? Yes – hosted PBX solutions under consideration for Q106 Yes – large site solutions in development for Sept 2005 Yes – FXS IADs in development for Sept/Oct 2005 – but not down to 4 lines

21. Bad Applications - 2 Future Solution? • IP PBX • I just installed a shiny new Cisco CallManager cluster – I don’t need no stinkin’ PRI! • WAN integration • I have 17 remote sites that access the Internet through a MultiConnect you sold me last year. Can I run their voice through it? Yes – direct interconnect to IP PBX in development for Sept 2005 Yes – support for access other than dedicated IP in development for Sept 2005

22. Table of Contents • Service overview • Sales methods and customer screening • Pricing • The Future

23. Pricing overview • Pricing that is consistent with IVAD, but reflects the additional value provided by VoIP (e.g. Voice VPN)

24. Pricing example / comparison • Substantial savings over separate PRIs and T1s • Includes unlimited local and LD • Analog only – no PBX, no DID service • Modest premium over IVAD • Unlimited Local & voice-VPN benefit • Can not purchase maintenance if not valued

25. Table of Contents • Service overview • Sales methods and customer screening • Pricing • The Future

26. Expanded Enterprise VoIP Services • Full suite of VoIP services planned to meet range of enterprise needs • Headquarters, branch, retail, call center • Traditional PBX, IP PBX, key system, analog • Bundled with IP data/WAN solutions for complete enterprise WAN solutions • Additional CPE and access options • Large IP pipes • Converged network integration • Multiple IAD/Gateway choices • Direct IP PBX / softswitch integration • General availability: September 2005

27. IP-IVAD • VoIP Integrated Access optimized for needs of small / medium businesses • Lower cost CPE • Possibly lower voice line counts (starting at 8?) • Add POTS/FXS support • Voice Mail/Unified Messaging • Installation services bundled • Management/maintenance services bundled • General availability: September (expected)

28. Future items Status • Fill partner • Additional local footprint – DID assignment / LNP, local termination • Required to win large enterprise deals, capture increased VoIP carrier market share • Evaluating multiple partners • Hosted PBX • 1-1000s of SIP phones • Mix and match with other BWNG products • Advanced features – real-time call control, unified messaging, etc. Concept only, expected EOY? Concept only, Q106 ?

29. Questions?