M2Z: Revolutionizing Wireless Broadband

1. M2Z: Revolutionizing Wireless Broadband EDUCAUSE Policy Conference May 16, 2007 Arlington, VA

2. The Team M2Z Has Assembled a World Class Team and Resources from Leading Financial Institutions Milo Medin – Former CTO and co-founder of @Home network • Over 20 years of experience in building large service provider networks for NASA, the Federal Government and @Home • Led technology team for development and deployment of national broadband network from concept to 4M operational North American subscribers • Helped create the DOCSIS standard and drove it through the vendor community John Muleta – Former wireless bureau chief at FCC, and SVP of global IP infrastructure build- out for PSINet • Over 22 years of experience in telecommunications • Served in the Hundt/Kennard and Powell/Martin FCC administrations • Enforcement Division Chief responsible for anti-slamming and anti-cramming enforcement in the 1990’s. • Responsible for Wireless Local Number Portability rules and for E911 deployment • Provisioned a global ISP backbone and local loop infrastructure in 28 countries • CEO of wireless OEM company based out of California • $400 million investment commitment towards network build-out from leading financial institutions • Fully funded current business plan led by Kleiner Perkins (Google & Netscape), Charles River Ventures (Flarion), Redpoint Ventures (MySpace & TIVO)

3. The Investors Founders and Board committed to innovation, open networks and consumer empowerment

4. What’s the Problem? Divide between the Digital Haves and Have Nots • Over 100 million adults (not including children) do not have access to broadband! • Pew Internet and American Life Project reports that 85% of Americans living in households that make less than $30,000 annually do not have broadband connections! • Free Press reports that American Farm households have broadband at only half the national average! • The digital divide limits the ability of Americans to compete for 21st Century jobs and the ability of the American economy to compete globally!

5. Rankings and Implications The US is Falling Behind in Global Broadband Competitiveness ---- Our Children’s Future is At Stake! US Ranking According to ITU Global Rankings, we are 21st in Broadband availability index and have one of the Lowest Value Indicators (Speed to Price Ratios) among industrial nations…

6. All Other, 5.90% LEC Cable Broadband Modem, Services, 55.90% 38.20% The Impact of the Broadband Duopoly in America Over 100 Million Americans Left Behind 2006 FCC Report on Residential High Speed Market Share shows 95% of broadband lines come from LECs or Cable 2006 FCC Report High Speed Data shows 45.8 million homes with broadband out of 113 million households • Federal Government Agencies agree that the Broadband Market is Duopoly: • Government Accountability Office, Report to Congressional Committees, May 2006 • Congressional Research Service, Report for Congress, June, 2006 • Congressional Budget Office, Report prepared for the Senate Budget Committee, December, 2003

7. Market Structure of Broadband Impact of a Duopoly Structure • Limited incentive to compete on price and applications (implicit collusion) • Facilities must be directly overlapping to generate sufficient head-on competition • Bundling and cross-subsidies limit consumer choice • Edge Applications have limited access to consumers by bottleneck facilities at the last mile

8. Increasing US Broadband Policy Agenda Bipartisan Support for Affordable and Universal Broadband Access • President Bush has challenged America’s broadband providers to provide: • Ubiquitous broadband internet access by the end of 2007 • Speaker Pelosi’s Democratic Innovation Agenda calls for: • Invest in a sustained federal research and development initiative that promotes public-private partnerships; • Guarantee affordable access to broadband technology for all Americans within 5 years

9. Other Industry Dynamics The US Broadband market has limited competition leading to high cost to consumers and inconsistent coverage • US Density and Geography make it difficult to accomplish cost effective and scalable Universal coverage for Broadband using existing technology (both wireline and wireless) • Large number of users cannot afford existing broadband offerings or have limited to no access, leading municipalities to step in to bridge the gap • Increasing demands to include broadband as part of an existing Universal Service structure strains the system and imposes undue burden on growth • Significant market failure to deliver consumers with “family friendly” internet access

10. M2Z’s Solution is Technical and Business Innovation M2Z filed a spectrum license application with the FCC with conditions that will serve the public interest. • Spectrum to be leased to M2Z under specified conditions for payment of 5% gross revenues from subscription services---a voluntary payment to US Treasury • M2Z to provide nationwide broadband service for consumers with no recurring costs to them (a “free network” like broadcast television) • M2Z to Construct a network to provide coverage for 95% of the US population and commit never to take USF funding • M2Z Block access to indecent content for all free access users to provide a family friendly broadband alternative and to protect children • M2Z to provide Public Safety officials with free access to an broadband network as a supplement to their existing networks (allowing desktop like and interoperable access to the officers’ at the incident site) Note: M2Z’s application will meet the following service obligations: (i) meet specific technical rules to avoid harmful interference in adjacent bands and (ii) clear incumbents on a timely basis

11. M2Z’s Solution Requires Innovation in Spectrum Licensing • The current technical paradigm in the domestic wireless industry uses paired spectrum • M2Z has submitted a license application for Advanced Wireless Services which has Unpaired, Fallow spectrum without service rules for at least 7 Years • 20 MHz Unpaired spectrum between 2155 and 2175 • No service rules or geographic assignment proposed by FCC • Issues related to unpaired spectrum make it infeasible to monetize for others • Immediate Availability Advanced Wireless Services (AWS) Band Plan Allocations between 1710 and 2200 MHz 2155 to 2175 MHz

12. Concrete Benefits of the M2Z Plan • Two independent economic studies have concluded that the grant of M2Z Networks’ Application will result in consumer welfare ranging from $18 to $34 billion* • Up to $12 billion in benefits to consumers from nationwide competitive entry and availability of free service • Up to $5 billion in savings from reducing USF tax increase for increasing broadband availability • M2Z’s geo-tagged search features as part of the free consumer service will pave the road to e-commerce for small, local businesses across the country • Research from the National Federation of Independent Businesses (NFIB) shows that the Internet is underutilized by local business: • Only 57% of small businesses use the internet for business related activities, even fewer have high-speed connectivity • Only 35% have company websites *You may retrieve these studies conducted by Professor Simon Wilkie, and Dr. Kostas Liopiros from http://www.m2znetworks.com/resource-center/

13. $ 32.4 Billion A one-year delay in the grant of M2Z’s license will cost as much as $4.7 billion in direct consumer benefits lost $ 18 Billion $ 4.7 Billion The Consumer Benefit of M2Z Networks’ Public Interest Commitments as High as $32.4 Billion Sources: Former FCC Chief Economist Dr. Simon Wilkie conservatively calculated the consumer benefit of M2Z Networks’ public interest commitments from $18 billion to as high as $25 billion over the life of the license. Alternatively, a study by Dr. Kostas Liopiros found that those benefits could reach as high as $32.4 billion. The direct cost to consumer benefit of a one-year delay in the grant of that license was calculated at up to $4.7 billion.

14. Status Towards a New National and Unaffiliated Broadband Competitor • M2Z Application for Spectrum License on May 5, 2006 – Formal Record Closed on March 26, 2007 • M2Z’s Forbearance Petition on September 1, 2006- Formal Record Closed on April 3, 2007 • Over 1,000 Comments of which nearly all support M2Z; • Sixteen parties have filed in opposition of M2Z’s application seeking assignment of the spectrum via a further rulemaking and subsequent auctions

15. The Path Forward: • M2Z is receiving widespread support from organizations, politicians, higher education institutions, public safety institutions, county and city executives, and from the grassroots in support of their application. For more information see WT 07-16 and WT 07-30 available at: http://gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi • Organizations with a common objective can move the process forward by lending their voice to the ongoing public dialogue. • Individuals can visit www.freebroadbandnow.org to show support.

16. Headquarters 2800 Sand Hill Road Suite 150 Menlo Park, CA 94025 (650) 687-5600 East Coast Office 2000 North 14th Street Suite 600 Arlington, VA 22201 (703) 894-9500