Value Added Services Integration Platform (VASIP)

1. Value Added Services Integration Platform(VASIP) Platform Overview November 2009

2. Contents • Platform Overview • Customer Experience • Functional Capabilities • Implementation Process • Technical Overview

3. Value Added Services Strategy ADVERTISING Portal, DNS Redirects, Interstitial VALUE ADDED SERVICES e.g. Internet Security, Games on Demand, Storage & Sharing, Video on Demand, Audio Downloads, etc. DEVICES ACCESS FiOS/HSI INSTALLATION & SUPPORT Premium Tech Support Verizon Telecom Footprint Verizon Telecom Footprint • Enhance Verizon’s Broadband business beyond providing access only to offering users life enrichment through value added services and enjoyable customer experience. • Establish partner relationships to build a diverse and attractive portfolio of product and service offerings. • Value Added Services (VAS) are important to broadband ARPU growth and converged services • Leveraging Verizon’s distribution, billing and care via legacy systems was costly and time consuming • The VASIP platform provides a robust interface to legacy platforms which reduces the time and cost of integrating new VAS & provides more flexibility around offers • The platform allows for the integration of services from 3rd parties with Verizon ordering, billing, settlements, support & provisioning • Support Verizon Broadband 1-2-3 marketing strategy: • Step 1 - DSL and FiOs access products • Step 2 - Broadband Essentials, i.e. security and disaster recovery products, etc. • Step 3 - Broadband Extras, i.e. games (games on demand), music, movies, sports, etc

4. Customer Benefits Ease of ordering with flexibility of self-service through Verizon portals Expanded choice of Broadband Extras options for individual lifestyles Cost savings from bundles and promotions Simplified authentication (i.e.. Single login) process for all Broadband Extras activity Integrated billing for access and Broadband Extras VASIP Value Proposition The Value Added Services Integrated Platform provides clear benefits across the distribution of services. Verizon Benefits • Monetization of Broadband Access Product • Increases customer loyalty and satisfaction • Positions Verizon as a single source broadband solutions provider • Creates efficiencies and flexibility for the Verizon marketing teams and/or partners to modify offers/products in real-time Partner Benefits • Leverage of Verizon Brand, Marketing, Customer Base, Tier 1 Support and Online Channels • Flexible billing support and Settlements • Integration with 3rdParty Systems • Potential to package their services with common products, increasing value proposition

5. VAS Business Summary Through the introduction of new products and features the VAS revenue stream has grown 480% across the entire Verizon footprint since 2006.

6. Business Relationship Models VASIP partner integrations fall into one of three categories driven by the financial relationship and technical integration model • Financial Relationship • Wholesale • Verizon Branded • Verizon recognizes 100% of sale price as revenue • Verizon establishes retail pricing • Vendor is compensated at a wholesale rate (fixed or percentage of sale) • Verizon collects and remits taxes • Retail • Verizon, Partner or Co-branded • Partner recognizes 100% of sale price as revenue • Vendor establishes retail price • Vendor remits taxes • Verizon recognizes revenues on commissions / payment fees only (fixed or percentage of sale) • Ez-Pay • Products are partner branded • Verizon servers solely as the payment processor • Ordering and Catalog Technical Integration • Verizon Controlled • Products are defined and managed in the VASIP product catalog • Orders originate from Verizon systems (SSP, CoFEE, SPOT, self care eCommerce, etc.) • Verizon sends order to Partner for provisioning • Subscriptions / customers are managed by Verizon • Partner Controlled • Orders originate from Partner • Verizon processes bills and payments only • Products are defined and managed within the partner’s product catalog • Partner manages subscription and customer • Partner provisions service for the customer Financial Relationship Ordering and Catalog Technical Integration

7. Product Life Cycle The VASIP product life cycle begins with a new partner integration and associated product / first offer launch then evolves into additional offers, bundles and discounts. • New Partner Integration / Product & First Offer Launch project schedule is driven by several factors such as: • Contract Negotiation • Legal requirements • Degree of customization • Product Complexity • Security Evaluation • Technical Support and Sales Training • A subsequent offer can be launched within 20 business days if it aligns with existing table driven offer capabilities. 4-6 months 20 Days Offer Launch Partner Integration Offer Launch Vendor Selection Product Definition Offer Launch Product Approval Offer Launch First Offer Launch Offer Launch Offer Launch

8. Contents • Platform Overview • Customer Experience • Functional Capabilities • Implementation Process • Technical Overview

9. Customer Experience Touch Points

10. About 80% of VAS order with new Broadband Access activate via WBA About 400 Downloads/Activations pre week are performed via the automated fulfillment tool VAS Fulfillment VAS fulfillment is included in the Broadband registration/activation flow, additionally Post Broadband Registration, Automated Fulfillment tools make it easy for customers to download and start using their 3rd party applications. VAS Manager Web Based Activation

11. Verizon Integrated Bill Broadband Essentials detail Broadband Essentials, Broadband Extras and Verizon EZPay summarized on bill Broadband Extras detail Verizon EZPay detail

12. Support Overview Technical Support Verizon - Tier 1 platform and product support (Roadmap) BBE&E Partners - Tier 2 product-related technical support Post Sales and Billing Inquiry Support Product upgrades/changes, billing inquiry, credits/adjustments/refunds, general product information Online Support Tech Support – email and Live Chat (Roadmap) Verizon eCare - billing inquiry, product information, and order fallout support Online Help - content specific to Broadband Essentials and Extras products BBE&E Partners - Frequently Asked Questions • Customer Self-Care • Verizon.net portal - Self-care functionality • billing inquiry • automatic refunds • account and service management (upgrades, downgrades, purchase new services, cancellations)

13. Contents • Platform Overview • Customer Experience • Functional Capabilities • Implementation Process • Technical Overview

14. Through the introduction of new products and features the VAS revenue stream has grown 480% since 2006. Platform Architecture VASIP was implemented in 2006 to support the service management, ordering, rating and provisioning of VAS products with the goal of isolating the product line from the traditional IT processes.

15. Product Catalog Hierarchy and Constructs • Offers and Categories: • Categories are used to display a group of offers for a product family (i.e. VISS with 3,6,9) or a group of related bundles (e.g. Internet Paks) • Storefronts generally display offer name, description, price, for a set of offers grouped by category. • Since there are several categories and multiple offers within each category, the ranking (sort order on display) for both offers and categories is meaningful. • The introduction of a new product usually requires the creation of a new category. • Discount descriptions and price are only displayed when applicable. • Multi Component Offers (MCO) • An MCO is a single offer comprised of multiple components where each component can contain one or more products (subscriber / rep pick one of the products when ordering) • The MCO construct provides customers with the flexibility of configuring which components they need • Currently the MCO construct is used only by SMB. • Storefronts display the MCO offer name and description with a breakdown of each component where the component name, component description, product(s) name, price and description are displayed. • Bundles • Single offer comprised of multiple products • The component products are static. That is, customers cannot choose between products. Storefront (VASIP GUI) Category 1 (Data Protection) Category 3 (Internet Paks) Category 2 (Starzplay) Multicomponent Offer (DPP) Simple Offer Simple Offer Bundle Offer Bundle Offer Simple Offer Discount Discount Component 1 Component 2 Component N Product 1 Product 2 Product Product Product Product Product 2 (VOBS 5G) Product 1 (VISS 3PC) Product 2 (VISS 3PC) Product 1 (Expertcare)

16. Offer Management Charge Period (monthly, yearly, daily, quarterly) Charge Type Recurring Subscriptions Non-recurring charges Duration / Subscription Term Not Fixed Fixed Free Trial Duration Allow Free Trial Bicycling Money Back Guarantee Commitment Period Eligibility Presentation Storefront Ranking Step 2 Broadband Essentials Step 3 Broadband Extras Offer Position Dispute Management Policies Commitment Cancellation Fee Ability to prorate this cancellation fee Generate Pro Rated Refund on Cancellation Refund Handling / Cancellation Handling Handled Automatically Not Allowed Handled Manually by CSR Handled Manually by Merchant Billing Trigger TOS Acceptance Order Complete 1st Product Activation (if bundled) Promotions Bundling Discounting Multiples Control whether multiple products are allowed on the account Fixed Quantity Tiers (e.g. VISS 3, 6 ,9) Quantity Based Ordering (e.g. VSM) Miscellaneous Upgrades / Downgrades Allowed Taxable (Vary by State) Eligible for Disconnect Credit Access Required NRC Time Limited Access Period: (used for PTS NRC) Product Catalog Summary

17. Customer Type All Consumer Business Portal No Restrictions MSN Yahoo User Type All Users Existing New Other Zip Code Access Market Code Access Package ID Access Component ID LATA LFA State Agency Region All East West Ordering Channel No Restrictions Online Sales Agent Customer Segment All Segments Dry Loop UNE-P Sales Channel All Channels dot com Offer Eligibility Dimensions

18. Discounting • Summary: • Below are the two types of discounts that are available; these discounts will also allow products to have a free trial period. • Increased flexibility and scalability in offer/promotion management and creation, VAS discount component, partner sponsorship, dynamic bundling, stepped pricing. • Offer Creation • Create Discount Elements in VASIP • Discounts applied to VAS • Decreased time to Market on new bundles/promotions • Greater Flexibility on bundling/promotions • Access Type Eligibility • Dynamic Discounting • Promotions/Coupons • Offer Lifecycle • Upgrade/Downgrade Solved • VAS Discount component is removed/added with eligibility changed • Ability to state lifecycle for a discount program • Bill Display • Line item discount for VAS • LOB Settlement • Sponsorship of discount between Partner and Verizon

19. Discounting Examples • One Step Discount A one step discount refers to a specific dollar amount or percentage off the MRC of a VAS product for a set period of time. Once that set period of time is over, the regular MRC will be in effect. • Example 1: Offer: $2 off the MRC of $5.00 for first three months. • Example 2: Offer: 10% off the MRC of $5.00 for the first two months. • Scheduled Discount off next charge (One Off discount) A Scheduled Discount off next charge allows a one time discount of a specific dollar amount or percentage off the next service charge for that VAS product. The product will return to the regular MRC after that one time discount. • Example 1: Rep gives disgruntled customer $2 off their next MRC of $5.00. • Example 2: Rep gives disgruntled customer 50% off their next MRC of $5.00.

20. Bundles • “Discounting Based” Access + VAS Bundles • Discounting on the VAS component with the Discount on the VAS line item, not at the Bottom of the bill • Uses an existing base offer • Shows subscribers the value of the bundle by adding a discount component to the offer • Automatically presented to sales reps • System automatically removes the discount if the “bundle” is broken • VAS-VAS Bundles: • Combinations of VAS Closed Model products can be offered with the following exceptions • Secure Mail (because of quantities). • Bundling with PTS creates a set of issues related to terms and ETF that must be managed. +

21. Payment Instruments • Current • Verizon Online Bill • ILEC Bill • Credit Card (ability to store multiple credit card instruments) • Debit Card

22. Subscriber Notification Emails • Order Confirmation • Activation Notification • Order Cancellation • Auto Order Cancellation • Offer Upgrade/Downgrade • Activation Reminder • Final Activation Reminder • Invalid Payment • Refund Granted • Refund Denied

23. Settlements Models Supported • Flat • Fixed price per unit regardless of volume • Example: $0.nn per GB • Tiered • Price per unit is based on the volume of licenses • Up to 250k $ n.nn • 250,001 to 500k $ n.nn • 500,001 to 1 mil $ n.nn • 1,000,001 to 2 mil $ n.nn • 2,000,001 and up $ n.nn • Stepped • Variable percentage of license paid to vendor based on the volume of licenses

24. Compensation • Points per Unit Sold • Consumer (Points) • Business (QRV) • Regrade Rules (Define Upgrade/Downgrade Rules for Compensation) • Quota Allocations (units)

25. Spending Limits • System Wide • User Default Per Transaction Limit ($150): Maximum $ amount per sales transaction, the VOL bill spending limit • User Default Spending Limit ($500): Overall spending limit across all accounts, monthly • Per Payment Instrument • Default Spending Limit ($150): For the VOL Bill, monthly spending limit comes from User Profile retrieved from SSP • Default Transaction Limit: Maximum amount for a single Valista transaction (any open model transaction or closed model charge) • Minimum Transaction Limit ($0.25): Smallest transaction amount • Minimum Reimbursement Amount ($0.01): Smallest refunded amount (any kind of refund)

26. Reporting & Metrics • All reports HSI and FiOS • “Net Adds To Billing” Dashboard • Reports by Region and Product • Confirmed Sales • Billable Services • Percentage of Sales by Product • TOS Accept Aging • By Region, Product, • Trending • Confirmed and Completed Sales: New vs. Existing

27. Contents • Platform Overview • Customer Experience • Functional Capabilities • Implementation Process • Technical Overview

28. Repeatable Implementation Process Partner Selection, Legal, Contract Contract Negotiation Pipeline & Portfolio Evaluation Partner Selection Business Negotiation Platform Delivery Production Test & Pilot Partner Integration JADS Analysis & Design Technical Integration Lab Testing Offer & Product Management Post Launch Offer Management Product Specs & Customer Experience Go To Market, Launch Planning & Execution Operations & Training Deliver Training Sales, Customer & Technical Support Technical, Customer & Billing Support Process & Training Development • Integration Kickoff • Scope Defined Signed Contract General Availability Software to Production

29. Contents • Platform Overview • Customer Experience • Functional Capabilities • Implementation Process • Technical Overview • Closed Model • Open Model

30. VASIP High Level Systems Architecture

31. VASIP High Level Systems Architecture

32. SSP/Cofee GUIs– Eligible VAS Offers Displayed to Call Center Agents

33. Verizon.net Portal- VAS Offers SHOP

34. Contents • Platform Overview • Customer Experience • Functional Capabilities • Implementation Process • Technical Overview • Closed Model • Open Model

35. Closed Model Overview • Ordering • Verizon Sales Channel • Verizon Portals • Partner Sales Site (Optional) • Provisioning / Product Access • Passive • Verizon Maintains subscriber database • Vendor checks license status during product use / access flow • Active • Both Verizon and Vendor maintain subscriber database • Verizon proactively invokes vendor provisioning API during order work flow. • Verizon invokes Vendor API when service is disconnected • Refunds • Refunds are received by Verizon representatives • Refunds are approved / denied by Verizon • Merchant is notified of refunds through monthly settlements reporting

36. Closed Model Call Flow Downstream Systems Partner systems Vasip Platform Ordering Channels Customer User accesses channels Gets eligible / already purchased offers Offers list returned Offers list displayed to customer Order submitted to VASIP User selects / changes the offer Success returned to front end Order confirmation Order data sent to backend systems if required Order confirmation email sent to customer Data sent to partners for provisioning Confirmation received from vendor

37. Customer Ordering VAS from VOL Portal (Closed Model)- Verizon as an aggregator with control over pricing, marketing, provisioning, billing and customer care.

38. Contents • Platform Overview • Customer Experience • Functional Capabilities • Implementation Process • Technical Overview • Closed Model • Open Model

39. Open Model Overview • Partner offerings are sold and supported through Verizon Portals • Product catalogue housed and managed by partner • Verizon bills the end customers and processes payment • Integrated billing using the EZ pay options • Easy and speedy partner on-boarding and speedy systems integration • Secure, simple and integrated single source for customers to purchase, use and manage multitude of product and service offerings • Verizon VASIP enables efficient partner on-boarding and repeatable systems integration processes • Value added services will be offered to Verizon non-access and non Verizon customers

40. Open model Call Flow Downstream Systems Vasip Platform Vendor Portal User logs in Vendor informs the vas purchase to VASIP Order data sent to backend systems if required Confirmation sent Confirmation displayed to user Vendor creates charges and sends to VASIP Confirmation sent to vendor

41. Customer Ordering VAS from Merchant Site (Open Model)- Verizon as the payment processor with merchant controlling pricing, marketing and provisioning.

42. Customer and Merchant Management • Customer Care Application: Complete administration of customer account / transactions and manage - • Purchases / Refunds / Adjustments / Spending limit • Payment methods • Email management • Different views for CSR, Tech Support, Billing Ops • Integrated with CSR, Tech Support and Billing Ops front ends • Merchant Care/Self-Care Application: • Configure merchants • Offer management – can be changed dynamically without any • Eligibility (Access type, state, product category, portal choice etc.) • MRC/NRC (Recurring / Non-recurring charge) • Stand Alone / Bundles • Pricing / Discounting • Upgrade / Downgrade