WildBlue Communications

The views and opinions expressed in this submission are solely those of the authors and do not represent the views of the Department of Justice.

Slide 1

WildBlue
Communications

2007 Telecommunications Symposium

29 November 2007

David M. Brown

© 2007 WildBlue Communications, Inc

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Slide 2

WildBlue Communications

WildBlue is a “Broadband Internet via Satellite” service provider with more than 275,000 customers in the 48 contiguous United States.

• Headquartered in Denver, Colorado
  • Privately held corporation
  • Entered commercial service June 2005
  • Growing rapidly – more than 20,000 new customers a month
• U.S. national infrastructure with
  • 2 Ka-band spot beam satellites
  • 11 Gateway Earth Stations
  • Network Operations Center
  • Business Systems Data Center
  • Customer Call Center

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Slide 3

WildBlue Network Architecture

Subscriber Terminal Small low cost subscriber terminal

Satellite Connectivity High power, bent-pipe spot beam satellites

Gateway Earth Stations Unmanned remotely operated Gateway Earth Stations

Fiber Connectivity Leased connectivity 3rd party email, web hosting, portal

Operations & Business Network operations Business systems Denver, Colorado

[D]

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Slide 4

Residential Service Offerings

Service Offering Value Pak Select Pak Pro Pak Speeds (“up to”) Downstream 512 kbps 1.0 Mbps 1.5 Mbps Upstream 128 kbps 200 kbps 256 kbps Consumption Limits Downstream / 30 days 7.5 GB 12 GB 17 GB Upstream / 30 days 2.3 GB 3 GB 5 GB ISP Services Email Accounts 5 100 MB 5 100 MB 10 100 MB Web Hosting 10 MB 10 MB 20 MB Free Dial-up - - 10 hrs/month Upfront Price Equipment $199 - 299 $199 - 299 $199 - 299 Installation $ 0 - 179 $ 0 - 179 $ 0 - 179 Total $199 - 478 $199 - 478 $199 - 478 Monthly Service $49.95 – 54.95 $69.95 $79.95

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Slide 5

WildBlue’s Target Market

[D]

Source:WildBlueMarket Research, 2006

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Slide 6

Key Drivers of Satellite Broadband Market

Social Trends

• Urban & second home movement to rural areas for “lifestyle”
• Long-term reduction in rural jobs
• Telecommuting

Product Trends

• Decline in upfront price
• Demand for speed & capacity (usage)

Competitive Trends

• Growth of DSL/CM (assumed very low)
  • LECs: “we will not serve 20% of our customers with DSL”
• Growth of fixed wireless
• Expansion of nascent technologies (BPL, 3 or 4G, etc.)

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Slide 7

Customer Demographics

WildBlue Targets the Most Rural Markets [D]

Customers WildBlue Customers: Population Density [D] Nearly 70% of WildBlue customers are in areas with <30 homes/Km2.

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Slide 8

Relative Customer Density

[D]

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Slide 9

Example 1: Broadband In Iowa

[D]

	Homes by Block Group Household Density (homes per sq.mi.)					% of total
	<50	50 to 99	100 to 250	Over 250	total	<50	50 to 99	100 to 250	Over 250	total
No Terr. Broadband	211,856	24,078	1,797	2,463	240,194	59%	28%	1%	0%	20%
Terr. Broadband	144,410	63,299	173,469	585,280	966,458	41%	72%	99%	100%	80%
Total	356,266	87,377	175,266	587,743	1,206,652	100%	100%	100%	100%	100%

Source: Pinkham Group (4/06);WildBlue extrapolation; Prairie I-net

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Slide 10

Example 2: Broadband In Texas

[D]

	Homes by Block Group Household Density (homes per sq.mi.)					% of total
	<50	50 to 99	100 to 250	Over 250	total	<50	50 to 99	100 to 250	Over 250	total
No Terr. Broadband	1,062,050	191,222	1,361	-	1,254,633	91%	52%	0%	0%	15%
Terr. Broadband	103,707	175,331	657,868	5,944,732	6,881,638	9%	48%	100%	100%	85%
Total	1,165,757	366,553	659,229	5,944,732	8,136,271	100%	100%	100%	100%	100%

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Slide 11

Distribution Partners

• Retail Distribution
  • Approximately 1500 dealers
• Wholesale Distribution
  • AT&T
  • DIRECTV
  • EchoStar/DISH
  • National Rural Telecommunications Cooperative (NRTC)
• Enterprise Distribution
  • Approximately 50 Value-Added Resellers

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Slide 12

Broadband Market (by Technology)

U.S. Broadband Customers

[D]

Source: Jupiter; ignores BPL subs

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Slide 13

Technology Comparison

	2005 EOY Subscribers	Growth 2005-09 (CAGR)	Pro	Con
Cable Modem/DSL	44.6 million	10%	Speed Price Local Presence Bundled offering	Not ubiquitous
Fixed Wireless	0.2 million	32%	Price Local Presence	Not ubiquitous Mostly unlicensed spectrum (except Sprint/Clearwire) Must choose where to build
Satellite	0.3 million	42%	Ubiquity	CPE Cost Unproven VoIPoffering Time to market for new capacity
Broadband Over Power Line (BPL)	<0.1 million	n/a	Price Local Presence Some existing infrastructure	Cost Not ubiquitous Must choose where to build

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Slide 14

Keys to Success

• Internet access architecture
• Affordable bandwidth, bent-pipe spot beam satellites
• DOCSIS standards
• Low-cost CPE
• Small outdoor unit, easy to install and attractive in a residential environment
• Strong distribution relationships
• Excellent technology and manufacturing partners

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Slide 15

WildBlue Vision for Future Technology

• Higher capacity satellites
  • Incredibly high capacities are possible, allowing millions of customers per satellite
• Improved latency mitigation
  • Better proxy, protocol translation and compression
• Decreased cost of providing the service
  • Smaller spot beams, advanced network design allowing lower power terminals at higher data rates
• Higher customer expectations for satellite Internet service will be the challenge

  Snappy web surfing	“Unlimited”consumption
  Faster speeds	No outages

• Next generation WildBlue technology and business processes incorporating lessons learned

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Slide 16

WildBlue
Communications