An Open Letter to the Communications Community

To the Communications Community:

A robust communications infrastructure is the cornerstone of today's information society. Unlike many other developed countries that have invested heavily in building communications infrastructure as part of government-sponsored growth strategies, America's decentralized telecommunications infrastructure has fallen behind in terms of broadband coverage and speed. In February 2009, Congress approved the "American Recovery and Reinvestment Act of 2009", allocating $7.2 billion to deliver broadband to rural and inner city communities. These funds will assist "unserved" or "underserved" communities to take full advantage of telecommunications' digital age to improve education, boost community growth and enhance people's lifestyles.

Most significant to many of Occam's customers is the $2.5B allocated to the Rural Utilities Service (RUS) for grants, loans and loan guarantees for broadband infrastructure. This budget comes with a set of priorities for funding that include the following stipulations:

• 75% of the area served must be rural
• Preference is given to unserved areas
• The borrower should be a past or current RUS borrower
• Projects should be ready to start immediately

It is this last clause that is driving people to get projects ready to present as soon as possible to the RUS. Many sources are saying be ready by May. There is also a restriction that access to this funding is mutually exclusive from the associated funding provided to the National Telecommunications and Information Administration (NTIA) in the Act.

However, there is one additional priority that is not widely discussed - that priority should go to projects "that will deliver end users a choice of service provider". We are watching this provision closely at Occam to understand how the FCC will interpret its direction. I would encourage you to seek out information on the impact it will have to your network in the future should you choose to take advantage of funds from the Act.

While raising the floor of broadband rates is welcome, basic broadband may not be enough. Industry experience has proven that rural areas may require higher speeds than urban networks, since these communities rely on services such as telemedicine and distance learning more than suburban or urban residents. We also support legislation for NTIA to create a grant program for "non-recurring" broadband deployment costs, prioritizing "unserved" and "underserved" areas.

DSL and FTTP penetration rates are well below 100% throughout the U.S. Occam supports regulatory and economic policies that aim to increase penetration of DSL, fiber and alternative technologies. Further, we support upgrading existing service areas that are below the definition of "basic broadband" to significantly higher bandwidths, reflecting the ongoing explosion of consumer interest in entertainment services such as video on demand, HD gaming and other bandwidth-intensive applications. And let's not forget about the impact of other initiatives such as the shift in the medical industry to digitize paper files. This along with telemedicine growth will also drive additional broadband demand.

Capital investment in infrastructure and broadband technology upgrades combined with increased use of high tech and operational human resources will spur short term economic activity. Occam feels these initial investments will serve as a basis for sustained job creation, a highly skilled labor force and advances in service provider business models. Redefining Basic Broadband is welcome, but Advanced Broadband will be the basis for self-sustained growth - the true goal of the stimulus package.

Sincerely,

Bob Howard-Anderson
President and CEO