Current Communications Group

Current Communications Group / Current Technologies 1Confidential

Current Communications Group

July 2003

Current Communications Group / Current Technologies Confidential – Subject to Liberty Associated Partners Agreement Terms


Introduction

Powerline communications offers a viable, cost-effective new network for broadband services

Target markets: consumers, SME, enterprises, and utilities

“This is within striking distance of becoming the third major pipe in the home” – Michael Powell, Chairman FCC, April 10, 2003

Agenda

1. Overview of Current

2. Current’s Powerline Communications Network

3. PLC vs. Other Broadband Networks

4. Summary


1. Overview of Current


Current Group’s Broadband Powerline Communications (PLC) Mission

Current TechnologyCompanyCurrent TechnologyCompany

Current ServicesCompanyCurrent ServicesCompany

Develop and manufacture powerline communications equipment that provides end-to-end broadband connectivity

Develop and manufacture powerline communications equipment that provides end-to-end broadband connectivity

Operate partnerships with electric utilities to deliver broadband data and voice services over the power grid to residential and business customers

Operate partnerships with electric utilities to deliver broadband data and voice services over the power grid to residential and business customers


Why Current’s Powerline Communications?

Current’s broadband service focuses on ubiquitous coverage of residential and small business customers– Macro-level: Power networks reach all homes and businesses– Micro-level: Power networks reach all outlets within a home or business– Cable and DSL cannot serve everyone

Current’s PLC service and network have economic advantages– Network equipment costs are low and improving– Few truck rolls to customer premises– Modular build-out minimizes upfront funding– Not a “greenfield” network overbuild – PLC uses existing infrastructure and

rights-of-way to sell additional services to existing utility customers

Customer powerline modems are available in stores today– “Plug-and-play” – customer buys a modem and plugs it into any outlet– 2-4 Mbps net symmetrical data rate – significant increase with next generation

Enhanced electric power distribution services for utility partners and their customers


Domestic Electric Utility Geographic Distribution

Over 2,500 utilities in the United States (a)Over 2,500 utilities in the United States (a)

30 largest utilities cover over 55% of U.S. residences

30 largest utilities cover over 55% of U.S. residences

Largest utility covers only 5% of U.S. residences

Largest utility covers only 5% of U.S. residences

Over 100 utilities coverthe top 100 metropolitan areas

Over 100 utilities coverthe top 100 metropolitan areas

(a) Includes investor-owned utilities (IOUs), municipals, government-owned and cooperatives


Current and Electric Utility Partnership

New value opportunities from broadband services for all partners

Combines strengths of each partner

– Utility infrastructure, local resources and customer relationships

– Current’s proprietary PLC equipment, technical and industry expertise

– Current’s history building communication services businesses with focused management team and operational execution experience

Infrastructure and best practices shared across markets

– Leverage capex investment – one NOC, one back office, etc.

Shared funding


Enhanced Power Distribution Services

Improved network management– Outage detection– Load shedding, profiling and balancing– Transformer overload protection– Power quality monitoring– Meter tamper and theft detection– Network security and monitoring

Cost savings– Automated meter reading (including gas and water)– Fewer truck rolls– Lower call center costs– Automation– Remote connect / disconnect – Internal communication links


Current Services Company Today

Two deployments underway with leading electric utility partners that collectively serve 2.5 million homes and over 300,000 small to medium-sized enterprises (SMEs)

Negotiations in process for other deployments Current has deployed 82 CT BridgesTM

To date 200+ homes installed for broadband data service, representing 30% of homes enabled

Homes generally already have access to DSL and cable modem Average electrical outlet in these homes receives over 2-4 Mbps

Current has experienced management operating the deployments

Current has a strong intellectual property position

Backed by Liberty Associated Partners and EnerTech Capital


2. Current’s Powerline Communications Network


Typical Domestic Aerial Electric Power Distribution Network


Overlay of Current’s Hybrid Fiber Powerline (HFP) Network

Fiber backhauls to a carrier

Point of Presence (POP)

Customer plugs modem into any outlet: broadband data and voice instantly enabled

Powerline-fiber interface at substation

CT BridgeTM installed at transformer


Current’s Network Components I

CT BridgeTM

Developed and manufactured by Current Industrial-grade product, meeting the stringent environmental,

electrical and safety requirements of the electrical utility industry. Deployed next to a transformer as a gateway between low-voltage and

medium-voltage lines Aggregates traffic from 6-12 homes or 1-2 businesses Uses a CT Coupler in order to communicate across the MV lines Provides routing, subscriber mgt., DHCP, security, differentiated

services, network mgt. & various enhanced power distribution services

Developed and manufactured by Current The only system element that physically touches the medium-

voltage distribution line Prevents dangerous voltage from passing from the MV lines

through it while at the same time allowing data signals to travel through with minimal signal loss

No active electronics and, therefore, has a long working life Deployed with both CT Bridges and CT Backhaul-points to

connect them to MV lines

CT CouplerTM


Current’s Network Components II

CT ViewTM

Powerline Modem CT Backhaul-PointTM

Available now from retailers Manufactured by third-parties Small size; plugs into any socket 2-4 Mbps net / 14 Mbps raw

bandwidth Connects to USB or Ethernet

port of any computer Complementary with 802.11x

Developed and manufactured by Current

Aggregates traffic from multiple CT Bridges and connects to a metro area network

Uses a CT Coupler in order to communicate across the MV lines

Network element management system developed by Current Group

Runs on a dedicated centralized computer offers multiple levels of security

Enables automated user and infrastructure provisioning

Manages customer data Monitors system status, performance and

usage


Powerline Modems Available Now

2-4 Mbps net (14 Mbps raw) symmetrical bandwidth delivered to an electrical outlet

“Plug and play” functionality Wholesale prices declining Current’s implementation provides LAN / WAN capability

throughout the customer premise– Customer can plug into any electrical outlet

Integrated PLC modem / 802.11b units also available Leading consumer electronics manufacturers


CTBridgeTM aggregates traffic from multiple

customer sites

Existing transformer

steps medium

voltage down to low

voltage levels

Residences

Fiber

Low voltage lines connect customers

to transformerCT

Backhaul-PointTM (node/cell site

equivalent) aggregates traffic from multiple CT

Bridges and connects to fiber metro area network

CTCouplerTM

connects CT Bridge to MV

line

Medium Voltage Line

PowerlineModems connect

devices to Current’s network by plugging into

electrical socket

Current’s Network Components at the Pole

CTCouplerTM

connects CT Backhaul-

Point to MV line


DistributionPt 1 of X

OC X

POP

Regional Data Center

Backhaul Point1 of X

DS1 or DS3

Internet

IP Applications

Other Markets

Other Regions

OSS/BSS

IP Applications

CallAgent

SS7Gateway

SS7Monitoring

PrivateWAN

DS1

DS1

IP Switch

NOC

DS1Op SvcsGateway

SS7ILEC/IXC

Router InternetDS3

911Gateway

911

Call Control andRegionally based

IP Applications

OperatorServices

Call Control and Regionally based IP Applications

Router

DS3

Internet

IP Switch

Mediaconverter

Customer’s Equipment

Carrier Equipment

Legend

Analog line

IP Line

PLC LAN

Customer Premise

LVPLM

PLM

PLM

LV Transformer1 of X

Router

Bypass Device

MV

Router

Router

PLM

Router

The Current IP-Based Network


Network Design Strategy

Minimize build-out costs– Utilize existing fiber, microwave, medium voltage and low

voltage network elements– Take advantage of natural aggregation points– Utilize inexpensive customer premise devices

Toolbox philosophy– Mix and match technologies as appropriate

Maximize modular, success-based deployment Technical specs

– Ensure signal can travel as far as possible on the MV lines– Attain data rate sufficient to service customer loads– Ensure a required latency level for certain services such as

streaming, voice and gaming services


PLC Equipment Development

HomePlug was a big step– Commercially available in 2002– Provides low-cost, high bandwidth device for inside premises

Solutions for the low voltage and medium voltage parts of the network have lagged

Equipment designed for one country generally cannot be used in another without substantial modification– Significant differences between electrical networks in North America

and elsewhere in the world Current has developed an end-to-end network solution

– Addresses LV and MV lines and customer premises– Significantly higher net throughput per user than any other solution that

has been publicly demonstrated Current has unique strategy of focusing on services as well

– More effective than a hardware-only strategy that is dependent on utilities implementing PLC networks on their own


3. PLC vs. Other Broadband Networks


PLC Comparative Advantages

PLC will be a viable third broadband network for residential and SME customers and can gain a significant share of the market– Compelling price, performance, quality, and ease of use

Broad footprint reaching substantially all homes and businesses– Power outlets provide PLC connectivity in every room and office

Network construction cost profile of PLC is compelling– PLC will become even more advantageous in future years

Powerline LAN devices are commercially available, operate at 2-4 Mbps net symmetrical, and cost $45 wholesale – Even lower prices available for high quantity purchases

An overlay, not a “greenfield” network overbuild– Use existing infrastructure, rights-of-way and sell additional services to

existing utility customers Additional revenue from electric power distribution network

management and automation services provided to utility partners


PLC is Complementary with 802.11x

802.11x offers inside mobility, but signal and throughput cannot be assured in every room/office, even when antenna is located inside

When deployed outdoors, 802.11x cannot pre-qualify customers– An outdoor antenna may cover a certain number of homes, but it is not

possible to determine reliably which of those homes have adequate wireless signal and bandwidth inside

– The only way to confirm is to attempt to install the equipment inside a user’s premises

– If the data rate is inadequate after installation, the customer will cancel, the sign-up and installation costs are lost, and reputation is impacted

PLC solves many limitations of 802.11x– Extends reliable bandwidth to every power outlet, bypassing physical

barriers to wireless signals– From a power outlet, an 802.11 WAP can then provide a reliable

wireless connection in a room/office that it otherwise could not Current can use 802.11x in various ways to augment its network


DSL Comparison

DSL-serviceable market limited by many factors– Many central offices (COs) cannot

accommodate DSLAMs– Remote terminals are very costly to

deploy (equip. + fiber backhaul) – Legacy loading coils block signals– Distance from CO affects available

data rate – typically asymmetrical– Near-end cross talk impairs bandwidth

and maximum number of suitable lines Higher bandwidth per user requires

– Shorter loop length– Higher quality copper – More expensive equipment

In order to achieve higher market penetration rates, ILECs must– Undertake costly upgrades, deploying

many new remote terminals and new fiber closer to customer locations

– Recondition / replace impaired copper

Breakdown of 205 Million Domestic Access Lines

57%

16%

16%

11%

43%

Unsuitable COs

Suitable COs: Properly conditioned lines

Suitable COs: Lines potentially problematic

Suitable COs: Lines beyond 15K feet

Source: CIBC October 2002


Cable Comparison

Networks presently have limited physical access to businesses– Owing to their heritage as a consumer service, cable networks primarily

wire residential areas– Although parts of the network pass near businesses, significant

expenditures would be required to actually connect them

Cable modem deployment will be substantial, but it will not pass all homes

Symmetrical data rates are typically not offered today Most deployments use DOCSIS 1.0/1.1 generation equipment

– Significant expenditures will be required for upgrades in order to satisfy increased bandwidth demand

Frequent truck rolls; limited self installation– New coax drops; rewiring coax in home (e.g., extend to computer location)

Upstream path is currently limited in bandwidth due to small spectrum allocation of 5-42 MHz


PLC Comparative Advantages

Symmetrical Bandwidth

Mobility / connectivity every room

Customer Truck Roll

Truck roll cost

PLC YesUbiquitous – all

homes and businesses

Yes (in-home

LAN/WAN)Seldom Very seldom $50-100

Cable Modem

No

80% U.S. homes passed, but little

access to businesses

No

Frequent(new coax drop, esp. if not existing customer; new room placement

for existing customers)

Moderate (area may not be

built out; issues with taps & feeder lines)

$100-$200

DSL

Seldom; much higher

price if offered

Tech. limitations; CIBC est. 35% of

lines not serviceable

No

Frequent (poor line quality;

security alarm or too many phone/fax/

answering machines present)

Frequent (CO not built-out; line quality and

distance)

$100-$200

CommentsGrowing upstream demand

PLC has broadest

reach

PLC uses existing wiring

PLC rarely requires visit

to the customer premises

PLC- incapable locationsare rare

PLC does not need new in-

home wiring

Network Footprint

Disqualified / Failed Installs


4. Summary


Highlights PLC is a viable, cost-effective new network for broadband services

Current’s competitive advantages

– Ubiquitous power networks today = ubiquitous Current broadband network tomorrow

– Few truck rolls to customer premise

– Low cost and high data rate powerline modems are available today

– In-premise LAN functionality with no additional wiring

Current has a focused strategy and is executing

– Network and proprietary PLC equipment operating successfully

– Deployments continue; building strong partnerships with leading utilities

– First mover: only independent company pursuing services

Liberty Associated Partners has a successful track record in launching communications companies

Current Communications Group

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