FCC - APPLICATION TO PARTICIPATE IN THE BROADBAND ADOPTION LIFELINE PILOT PROGRAM

In accordance to FCC Public Notice released on April 30, 2012 (DA-12-683) (the "Public Notice"), we submit our application to participate in the pilot program to provide wireless broadband to low-income consumers in the San Juan area of the Commonwealth of Puerto Rico. PR Wireless, Inc. ("Open Mobile") is an Eligible Telecommunication Carrier ("ETC") with over 300,000 customers in Puerto Rico and has recently launched the latest 4G voice and data network.

Name and Identifiers PR Wireless, Inc. d/b/a Open Mobile ("Open Mobile") Holding Company PR Wireless LLC Company Mailing Address PMB 856 PO Box 7891 Guaynabo PR 00970-7891

Company Contact Name Javier Lamoso Company Telephone Number 787-554-6736 Company Contact Email Address Javier. Lamoso@openmobilepr. com FCC Registration Number (FRN) 0015991664 Study Area Code (SACs) 639007 State or Territory where we are Puerto Rico currently designated to provide Lifeline service Detailed information, including All Puerto Rico geographic locations, of the ETC's current service offerings in the market Maximum Number of months 12 months discount available Type of Service OfferinQ Standalone BB Project Code ldentifier(s) SJData

INTRODUCTION

Puerto Rico has the lowest broadband penetration within the United States. Residential survey research conducted by Connect Puerto Rico reveals an acute lag in broadband adoption across the island. Although 86% of Puerto Rican households have access to broadband, in 2010 only 31% subscribed to the service, implying an adoption gap in Puerto Rico of 55%. In other words, more than one-half of Puerto Ricans have basic broadband service available but are choosing not to subscribe. In comparison, data collected in 2010 by the National Telecommunications and Information Administration indicated that 68% of U.S. households subscribed to broadband service.

The mobile broadband adoption gap is also acute, as only 27% of Puerto Rico residents reported accessing mobile broadband service in 201 0; which is significantly lower than the 59% U.S. average. Even though now there are several fix and mobile operators offering broadband, there is no "product -package" offered in the market directed at non-online population, as well as affordable equipment and actual basic training on digital literacy. For further detailed explanation please see letter of May 21,

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2012 to Secretary Marlene H. Dortsch from the Puerto Rico Telecommunications Regulatory Board and the accompanied copy of the Puerto Rico Broadband Strategic Plan https://prodnet.www.neca.org/publicationsdocs/wwpdf/52112jsi.pdf .

Across Puerto Rico, broadband non-adopters are generally people of low-income, senior citizens, and/or less educated persons. These trends mirror demographic patterns across the US; however, the adoption gap in Puerto Rico for each of these groups is more acute. While across Puerto Rico broadband adoption is 31%, the broadband adoption rate is 5% among adults 65 and older; 7% among residents without a high school diploma; and 15% among households with annual incomes below 2012 Federal Poverty Guidelines. The top barriers to broadband adoption in Puerto Rico include: relevance of the online experience to non-adopters (a lack of value proposition); affordability of the broadband service and access technology; and lack of computer ownership and digital literacy (or knowledge of how to use the technology).

The implementation of Open Mobile's Pilot Program for standalone broadband service will impact an approximate 2,500 households that comply with current Lifeline program requirements. We will provide service, distribute, offer on-line education and maintain operational plans of action to retain broadband subscribers to the Pilot Program.

I . Geographic Area (and specific groups of impact)

We are going to concentrate our efforts to accomplish the goals of the Program in two low-income schools of the Municipality of San Juan. We have partnered with the Municipality of San Juan and we are receiving full cooperation from the schools' administration. We have chosen this municipality for various reasons. Even though is the largest city in the Commonwealth of Puerto Rico, it also has the greatest concentration of citizens living below the poverty line. According to 2010 Census Data this area has an eligible population of approximately 432,403 or 51 .59% of the total population. We estimate that there are approximate 2,500 subscribers and/or household that study in this low-income schools and in our current participating regular Lifeline voice subscribers that we will be reaching out to participate in our Program (see below, Control and Treatment Groups). With the cooperation of the schools' administration we have been able to identify the household of students that are under the 2012 Federal Poverty Guidel ines implemented on June 1, 2012.

A. The School of San Juan www.sanjuan.pr/educacion/schoolofsj.aspx. This is a state of the art school with over 360 students from pre-kinder thru 61

h grade. They are exposed to a complete digital education but because is a public school (managed by the municipality of San Juan) almost all of the students attending come from low-income and qualifying households under the Lifeline Program. In addition, in accordance to informal surveys conducted by the school, the great majority (if not all) of the households of the attending students are not subscribed to a broadband service at home. This situation limits the teachers' and students' capability to perform the appropriate homework. It also limits the communication with the parents as well as their involvement with the school and the school community.

B. The Colegio Universitario de San Juan ("CUSJ")

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www.sanjuan.pr/educacion/ColegioUniversitario.aspx This technical college is also managed and run by the Municipality of San Juan and is completely geared at the education of young adults to pursuit bachelor degrees and train ing of professional courses such as computer programming, electronics, professional assistance, nursing, etc. Students are exposed to internet education while attending only the school, not at their homes. Most of the students are young adults that work part-time, receive federal aid and participate in student loans programs to pay for their continued education. The student body is composed of approximately 2,000 students. And, approximately 1,200 are between the ages of 19 and 29 years old. The CUSJ is quickly moving into on-line education combined with traditional classes. However, CUSJ is facing the same problems as the School of San Juan when it comes to home internet access for its students. CUSJ will start this Fall with the Blackboard Software System in the classroom and all what that entails. However, the success and best use of it will be limited by the individual access to the internet that students may have at home. There are also legal matters under The Student Right to Know Act (38 C.F.R. Sec. 669- Subpart D) that although CUSJ complies by publishing and communicating digitally to its students, again the intent behind the compliance with the Student Right to Know Act is limited by the connectivity that can be utilized by the student body while not within the reach of the Wi-Fi "hot spots" premises.

C. Low-income current Lifeline San Juan Participants We also intent to offer a bundled service of broadband data to approximately 1 ,400 of current participating subscribers of our regular Lifeline voice participants. We currently have an approximate of 7,500 lifeline subscribers within the municipality of San Juan. The idea is to offer the adding on to their already Lifeline voice service, any Price Plan data offering described below at the same extra cost as to none Lifeline Voice participants.

II Technology used for Broadband Service: 4G LTE Wireless Data Network

On April 4, 2012, we launched our 4G LTE network, which is compliant with 3GPP Release 8 and 9. Other technical specifications regarding our 4G L TE network are as follow:

0 50 Mbps Peak Downlink Throughput 10 Mbps Peak Uplink Throughput

0 10 Mbps average throughput DL and 3 Mbps average UL at Good coverage Area

0 3 Mbps (DL) and 1 Mbps (UL) throughput at Cell Edge Coverage

0 Latency of 25ms average

0 10 MHz @ 700 MHz, Band 13 operation

0 Capable of 3G (EVDO) fallback (eHRPD)

We have in-building coverage in approximate 70% of the households that are within the area where the Pilot Program will be implemented. At this time we are delivering speeds averaging 12Mbps. The improvements that will be made when LTE technology is finally rolled out in terms of speed, network capacity and coverage will make mobile broadband a far more viable option for many users, whether they are using the service for personal or business use. Faster connection speeds and greater levels

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of coverage will allow users to access the internet from almost anywhere in Puerto Rico at a speed that is similar to a fixed-line broadband connection and this will appeal to existing users who wish to upgrade to a better service and new users who now feel that LTE technology will allow them to do everything they want to do.

Open Mobile Frequency: Frequency license in the 700 MHz, with specific frequencies: 746-757 MHz, 776-787 MHz

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Dlo.>d : Fr~gHl' IIC I~S (MIIz} D~nclwidlh .!2iJ.llis 1\r~:\ T')~ J.ic<.'II\~S

r A 698·70·1, 72&-73-1 1:! Mil:< 2 X 6 ~1Hz EJ\ 176

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c 7 10-7 16, 740-'1·16 12 MHz 2 x 6 MHz C'MA 73·1

J) 7 16·7?.2 6MHz unp~ir.:-<1 EA O 6

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D 758·763 , 7SS-'/93 10 :-.111z 2 x S MHz N~tionwid<' I •

I) 775-776, &OS·806 2 Ml-!z 2 x 1 MHz MEA 52

Broadband Speeds: The L TE technology includes much faster connection speeds that will allow users to stream high quality audio and video over the internet and also the ability the download much larger data files than they are currently able to over their 3G service. For mobile network providers LTE technology will allow them to support far more users over their network and the extra bandwidth will also allow them to handle much data moving around their network, even during the busiest times of the day. Far better network coverage will also be available using LTE technology and providers will need to install less equipment in order to achieve this extra coverage, which will greatly reduce the cost of upgrading their network and this will allow them to provide much cheaper services. Users living in rural and remote parts of Puerto Rico that are currently very limited in the level of fixed-line and mobile broadband services they are able to receive, will stand to benefit the most from the introduction of this technology as it will provide them with internet access over an affordable high-speed broadband connection. At the moment the biggest rival to LTE technology is WiMAX and although they offer almost identical benefits in terms of speed and coverage they are completely different technologies. The cost of the two technologies will also differ, and this may have a major impact on which of the technologies network providers opt for. Even after a number of successful trials of LTE technology there is no guarantee that this will be the technology they use for their next generation networks.

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4G LTE Rate Plans, Dongle and Hotspots (in the market):

4G LTE C.rrler Monthly Quote

TechnoloBY/Overage Charge/Comments Unks

2GB SGB 10GB 20GB

oP.~n $40 $60 $80 TechnoloBY, LTE Top-up Service; 1GB for $10

~at&t $50 TechnoloBY, LTE ~ttp://www. att.com/shop/wfrefe

Overage, $10/GB s/pfans/data·

plans.jsp?tbld:CKNkdnY6tHI

There activation fees between $20 and $35 for these plans and the wireless routers needed for the service are sold separately at around $175.

4G Rate Plans, Dongle and Hotspots (in the market)

"4G" Cerrler Monthly Quot1

Technolocv/Overece Cherce/Comments Links 2GB SGB 10GB 20GB

TechnoloBY, HSPA+

· · T- · ·~lobilc· $39.99 $49.99 $79.99 After 100% quota consumption lsreached, speed Is :}1/t.·t.w.t~':it <-:-Js"~;Jri•• J/f"'·:~·t-t:r.: •~ •·.:..;:,~, u;'

lowered until next billing cycle

Technolocv, HSOPA Data usage will be stopped at 100% of quota •t:".'"//(.:t'!i -·.:: Lc·• -;~:..:' <·:-... t.,·nt~:.: , fl& r

8 consumption '&<I; . 1 >!11/0:11/'f. •• !'1_1 ·~··_,,,.,._~.,: l l.t!'.Ct\.t l"j i_I '(~ J_lf ~ l'll!P I"U·

$24.99 $34.99 Top·up of 1GB ($19.99) "<S!,: IJO:/!.'~/;/d/N,..S ~nr•1.L\'HoUS:J'/IJ t: -:rc.:n ,'•(l.:. u::ITt t.."'l_fln.t'CJJ t lO, •~:I_t.,

Other Top·up alternatives available ·:c_' U.l U ,,·,-t :t • J 7n_Q1G (JIT~I¢f1Jr:¢:-.\

Also, lGB($19.99), SGB($29.99), 12GB($69.99) ,!IQlJ .rf lff~ iiJ:.;r.; Zi i'\~~!·••,,,.,UC! t'A~T

~-1!/: J/O:.S/LZ :I I.S !tlC 'IISI"Cl.StV

monthly plans available

TechnoloBY, Wlmax

> Overage, $.05/MB n,l/.~.:;- •;/·t.t~~"'~lnt•?n./•~ :;Jr' ••Jp•

$59.99 SGB plan exclusive for Dongles .,.Y.l .!I;!U';~:• ;t_tl~ l_fl!.J_UH.~<:w•U~

Also, 6GB($49.99), 12GB($79.99) available for Dongles l ;:a•P& ""\-' tTt&.t • • .-1

Sprint Hotspots, SGB($34.99)

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Noteworthy Land line Internet Providers- Metro Area

Carrier Quota Technology/Overage Charge/Comments

40GB Unlimited

O NE-LinK $44.92 Landline/ 10GB for $17/ 2 Year Contract •

~ @ ~!M.,.lC I '!

$55.99 laro MVNO/ Unlimited/ 3MB to 5MB of Speed/ 1 Year Contract

LIBERTY &4-t ,, .. ......,. .. w

$65 r.;atell lte/ Unlimited/ 10MB of Speed*/ 1 Year Contract

I·~·~ J $84.95 Land line/ Unlimited/ 5MB of Speed*/ 1 Year Contract

All of these plans above involve the purchase of equipment costing between $150 and $200. For the eligible sector these are high barriers of entry to connectivity.

Ill. Service Plan of the Pilot Program

We have designed plans that take in consideration the economics of the groups and demographics we want to impact together with our experience as a Lifeline Program provider for the last 5 years in Puerto Rico. We believe these are plans that do not only make them affordable to the households we are trying to reach, but that would also satisfy the hopefully fast growing appetite for internet access speed and data capacity. We also believe that simplicity in the offering is necessary to "bridge" over the intimidation this consumer sector may have when it comes to what essentially may be a new product and experience. Furthermore, we have experienced that partial monthly payment helps the new subscriber appreciate and commit to obtain the best use of the service being offered. Open Mobile currently offers EV/DO data connectivity (not 3G or 4G speeds) to its current Lifeline Plan customers at approximately $42 monthly price (currently 14,500 subscribers have this plan). Taking all of our experience into consideration please find our proposed plans below:

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lifeline Data Pilot Program

lifeine J Plans

USB Modem

Hotspot

Tab let Bundle

Laptop Bundle

Monthly J ree

$20

$20

$20

$20

Desktop Bundle $20

Connectivity Equipment

Oata J Quota

5GB

5GB

5GB

5GB

5GB

Oata Speed J

Up to 12M bps

Up t o12Mbps

Up to 12Mbps

Up to 12Mbps

Up to 12Mbps

Pac~age J PfKe

$50

$50

$300

$300

$300

Device J

fO•o•. , C tt O N/\1 1C•lN.

C..O•.t~f' C i t O

N /\ I H•l N .

• The "USB Modem" refers to the Ovation™ MC551 4G LTE Modem. This modem is the next generation of the Novate! Wireless Ovation USB mobile broadband modem portfolio, building on award-winning innovation and design, proven performance and industry-leading flexibility and reliability. This 4G LTE USB modem provides LTE peak download speeds of up to 100 Mbps*(theoretical) and peak upload speeds of up to 50 Mbps.

• The "Hotspot Modem" refers to MiFi 4510 of Novate! W ireless with proven performance and industry-leading flexibility, convenience, and reliability. The reliable MiFi 4510 is backward compatible with the 3G COMA 1 XEvDO Rev A network and includes new features, such as integrated status display on the device showing signal strength, roaming , battery level, and number of devices connected.

• The "Tablet Bundle" includes a Xoom Motorola Tablet (WiFi) with 10.1 inches wide screen, dual core processor and 1GB of RAM. It has 32 GB external storage, expandable to 64GB. This Tablet is an Android HTML Webkit , Tabbed browsing, Chrome bookmark sync, Incognito mode, Form auto-fill and includes app's of all Google Services (such as Maps and eBooks).

• The desktop and laptop computers are described below under Digital Literacy Training and Computer Equipment.

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Pricing and Subsidy

All of the Package Prices include discounted equipment with no hidden cost. On the first 2 plans (USB Modem and Hotspot), the modems included have a regular cost price of $1 69. If you apply the Package Price against this payment, Open Mobile will be subsidizing $119 on the equipment for these packages. The 'Tablet Bundle" includes the "Hot Spot" Modem together with a Xoom Motorola Tablet (described above) that currently sells for $300. On a $300 Package Price, the total amount in subsidized equipment is $169. The "Laptop Bundle" and "Desktop · Bundle" include the "Hot Spot" Modem plus either a Laptop Computer or a Desktop Computer supplied by Connected Nation at an average cost with shipment of $190. With a $300 Package Price paid by the subscriber the total subsidy on the equipment would be of $59. Pricing , discount and monthly revenue are discussed on the attached Table A and B.

In our experience, we have seen that those subscribers (including Lifeline customers) that invest on the most expensive of equipment tend to have the lowest of percentage of disconnections.

Open Mobile Pilot Program Offering Market Comparison

To illustrate how our offers will compare with current wireless data offers in the market we have prepared these comparative tables. You will notice that they all required contract and therefore be credited and must have bank accounts.

Devices and Costs: Open Mobile vs, AT&T

~at&t

Devices USB Modem Hots pot Laptop Bundle USB Modem Hotspot AcerNetbook

Monthly Fee $20 $20 $20 $50 $50 $50

Data Quota 5GB 5GB 5GB 5GB 5GB 5GB

Data Speed Upb l 2~16 Up t~ 12 ~16 Up to 12 )18 li~ irlo; l TE Sy::~ t;~ info; l Tf SF'! td t::> irfo; lTf S;.-tr~

Package Price $50 $50 $300 $79.99 $69.99 Sl9.99 mo. x 24 mo. +

S6 9.99 (lfottp o t c o il)

Re strictions n/a n/ a n/ a 2 Yr. Contract 2 Yr. Cont ract 2 Yr. Contricton bot h devices

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Devices at'\d Costs: Open Mobile vs. Claro

Devices USB Modem TabiE.t Laptop Des !..top Bundle Bundle Bundle

Monthly Fee $20 $20 $20 $20

Data Quota 5GB 5GB 5GB 5GB

Data Speed Up h 12H8 Up !~ 12 H8 Up t~ 12 ~IB Up!? 12 HB

Pack.lgeP!ice $50 $300 $300 $300

Restrictions n/ a n/ a n/ a n/ a

Proposed Pilot Program Funding Amount

USB Modem

$29.99

2GB

GS'I

$19.99

2 Yr. C':'rlr3:t CrEd t cr.ec~

Tablet Bundle

$19.99

*

Laptop Bundle

$19.99

Url-mf\~ 13 ; Ur' •rutt d; SFn d Limit S;>nO l,;m I

51 2~~0/ Ls•O Liro 512~~•.1 Lo•cS Lir•

$27.95 mo. $11.95 mo. s 670.60 s 573.60

24 m:o. 4S m~.

Cn:e I Cr rc~; Afproval ~r APR 3.65\~

Londline 0/fuings

• Not on LTE Network

The duration of the monthly subsidies will be for the duration of the pilot program. The proposed Pilot Program Service Plans described above requires a monthly subsidy of $30.00 per subscriber plus a onetime activation fee of $50.00. We intend to service a total of approximately 2500 for 13 months but due to a 1% assumed churn plus the fact that it will take some months to reach the total amount of subscriber the total amount would be of $875,708. Please see our month to month detailed projections for our proposed Pilot Program on the attachment identified as Table B. We must clarify that considering the compliance required under the Public Notice, the task of information gathering and everything else we are trying to accomplish with the Pilot Program, we are presenting the most optimistic of our scenarios when considering amount of actual subscribers and churn.

Marketing and Reach-out Plan to Pilot Plan Participants

We would be ready to roll-out our campaign 8 weeks after being officially awarded with the Pilot Program requested herein. Because of our experience, our partnership with the San Juan's schools described above and our research and preparation in our proposed pilot plan services, we strongly believe we would be able to provide access to the proper groups in an almost immediate basis. We have a specialized sales unit that concentrates on low income Lifeline eligible subscribers that we will be assigning for the San Juan school. We will also have printed brochures information with detailed information of the Pilot Program with its terms and conditions.

The schools have all the data ready and available for us and the schools' administration have explained that parents and students at both schools will be quickly notified to attend informational seminars on the Program. Booths and helping desks will be located on the premises for the parents (on School of San Juan) and the students of CUSJ are able to learn and request to participate in our program (collectively referred to as "the San Juan Schools"). The availability to their residential data and other demographic information will allow us to quickly qualify the participants; help create the "control groups" and the "treatment groups" at each school (details below under Treatment and Control

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Groups).

In connection with the regular Lifeline Program, we currently have approximately 80,000 subscribers of our voice Lifeline Plan in Puerto Rico. In San Juan particularly, there are approximate 7,000 participants in a monthly average. We plan to reach and receive request to participate in the Pilot Program from at least 2,000 of these participants. We will reach out to this group on random basis by means of SMS and outbound calls from our call center until we reach the 2,000 possible participants. Our call center is equipped with state of the art technology and is locally operated by us with over 150 employees and with I.V.R. 24/7 operations.

Treatment and Control Groups

We will have 2 sets of treatment and control groups. The first set of group will be composed of the subscribers chosen from the San Juan Schools. In this set of groups we intend to maintain a 30% of the applicants as part of the control group - approximately 500 applicants - (the "School Control Group"). The other 70% of the qualified applicants will be offered the service as detailed above for an estimated total of 1,100 subscriptions (the "School Treatment Group").

The second set of group will be the one composed of the qualified applicants that within the San Juan municipality currently participate in Open Mobile's voice Lifeline Program. As we mentioned before, we believe that we can receive approximately 2,000 (or 28% of the current total eligible Universe) to apply for the Pilot Program. In this case the control group would be of no less than 30% of the applicants, or approximately 600 eligible applicants (the "San Juan Control Group"). The San Juan Treatment Group would then be composed of approximately 1,400 actual eligible subscribers.

One reason for focusing on these particular segments is to be able to maintain control of information on the individuals that will form the Control Group.

Randomization (how the Treatment vs. the Control Group will be chosen)

In the past, we have created randomized systems that originate calls and SMS text messages for our network tests and customer surveys. For the purposes of the Pilot Program, we will set in place a separate relational database that will include all applicants to the groups. For every applicant there will be a unique identifier. That unique identifier will be used to apply a module 3 function, based on the 30% control group definition to classify each 3 of every 1 0 that will be loaded on each database schema.

Customer Service support to Pilot Program Participants

In regards to customer service, we plan to support these customers as we service our regular paying customers. The Pilot Program participants will receive the same high level attention we give to all our customers. At our call center we also have a technical unit that currently specializes in the use of connectivity of our 4GLTE product line and that will be concentrated during the first few months of signing up our participants to the Pilot Program.

The San Juan Schools will make available time and office space (if necessary) for the set up and use of the wireless modems included in the offerings.

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Digital Literacy Training and Computer Equipment

The School of San Juan and CUSJ both offer and require digital literacy courses (and related support) at all levels.

For those in the San Juan Treatment Group (as well as those that so decide to in the School Treatment Group) there will also be certain computer digital courses required to all of those interested in acquiring the bundled offer of the Laptop and the Desktop computer. For this purpose we have partnered with Connected Nation (http://www.connectednation.org), a non-profit organization solely dedicated to the promotion and adoption of technology and broadband in the United States.

We have identified specific easy-to-use videos and slide-based coursework sponsored by Connected Nation that cover computer basics, Internet fundamentals, and applied Internet use. After completing the basic training, students can move into a wide array of topics from jobs to education, healthcare, or further computer knowledge. The training may be self-guided or instructor-led, and Connected Nation can help oversee instructor-led programs. The training is also made available in Spanish and English to align with trainee preferences.

Participants in our Pilot Program and in the Connected Nation's training programs will be able to purchase top of the line refurbished computers. There will be 2 models available: 1) Desktop - with Pentium 4 Processor, 1GB RAM, 40GB Hard Drive with DVD Drive and a flat 15" Display Monitor; and 2) Laptop - with Pentium 4 Processor, 1GB RAM, 40GB Hard Drive with DVD Drive and a flat 15" Display Monitor and wireless capability. However, Connected Nation currently sells this equipment only by credit card or check and money order by mail. We believe that these type of payments makes it difficult for the targeted participants to acquire such equipment. Our customer service department estimates that no greater than 15% of our Lifeline customers have a bank account. If the proposed program is awarded, Open Mobile has agreed to purchase in advance an inventory of these computers in order to have them ready and available in Puerto Rico to be sold at cost (no mark-up) to the Participants of the Pilot Program and Connected Nation's training program. The packages and cost have been explained above and can be also analyzed on the attached Table A.

Reports on standardized data for USAC

Due to the fact that Spanish is the only language spoken by the great majority of the people in the communities that we plan to serve, we have opted to gather the data, translate it to English and report it to USAC. On a quarterly basis, we will be digitalizing the information required in the attachments of the Public Notice and presenting it in the form of "captive page". Therefore, on a periodical basis, users will be presented with a "captive page" that will require the filling of the information required in the Public Notice. We will also have an outbound campaign conducted from our call center to gather general customer satisfaction information. A lot of the information in the standardized forms can be collected directly from the network and the monitoring of the consumers participating in the Program. Other important information will be asked by contacting the customer directly by means of our call center and direct email when possible. At the end of the Pilot Program Open Mobile will provide a report on the use of bandwidth and average speeds provided to the participants.

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Compliance with Lifeline and Commission's Rules for the Program

Open Mobile has been an ETC Certified operator since May 2007; therefore, we had complied with Lifeline local and federal rules since that date. Open Mobile already modified its certification form to comply with the new rules of the February 2012 Order. In addition, the Puerto Rico Regulatory Board implemented in May 1, 2012, a central database that avoids duplicates in social security and households. Therefore, due to the Public Notice requirements and selection of demographic and our specific segments of our targeted groups, we do not see difficulty in our verification of eligibility compliance. Our staff is also well versed on the eligibility requirements that we keep published in the company web-site as well as in all related printed material for the public.

Description of how Open Mobile will transition its broadband subscribers at the conclusion of Open Mobile's project once the Pilot Program ends

We have designed our Pilot Program Service Plans in such a way that participants that stay for the full year with the service and have maintained their equipment will be able to continue enjoying the service for as long as new equipment is not needed. That is, if participants take care of the provided equipment, after the 12 months of subscription we will honor the price and service level of the Pilot Program for as long as new equipment is not required without receipt of the awarded subsidy to initial participants only. This information will be explained in all brochures and printed material, as well as explained by the staff participating in the reach-out marketing plan.

Final Report to the Commission and Hypothesis

Open Mobile intends to submit a final report to supplement the information of the quarterly reports described above, which would include the cost for subscribers to convert from non-broadband users to broadband adopters. A general 'lessons learned' report will be provided as well as all other information on effectiveness on actions taken for the adoption and retention of broadband subscribers. In addition, we would be available to answer any doubts or other information that the Commission may request in connection with the implementation and results of the Pilot Program.

Taking into consideration price plans, equipment and training being offered as part of the Pilot Plan, Open Mobile hypothesizes that the San Juan Treatment Group will have a much lower churn percentage and greater retention than our regular Lifeline customers. At Open Mobile, we see a growth of time spent with their smart phones on data related actions and less on plain voice calls .

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Certification

D Open Mobile intends to offer broadband service pursuant to the Commission's rules and regulation for the Lifeline program;

D Open Mobile will implement all necessary procedures and efforts to prevent waste, fraud and abuse in connection with its participation in the Pilot Program, including but not limited to procedures that Open Mobile will have in place to prevent duplicate broadband subsidies within its subscriber base, and procedures the carrier undertakes to de-enroll subscribers receiving more than one broadband discount per household;

D Open Mobile's broadband service offering will provide sufficiently low latency to enable use of real­time applications such as Voice over Internet Protocol and if there are usage limits for each plan, that they are reasonably comparable to usage limits for comparable broadband offering in urban areas; and

D Open Mobile will participate in the collection and sharing of anonymous qualitative and quantitative data with standardized data elements, formatting, and submission requirements, and that Open mobile will participate in workshops to discuss interim and final results of the project, and how best to use limited universal service funds to increase low-income consumers' adoption of broadband services.

I, Federico Grosso, Chief Financial Officer of Open Mobile, certify under penalty of perjury.

FEDERICO GROSSO, CFO

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TABLE A

Bundle LTE Modem/Tablet Plan:

Tablet Cost ($ 300) L TE Modem Cost ($ 169) Bundle Price $300 Bundle Plan Subsidy {$169) Federal Subsidy Amount Activation Fee $50 #Sales in 4 months: 200

Bundle LTE Modem/Laptop Plan:

Laptop Cost ($190)

L TE Modem Cost ($169)

Bundle Price $300 Bundle Plan Subsidy ($59) Federal Subsidy Amount Activation Fee $50 #Sales in 4 months: 200

LTE Modem Plan:

LTE Modem Cost ($ 169) Router Price i2Q L TE Router Subsidy ($ 119)

Federal Subsidy Amount Activation Fee $50 #Sales in 4 months: 2,100

Model Assumptions:

Federal Subsidy Amount Monthly Fee $30 Monthly Fee paid by Customer $20

TABLE B

Mode l: Month 1 Month 2 Month3 Month 4 MonthS Month6 Month7 MonthS Month 9 Month 10 Month 11 MonthU Month 13 Total

BoP Subs 62S 1,244 1,857 2,463 2,438 2,414 2,390 2,366 2,342 2,319 2,296 2,273

Gross Adds 625 625 625 625 2,500 Disconnects (6) (12) (19) (25) (24) (24) (24) (24) {23) (23) (23) (23) (250) Churn% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

EoP Subs 625 1,244 1,857 2,463 2,438 2,414 2,390 2,366 2,342 2,319 2,296 2,273 2,250

Federal Subsidy Amount Monthly Fee 18,750 37,313 55,689 73,882 73,144 72,412 71,688 70,971 70,262 69,559 68,863 68,175 750,708 Federal Subsidy Amount Activation Fee 31,250 31,250 31,250 31,250 125,000

Federal Subsidy Amount Total 50,000 68,563 86,939 105,132 73,144 72,412 71,688 70,971 70,262 69,559 68,863 68,175 875,708