IBEC, Inc. 285 Dunlop Blvd, Suite K Huntsville, AL 35824 256.492.1000 ibec

International Broadband Electric Communications

285 Dunlop Boulevard SW, Suite K – Huntsville, AL 35824

256-492-1000 – [email protected]

IBEC, Inc.285 Dunlop Blvd, Suite K

Huntsville, AL 35824256.492.1000www.ibec.net

Rural TeleCon ‘07

Introduction to IBEC’s BPL Solutions




Overview

• IBEC’s Experience in Industry

• IBEC’s Equipment and Investment

Estimates

• IBEC’s Market Focus and Potential

• BPL Outlook

• Questions




IBEC’s Experience in Industry

• Established in 2003 for BPL; ISP Services Since 1995Offices in Huntsville and Hokes Bluff, AL

• Full-service Internet Service Provider, Serving Over 5,000 Customers in Northern Alabama and Georgia

• Existing ISP & Service Relationships with Utilities mostly Electric Cooperatives

• BPL 1st deployed in October of 2002

• Two commercial deployments- VA and IN, passing some 1,500 homes, via approximately 170 mile of power line, (average density is 9 homes/mile) and 300+ paying customers




• Model - Full-Service ISP Solutions at Competitive Prices With Modest Financial Investment by the Utilities

• Turnkey Solution - IBEC Provides Equipment and Services Utility Provides Infrastructure and

Customers

• Technology Delivers Fully-IP-Based, DS2 Based BPL wired connectivity and Wi-Fi Internet Solutions to Utilities & Their Customers

• Solutions are Optimized for Low-Density Marketplace

• Electric Cooperatives and Rural Utilities are IBEC’s Ideal Partners





DNS / Billing Servers

Internet OC-3 n x 45 Mbps

Power Substation

MV Distribution Feeders (3-4) 4-36 KV

MV Power Distribution LinesRegenerator

Unit

IP-based broadband Internet access over the existing electric power distribution network

• Data • Voice • Video Security

TypicalResidential Consumer

DistributionTransformer

&LV

Secondary

Wireless Router

Ethernet or USB

To Other Customers

The BPL System consists of the:1. Head End / ISP Access

Connection2. Substation Router/Couplers3. Regenerator Units 5. Wireless Router

Router / Gateway

PSTN n x T1 PRI Voice

Regional Communications

CenterOr

Utility Office

To OtherSubstations

Fiber

1

23

5 Substation Detail

Router

Head-End Modem & Fiber Xcvr

Fiber

MV Coupler

Fiber

802.11 Wi-Fi802.11 Wi-Fi

Regenerator Unit

Wireless Hybrid BPL Network





• Awarded $19.2 Million Loan from RUS Broadband Program in August 2005 (RUS’s 1st BPL Loan)

• Loan to fund deployment in 3 Cooperatives (Cullman AL, Central VA, and South Central IN) passing 105,000+ homes

• Submitted 2nd Application for $50+ Million in September 2006 to deploy 13 additional Electric Cooperatives passing more than 200,000 homes

• Currently working on 3rd Application with expectation of 20+

additional Cooperatives and approximately 400,000+ homes – to be submitted by mid 2008





• Tremendous Growth being experienced in BPL industry today

• Long-term benefits exist beyond broadband data services

• Current products offer bandwidth up to 80Mb of usable data

throughput, but like all IT, even greater things to come – SOON

• Power lines are the only truly ubiquitous “wires to the home”





Commercial Deployment

Trial Deployment

City of Manassas

PPL

Cinergy

ConEd

DQE

PEPCO

Southern Company

Clyde

Consumers

Cullman Co-op

Ameren

South Central Indiana REMC

RPU Lebanon

Fayetteville

Indianola Municipal

OPPDAPS

Idaho Power

Hawaiian Electric

Sierra Pacific

PG&E

Santee Cooper

Progress Energy

Solvay Electric

Chelan PUD

Douglas PUD

Duke

Central Virginia Electric Co-op

AEP

SMECO

Avista

New Horizon

Bowling Green

Orange & Rockland

City of Salem

City of Sherril

Habersham EMC

HILCO Co-op

United Illuminating

Northeast Utilities

Courtesy:

City of Burnet

City of Weimar

CenterPoint

LADWP

San DiegoGas & Electric

Princeton





Overview



Estimates




IBEC Licenses Patented BPL Coupling & System Architecture Technology

IBEC Has Four (4) Pending U.S. Patents:

– BPL Regenerator System Architecture

– Enhanced MOV Capacitive Coupler Improvements and Methods

– Method of Coupling BPL Signals to Underground MV Power Lines

– High-Performance Impedance-Matching Device and Methodology

International Patent is Pending on the 2nd-Generation Architecture

The Company Expects to File Additional Patent Applications on:

– Feed Method for Delta Power Distribution Systems

– BPL AMR integration

– Additional New Technologies

IBEC’s Equipment and Investment Estimates




Interference

Carriers

Nulled carriers

Frequency Spectrum

Notched carriers

OFDM Modulation

• Very Tolerant of Noisy Environments Seen in Power Lines

• Fixed Notching With Self-Notching Capability

• Remote Notching Capable (Required by FCC)






Access BPL Equipment

BRU CAU





In-home / Customer Premises BPL Equipment





IBEC’s Patent-Pending BPL Coupling Technology





Medium-Voltage

Access BPLEquipmentInstallation





• The average Electric Cooperative has approximately 2,200 miles of distribution power lines

• The average Electric Cooperative has approximately 18,900 Members

• IBEC’s current medium-voltage products require signal regenerator placement approximately every half-mile

• IBEC projects a conservative ~ 20% Member subscription rate

• IBEC projections based on the above numbers correspond to an ~ $5 Million BPL investment per average Cooperative




Overview


• IBEC’s Equipment and Investment Estimates





Mission Statement

“To become the leading provider of Internet Protocol (IP)–based

Broadband communications over electric Power Lines (BPL) to

rural and underserved markets in North America”

IBEC’s Market Focus and Potential




Electric cooperatives are private, independent, member-owned electric utility companies

– Established in early 1900s to deliver at–cost electric service to rural consumers

There are 865 distribution electric cooperatives in the U.S.

– Serve more than 39 million people and 17 million homes and businesses

– Cover more than 2.4 million miles, which is 44% of the U.S. electric distribution grid and over 75% of the nation’s land mass

– Span 47 states and more than 2,500 counties





Courtesy: NRECA

Approximately 75% of the US Land Mass and 44% of the US Distribution Miles are Co-Ops





Rural Consumers Prefer to Receive Broadband from Their Cooperative

Co- op Member Broadband Preferences

25

1015

50

0

10

20

30

40

50

60

Local Phone National ISP Satellite Electric Co- op

% o

f Pro

vid

er

Pre

fere

nce

Source: Touchstone Energy Broadband Internet Survey, 2003





Rural vs. National Broadband AdoptionBroadband Users At Home

05

101520253035404550

2000 2001 2002 2003 2004

Year

Mill

ions

of

Use

rs

Nation Rural

Source: Pew Internet & American Life Project, 2004





Overview


• IBEC’s Equipment and Investment Estimates


• BPL Outlook




BPL Market Growth Projections

BPL is expected to grow by a compound annual

growth rate (CAGR) of 106% from 2006 to 2012,

with 33% of new broadband customers choosing

BPL and 12% of existing broadband customers

switching to BPL by 2012 (Research Reports

International, 2005)

BPL Outlook




IBEC has “signed” contracts equaling 07 projection

BPL Outlook




(Aggregate Value of Achieved Intelligrid)

$0

$100

$200

$300

$400

$500

$600

$700

Reliability

Productivity

Capacity

Bill

ions

Safety

Security

Quality of Life

Cost

Environment

Quality

Why do Utilities want BPL?

$671 Billion

Source: Electric Power Research Institute

Note: 20 year period

Intelligence

BPL Outlook




BPL is a Growing, Viable “Third Wire” option for Broadband Delivery Anywhere, but especially applicable to Rural Areas

Industry is still Young and Growing; Opportunities Abound not only in U.S., but Worldwide

IBEC currently has 16 Electric Cooperatives under Contract passing some 200,000+ homes, of which ~86% currently have ONLY dial-up service as an Internet Option

IBEC has received RUS Broadband funding for 3 Co-Ops; 13 More are now in Application Review, with More to Follow

Electric Utility Applications are a Huge Long-term Opportunity

BPL Outlook




Overview



Estimates


• BPL Outlook

• Questions ??




Thank You

Contact Information:

International Broadband Electric Communications, Inc.

285 Dunlop Boulevard SW, Suite K

Huntsville, Alabama 35824

Telephone: 256.492.1000

Facsimile: 256.456.1406

Email: [email protected]

Documents

IBEC, Inc. 285 Dunlop Blvd, Suite K Huntsville, AL 35824 256.492.1000 ibec