Company Background Clear Creek Communications Service Area 52
Sq. Miles Founded 1906 Statistics Dwindling Access Lines Stable DSL
and Cable Modem Customers (20/80) Stable Number of Video Customers
Growing Number of Security Customers We serve no place Virtually no
cities, towns or named communities
Slide 3
The Network of the Future May Not Be Your Own External Forces
Are Changing How Traditional Carriers View the Very Nature of Their
Operations Leveraging Any Available Network is Now Acceptable
Slide 4
External Forces Change the Future Three Drivers of Change 1.
Reductions in Traditional Revenues 2. Financiers Tighten Credit 3.
Active Regulatory Period Opportunities Brought by Change New
Revenues and Markets Outcomes Actions Reactions
Slide 5
1.) Reduction in Traditional Revenues ILECs Actions Traditional
Cost Cutting Can Result In Returned Revenue Customers Actions
Movement Toward Wireless Can Result in Uncollected Revenues Action
Of Others Events Beyond Your Control Can Result in Lower
Revenue
Slide 6
ILECs Actions Cant Manage an ILEC Like a Normal Business Cost
Savings vs Cost Study Complicated by Two Year Lag Positive Impact
Can Be Short Lived Frustration and ?#*%&$!
Slide 7
Customer Action Adoption of Broadband Loss of Second Lines
Shift Toward Wireless Loss of Primary Lines Recession Just Trying
to Cut Back Impact on All Services Expanded Options Some Customers
May Not Know You
Slide 8
Customer Actions Wireless Drift Access Line Loss
Slide 9
Local Impact Caused By Separation Rules Returns That Are Driven
By Averages National Average Loop Cost Local Rate Benchmarks CAPS
Directly Impacted Our Operations Heavy Investment In Some Areas
Raised NALC Our Investment Straight Lined Impacts Our NALC Multiple
Significant Reduction in Support 20% of Annual Revenue Lost Actions
of Others
Slide 10
Exponential Growth National Average Loop Cost Increase
7.5%,14%, 10%, 12%, 1% NACP Grew 3x Faster Than Company 2.2x
2.1x1.9x 1.7x1.5x1.6x
Slide 11
2.) Financiers Tighten Credit Concerns With Industry Segment
Telephone Business Performance Regulatory Uncertainty Result
Cautious Lending Tighter Covenants Bottom-Line Less Capital
Available Loan Pre-Payments
Slide 12
Concerns With Industry Segment Industry Multiples Jan 2013 Mean
Enterprise ValueGrowthLending Multiple Transport/ Data Center 13.0
x (DCs)10 20%3.5 6.0 x Cable7.3 x5 10%3.5 6.0 x Wireless5.2 x0
5%2.5 3.5 x Telco5.7 x-5 5%1.5 3.0 x
Slide 13
Credit Impacts Operation Shifts Importance of Debt Service 20%
Movement in 5 Years Options Still Exist For Funding Leverage Must
Be Moderate Business Plan Must be Prudent Heightened Due Diligence
Will Be Pricing to Risk Bank Will Have a Greater Focus Management
Diversification Performance To Plan
Slide 14
3.) Active Regulatory Period Pressure on Telco Operations
Limitations on USF Support Phase Down of Switched Access Cost
Recovery Corporate Operations Expense Limitation Rate of Return
Re-Prescription And More
Slide 15
Pressure on Telco Operations USF and ICC Reform is Our Reality
Industry Continues to Advocate We Are Well Represented Yet That May
Not Solve Your Specific Challenge Some of Us May Have Serious
Issues Regulators Continue to Regulate They May Not Have Your Best
Interest In Mind Surprise!
Slide 16
4.) New Revenues and Markets Positive Action Can Be Taken
Revenue Generation Possibilities Actions We Pursued Large Scale
Project Security and Home Automation Leverage Available Networks
Both Wired and Wireless Partnering
Slide 17
Positive Action Can Be Taken Additional Revenue May Be
Generated By New Services New Customers Low Capital Options Funded
Per Customer Partnerships Cost Savings Expertise
Slide 18
Revenue Generation Possibilities Many Carriers Have Developed
New Services Regulated & Non Regulated Monitoring/Security Home
Networking Computer Literacy/Support VoIP Hosted PBX Ethernet
Transport to Wireless Dark Fiber Colocation
Slide 19
Revenue Generation Possibilities Or Attempted to Leverage
Existing Assets Assets Owned and Operated Switching Services
Installation & Repair Customer Service Billing & Collection
Accounting/Regulatory/Management Assets of Others Wireless Networks
Interconnected Networks Capital Investment Labor and expertise
Slide 20
Security & Home Automation ClearView Next Generation
Security Interactive Security Energy Management Home Automation
Video Monitoring Leverages Wireless and IP Networks Backhaul on
Verizon, ATT, T-Mobile Video and Secondary on Any IP Connection
Easily Offered Beyond Exchange
Slide 21
Industry With Growth Spurt Projected Annual Revenue Growth
Slide 22
Interactive Security Complete Web Control A New Reality for
Customers
Slide 23
Energy Management Measure Energy Usage Multiple Measurement
Levels Set Energy Goals Query Current Usage emPower Control Lights
Operate Appliances Thermostats
Slide 24
Home Automation Intelligent Operations Smart Schedules Activity
Patterns Geo-Services Home Control Garage Doors Window Blinds
Slide 25
Video Monitoring Video Is The Most Popular Feature Live
Streaming Video Alerts Cloud Storage Network DVR
Slide 26
Leverage Other Networks Western Independent Networks Expands
Our Reach Offers Transport Network Throughout Oregon And The
Greater Northwest Region Leverage The Networks Of 25 Shareholder
Companies Expands Our Opportunities Oregon Broadband Partnership
Participation With Others Integra Century Link Wave Broadband LS
Networks INDATEL (National Coverage)
Slide 27
Partnering ClearView Particularly Suited to Working Together
Current Have 7 Partners Sharing Common Brand Knowledge Marketing
Sales and Technical Staff Facilitates Quick Entry
Slide 28
Partnering Oregon Cable Group Created in 1999 Recently Joined
Current Have 4 Members Sharing Headend Equipment Capital Projects
Knowledge Technical Staff
Slide 29
Partnering Western Independent Networks Equity Partner Network
Partnership Services Utilized Point to Point Special Access
Ethernet Transport Internet Backbone Access IP Voice Aggregation
Peering NOC and Maintenance Services
Slide 30
Partnering Possibilities Abound Jointly Provided Services
Infrastructure Sharing Wholesale Purchasing Management/Labor
Contracts Look Around You Whats Happening in Your Neighborhood? Are
You Part of The Discussion?