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Transcript of 970 WEST VALLEY PARKWAY, SUITE 509 SAN DIEGO, CALIFORNIA 92025 PHONE: 760.233.2387
970 WEST VALLEY PARKWAY, SUITE 509970 WEST VALLEY PARKWAY, SUITE 509SAN DIEGO, CALIFORNIA 92025SAN DIEGO, CALIFORNIA 92025
PHONE: 760.233.2387PHONE: 760.233.2387FAX: 501.639.6825FAX: 501.639.6825
www.nethercomm.comwww.nethercomm.com
THIS PRESENTATION AND ANY DOCUMENTS ATTACHED HERETO, CONTAINS CONFIDENTIAL AND/OR LEGALLY PRIVILEGED INFORMATION. THE INFORMATION IS INTENDED ONLY FOR REVIEW BY THE AGREED RECIPIENT PER THE TERMS OF A PREVIOUSLY EXECUTED CONFIDENTIALITY AGREEMENT. IF YOU HAVE RECEIVED THIS PRESENTATION IN ERROR OR ARE NOT AWARE OF THE TERMS OF THE PREVIOUSLY EXECUTED CONTINENTALLY AGREEMENT PLEASE NOTIFY THE SENDER AND DESTROY THIS COPY. ANY DISCLOSURE, COPYING, DISTRIBUTION, OR USE OF THE CONTENTS OF INFORMATION RECEIVED IN ERROR OR WITHOUT AGREEMENT IS STRICTLY PROHIBITED.
...
C O R P O R A T I O N
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Nethercomm BackgroundNethercomm BackgroundNethercomm is a privately-held Delaware corporation based in Southern California and led by start-up veterans who have extensive experience in developing and rolling-out new communications technologies.
Nethercomm plans to deliver the industry’s most capable and lowest cost last-mile communication technology by combining our intellectual property and proprietary technologies with established broadband and natural gas distribution systems.
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
The market for broadband services is enormous The market for broadband services is enormous
• 47 Million US Broadband Subscribers47 Million US Broadband Subscribers• 95 Million Domestic Cable/Satellite TV Customers95 Million Domestic Cable/Satellite TV Customers• 112 Million Residential Telephone Lines in the US112 Million Residential Telephone Lines in the US• Broadband Internet Subscriptions grew over 37% last yearBroadband Internet Subscriptions grew over 37% last year• 20 Million US Homes used Video-on-Demand in 200420 Million US Homes used Video-on-Demand in 2004• Last year 32 Million residences received telephone service from non-RBOCsLast year 32 Million residences received telephone service from non-RBOCs
Adoption of broadband services remains constrained Adoption of broadband services remains constrained
• Today D/L rates average <3 Mbps; by 2009, 57-84 Mbps will be neededToday D/L rates average <3 Mbps; by 2009, 57-84 Mbps will be needed• U.S. pays about $35/month for 1.5Mbps; in Japan, about $25 for 26 MbpsU.S. pays about $35/month for 1.5Mbps; in Japan, about $25 for 26 Mbps• 80% do not have broadband, including half of those earning over $75K80% do not have broadband, including half of those earning over $75K
The residential Broadband Industry will be worth $90B by 2009 representing a seven fold increase in revenue over the next five years. -- ARC Group (www.arcgroup.com)
Broadband BackgroundBroadband Background
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Nethercomm’s Intellectual Property Enables Delivery of Nethercomm’s Intellectual Property Enables Delivery of Broadband Services Over Natural Gas Distribution PipingBroadband Services Over Natural Gas Distribution Piping
Nethercomm’s proprietary system "piggybacks" high-performance broadband communications over existing natural gas distribution networks
Broadband-in-Gas (BiG) leverages Broadband-in-Gas (BiG) leverages existing natural gas infrastructure to existing natural gas infrastructure to bridge the “last mile” which hampers bridge the “last mile” which hampers other broadband approaches.other broadband approaches.
Nethercomm invented the BiG Nethercomm invented the BiG technology and is developing and technology and is developing and making BiG available through our making BiG available through our development partners and strategic development partners and strategic alliances.alliances.
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Nethercomm Wireless Transmission:
-- Uses wireless radio frequency (RF) transmission like a conventional radio station broadcasting through the atmosphere
-- Signal travels through the hollow center of existing Natural Gas distribution pipes like a coaxial cable, with the gas being the conductive wire
Broadband in Gas (BiG) Network Technology Harnesses Broadband in Gas (BiG) Network Technology Harnesses Basic Physics For Super-Efficient Signal TransmissionBasic Physics For Super-Efficient Signal Transmission
Using signals inside a buried conduit presents an unlimited private spectrumUsing signals inside a buried conduit presents an unlimited private spectrum- very low-noise within the operating environment, zero conflict with external
applications
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Ultra Wide Band (UWB) Communication:
Extremely low-power transmission -- tiny fractions of a watt for safe, efficient
transmission in flammable environment
Spreads signal over a block of frequencies -- opposite of conventional radio, which puts
high power into a narrow frequency band
Wide-spectrum signal inherently robust, recoverable, and interference-resistant -- UWB redundancy keeps signal intact even if an external source
“jams” a frequency
Widely used for state-of-the-art commercial wireless and military communications -- high efficiency, high reliability, high performance
“Ultra Wide Band” (UWB) is a Communication Technology Declassified by the US Defense Department
in 1994
Em
itte
d S
ign
al P
ow
er Narrowband Communications
(30KHz bandwidth)
Spread Spectrum Communications(5MHz bandwidth)
Ultra Wideband Communications(Several GHz bandwidth)
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Operational Overview of the Nethercomm System
NODEHUB
NetworkNetworkOperations Operations
CenterCenter
.
Ultra WidebandTransceiver
Ultra WidebandTransceiver
NG Service
Cable TVHDTV/VoD/IPPhone/VoIPBroadband InternetWiFi/WiMAXOther Services
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Subscriber homes
“Last Mile” BiG Network
High-Capacity Fiber Optic “First Mile”
Managed Network Operation Center
Neighborhood network bridge
Middle Mile” connection
Sector Aggregation/Routing HubHub
HEADENDNOC
Tier 1 Internet
Node Node Node
Nethercomm Broadband Architecture
Nethercomm is enabling a complete broadband service combining its break-through “last-mile” technology with the best supporting
infrastructure to deliver high-performance Internet, Television, Telephony, HDTV and other applications
Television Feed
Telephone Backbone
w/ CPE hardware
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Nethercomm Has Compelling Advantages Over Conventional Broadband Technologies
Pro: Uses CATV cable plant, low-cost CPE Con: Shared connection can overload, slow uploads, high OPEX
Pro: Wireless install saves time and trenching costsCon: Weather, buildings, and electronics may cause interferenceFixed
wireless
Hybrid Fiber Coax (Cable)
Fiber tothe home
Digital subscriberLine (DSL)
T1/T3
Satellite
BroadbandIn Gas
0.5 0.5 0.5 0.5
0.5 0.5 0.05 0.05
1.5 1.5 1.5 1.5
19.219.2 4.844.84
1.0 1.0 0.6 0.6
1.51.5 0.130.13
40.9640.96 40.9640.96
Typical Bandwidth (Mbps)
Pro: Near universal coverage reaches inaccessible locationsCon: Expensive service and equipment, high latency, needs LoS
Pro: Link always delivers full bandwidth, good upstream rateCon: Expensive, slower downloads than cheaper alternatives
Pro: Data rates & cable life, low maintenance and power costsCon: Huge deployment costs, no consensus on preferred format
Pro: fast, robust & reliable link enables full broadbandCon: availability limited to areas with natural gas distribution
Pro: Connects via existing phone wiring, multiple ISP resellersCon: Performance drops sharply with range, susceptible to crosstalk
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Nethercomm Technology Trumps The Competition In Subscriber Deployment
Costs
CO and Distribution Headend
OSP and Transmission Media
CPE + Customer Installation
500
200
300
xDSL
100
1100
300
HFC
500
5000
1500
FTTx
100
0
400
BIG
1000
2000
3000
4000
5000
6000
7000
Per
Su
bsc
rib
er
Dep
loym
ent
Co
sts
($)
0
.
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Nethercomm Presents A Compelling Value Proposition With The Lowest Cost and Highest Bandwidth
.
This "Last Mile” solution delivers a uniquely low CAPEX requirement.
Subscriber connection costs are truly incremental allowing the incorporation complementary fiber networks.
Avoided “Last Mile” work significantly shortens time to market and precludes many regulatory restrictions.
Supports Residential, SME and Enterprise offerings on same network delivering shared build-out savings hence a key solution to digital divide initiatives.
Provides added benefits of integrated gas line integrity monitoring, meter reading and tamper prevention.
Bandwidth (Kbps) per Subscriber Deployment costs($)
0
10
20
30
40
50
60
7080
xDSL HFC FTTx BiG
COMPANY CONFIDENTIAL
COMPANY CONFIDENTIAL
Nethercomm System Capabilities Drive Bottom-Line Benefits
Nethercomm delivers solid value tobroadband, telecom and gas utility providers
Strong Technology Powers Critical Advantages
• "Last Mile” Solution Leverages Current NG Infrastructure • High-Performance Network Delivers Superior Bandwidth• Robust Architecture, Reliable Operation • Excellent Scalability and Flexibility with Existing Plant
Rock-Bottom Cost Basis
• Low CAPEX using Innovative Design and Existing Pipelines • Compact and Efficient Physical Plant Keeps OPEX Small • Subscriber connection cost is truly incremental• Actively incorporates complementary infrastructure
Strong Technology Powers Critical Advantages
Tremendous Revenue Opportunities• Bandwidth Enables Full Range of Advanced Applications• Bundled Services Maximize Revenue Streams• Offers Multiple Product Tiers to Monetize Capacity• Supports Residential, SME, and Enterprise on Same Network
Tremendous Revenue Opportunities
Rock-Bottom Cost Basis
Competitive Position Strong• Avoided “Last Mile” Work Significantly Shortens Time to Market• Novel Architecture Precludes Most Regulatory Restriction• Shared Subscriber Savings in Customer Acquisition, Invoicing• Strong Product Improves Take Rate and Reduces Churn
Competitive Position Strong
.
“Broadband access to the Internet will become as important as electricity was at the turn of the century”
- Business Week
. C O R P O R A T I O NC O R P O R A T I O N