Transcript Slide 1

Current Communications Group
July 2003
Current Communications Group / Current Technologies
Confidential
Confidential – Subject to Liberty Associated Partners Agreement Terms 1
Introduction
“This is within striking distance of becoming the third major pipe in
the home” – Michael Powell, Chairman FCC, April 10, 2003
 Powerline communications offers a viable, cost-effective
new network for broadband services
 Target markets: consumers, SME, enterprises, and utilities
Agenda
1. Overview of Current
2. Current’s Powerline Communications Network
3. PLC vs. Other Broadband Networks
4. Summary
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1. Overview of Current
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Current Group’s Broadband
Powerline Communications (PLC) Mission
Current Services
Company
Current Technology
Company
Current Communications Group / Current Technologies
Operate partnerships with electric utilities
to deliver broadband data and voice
services over the power grid to residential
and business customers
Develop and manufacture powerline
communications equipment that provides
end-to-end broadband connectivity
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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
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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
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Domestic Electric Utility
Geographic Distribution
Largest utility covers
only 5% of U.S. residences
30 largest utilities cover
over 55% of U.S. residences
Over 100 utilities cover
the top 100 metropolitan areas
Over 2,500 utilities in the United States (a)
(a) Includes investor-owned utilities (IOUs), municipals, government-owned and cooperatives
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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
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Enhanced Power Distribution Services
 Improved network management
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Outage detection
Load shedding, profiling and balancing
Transformer overload protection
Power quality monitoring
Meter tamper and theft detection
Network security and monitoring
 Cost savings
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Automated meter reading (including gas and water)
Fewer truck rolls
Lower call center costs
Automation
Remote connect / disconnect
Internal communication links
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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
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2. Current’s Powerline
Communications Network
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Typical Domestic Aerial
Electric Power Distribution Network
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Overlay of Current’s
Hybrid Fiber Powerline (HFP) Network
Fiber backhauls to a carrier
Point of Presence (POP)
Powerline-fiber interface at substation
CT BridgeTM installed at transformer
Customer plugs modem into any outlet:
broadband data and voice instantly enabled
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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
CT CouplerTM
 Developed and manufactured by Current
 The only system element that physically touches the mediumvoltage 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
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Current’s Network Components II
CT Backhaul-PointTM
Powerline Modem
 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
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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
CT ViewTM
 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
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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
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Current’s Network Components at the Pole
CT
CouplerTM
connects CT
Bridge to MV
line
Medium Voltage Line
CT
CouplerTM
connects CT
BackhaulPoint to MV
line
CT
BridgeTM
aggregates traffic
from multiple
customer sites
Low voltage lines
connect customers
to transformer
Powerline
Modems connect
devices to Current’s
network by plugging
into electrical socket
Residences
CT
Backhaul-PointTM
(node/cell site
equivalent) aggregates
traffic from multiple CT
Bridges and connects to
fiber metro area network
Existing
transformer
steps
medium
voltage down
to low
voltage levels
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Fiber
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The Current IP-Based Network
Regional Data Center
Legend
Customer’s Equipment
SS7
Gateway
NOC
Carrier Equipment
Call
Agent
IP Switch
Customer Premise
OSS/BSS
Analog line
IP Line
PLM
SS7
Monitoring
Op Svcs
Gateway
DS1
SS7
ILEC/IXC
DS1
Operator
Services
LV
Other Regions
Router
IP Applications
PLC LAN
Call Control and Regionally based IP Applications
PLM
Private
WAN
Backhaul Point
1 of X
PLM
POP
LV Transformer
1 of X
Other Markets
Distribution
Pt 1 of X
PLM
Router
Router
Call Control and
Regionally based
IP Applications
Router
DS1 or DS3
DS3
IP Switch
Bypass Device
MV
Media
converter
OC X
Router
IP Applications
Internet
Router
911
Internet Gateway
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Internet
DS3
911
DS1
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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
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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
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3. PLC vs. Other
Broadband Networks
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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
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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
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DSL Comparison

DSL-serviceable market limited by
many factors
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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
16%
57%
43%
16%
11%
Higher bandwidth per user requires
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Breakdown of 205 Million
Domestic Access Lines
Shorter loop length
Higher quality copper
More expensive equipment
Unsuitable COs
Suitable COs: Properly conditioned lines
In order to achieve higher market
penetration rates, ILECs must
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Suitable COs: Lines potentially problematic
Undertake costly upgrades, deploying
many new remote terminals and new
fiber closer to customer locations
Recondition / replace impaired copper
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Suitable COs: Lines beyond 15K feet
Source: CIBC October 2002
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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
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PLC Comparative Advantages
PLC
Cable
Modem
DSL
Comments
Symmetrical
Bandwidth
Network
Footprint
Mobility /
connectivity
every room
Customer Truck
Roll
Disqualified /
Failed Installs
Truck roll
cost
Yes
Ubiquitous – all
homes and
businesses
Yes
(in-home
LAN/WAN)
Seldom
Very seldom
$50-100
No
80% U.S. homes
passed, but little
access to
businesses
No
Seldom;
Tech. limitations;
much higher CIBC est. 35% of
price if
lines not
offered
serviceable
No
Growing
upstream
demand
PLC has
broadest
reach
Current Communications Group / Current Technologies
PLC uses
existing
wiring
Frequent
Moderate
(new coax drop, esp. if
(area may not be
not existing customer;
$100-$200
built out; issues with
new room placement
taps & feeder lines)
for existing customers)
Frequent
(poor line quality;
Frequent
security alarm or too
(CO not built-out;
$100-$200
many phone/fax/
line quality and
answering machines
distance)
present)
PLC rarely
PLC does
PLC- incapable
requires visit
not need
locations
to the customer
new inare rare
premises
home wiring
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4. Summary
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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
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