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Broadband Authority Program and Project Update. March 17, 2005. Mission and Lending Criteria. Mission— attract investment to underserved communities and encourage competition and more affordable broadband services across the state in all markets

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Mission and Lending Criteria

  • Mission—attractinvestment to underserved communities and encourage competition and more affordable broadband services across the state in all markets

  • Tool for the above—loansmade to broadband providers and grants combined with loans in limited areas (using bond sale proceeds and NO general fund dollars for this purpose)

  • LendingCriteria—adequate cashflow, solid business plan, sufficient borrower equity, guarantees and other security requirements as necessary

March 2005


Typical Loan Terms & Conditions

  • Terms—Seniorlender withterm loans ranging from 5 to 7 years and 12 to 24 month interest-only draw periods if necessary

  • Interest Rate—8 percent fixed (also have limited availability of a variable rate currently pegged at less than 5 percent)

  • Equity—100 percent project financing available but net equity on company balance sheet should equal 20 percent (at a minimum) of loan request.

  • Guarantees—Typically required but usually NOT collateralized. Operating deficit reserves and other alternatives to personal guarantees utilized on occasion

March 2005


Mbda is achieving its vision and making an impact
MBDA is achieving its vision and making an impact

$17.7 M Approved Projects

$10M in Applications

$10M Near-Term Applications

$6-10M in likely loan applications

Fiber and wireless projects in underserved areas

2nd RFP for

Digital Divide Investment Program

Area Served—in dark

ISP Wireless

PCS Broadband

M-33 Access

Appia Communications

ACD.net

ACD.net WEST

SpeedNet

Michigan Lightwave

Merit Networks

UPLink Services Inc. (seed)

LDMI

Lighthouse Broadband

UPLink Services, Inc.

OneWorld

AriaLink

Endless Journey

Additional DDIP Applications

VoEx

Lucre.Net

Emmet Wireless

Grid 4

T2 Communications

NBD Communications

First Step

Michwave

QIC

Borrower

March 2005


ISP Wireless

  • Project

    • $341,836 loan for the expansion of fixed wireless broadband service in seven low-to-moderate income communities

    • Purchase of tower antenna and customer premise equipment

  • Status

    • ISP Wireless is expanding customer base

    • Internet Service Provider (ISP) business since 1995

    • Stable business and revenues

March 2005


PCS Broadband

  • Project

    • $510,000 loan for the expansion of fixed wireless broadband service in areas where small-to-medium enterprises (SMEs) are underserved

    • Purchase of tower antenna, routers and customer premise equipment

  • Status

    • Premise cabling company since 1992 and enterprise phone systems sales since 2000

March 2005


M-33 Access

  • Project

    • Expanding contract service to community college and school districts

    • Refinancing of existing debt and purchase of equipment (towers, antennae, customer premise equipment)

    • $1.3 million loan

  • Status

    • Largest wireless broadband network grid of its kind in the US

    • New contract saving schools nearly $1 million and provide higher speed services

Note: Illustrative only – wireless coverage does not blanket entire counties

March 2005


ACD.net

  • Project

    • Facilities-based carrier expands DSL service to new markets and within existing areas

    • Re-financing of existing debt

    • New financing for expansion into new markets, new fiber routes and new equipment

    • $1.2 million loan

  • Status

    • Expansions in mid-Michigan complete

    • SBC mirroring activity

March 2005


Acd net west

Project

Acquisition of Quantum Connections assets and expansion of broadband service

$1,681,139 loan

Project will provide broadband service for business and residential customers

Status

Nearing completion of acquisition and transition

ACD.net WEST

March 2005


Appia communications
Appia Communications

  • Project

    • $758,000 loan to Traverse City-based INSORS, Inc. (dba Appia Communications)

    • Expansion and upgrades of network operations centers to expand service and provide redundancy

    • Enhanced converged voice and data network services for small and medium-sized enterprises

  • Status

    • Currently offers service in Kalamazoo, Detroit, Traverse City, Chicago and Indianapolis

    • Loan expanding footprint into Lansing and Grand Rapids

March 2005


Speednet

Project

$1.5 million to finance the purchase of non-line-of-sight tower equipment and customer premise equipment and expansion in Tri-City area (Saginaw, Midland, Bay City)

Status

SpeedNet LLC, with headquarters in Saginaw

Uses licensed 2.1 GHz, 2.5 GHz and 2.6 GHz MMDS spectrum to provide fixed wireless broadband service

Currently serves the Alpena, Saginaw and Mount Pleasant areas

SpeedNet

March 2005


Michigan lightwave

Project

“Dark” fiber network in Macomb County

Michigan Lightwave partnered with Macomb ISD and county government on network

$826,327 loan for completion and purchase of dark fiber network

New network will provide high-capacity, low-cost circuits for large enterprises

Status

Michigan Lightwave, LLC

Operates successful dark fiber network in Kalamazoo County

Michigan Lightwave

Project serves 25 new communities in Macomb County and extends into St. Clair and Oakland Counties

March 2005


Merit networks

Project

$4.1 million loan approved

Acquisition of fiber IRUs and construction of laterals to improve their backbone network

Borrower

Provider of high-speed data services to numerous universities and other public institutions throughout the State of Michigan

Currently determining whether tax exempt financing possible

Merit Networks

March 2005


LDMI

  • Project

    • Softswitch and broadband gateways

    • $5 million loan to build out IP network

    • Integrated voice and data services to Southeastern Lower Michigan

    • Expand facilities-based infrastructure

  • Borrower

    • Southfield-based Competitive Local Exchange Carrier (CLEC)

    • 300 Plus Michigan employees

March 2005


Up link
UP Link

  • Project

    • $815,000 loan requested

    • Purchase of tower antennae, customer premise equipment and construction of wireless tower

    • $50,000 Seed Loan recipient

    • Underserved Upper Peninsula market

    • MBDA Board consideration in March

  • Borrower

    • UpLink Services, Inc.

    • Purchased earlier this year by several Marquette investors with strong technology and finance background

March 2005


Lighthouse broadband
Lighthouse Broadband

  • Project

    • $500,000 loan for capital build-out costs to deploy Broadband Over Powerline (BPL) Initiative

    • CMS Partnership

    • Approved in February

  • Borrower

    • Shpigler Group (dba Lighthouse Broadband)

    • Management consulting firm for communications and technology

    • Operating two other BPL pilots across the country

    • Selected by Consumers Energy to pilot BPL initiative in Grand Ledge and likely St. Johns.

March 2005


Mbda current portfolio of approved projects
MBDA current portfolio of approved projects

  • Total number of counties at least partially impacted by approved loans: 45

  • Total number of cities impacted by approved loans once networks are built and lit: 150

  • Total number of loan applications received in last 12 months: 25

  • Total $ amount of approved projects: $17.7M

  • Total $ amount in project “pipeline” (approved, received and expected ’05 applications): $35 to $40M

March 2005


March 2005


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