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What the New FCC (and other regulators) Can Do To “ Get it Right” MARC - Traverse City, MI Jeff Gardner - President and CEO June 16, 2009. Windstream is . . . . A heavily regulated ILEC competing against lightly regulated communications and entertainment providers; rural focused.
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What the New FCC (and other regulators) Can Do To “ Get it Right” MARC - Traverse City, MI Jeff Gardner - President and CEO June 16, 2009
Windstream is . . . A heavily regulated ILEC competing against lightly regulated communications and entertainment providers; rural focused. Business Overview As of March 31, 2009 Rural Markets Geographically Diverse Serving 16 States • Access Lines: 3M • Long-distance customers: 2M • High-speed Internet customers: 1M • Digital TV (via DISH) customers: 295K • Since 2002, WIN has lost roughly 25% of its voice customers (and WIN leads the industry with the lowest rate of access line erosion!) Not heavily reliant on FUSF • Less than $2.50 per line monthly
Serving rural consumers . . . Competitive Environment Low Density Access Lines per Square Mile (1) • Following the upcoming CTL/EQ and FTR/VZ transactions, WIN will have the fewest access lines per square mile of mid-size group • ~60% of lines have cable voice competition • ~75-80% of lines have broadband competition • 100% of lines have wireless competition Notes: (1) Windstream access lines excludes CATV and CLEC lines Source: Public filings and investor presentations
Our business objectives are aligned with policymakers’ objectives . . . Video Penetration of Total Access Lines HSI Penetration of Total Access Lines Year-over-Year Change in Access Lines Internet speed availability (% of addressable lines) Data as of 3/31/09 Source: Public filings and Analyst Reports
But regulation and market realitiesare in conflict . . . • Then: Monopoly era social compact -- exclusivity benefit vs. COLR burden; reliance on implicit subsidies. • Now: Fierce competition for higher profit customers between multiple facilities-based providers using various technologies. Inadequate support in high-cost areas for mid-sized ILECs. • Current regulatory regime is notsustainable. Reform urgently needed to reflect modern market realities, such as: • “Technology neutral” regulatory parity • Sufficient, sustainable, and explicit universal service/inter-carrier compensation 3