Parameter and revenue inputs to CLEC model
	Vintage Groups:																																																														Q1																												Q2																										Q3																					Q4																			Q5																		Q6																		Q7																						Q8																				Q9																	Q10																		Q11												Q12
Large colos opened/Q, per region																																																																																					2																												2																					2																			2																			2																	1																						1																				1																0																					0												0
Small colos opened/Q, per region																																																																																					0																												1																					1																			2																			2																	2																						1																				0																0																					1												0
New regions opened, by quarter																																																																																					1																												0																					0																			0																			1																	0																						0																				0																1																					0												0
Cumulative regions in service																																																																																					1																												1																					1																			1																			2																	2																						2																				2																3																					3												3
																																																																end-state:
Two methods are available for specifying the takeup of loop-based offerings in large and small collocations
Select method 1 or 2:																																																																																				2
Method 1:  Percentages																																																																																											This method computes lines as percentages of given total office sizes
				(inactive)																																																											Per region:
avg loops per large office:																																																																																900											at stasis

avg loops per small office:																																																																																250
Business user % of total loops																																																																															55%												residential:																																						45%
Prices: (inflators applied later)																																																																		Price/MO																																NRC																					TakeRate																			Shared%																			per LgColo																		perSmColo																																																																																			% of res:												% of bus:
Residential POTS only																																																																$                           35																												$                         50																																					30%																						0%															121.5																	33.75																															% of loops with POTS:																																																72.8%												70.0%													75.0%
Residential DSL only																																																																$                           42																												$                         50																																					30%																				90%																	121.5																	33.75																																			% of loops with DSL:																																												59.0%
Residential POTS + DSL																																																																$                           65																												$                         50																																					40%																						0%																		162																			45
							add to 100% of resi loops:																																																																																																																						100%																			27.0%																							405												112.5
Business POTS only																																																																$                           50																												$                      100																																					50%																						0%															247.5																	68.75																																				% of DSL loops bus:																																											46.6%
Business DSL only																																																																$                           65																												$                      100																																					25%																				50%															123.75															34.375																																								% of DSL loops resi:																																											53.4%
Business POTS + DSL																																																																$                        100																												$                      100																																					25%																						0%													123.75															34.375																																											Avg DSL data rate:																																									20.39
																																						add to 100% of business single loops, not T1s:																																																																									100%																			12.5%																							495												137.5																																																	DSL users/DS1																																			75.33
			computed for Method 1:																																																																																										Percent of total loops shared:																																																			19.0%

ARPU for loop services																																																																$                     58.53																												$                   77.50
Residential ARPU																																																																$                     49.10																												$                   50.00
Business loop ARPU																																																																$                     66.25																												$                100.00
Method 2: Absolute quantities																																																																																											This method computes percentages based on given sales of each loop-based offering
		Active																																																																				Per LgColo																					PerSmColo																			Shared %																		LTotMRC																		LTotNRC																						STotMRC																				STotNRC
Residential POTS only																																																																$                           35																												$                         50																																						120																						35																		0%														4200																				6000																					1225																		1750								% of loops with POTS:																																				72.7%
Residential DSL only																																																																$                           42																												$                         50																																						120																						35																90%																5040																				6000																					1470																		1750																												% of res:												% of bus:
Residential POTS + DSL																																																																$                           65																												$                         50																																						160																						45																		0%											10400																							8000																					2925																		2250																															69.9%													74.9%
																																		Res total:																																																																																												400																				115																															19640																					20000																							5620																		5750												% of loops with DSL:																																59.1%
																																																																250																						65																		0%											12500																					25000																							3250																		6500											Total res lines in plan:																																19395
								Costs												Param																																			SmColos																			LgColos																										Wrapup
Business DSL only																																																																$                           65																												$                      100																																						125																						35																50%																8125																		12500																							2275																		3500										Total bus lines in plan:																																	23988

Business POTS + DSL																																																																$                        100																												$                      100																																						125																						36																		0%											12500																					12500																							3600																		3600																		Total lines in plan:																									43383
																																		Bus total:																																																																																												500																				136																															33125																					50000																							9125																13600															% of DSL loops bus:																															47.1%
																																																																Total																							900																				251																															52765																					70000																						14745																	19350															% of DSL loops resi:																															52.9%
																																																																Colos in plan:																																				39																				33																																																																			Avg DSL data rate:																													20.49
																																																																Total lines in colo:																																		35100																								8283																														2057835																					2730000																							486585																		638550																									DSL Users/DS1																								74.98
																																																																% of lines by CO size:																																									80.9%																				19.1%																																																																											Total lines with DSL:																														25653
			computed for Method 2:																																																																																													shared loops:																															6650																				1617																		19.1%																																																																								% of total loops res
ARPU for loop services																																																																$                     58.65																												$                   77.65
Residential ARPU																																																																$                     49.05																												$                   50.00
Business ARPU																																																																$                     66.41																												$                100.00
% of loops with POTS:																																																																											72.7%																																														% of res:																							69.9%																% of bus:																						74.9%
% of loops with DSL:																																																																											59.1%

Average number of data users/DS1																																																																													75.0
Percent of total loops shared:																																																																											19.1%
Loops per large collocation																																																																														900
Loops per small collocation																																																																														251
% of total lines residential																																																																											44.7%
% of total lines business																																																																											55.3%
			Using selected method:
ARPU for loop services																																																																$                     58.65																												$                   77.65
Residential ARPU																																																																$                     49.05																												$                   50.00
Business ARPU																																																																$                     66.41																												$                100.00
Measured business local rate/min																																																																$                         -																											use 0 for flat rate business service
Bus. T1 PBX/PRI/CT1 in region																																																																																			70								initial model: sold as EELs across region, not tied to colos

	SP-shared EELs in region																																																																																		60									initial model: not tied to colos; 50% V 50% data																																																																																												% of T1s shared																																									46%
Business T1 PBX/PRI/CT1 price																																																																$                        700																												$                      500
	SP-shared EEL V+D price																																																															$                        700																												$                      800
																																																															"Average across the quarter"																																																																																																							Stasis
Takeup																																																																				Q1																																Q2																						Q3																				Q4																						Q5																Q6																					Q7																						Q8																	Q9																		Q10														Q11												Q12+
Takeup rate:  Small collocations																																																																																		5%																												15%																			22%																				31%																			40%																	50%																				60%																						70%																	80%																				90%											100%													100%
Takeup rate:  Large collocations																																																																																		5%																												15%																			22%																				31%																			40%																	50%																				60%																						70%																	80%																				90%											100%													100%
Takeup rate:  PRI/T1 PBX, Shared																																																																																		2%																												10%																			20%																				35%																			45%																	55%																				70%																						80%																	90%																				95%												97%												100%
Small colo:  Loops in svc by quarter																																																																																			13																													38																				55																				78																	100																	126																					151																						176																201																				226												251
Lg colo:  Loops in svc by quarter																																																																																			45																												135																			198																				279																			360																	450																					540																						630																720																				810												900
T1 PBX/RAS ckts by quarter																																																																																					1																												7																			14																				25																			32																	39																						49																				56																63																					67												68
	SP-shared V+D T1s by quarter																																																																																				1																												6																			12																				21																			27																	33																						42																				48																54																					57												58

Churn rate/year																																																																												20%
Minutes of use																																																															local out																												local in																										toll out																					toll in																																					Traffic calculations:
Average IXC access MOU rate																																																																																																														0.010																				0.010																														MOU/mo																		MOU/BHr																						BHErlangs																				CCS/DS0
Average residential line MOU/mo																																																																																600																															500																			120																				100																																		1320																								6.6																			0.11																	3.96
Average business line MOU/mo																																																																													1000																															1100																						300																				250																																		2650																			13.25														0.220833																											7.95
Average all V loops MOU/mo																																																																			821.1741927																														831.761289																						219.528387																				182.9403222																																					2055.404																				10.277021																					0.171284																			6.166213
Average PRI/T1 line MOU/mo																																																																								40,000																															50,000																								4000																				3000																																		97000																						533.5														0.370486																				13.3375
Average Shared-T1 MOU/mo																																																																								15,000																															15,000																								2500																				1500																																		34000																										187										0.129861																									4.675
Price/minute of resold toll																																																																$                       0.07																											gross margin:																											$             0.04
% of resi V subs taking resold toll																																																																															75%																																																																									Loops/region:																																14461
% of bus V subs taking resold toll																																																																															50%																																																																									out																								in
% of resi subs in toto taking toll																																																																															52%																																								62.9234339																																		Loop local MOU/region:																																												11875000																			12028100

% of bus subs in toto taking toll																																																																															37%																																								112.293647																																								PRI locMOU/region:																																							2800000																					3000000
% of PRI/T1 subs taking resold toll																																																																															50%																																																																							Shared-T1 locMOU/region																																																		900000																					900000
ARPU (loop) on resold toll																																																																$                       6.32																														Wholesale toll:																								$             3.16																				average loop																																																											15589461																			15928100
ARPU (loop) on access																																																																$                       2.96
ARPU PRI/T1 on resold toll+access																																																																$                  210.00																																																						$          70.00
ARPU Shared-T1 on resold toll+acc																																																																$                  127.50
Percentage of traffic outbound																																																																															49%																						inbound:																												51%
Network Parameters:
Busy hour loop traffic %/month																																																																											0.50%																																										imts/line																						0.009277866
GR303 ratio:																																																																										5.06																																								gr303/line																										0.0090
Busy hour T1 traffic %/month																																																																											0.55%
	MT fill margin (ch/Erlang)																																																																																	1.3

	MTs per T1/PRI trunk																																																																									0.482
	MTs per Voice/data ISP-shared T1																																																																									0.169
	MTs per GR303																																																																												1.03
Avg. Resi DSL kbps																																																																																		12
Avg Business DSL kbps																																																																																			30
Gross Rack Units/colo rack																																																																																			42
Per rack common eq. RU																																																																																					4
Rack units/small DLC																																																																																					5
Rack units/Large DLC																																																																																			12
Core managers per region																																																																																					4
Lines per additional core manager																																																																													2500
PRI/T1s per add'l core manager																																																																																500

Headquarters core managers																																																																																					4
Lines per craft employee																																																																																500
Lines per office employee																																																																													1000
PRI/T1s per craft employee																																																																																100
PRI/T1s per office employee																																																																																200
Trucks per craft employee																																																																																		0.6
Model T1/PRI as EELs not colo?																																																																																					1						not yet turned on; this version assumes yes [1]
Percent of large colos "urban"																																																																															50%
Percent of large colos "suburban"																																																																															50%
Percent of large colos "rural"																																																																																		0%
									These must add to 100%																																																																			100%
Percent of small colos "urban"																																																																															20%

Percent of small colos "suburban"																																																																															50%
Percent of small colos "rural"																																																																															30%
									These must add to 100%																																																																			100%
Residential rate inflator /quarter																																																																											0.75%
Business rate inflator/quarter																																																																									-0.50%
T1/PRI rate inflator/quarter																																																																									-0.50%
Long dist./access inflator/quarter																																																																									-1.00%																		applies to both wholesale (cost) and retail (price)

Cost inputs to CLEC model																																																																	variables in blue
Opex:
		LEC-related charges:																																																															Monthly																			NRC
Collocation, per rack																																																																		$             100.00																			$      7,500.00
Collocation power, per peak Amp																																																																		$               20.00																			$                -
UNE loop, analog/urban																																																																		$               12.00																			$            75.00
UNE loop, analog/suburban																																																																		$               15.00																			$            75.00
UNE loop, analog/rural																																																																		$               18.00																			$            75.00
Average loop, large colos																																																																		$               13.50																			$            75.00
Average loop, small colos																																																																		$               15.30																			$            75.00
UNE HFS - shared loop																																																																		$                  1.00																			$            50.00
UNE DS1 loop																																																																		$             100.00																			$         250.00																														MRC

Dedicated transport - DS1 /fixed																																																																		$             100.00																			$         200.00																													$           110												Avg. T1 EEL:						$  210.00				MRC
Dedicated transport - DS1/per mile																																																																		$                  0.50																			$                -																			T1 EEL NRC adder																			$  100.00						EEL total:			$  550.00				NRC
Dedicated transport - DS3 /fixed																																																																		$             950.00																			$         200.00																													$       1,050										Breakeven DS1s:									10
Dedicated transport - DS3/per mile																																																																		$                  5.00																			$                -																								Average miles:																20
	MT average																																																																	$             250.00																			$         500.00
SS7 per A-link													pair																																																					$         1,500.00																			$      2,000.00
Entrance Facility																																																																		$             250.00																			$      1,000.00
UNE M10 mux																																																																		$             200.00																			$         200.00
UNE M13 mux																																																																		$             200.00																			$         200.00
																																																																per minute
Reciprocal compensation																																																																								0.0025
Unbundled tandem switching																																																																										0.001																											not used in this version -- assumed built into recip or  not charged

Resold IXC MOU wholesale price

0.035

Labor costs:

Annually

Average HQ mgmt employee

$          120,000

Average region mgmt employee

$             75,000

Average technician

$             45,000

Average back office

$             40,000

Other opex:

Monthly

NRC

Truck lease

$                   500

Headquarters lease

$               3,000

Costs

Param

SmColos

LgColos

Wrapup

Billing cost per line - voice

$                  1.00

Billing cost per line - DSL only

$                  0.50

BB cost/mo/sub

	SP backbone $/Mbps																																																																	$             500.00																																				$       6.64
	SP vertical charges/DSL sub																																																																	$                  2.00																																				$       8.64
Consulting+fitup/new region																																																																																					$         50,000
Marketing per region per quarter																																																																		$             12,500
First qtr extra marketing per region																																																																																					$         25,000
R&D expense as % of revenues																																																																												1.0%
Customer acquisition cost (loops)																																																																																													$100
Customer acquisition cost (T1s)																																																																																													$500
Per-line installation direct non-ILEC cost																																																																																	$            75.00
Per-T1 installation direct non-ILEC cost																																																																																		$         100.00
Corporate startup costs																																																																																					$       150,000
Per-region startup, legal costs																																																																																					$         25,000

Capex:																																																																	Note most of these numbers are dummies; I do not have all the real prices
CO switch:
Price per base CO switch (w/ss7)																																																																		$          120,000
Price per GR-303 port																																																																		$               2,200
Price per DS-1 trunk port																																																																		$               1,900
Price per PRI port																																																																		$               2,100
Price for GR-303 capability																																																																		$             50,000
Price for End Office feature set																																																																		$             50,000																																							DC power budget:
Price for CO w/features, GR303																																																																		$          220,000																																								Common Amps																				3
Price for small NG-DLC - base																																																																		$               5,000																				cards/DLC:																						22								Amps:										7
Price for small DLC analog line card																																																																		$                   600																							Lines/card																					6
Price for small DLC DSL line card																																																																		$               1,800																							Lines/card																					6

Price for small DLC DS1 line card																																																																		$                   450																							Lines/card																					1
Price for large NG-DLC - base																																																																		$             40,000																						cards/DLC																				16								Amps:									15
Price for large DLC analog line card																																																																		$               2,500																								lines/card																		32
Price for large DLC DSL line card																																																																		$               2,000																								lines/card																		12
Price for large DLC DS1 line card																																																																		$               2,000																								lines/card																				4
Price for large DLC DS3 line card																																																																		$               3,000																								lines/card																				1
Price per IAD (T1/EEL)																																																																		$               2,000
Price for hub DC power system																																																																		$             50,000
Price for regional hub router/base																																																																		$               5,000
Regional hub router/DS1 port																																																																		$               1,000
Regional hub router/DS3 port																																																																		$               5,000
Price per M13 in colo using DS3																																																																		$               5,000																		Rack units:																										4			Amps:													4

Base price for DACS at region hub																																																																		$             20,000
DACS DS1 port at hub																																																																		$               1,000
DACS DS3 port at hub																																																																		$             10,000
Data Processing capex: HQ																																																																		$          100,000
Data processing capex: each region																																																																		$             50,000
DP & sundry capex per employee																																																																		$               3,000
Capex replacement % of prev. 4 yrs																																																																												4.0%								(quarterly)
Capex Inflation rate %/qtr																																																																								-1.00%
Labor inflatiaon rate %/qtr																																																																									0.75%
Opex (non-ILEC) inflation rate %/qrt																																																																									0.33%
	LEC inflation rate %/qtr																																																																								0.25%
Corporate tax rate																																																																													30%

Percent financed

75%

Assumes line-of-credit financing, not capital leases

Financing interest rate %/Qtr

3.50%

Debt amortization - quarters

20

(sorry, not yet variable)

Capital depreciation - quarters

16

(sorry, not yet variable)

Color code for cash inputs:

Capital Expenditures

Operating Expenses

Labor

Revenues

Annualized:																Y1												Y2								Y3								Y4								Y5									Y6							Y7							Y8								Y9
EBITDA																			-1,203,082										-1,426,713										-573,942						2,357,139									5,879,139								8,253,219							9,031,167							8,755,375									8,288,120
Cash Flow																				-843,302											-722,187									259,044					2,226,042									4,861,141								5,894,257							5,825,203							5,589,994									5,482,085
Net Income																			-1,387,694										-2,105,665								-2,230,677										-469,102										718,514					4,071,671							3,247,141							3,163,760									3,148,752
Net IRR																								18.6%
Cash flow IRR																								90.1%
An assumed interest rate of:																									15%
		Provides an NPV of																			733,763
A terminal value mulitplier of																										5
Provides a terminal value of																		41,440,601
	for a total net worth of																	42,174,364
			458					Headquarters + region DP capex																										$0								$0								$0						$50,000										$0							$0								$0						$50,000							$0					$0

			459					Per-emp DP & sundry capex																									$33,000																$3,000										$9,000					$24,000							$15,000								$15,000								$21,000					$39,000					$30,000
			460					Colo-related capex (sm+lg)																						$111,000								$150,550								$172,950									$297,300								$445,100							$554,350							$588,800									$821,950					$891,450					$1,020,300					$
			461					Total growth capex pre-inflation																						$197,000								$223,950								$255,150									$745,100								$614,400							$733,550							$803,200							$1,432,150						$1,220,950						$1,344,000					$
			462					Capex inflator																								100.00%									99.00%							98.01%										97.03%							96.06%							95.10%								94.15%								93.21%					92.27%					91.35%
			463					Growth capex w/inflation																						$197,000								$221,711								$250,073									$722,970								$590,190							$697,599							$756,197							$1,334,857						$1,126,625						$1,227,767					$