360 List Pricing Update

1
Partnering with Education and Research Katherine
Beal GM, Carrier Products
360networks Confidential
2
Agenda

• 360networks Overview Post-Bust Strategies
• History of partnering with research and education
• Products Architecture
• QA

3
Overview

• 360networks delivers high-quality, low-cost,
  telecommunication services via our powerful North
  American network
• We are a major facilities-based carrier with
  long-haul and metro presence throughout the
  United States and Canada
• 29,000-mile North American network
• 69 North American markets served
• 46 US markets
• 23 Canadian Markets
• 36 North American cities with metro presence
• Our US focus is wholesale bandwidth services
• Targeting carrier and large enterprise customers
• Private line and wavelength services
• Group Telecom provides Canada with a competitive
  spectrum of telecommunication services
• Traditional voice and data products, as well as
  IP Transit
• Over 13,000 Commercial and residential customers

4
History Milestones

• 360networks origins date to 1987, forming as the
  telecommunications subsidiary of one of North
  Americas largest construction concerns, Ledcor
  Industries
• Since 1987, weve designed and built optical
  networks for companies such as ATT Canada and
  Bell Canada, as well at 10,000 route miles of our
  own network
• Voluntary restructuring in 2002 allowed
  360networks to significantly reduce debt without
  compromising operational delivery and success
• Reduced our debt from 2.7 billion, to 215
  million upon emergence
• Refocused strategy to serve solely the North
  American sector
• Acquired Group Telecom in February 2003
• Canadas largest independent competitive
  telecommunications provider
• Strong metro and regional presence throughout
  Canada
• Offers voice and data services to the small,
  medium, large enterprise and carrier customers
• Acquired Dynegy Communications in May 2003
• High capacity broadband network spanning more
  than 16K route miles throughout the US
• Access points in 44 US cities
• Metro presence in 13 US cities
• Submitted Asset Purchase Agreement for Touch
  America Private Line Internet Business ( 60
  Days to Close)

5
Financial Strengths

• 360networks is a consolidator, successfully
  navigating troubled Telecom waters
• Solid revenue base
• Recurring revenue approaching 14 million per
  month
• Bank approved business plan
• Our rationalized network will take 28 Million
  annually out of our cost structure
• Cash-positive EBITDA in 2004.
• High degree of liquidity
• Greater than 63 million of cash with no net cash
  burn
• Successfully restructured balance sheet with low
  degree of financial leverage
• 215 million of debt
• Interest based on LIBOR plus five percent

6
Valued Customers

• Carrier Customers
• ATT Canada, Big Pipe, Fusepoint, Infonet,
  Microsoft, MTS, Navigata, Peer 1 Networks,
  Sprint, Telus, T-Systems, Universal Access,
  Videotron, Call Net, CP Railway, HydroOne, KMTS,
  Qwest, Telus, Thunder Bay Tel
• Research Education Customers
• Canarie Inc, Canarie Atlantic, GTaNet, Canadian
  Universities School Boards
• Commercial Services Customers
• Cisco, EBay, Electronic Arts, PricewaterhouseCoope
  rs, Bank of Montreal, Scotia bank, RBC Dominion
  Securities, TD Bank, Alberta Energy, American
  Express, Bombardier, Allstate Insurance
• Government Accounts
• Govt of Canada, Govt of Newfoundland

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Post-Bust Strategies

• Take Advantage of Consolidation Opportunities
• Leverage financial sponsorship to augment our
  network and services with attractive acquisitions
• Focus on Financials
• Cost Reduction
• Success-based investment in network augments
• Cost-Based Pricing for Future Success
• Cost margin based pricing
• Cost efficient network architecture facilitates
  pricing advantage
• Positioned to replace inventory
• Provide Flexible Partnership Deal Structures

8
Network Footprint
Edmonton
St. Johns NFLD
Saskatoon
Kamloops
Vancouver
Winnipeg
Calgary
Victoria
Moncton
Thunder Bay
Kelowna
Quebec City
Regina
Seattle
Montreal
Sudbury
Portland
Saint John
Barrie London Hamilton Kitchner
Halifax
Ottawa
Albany
Boise
Lynn
Toronto
Boston
Minneapolis
Hartford
Chicago
Buffalo
Stamford
Newark
Oakland
Ogden
New York
Sacramento
Detroit
Pittsburgh
Omaha
Tuckerton
Cleveland
Princeton
Salt Lake City
San Fran
Philadelphia
Indianapolis
Baltimore
Fresno
San Jose
McLean VA / Wash DC
Cincinnati
Kansas City
Denver
E. St. Louis
Richmond
St. Louis
Las Vegas
Raleigh
San Luis Obispo
Nashville
Stratford
Memphis
San Bernardino
Charlotte
Birmingham
Los Angeles
Dallas
Phoenix
San Diego
Atlanta
Fort Worth
Jackson
LH POP
Tallahassee
Austin
Jacksonville
KEY
Dark Fiber POP
Mobile
San Antonio
Orlando
New Orleans
Metro Networks
Houston
Tampa
Regen / Potential LH POP
Miami
Lit Services Route
Lit Dark Fiber Route
Dark Fiber Route
Not all Canadian POPs and metro networks
illustrated
Metro Partners Ready
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Network Footprint

• In Canada, 360 acquired the largest independent
  local access provider with fiber connectivity to
  2,200 on-net buildings
• Additional connectivity through unbundled network
  elements through incumbent
• Strategic interconnection agreements with U.S.
  based metro access providers
• Ongoing effort to increase metro access
  partnerships
• Waves
• Transport
• GigE Private Line
• DS3 Private Line
• DS1 Aggregation in US
• 10/100 Aggregation in US (late 2003, cross border
  focus)
• Acquiring additional assets to augment existing
  network footprint

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Product Differentiators

• Robust North American Footprint
• Large footprint (Canada and US)
• Strategic Interconnection Agreements

• Technology Leader
• Mesh Topology Cost effective protected service
  offering for data services customers
• Intelligent Optical Switching
• 10/100 Ethernet with Local Access in Canada
• Optical Virtual Private Network (Pay as You
  Grow Requires Channelized Interface)
• GigE Private Line (Pay as You Grow with GigE
  Interface)

• Performance Leader
• Proven Performance
• Will back our performance with
• Rigid SLA (Availability/Provisioning)
• Reporting on SLAs
• Refund / Credits Provided if SLAs Not Met

11
Research Education Partners

• Major research networks currently supported
• Unique partnership arrangements and pricing
  strategies provided to research education
  community
• Experience collaborating with research
  education
• Allows us to see first hand new innovations in
  networking application that will emerge in future
  commercial and carrier sectors
• Positions us with business owners / leaders of
  the future
• Brings significant network traffic to our
  platforms
• Current major research customers include
• CANARIE
• GTaNet
• Universities and School Boards
• Working toward partnership with NLR

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CANARIE Partnership

• Lead provider of Ca NET 4 (red)
• Current effort focused 10G wave augments (green)
• CANARIE Atlantic Provider
• Member of CANARIE Review Board

Edmonton
Saskatoon
Calgary
Vancouver
Winnipeg
Regina
Halifax
Thunder Bay
Kamloops
Campbellton
Victoria
St. John's
Seattle
Quebec City
Sudbury
Montreal
Charlottetown
Ottawa
Fredericton
Halifax
Minneapolis
Toronto
Albany
Windsor
London
Buffalo
Boston
Chicago
New York
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Research Education

• GTaNet
• Greater Toronto Area
• Universities and University Hospital
  Interconnection via Dark Fiber Solution
• Universities School Boards
• Networking and Internet access to institutions as
  part of Schoolnet / Grassroots, etc

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Product Summary
Wavelength Services
Transport Services

• North American Carrier Service Offering
• Infrastructure Services (Collocation, Dark Fiber,
  Conduit)
• Wavelength Services
• Transport OCn
• GigE Private Line
• DS3 Private Line
• DS1 Private Line
• Services Supported using
• High Capacity Longhaul DWDM
• Intelligent OEO Switching Platform
• Canada - Additional Commercial Service Focused
  on Medium and Large Enterprise
• 10/100 Ethernet WITH Local Access
• Voice (Local, LD and PRI)
• LAN / WAN Services
• Internet Access
• IP Transit

High CapacityDWDM
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Infrastructure

• Dark Fiber and Conduit for sale, lease, or IRU
  grant, dependent upon capacity and underlying
  rights
• Long Haul and Metro Dark Fiber
• LH Fiber available for sale 725,000 fiber-mi
• Metro available for sale
• US 28,000 fiber-mi
• Canada 68,000 fiber-mi
• Option to include space power in shelters and
  POP sites where available
• Comes with operations maintenance service (OM)
• Long Haul and Metro Conduit - conduits of various
  types sizes
• Comes with operations maintenance service (OM)
• 360 can build or purchase dark fiber from our
  demarcation points to customer locations where
  cost justified
• Space Power / Collocation Space
• Telco Collocation -48V DC power environment
• Server Collocation AC UPS power, typical raised
  floor environment

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Wave Private Line Services

• Wavelength Services provides high capacity
  point-to-point unprotected bandwidth between two
  locations on 360networks North American backbone
• 2.5 and 10 gigabit per second bandwidths
• Fully transparent
• Private Line services provides point-to-point
  bandwidth solutions
• DS1, DS3, OCN Private Line in North America
• Metro Access Solutions in Canada
• DS1, DS3 and OCN Services (OC-3 to OC-48)
• Metro Access Solutions in US
• On ramp to Intercity Network Only
• North American Intercity Solutions
• Flexible Protection Options
• 10 (Unprotected), Mesh Protected, and 11
  Protected
• Quickly provisioned, flexible, upgradeable

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Pay as You Grow OVPN (SONET Based)

• The ability to purchase increments of bandwidth
  at STS1 granularity (50Mb/s chunks)
• The ability to quickly upgrade bandwidth when
  needed software provisioning after initial port
  and STS1s established up to the full speed of
  the port purchased
• 15 Business day target for initial provisioning
  interval If we miss customer gets one month
  free service (for POPs with existing SN3000s)
• 3 Business day provisioning for STS1 provisioning
  interval Target is provisioning in hours
  instead of days
• The ability to configure protection options (11,
  Mesh or unprotected) at the STS1 circuit level
• No premium charges above standard point-to-point
  OCN service pricing

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Gigabit Ethernet Service

• Gigabit Ethernet customer interfaces
• Pay as you grow dedicated bandwidth in 50 Mb/s
  chunks (SONET STS1s)
• Features
• Each STS1 can be unprotected, mesh protected or
  unprotected
• Supports existing GigE interfaces
• 50Mb/s to a full GigE
• Transparent delivery - customer owns flow Control
  rate Shaping
• Provisioning and availability SLAs aligned with
  Transport OVPN
• Benefits
• Significantly lower cost router interfaces
• Ability to scale bandwidth up in 50Mb/s
  increments as customer traffic requirements grow.
• No need for any level of in-house SONET
  expertise.
• QOS Simplified
• No statistical muxing or frame switching is
  performed.
• Customer Ethernet frames are directly mapped into
  their dedicated SONET pipe through the network.

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360networks Service Commitment

• Service Delivery Commitment
• To meet our committed delivery date (or first
  month is free)
• Targeted delivery within 15 business days on all
  on-net services in inventory
• Service Availability Commitment
• To provide protected services at 99.999 (any
  circuit length) and unprotected services at 99.9
  (circuits less than 750 miles) for all on-net
  circuits
• To measure availability in monthly intervals
• To provide credits if availability falls below
  SLA commitment