Bill Johnson

1
Bill Johnson

• State Employee
• 33 Years in Telecommunications, Industry,
  Military, Federal Gov, State Gov.
• OneNet - Oklahoma State Regents for Higher
  Education
• State Contract negotiations for Oklahoma
• Contracts for Cisco, Sun, Polycom, Tandberg,
  Microsoft,
• Holder of EBS Licenses in 10 GSAs in Oklahoma
• OneNet Official Telecommunications Network for
  Education, Government and Research
• OneNet provides services to Prisons, Libraries,
  K-12, CareerTech, Indian Tribes, Hospitals, Law
  Enforcement, First Responders, Colleges,
  Researchers, Military, FAA, NOAA, NSSL, NWC
• Largest purchaser of telecom services in
  Oklahoma.
• Required to use judgment to obtain Best Value
• Best is not always Best Value.

2
What we know today

• EBS licenses have been selling for 0.04 per
  MHzPOP
• Auction 66 AWS licenses sold for .50 to 1.59
  per MHzPOP 1.7 2.1GHz
• Google for WiMAX Million News Stories about
  smart companies investing heavily
• This is NOT Antenna Vision
• There are Millions and Billions being dealt in
  the WiMax industry Much of which is 2.5GHz

3
How many MHzPOP do you hold?What could you do
with them?

• OSRHE holds 57 Million MHzPOP
• Consider Municipal WiFi Model
• Federally Protected against interference
• One EBS License - 64 cell sites in one GSA
• Many manufactures are ready now
• Services to K-12, Higher Ed, Public Safety Back
  Haul, Community (homes)
• Costs are high Services are higher

4
What IS a MHzPOP?

• 1 MHz of BW (2Mb/s) - 1 Person for 30 years
  (Going Rate 0.04)
• 2 Mb/sec to one person for 30 years at 40/month
  144,000
• Huge disparity between 0.04 and 144,000
• How can something worth so much be selling for so
  little?

5
Louisiana Purchase

• 11,250,000
• 524,800,000 acres
• Land for 0.03/acre!
• Cut me off a slice of that! (Groucho Marx)

6
Practical Considerations

• France owned so much land they did not even know
  what they HAD! They sure didnt know what to do
  with it
• The US did not have a clear understanding what it
  would be worth.
• They both probably knew the land would be worth
  much more than 0.03 per acre. But there was not
  enough money anywhere to pay it true worth

7
Valuing Louisiana

• Bottom Up Pricing
• Louisiana didnt cost the French much so US
  decided to offer 3 cents/acre
• Top Down Pricing
• Louisiana was worth Trillions, but the US didnt
  have much to spend. France might have held out
  for a good deal more, or kept mineral rights.
  Probably a war.

8
Valuing EBS Licenses

• Bottom Up Pricing
• It costs this much to make or its worth this
  much, lets add a little profit
• Lessees like this model (0.04)
• Top Down Pricing
• We think the market can stand this price
• Licensees want this model.
• Could Oklahoma Regents get 4 for our licenses
  today?
• With development our licenses WILL be worth 4
• This model will work better in a couple of years
  after the market develops (IMO 4.00)

9
How does the lesson of the Louisiana Purchase
apply?

• What if someone had stood in front of the leaders
  of France and suggested they hold out for
  4/acre?
• It is worth so much, we probably will not be able
  to get what it is worth if we expect to get it
  today

10
Conclusion

• The BEST value will be to build your own system
  and server your constituents directly.
• Even at 0.50 you are getting a bad deal!
• Look at the future!
• Dont lease for less than 4!

11
Bill Johnson

• bjohnson_at_onenet.net
• 405-919-1718