Wildblue Communications, Inc Wildblue Communications

WildBlue History

November 2007

WildBlue is a “Broadband Internet via Satellite” service provider with more than 250,000 customers in the 48 contiguous United States.

• Headquartered in Denver, Colorado in the U.S. – Privately held corporation – Entered commercial service June 2005 – Growing rapidly – more than 20,000 new customers a month • U.S. national infrastructure with – 2 Ka-band spot beam satellites – 11 Gateway Earth Stations – Network Operations Center – Business Systems Data Center – Customer Call Center

• By the late 1980’s, the cellular telephone business was growing faster than anyone had imagined. • Possibility of world-wide cell phones from space set off an irrational frenzy in the satellite industry in the early 1990s.

Primary First Satellite Service Bankruptcy Estimated SYSTEM Investors Launched Launched Filing Money Lost

05/05/1997 Iridium Iridium Motorola 01/01/1998 08/13/1999 ! $8B (90 total)

Loral; 09/09/1998 GlobalStar 01/10/2000 02/15/2002 ! $5B Qualcomm (52 total)

TRW; Abandoned Odyssey never never $1-2B Teleglobe 12/01/1997 Globalstar • Satellite telephony only worked outdoors, required big heavy phones with limited battery life – they were not cell phones; a limited market.

• Early in the Satellite Telephony frenzy, before any hint of business failure and multi-$B losses, an even more irrational Satellite Data frenzy broke out. • On 12/03/1993, Hughes Aircraft Company, parent of DirecTV, filed with the FCC for the first Ka-band satellite, Spaceway. • The FCC was surprised; they had no process for satellite licensing in the Ka-band • On July 28, 1995, the FCC issue a call for Ka-band satellite applications and set a deadline of September 28, 1995. • 15 companies filed new or amended applications

Applicant Satellites Orbital Slots Ultimately Awarded Comm, Inc. (Motorola) Millenium 75W, 77W, 87W, 91W Echostar None 83W, 121W GE-Americom GE*Star 17W, 85W, 105W, 56E, 114.5E 49W, 67W, 99W, 101W, 25E, 36E, 40E ,48E, Hughes/Galaxy Spaceway 54E, 101E, 111E, 124.5E, 149E, 164E, 173E KaStar Satellite Ladybug 1, 2 73W, 109.2W Lockheed Martin Astrolink 21.5W, 97W, 38E, 130E, 175.25E Loral Cyberstar 115W, 28E, 105.5E MorningStar MorningStar 62W, 147W, 30E, 107.5E NetSat 28 NetSat 28 95W Orion (3 companies) Orion F2…F9 47W, 81W, 89W, 78E, 126.5E PanAmSat PAS-10, 11… 133W, 58W, 45W, 68.5E, 72.7E, 166E VisionStar VisionStar 113W Teledesic Teledesic 840 Ka-band satellites in low earth orbit

• Craig Macaw, Bill Gates venture with Boeing, Motorola, others • Announced on March 21,1994 and seeded with billions in cash • Was to be a constellation of 840 Ka-band satellites in low earth orbit 840 satellites! – Nearly free OC-12’s for everyone, everywhere – All interconnected with lasers, 8 per satellite – Unimaginable technology • Licensed by the FCC on March 14, 1997 for worldwide operations in the Ka-band • Officially abandoned on June 27, 2003 Teledesic Satellite Concept

• May 8, 1997 the FCC licensed 109.2W & 73W orbital slots to KaStar • October 1, 1998 KaStar opens for business

ACTS satellite contract awarded to 8/10/1984 RCA AstroSpace • KaStar was founded in 9/12/1993 ACTS satellite launched April 1995 and filed with FCC 12/3/1993 Spaceway FCC filing • Grew to !10 people by end of 1999 and 4/21/1995 KaStar established as a Colorado Corp to !40 people by the end of 2000 7/28/1995 FCC calls for 1st round Ka-band filings • Raised !$250M; early investors were 9/29/1995 First round FCC filings due date TRW/NGC, Kleiner Perkins Caulfield & Byers , Telesat Canada, EchoStar, TV 3/14/1997 Teledesic FCC license granted Guide, Liberty 5/9/1997 FCC first round assignment order • WildBlue-1 “QuickStart” (22 months) 10/1/1998 First two WildBlue employees contract with Loral signed in Nov 1999 KaStar renamed iSky.net, then 10/19/1999 renamed iSKY, Inc. on 12/3/1999 • Invested in US Monolithics in Mar 2000 11/2/1999 WildBlue-1 contract with Loral signed WildBlue and Telesat sign Anik F2 • Anik F2 Ka-band payload lease signed 3/17/2000 lease agreement with Telesat in Mar 2000 3/24/2000 WildBlue invests in US Monolithics • Original Ariane, ViaSat contracts signed 8/14/2000 iSKY, Inc. became WildBlue Comm. • KaStar became iSKY, then WildBlue 3/5/2001 ViaSat SM/SMTS contract signed

6/25/2001 Telesat takes equity stake in WildBlue

• Prior to 9/11/01, we were working Terrorist attack on the United 9/11/2001 States on several sources of new funds

WildBlue-1 satellite contractual 9/26/2001 • 9/11 attacks wiped out any hope ship date of continuing the project as planned 11/6/2001 Astrolink folds; closes down • Company chose to “weather the storm” 12/2001 – All WildBlue contracts suspended 01/2002 or terminated; project put on hold with an assertion that the business plan

WildBlue licensed by FCC to use was sound and economic conditions 12/18/2002 Anik F2 in the US would improve eventually • Renegotiated/delayed all of our contracts • Hunkered down with 9 remaining employees • Sold our stake in US Monolithics to ViaSat in Jan 2002, the proceeds of which provided cash to stay alive for at least a year • Spent all of 2002 looking for new partners, Terrorist Attack – September 11, 2001 modified business plans including video 9 broadcast, etc. © 2007 WildBlue Communications, Inc WildBlue Timeline: Dark Days

Dow Jones Industrial Average 2001

Economic Impacts of 9/11 Were Hard on WildBlue

We Explored Every Mickey Mouse Idea (Well Almost!) Early 2002: “Reports of our death were greatly exaggerated.”

Liberty, Intelsat, NRTC, Kleiner 12/23/2002 announce $156M investment to • Liberty, Intelsat, and NRTC restart WildBlue with Kleiner Perkins and Liberty, Intelsat, NRTC, Kleiner 4/22/2003 David Drucker invested close $156M investment $156M to restart WildBlue 6/27/2003 Teledesic Folds Spaceway F1, F2 sold to DirecTV • Company restarted with a one satellite 3/28/2004 for video business plan based on Anik F2 4/28/2004 ACTS decommissioned • WildBlue-1 satellite was completed 7/17/2004 Anik F2 satellite launched and placed in storage at SS/Loral First email sent over the WildBlue 10/18/2004 network • Began rehiring in April 2003 and Spaceway F1 satellite launched by 4/26/2005 entirely rebuilt the company during the DirecTV for video second half of 2003 WildBlue enters commercial 6/3/2005 service • Successful launch of Anik F2 satellite WildBlue closes $350M debt 8/21/2006 occurred in July 2004 facility with Liberty, Tennenbaum WildBlue reaches 100,000 • Massive effort 2004-2005 to build out 10/1/2006 subscribers the gateways, IT systems, NMS WildBlue-1 satellite actual ship 11/2/2006 systems, CPE manufacture capability date to the launch site 12/8/2006 WildBlue-1 satellite launched • Commercial service was established in June 2005. 11 © 2007 WildBlue Communications, Inc WildBlue Timeline: Recovery & Growth

WildBlue Team – July 17, 2004 Anik F2 Launch – July 17, 2004 Anik F2 Launch Party

• >250,000 subscribers, healthy growth rate • Approximately 250 employees • Exclusive distribution agreement NRTC • Exclusive distribution agreements with both major US satellite TV companies, EchoStar & DirecTV • Strategic distribution agreement with AT&T • Two operational satellites providing CONUS service • WildBlue controls almost 100% of bent-pipe Ka-band spot beam satellite capacity over the United States.

35m 14m 100% - Don’t use Internet Have Access (4.9m) To Cable Modem/ DSL (21m)

Dial-Up Subs (8.6m) WB Target DON’T Market Have Access To Cable Modem/ DSL Satellite (0.3m) (14m) Fixed Wireless (0.2m) Homes & Small Offices Homes & Small Offices (Rural = C&D Counties) (Rural = C&D Counties) With No Access To Terrestrial Broadband 14 © 2007 WildBlue Communications, Inc Satellite Broadband Market Size Forecast

(millions) 2006 2007 2008 2009 2010

# Rural homes/SOHOs 34.2 34.0 34.0 34.0 34.0

# Rural homes/SOHOs 13.9 12.9 11.9 10.8 10.2 w/ no terrestrial broadband access

# Rural homes/SOHOs 8.6 8.3 8.1 7.9 7.7 w/ no terrestrial broadband access that are online

Satellite broadband subs 0.5 0.8 1.2 1.3 1.8

Satellite broadband subscriber 6% 10% 15% 17% 23% penetration of rural online w/no terrestrial broadband access

Social Trends – Urban & second home movement to rural areas for “lifestyle” – Long-term reduction in rural jobs – Telecommuting

Product Trends – Decline in upfront price – Demand for speed & capacity (usage)

Competitive Trends – Growth of DSL/CM (assumed very low) ! LECs: “we will not serve 20% of our customers with DSL” – Growth of fixed wireless – Expansion of nascent technologies (BPL, 3 or 4G, etc.)

Subscriber Space Gateway WAN/LAN NOC and Terminal Segment Earth Stations Connectivity OSS/BSS

Internet

DOCSIS-based Standard Platform DOCSIS-based Leased connectivity DOCSIS-based Simple “Bent-Pipe” Unmanned Facilities Commercial Products

Density U.S. Homes WB Customers

(Homes/mi2) Cumulative (m) Cum % Cumulative Cum % 0-9 4.9 4% 19,082 45% 10-19 10.5 10% 26,374 62% 20-29 15.2 14% 29,285 69% 30-39 18.4 17% 31,621 75% 40-49 21.5 20% 33,116 78% 50-59 24.1 22% 34,299 81% 60-69 26.2 24% 35,139 83% 70-79 28.0 26% 35,753 85% 80-89 29.8 27% 36,279 86% 90-100 31.4 29% 36,714 87% 101-150 37.5 34% 38,124 90% 151-200 41.5 38% 38,808 92% 201+ 109.0 100% 42,266 100% Total 109.0 42,266

U.S. Broadband Customers 60

40 Satellite Fixed Wireless 30 DSL

20 Cable Modem

0 4Q'05 4Q'06

Source: Jupiter; ignores BPL subs

2005 EOY Growth 2005-09 Subscribers (CAGR) Pro Con Cable 44.6 million 10% • Speed • Not ubiquitous Modem/DSL • Price • Local Presence • Bundled offering Fixed Wireless 0.2 million 32% • Price • Not ubiquitous • Local Presence • Mostly unlicensed spectrum (except Sprint/Clearwire) • Must choose where to build Satellite 0.3 million 42% • Ubiquity • CPE Cost • Unproven VoIP offering • Time to market for new capacity Broadband Over <0.1 million n/a • Price • Cost Power Line (BPL) • Local Presence • Not ubiquitous • Some existing • Must choose where to infrastructure build