SF758 – Modernizing Telecom Regulation Addressing Market Competition & Obligation to Serve

Competitive Market Regulation Obligation to Serve • This change recognizes a competitive voice • Lumen recognizes our Federal obligation to market – consumers are moving away from provide service where we are the only voice copper landlines option • Today’s “New Normal” is digital, Minnesotans • FCC Discontinuance Process still remains for have moved to cell, cable, broadband, VoIP Incumbent Local Exchange Carriers(ILECs) 56.2% wireless only • Our goal with this change is to have the ability to eliminate spending in copper where 16% wireless mostly competition exists, and further investment is 12.9% dual use uneconomic 7.6% landline mostly • Rural Digital Opportunity Fund entrants take on this obligation to serve in Jan. ’22 4.4% landline only • ILEC discontinuance at FCC even after new 2.9% no network connection/too remote entrant takes on the obligation • Avoids another costly market evaluation • Copper is at the end of its life-cycle – time to process with the State let go of dual obligation

No Usage/Too Remote,3% Landline only, 4% Landline mostly,8%

Dual Use,13% Wireless Only,56%

Wireless mostly,16%

Wireless Only Wireless mostly Dual Use Landline mostly Landline only No telephone Service

Fiber enabled living units built: Broadband Market Investment/Enablement & New Residential Services • 2018 – 17,902 • 2019 – 15,473 TOTAL INVESTMENT IN FIBER 2018-2020: • 2020 – 18,224 $43,635,560 TOTAL: 51,599 Households

HSI Existing Market Expansion HSI Market Investment/Expansion • 2018 – 15,457 • 2019 – 17, 453 TOTAL INVETSMENT IN HSI 2018-2020: • 2020 – 3,756 $158,378,166 TOTAL: 36,666 Households

2018-2020 Copper Capital Expenditure: -Access and maintenance: $14,289,568 -Road Moves: $42,764,732 • Current State and Federal subsidies are being appropriated for broadband – incumbent voice providers no longer have ability to capture rate of return • Copper as a voice technology is at the end of its life-cycle, no longer supported in the industry • These costs adversely affect our investment in Fiber and HSI.