Wireline / Regulatory November 2019

by Mike Harder

RDOF – Rural Development Opportunity Fund Mapping - Digital Opportunity Data Collection (DODC) According to the most recent FCC broadband report, ~24% of “rural” areas still lack access to 25/3 Mbps broadband speed. In Also in August 2019, the FCC approved an order for improved August 2019, the FCC voted on two important items that should Digital Opportunity Data Collection (DODC), which will collect improve funding for broadband providers to these rural more granular location broadband speed data than the outdated communities. Most notably, the FCC approved a new “Rural FCC “Form 477”. The new DODC program will be a completely Digital Opportunities Fund” (RDOF), which is the next iteration new data collection regime that requires all fixed broadband of the Connect America Fund (CAF) for areas served by price cap providers to submit “geospatial broadband deployment maps” carriers. In effect, RDOF is expected to replace the CAF program showing much more precise coverage data than the census block for the price cap carriers when that program expires in 2020. The level data collected via the legacy Form 477. new RDOF program will disburse ~$20.4 Bln in support over 10 years, with the first phase expected to begin in ~2021. RDOF will FCC chair Ajit Pai has openly acknowledged the need for better essentially be “CAF III” and awarded via a reverse auction similar tools to collect data about broadband deployment and to improve to the CAF II process that took place in 2018. The RDOF will not the current Form 477 reporting process. Accurate maps of who provide funding for any services less than 25/3 Mbps, such as 10/1 does and who doesn't have access to broadband are viewed as a Mbps services that were funded in the CAF II auction. Otherwise, critical first step toward closing the digital divide. the FCC proposes generally to use the same auction format as CAF II for the upcoming RDOF.

The RDOF will be doled out in two phases. Phase I ($16 Bln in funds) will target census block areas that are completely without access to 25/3 Mbps speed. These award areas must meet the required speed thresholds within the next 6-years. Phase II award is budgeted for $4.4 Bln and will cover those areas with “partial” 25/3 Mbs service coverage.

Some believe that the new RDOF has the potential to trigger a shift of government support funding away from the traditional legacy price cap carriers. Similar to the recent CAF II auction, varying communications won auction block awards including electric cooperatives, fixed wireless providers, and satellite providers. In fact, 5 of the top 10 CAF II award winners were fixed wireless Some industry lobbyist groups argue that the long time approach providers with only 2 ILEC’s being in the top 10 award recipients. of using the reported Form 477 data has led to some material These 2 LEC’s cited fixed wireless as a potential source of the misapplication of government funds. Shirley Bloomfield, CEO of funds to be deployed. NTCA–The Rural Broadband Association claims that: "Better broadband maps can play a key role in making sure that we both CAF II - Winning Bidder (in $ millions) Award Sector AMG Technology Investment Group LLC $281.3 Fixed Wireless build broadband where it is lacking and sustain broadband where Wisper ISP, Inc $220.3 Fixed Wireless it exists today". She also calls the FCC's current maps Rural Electric Cooperative Consortium $186.0 Fiber/Electric Coop "frustratingly inconsistent and unreliable" with many "false Viasat, Inc. $122.5 Sateliite positives" that identify areas as "served" even if only a few California , L.P. $87.8 Fixed Wireless individual sites within a large region actually have broadband Commnet Wireless, LLC $79.9 Fixed Wireless Benton Ridge Telephone Company $52.4 Fiber/LEC & Fixed Wireless access.” In any case, the new DODC is expected to result in more Cal., Inc. $50.5 Fiber/LEC & Fixed Wireless accurate broadband speed reporting and cut down on wasteful Midcontinent Communications $38.9 Fiber & Fixed Wireless spending. Wilkes Telephone Membership Corporation $32.8 Fiber/LEC & Fixed Wireless

So all this it begs the question: Will the traditional ILEC still be considered the carrier of last resort in the years to come? When A-CAM Deployments the FCC transitioned the voice-focused USF to the broadband- focused CAF program, it gave price cap carriers the right of first The FCC announced certain guidance on the deployment refusal on funding to bring broadband to areas of their local service obligations for all LEC carriers who elected A-CAM federal territory where broadband wasn’t available. As the legacy USF support. A-CAM stands for the “Alternative Connect America programs are being replaced with support programs geared Model”, which is a federal government support subsidy payment towards greater broadband deployment, the traditional ILEC could to rate-of-return carriers that voluntarily elected to transition to a be in the seat. new cost model for calculating High Cost funding. ACAM models Wireline / Regulatory November 2019

by Mike Harder forward-looking economic costs of deploying and operating a Some argue that ripping Huawei/ZET equipment out of US fiber-to-the-premise (FTTP) network. Carriers who elected this networks could be a costly headache for rural option will have the certainty of receiving specific and predictable providers. As an example, one LEC provider in indicated that they monthly support amounts over the 10 year support term (2017- have ~$500,000 of Huawei equipment in their existing network. 2026). Those that elected model support must maintain voice and This particular LEC estimated that buying new parts and hiring a existing broadband service and offer at least 10/1 Mbps to all contractor to replace the equipment could cost between $1.2 -$1.5 locations fully funded by the model. They must also offer at least million. Additionally, if this legislation is passed it could also lead 25/3 Mbps to a certain percentage of those locations by the end of to delays in various projects geared towards deploying faster the support term. In addition, carriers must also offer at least 4/1 broadband speeds in their rural markets. In addition to terrestrial Mbps to a certain percentage of capped locations by the end of the fixe line/fiber networks, rural wireless companies could also be support term, and provide broadband upon reasonable request to affected. The Rural Wireless Association, a trade association the remainder. representing rural wireless carriers who each serve fewer than 100,000 subscribers, claimed that ~25% of its membership could If carriers fail to meet their required buildout obligations. be impacted by the “rip and replace” legislation companies could be subject to support recovery by the FCC. The FCC would seek to recover the percentage of support “that is equal to 1.89 times the average amount of support per location received “E-Rate” Program Modernization in that state” over the support term for the relevant number of locations that were not deployed, plus 10% of the carrier’s total relevant high-cost support over the term for the state. For those For over 20 years, schools and libraries have received universal carriers who elected A-CAM there could be negative cash flow service support program, commonly known as the “E-Rate” implications in the event of not meeting the mandated deployment program, to help obtain affordable broadband access. Eligible oblations as required under the A-CAM program. Thus, it this is schools, school districts and libraries may apply individually or as an important due diligence item to inquire about in order to part of a consortium. Discounts for support depend on the level of determine a LEC borrower’s overall credit risk profile. poverty and whether the school or library is located in an urban or rural area. The discounts range from 20% to 90% of the costs of eligible services. E-rate program funding is based on demand up to an annual established cap of $4.15 billion. A recent report from Huawei & ZTE gear – $1Bln Rip and Replace an E-Rate compliance firm called “Funds for Learning” found that the demand for E-Rate is continuing to grow, with 88% of It’s getting real now – a newly proposed House of Representatives applicants expecting bandwidth needs for schools and libraries to Bill asks for $1Bln to “rip & replace” any Huawei gear from US increase over the next three years. telecommunications networks. The bill is bipartisan in nature and specifically singles out Huawei and ZTE equipment manufactured Notably, E-Rate has two in China. The newly proposed legislation follows the Department categories of funding that of Commerce’s action in May to place Huawei and 70 of its support schools and affiliates on an “entity list,” effectively banning the entities from libraries. “Category one” buying components from U.S. companies without government provides connectivity to approval. schools and libraries, and “Category two” provides connectivity for services within schools and libraries (i.e. Wi-Fi, Ethernet, etc.) When the FCC adopted the new 5-year budget, the “category two” funding was deemed temporary in nature, expiring in 2019. Recently, the FCC announced that they The proposed bill directs the FCC to establish a reimbursement are considering making changes to how the program would make program to help smaller telcos replace equipment from the the “category two” funding permanent. aforementioned Chinese equipment companies. The funds would remain available through fiscal year 2029. This new bill We see this as a credit positive event for those borrowers who rely represents an increase in funding from the previously announced on E-rate funding as a meaningful source of revenue. As $700MM bill in May 2019 that never made it out of committee technology evolves and data usage needs increase due to the phase. growing IoT use, we see greater demand for the “category two” funding going forward in schools and classrooms. Additionally, the proposed bill "prohibits the use of federal funds to purchase communications equipment or services from any company that poses a national security risk to American communications networks. Wireline / Regulatory November 2019

by Mike Harder

Public Valuation and Leverage Trends Source: www.snl.com

Public Valuation Data Works Cited: EV / EBITDA Dec-16 Dec-17 Dec-18 Jun-19 Large Cap Alen, Garty. “Better Broadband Mapping Needs Granularity, Shapefiles, AT&T 7.39x 7.38x 6.98x 7.37x Industry Leaders Tell Hill” www.broadcastingcable.com/news/fcc- CenturyLink 5.00x 8.74x 5.87x 5.50x Mean 6.20x 8.06x 6.43x 6.44x broadband-mapping-process-gets-congressional-scrutiny Median 6.20x 8.06x 6.43x 6.44x Engebreston, Joan. “USTelecom on RDOF Impact: When the ILEC is No Mid Cap Longer the Carrier of Last Resort” TDS 4.82x 4.89x 4.83x 5.40x www.telecompetitor.com/ustelecom-on-rdof-impact-when-the-ilec-is- no-longer-the-carrier-of-last-resort/ Small Cap Alaska Communications 4.47x 5.87x 4.02x 6.00x Federal Communications Commission. “2019 Broadband Deployment Report” 7.95x 9.66x 6.72x 5.84x www.fcc.gov/reports-research/reports/broadband-progress- Consolidated Communications 9.21x 8.07x 6.15x 5.62x reports/2019-broadband-deployment-report 6.24x 5.04x 4.96x 4.97x Nuvera Communications 5.17x 5.98x 6.69x 5.24x Hardesty, Linda. “House bill asks for $1B to rip and replace Huawei equipment.” Otelco, Inc. 3.85x 4.63x 4.92x 5.18x www.fiercewireless.com/regulatory/house-bill-asks-for-1b-to-rip-and- Mean 6.15x 6.54x 5.58x 5.48x replace-huawei-equipment Median 5.71x 5.93x 5.56x 5.43x JSItel.com. “FCC Releases Guidance & Examples on A-CAM Deployment Total Mean 6.01x 6.70x 5.68x 5.68x Obligations” www.jsitel.com/fcc-releases-guidance-examples-on-a- Total Median 5.17x 5.98x 5.87x 5.50x cam-deployment-obligations/”

Public Valuation Data Lecher, Colin. “Ripping Huawei out of US networks could be a nightmare for Total Debt / EBITDA rural providers.” www.theverge.com/2019/6/5/18652769/huawei- Dec-16 Dec-17 Dec-18 Jun-19 china-security-rural-internet-rip-replace Large Cap AT&T 2.51x 3.21x 2.89x 3.29x CenturyLink 3.17x 4.14x 4.18x 4.16x Mean 2.84x 3.68x 3.54x 3.73x Median 2.84x 3.68x 3.54x 3.73x Mid Cap TDS 2.22x 2.79x 1.98x 2.34x

Small Cap Alaska Communications 3.35x 4.35x 3.06x 4.89x Cincinnati Bell 2.87x 3.53x 4.95x 4.98x Consolidated Communications 4.81x 4.83x 4.75x 4.78x Frontier Communications 5.87x 4.99x 5.05x 5.05x Nuvera Communications 2.12x 1.46x 1.74x 2.18x Otelco, Inc. 3.55x 3.56x 3.15x 3.22x Mean 3.76x 3.79x 3.78x 4.18x Median 3.45x 3.96x 3.95x 4.84x

Total Mean 3.39x 3.65x 3.53x 3.88x Total Median 3.17x 3.56x 3.15x 4.16x

Based on our market observations we are re-affirming the below ILEC (1) Non Distressed Market Multiples (2) Distressed Multiples and (3) the Distressed Discount of ~20%.

ILEC Non-Distressed Market Multiples Low Mid High Comments Current Run Rate EBITDA 4.50x 5.00x 5.50x Unchanged

ILEC Distressed Multiples for LGD Distressed Low Mid High Discount Current Run Rate EBITDA 3.50x 4.00x 4.50x ~20% Cable & Satellite November 2019

by Clay 3Q10Curry

The Current State of Satellite Broadband The big players in this nascent LEO broadband industry include SoftBank-backed OneWeb and Elon Musk’s SpaceX with its Starlink network. OneWeb will begin with an initial constellation of 650 Satellite internet has been around since the late 1990’s, but current mass-produced satellites around the globe, with plans to grow up to offerings are inferior to most wired alternatives today due to overall ~2,000 satellites. OneWeb successfully tested six of its LEO satellites performance and reliability. Geostationary (“GEO”) satellites, which this past summer, delivering more than 400 Mbps with average orbit a path parallel to Earth’s rotation and cover a specific area, are latency of 32 milliseconds, and plans to have a fully functioning the primary satellite internet delivery platforms available today. A network by 2021. Starlink plans to deliver its own service over a key drawback to GEO services is latency, since a signal from earth massive constellation of up to ~12,000 LEO satellties to deliver must travel ~22,000 miles up to the satellite, then down to an earth broadband-level speeds to the entire planet, and is currently testing its station to connect to the internet backbone, then back to the satellite first 60 satellites in orbit. The estimated cost of Starlink’s network is before reaching the end user again. This results in a a degree of about $10 billion – it’s projected to be operational as early as 2020 sluggishness that terrestrial broadband does not have to contend with, and fully deployed by 2027. Not to be outdone, recently not to mention line of sight and weather conditions that present announed Project Kuiper, its planned network of over 3,200 LEO additional challenges. GEO satellite internet, with speeds up to 25- satellites to “provide low-latency, high-speed broadband connectivity 100 Mbps, has shown it can be a viable alternative to dial-up internet to unserved and underserved communities around the world.” or fixed wireless, but it’s usuually more expensive than comparable wireline service and mostly appeals to rural households that are not served by a cable or telco provider.

The satellite internet industry is currently dominated by two GEO providers, Hughes Satellite Systems and ViaSat. While some estimate there are roughly 15 to 18 million unserved or underserved households in the US, Hughes and Viasat only have about 2.5 million satellite internet customers combined. In addition to the aforemetnioned performance issues compared to wired networks, GEO services are expensive (costing up to hundreds of millions per satellite) and capacity constrained, which means service often comes with low data caps making it a poor choice for cord cutters. Hughes, the leading provider with ~1.5 million subscribers, has just two satellites in operation that currently support all the subscribers it can handle. Hughes’s next generation satellite, which offers more capacity with speeds up to 100 Mbps, is set to launch in 2021. ViaSat’s next generation ViaSat-3 satellite is also slated for 2021 and will have more than a terabit per second of total capacity. Despite the increased capacity of next generation satellites, we believe GEO’s will remain disadvantaged to wired networks due to the unavoidable latency in the network. To this point, the FCC penalizes broadband subsidy auction One hurdle to building a satellite network is the high cost assoicated participants if they cannot provide service with latency of 100 with the required ground infrastructure. However, given the financial milliseconds or less - GEO latency is typically five to six times greater heavyweights getting involved, this barrier to entry appears to be than that. coming down. OneWeb, which is backed by the likes of SoftBank, Virgin Group, Coca-Cola, Airbus, and Indian conlomerate Bharti Enterprises, has contracted Hughes to provide $300 million in ground Will LEO’s Bridge the Digital Divide? infrastructure so far. Amazon already has functional infrastucture in place with its AWS Ground Station, which it launched in 2018 to bring Satellite-based internet may not remain the last resort for broadband low-cost ground infrastructure to satellite service proivders with the in the future. Due to technologcial developments in smaller satellites cloud computing capabilities of Amazon Web Services (“AWS”) – and reusable rockets, there are several low-altitude satellite Amazon currently has ~12 ground stations that are colocated with its constellations being planned to provide high quality, low latency AWS data centers. SpaceX’s Starlink, among others, is expected to broadband to underserved and rural communities. These Low Earth feature laser crosslinks that allow its satellites to communicate with Orbit (“LEO”) satellites travel etremely close to earth (1,200 miles or one another while in orbit, essentially creating a space-based internet less) compared to GEO satellites, which results in much lower latancy backbone, which may reduce the need for ground infrastructure and and service quality more comparable to cable and fiber broadband. could change the way we view the web entirely. Cable & Satellite November 2019

by Clay 3Q10Curry

In the near term, the planned LEO networks may help bridge the Public Valuation and Leverage Trends digital divide by at least allowing people in the most rural areas to get fast, relaiable broadband. Longer term, these new satellite services Cable Industry Leverage (Total Debt / EBITDA) could begin to offer solid broadband to a wider demographic, too. Public Comps Dec-16 Dec-17 Dec-18 Jun-19 Since LEO services will be available across the US, these additional Public Comps (Ranked by Market Cap.): broadband provider/s could ramp up competition nationwide. 2.3x 2.3x 3.6x 3.3x According to a report by BroadbandNow – based on the average Charter 4.2x 4.7x 4.6x 4.6x lowest available monthly price by number of internet providers (as Altice USA 6.6x 5.6x 5.6x 5.7x shown in the chart below) - if there is one successful LEO network, 1.6x 2.8x 2.4x 2.7x then the 263 million Americans with three or fewer wired broadband Cogeco 3.0x 2.6x 3.5x 3.0x opions could save over $14 billion a year, and Americans with four or 6.4x 5.4x 6.0x 6.1x more options could save another $4 billion. With two LEO networks, Average 4.0x 3.9x 4.3x 4.2x the collective savings estimate tops $30 billion. It remains to be seen Median 3.6x 3.8x 4.1x 4.0x how viable these new services will be, but if one or more satellite networks can deliver as promised, it could have negative implications for cable and other wired broadband providers. Cable Industry Valuation (TEV / EBITDA) Public Comps Dec-16 Dec-17 Dec-18 Jun-19 Public Comps (Ranked by Market Cap.): Comcast 8.5x 9.1x 7.6x 9.6x Charter 10.3x 10.8x 9.1x 10.5x Altice USA 9.9x 8.6x 9.4x Cable One 11.5x 11.7x 11.5x 12.9x Cogeco 6.2x 6.5x 6.8x 7.6x Wide Open West 7.6x 7.5x 7.5x Average 9.1x 9.3x 8.5x 9.6x Median 9.4x 9.5x 8.1x 9.5x

Public valuations have bounced back and now trade slightly higher than where Cable names have traded in recent years. Based on seven observable market transactions YTD, the headline average/median EBITDA multiples are 10.3x/11.5x – adjusted for synergies, the average/median multiples are 9.1x/8.8x – excluding a high multiple of 16.2x, an outlier, the average/median multiples are 8.0x/8.2x. There are no recommend changes to our Market Multiples at this time. We believe most Cable operators, who are typically the leading broadband providers in their respective footprints, will fall within our At NCTC’s The Independent Show earlier this year, broadband in Mid-point and High guidelines, depending on growth prospects, rural areas and future wireless competition were hot topics. When competitive footprint, and network capabilities. We believe our Low asked about potential LEO satellite constellations, one panelist guideline remains appropriate for small operators with less advanced acknowledged that “cable could be facing headwinds if the tech giants networks or that have competitive disadvantages in their footprints. manage to deliver [high-speed broadband]”. Given the prospect of increased competiton from big tech and the potential commoditization Cable Non-Distressed Market Multiples of high-speed broadband, ’s COO Geoff Shock Low Mid-Point High Comments said: EBITDA Multiple 6.0x 7.5x 8.5x Unchanged

“We have to find ways to differentiate ourselves, and we can either be Cable Distressed Multiples for LGD Distressed the low-cost provider, and that means lower service, or we can be a Low Mid-Point High Discount higher-priced proivder and have a superior service that makes up for EBITDA Multiple 4.5x 6.0x 7.0x ~20% the difference.” Works Cited www.broadbandnow.com/research; www.cnbc.com; www.snl.com; www.capitaliq.com; www.fastcompany.com; www.wired.com. Fiber Transport Providers November 2019

by Ron Blissett

INCOMPAS Policy Initiatives What the Texas Carriers Want: Per their petition, the Texas Carriers requested that the FCC amend the E-Rate competitive bidding requirements, to include safeguards that might eliminate, INCOMPAS is one of the leading trade associations for or at least reduce, the possibility of overbuilding existing USF or competitive telecom providers, communications and technology other government funded networks with E-Rate funds. The Texas companies. The association is actively engaged in policy Carriers propose that the FCC adopt rules that prohibit the use of advocacy before Congress, the FCC and the courts. A number of USF for special construction of fiber networks that overbuild current or former CoBank borrowers in the fiber transport space existing fiber networks. Specifically: are members of the group. One may recall that INCOMPAS was very active in the actions the FCC took in 2018 related to pole o To determine whether fiber already exists, the Texas Carriers attachment reforms in helping to speed broadband deployments. suggest that the FCC incorporate a public challenge process For this update, we offer a review of a couple of INCOMPAS’ that requires an E-Rate applicant (including consortia) recent policy initiatives/positions on the regulatory front: seeking funding for special construction fiber projects, specifically, on the E-Rate program and most, recently, potential whether for self-provisioned networks or networks owned by rules regarding access to multi-tenant buildings. a commercial provider, to confirm that no existing fiber facilities exist. E-Rate FCC Petition o E-Rate applicants seeking new fiber builds would be required to post their proposed special construction projects on the A group of 3 telecom carriers in Texas filed a petition with the USAC website and allow a 60-day challenge period in which FCC in May, requesting that the FCC initiate a rulemaking existing provider(s) can demonstrate that its existing network proceeding to consider amending Part 54 of the Commission facilities are capable of connecting via fiber the school or Rules, specifically with respect to the Universal Service Fund library in question. (“USF”) Schools and Libraries Program (“E-Rate”) competitive o If it is shown that fiber already exists, the selected service bidding requirements, to include safeguards which would provider and the existing fiber owner would have a 120-day discourage overbuilding of existing federally supported fiber period to negotiate in good faith the terms, conditions and networks. (As a brief reminder, the E-Rate program subsidizes the reasonable, market-based price of a fiber lease agreement. cost of connectivity and other telecom services for schools and o Funding will not be approved for any special construction libraries. A number of fiber transport and other traditional telecom costs associated with laying new fiber infrastructure to any providers are active in the E-Rate space.) The petitioning portion of the proposed network where it is demonstrated that companies included Central Texas Telephone Cooperative, Inc., fiber already exists. Peoples Telephone Cooperative, Inc. and Totelcom Communications, LLC (collectively, the “Texas Carriers”). INCOMPAS Position: Based on their filed comments and press releases, INCOMPAS appears strongly in opposition to the The Texas Carriers appear particularly concerned about region- changes to the E-Rate program proposed in the Texas Carrier’s based consortia groups in Texas that have issued Requests for petition and subsequent comments filed by parties in support of Proposals (“RFPs”), through the E-Rate program, for the the petition. Some of the overriding themes in INCOMPAS’ filing construction of Wide Area Networks (“WANs”) to provide are that the proposed measures are anti-competitive and not broadband services to each school within the region, even though necessary to prevent waste, fraud and abuse in the E-Rate many of those schools are already served by fiber. They maintain program. INCOMPAS also takes the position that the proposed that, because the regions include hundreds of schools and cover changes to the E-rate competitive bidding requirements would add thousands of square miles, only select, large service providers significant delays to an already lengthy vendor selection process. have been able to respond to the RFPs. Smaller providers that are They also view the mechanism proposed to provide unwarranted already serving individual schools within the region, via their protection for incumbents that INCOMPAS portends have every USF-supported fiber networks, were unable to respond to the opportunity to participate in the program’s competitive bidding RFPs due to the sheer size of the requested WANs. Accordingly, process. They further suggest that where any provider, including only a few providers actually responded to the RFPs and the an incumbent with alleged subsidized facilities, is participating in providers that responded did not necessarily propose the most a competitive bidding process for an E-rate project—they are in cost-effective solutions. the best position to offer the lowest price option. E-rate program rules have never required applicants to select the cheapest bid, but Fiber Transport Providers November 2019

by Ron Blissett rather the “most cost effective” offer. The current review process can access unused wiring when a customer has discontinued an for competitive bidding requirements is sufficient. If an incumbent’s service. There are also exclusive marketing incumbent submitted a bid that was less expensive than the agreements that INCOMPAS believes should be disclosed to selected bid, then USAC would conduct a cost-effectiveness tenants to make it clear that while an incumbent may have an review to ensure the competitive bidding rules were followed. arrangement in place, the tenant still has a right to select the communications service provider that best meets their needs. Multiple Tenant Competition Overall, INCOMPAS wants the FCC to prohibit any exclusive commercial arrangement that impedes competitive providers’ On 7/10/19, the FCC filed a notice of proposed rulemaking access to MTEs or that makes unreasonable, anticompetitive, or (“NPRM”) aimed at promoting communication service providers’ discriminatory demands of a provider. access to multiple tenant environments (MTEs). MTEs include buildings such as apartments, condominiums, and office buildings. The FCC previously issued a Notice of Inquiry on this M&A Update topic back in 2017. Per this NPRM, the FCC’s overall goals is to encourage facilities-based broadband deployment and competition in MTEs and, as a result, competition in the video distribution market and for other communications services. The FCC is Publicly-announced M&A activity since the last industry update seeking comments on additional actions it could take to accelerate appears to have slowed down considerably among the pure-play the deployment of next-generation networks and services within fiber transport providers. A noteworthy transaction announced MTEs. The FCC also clarified that it welcomes state and local was Everstream’s purchase of a 200-plus-mile Indianapolis-based experimentation to increase access to MTEs consistent with fiber network and CLEC operation from data center and managed federal policy. The FCC additionally sought further targeted service provider DataBank. The fiber assets and CLEC business comment on a variety of issues that may affect the provisioning of were part of Databank’s recent acquisition of LightBound, which broadband to MTEs, including exclusive marketing and wiring operated 2 data centers. The transaction is reportedly part of arrangements, revenue sharing agreements, and state and local Everstream’s expansion plan in Indianapolis, under which they regulations. expect to reach more than 800 route miles and invest about $38.0 million throughout that metro area. Everstream larger strategic INCOMPAS Position: INCOMPAS appears to support most of the plan is to grow to more than 15,000 miles of fiber with more than goals of the NPRM. They have commented that the commercial 3,000 on-net locations in 12 markets throughout the Midwest by arrangements at issue in the NPRM, largely have the effect of the end of 2020. preventing successful competition in MTEs. INCOMPAS has pointed to arrangements such as graduated revenue sharing agreements, in which a provider offers a property owner a sum Valuation Guidelines based on penetration rates and revenue per unit on a quarterly or annual basis. While INCOMPAS acknowledges the costs associated with building owners allowing providers to wire No change is currently recommended to the present valuation buildings for broadband services, they suggest that the agreements guidelines for fiber transport providers. CoBank has; however, often extend beyond the timeframe to recover the costs and recently introduced a more standardized approach to our valuation become supplemental income for the building owner. They guidelines to be utilized for “distressed” or loss given default recommend that the FCC prohibit these graduated revenue sharing (LGD) purposes. For fiber transport providers, we have initially agreements in favor of “cost-based and non-discriminatory” established an approximate 30% discount to the non-distressed revenue sharing arrangements. They are also concerned about valuation multiple utilized for PD-rating purposes. exclusive wiring agreements, like sale-leasebacks, in which an incumbent transfers control of inside wiring to the building owner and then leases it back on an exclusive basis. If wiring is not made available due to such an agreement, competitors that still can access the building face the unenviable choice of rewiring the building or abandoning the project. INCOMPAS wants the FCC to consider new protections ensuring that competitive providers Fiber Transport Providers November 2019

by Ron Blissett

Fiber Non-Distressed Market Multiples Low Mid High Comments Current Run Rate EBITDA 9.00x 11.50x 13.00x Unchanged

Fiber Distressed Multiples for LGD Distressed Low Mid High Discount Current Run Rate EBITDA 6.50x 8.00x 9.00x ~30%

Works Cited www.telecomramblings.com www.incompas.org www.fcc.gov Wireless & Tower November 2019

By: Michael Robbins

A Dive into CBRS and Spectrum Sharing ensure operation is of interference. SAS administrators include: Amdocs, Comsearch, CTIA, Federated Wireless, Google, Key Bridge, and Sony Electronics. CBRS spectrum, which operates between the 3.55-3.70 GHz bands (150 MHz), has long been considered prime real estate in Who initially stands to benefit from CBRS use-cases? mid-band spectrum given its high compatibility with both 4G and Rural Markets—Spectrum sharing capabilities combined with the 5G, uniform coverage, and overall network security. This uniform nature of CBRS pave a cost-effective way for rural spectrum has remained largely underutilized by its incumbent telecom, WISP, and electric distribution operators to reach military, satellite, and wireless broadband users, and has been a subscribers that otherwise have been not economically feasible to key discussion piece under the FCC’s initiative to push more reach. This will most likely be achieved through fixed wireless, commercialized spectrum into the marketplace over the last which companies such as Federated Wireless have already several years. What makes the CBRS situation so unique in the announced plans to deploy since the September announcement eyes of the FCC, as well as to potential buyers, is that it’s the first (subsequently raised $51 million in Series C funding). Many rural deployment of wireless spectrum as a shared resource. operators also deem the use of CBRS as a cost-effective way to Acknowledging the June 25th, 2020 CBRS auction date for meet CAF-II obligations. WISPs using LTE-based networks licensed users, we aim to take a deeper dive into what shared would further have better security and offer faster speeds spectrum is and what CBRS means to various stakeholders compared to their existing Wi-Fi-based networks. surrounding the industry. Mobile Network Operators—MNOs can use CBRS as an What is shared spectrum and how will the CBRS band operate? extension of their existing networks in preparation for 5G, with Spectrum sharing is a way to efficiently and safely permit multiple deployment costs cheaper than traditional DAS cells and more users to share the same frequency bands of spectrum. The adopted competitive with Wi-Fi. According to Mobile Experts, CBRS rules set forth by the FCC organizes the 150 MHz of CBRS small cells can be deployed at ~$.30/square foot, which is spectrum under a three-tiered sharing model: significantly cheaper to deploy than DAS cells that can average $3/square foot. 1) Tier 1 Priority: Incumbent users. 2) Tier 2 Priority: When not in use by incumbent users, Cable Providers—Cable providers can complement their strong buyers can purchase 10 MHz channels in the June 25th, indoor Wi-Fi presence with an indoor/outdoor CBRS product, thus 2020 auction called Priority Access Licenses (“PALs”) providing a platform into the wireless space. While cable for 10-year renewable terms. Each county will be providers would be attracted to the unlicensed spectrum, they organized to contain 7 PALs (70 MHz per county could also be a big player in the PAL auctions. Each of the large licensed), with buyers allowed to purchase up to 4 per cable operators have been active in trialing CBRS over the last county. This Tier 2 stage currently remains in the year, with New Street Research estimating cable providers may be challenge process at the FCC. able to reduce MVNO costs by roughly two-thirds over the next 3) Tier 3 Priority: The remaining 80 MHz per county will several years “boosting EBITDA per sub by ~$10 per month, on be considered General Authorized Access (“GAA”), average." If adopted, New Street Research also estimates cable which allows for unlicensed use for all potential users. companies can reach an incremental 6-7 million homes in both GAA access began in September 2019. rural and urban markets.

Exhibit 1: Private LTE/Enterprise—With CBRS availability, enterprises can reduce reliability issues associated with Wi-Fi, while running IoT tasks with greater security (both indoor and outdoor). Under the circumstance an enterprise uses the unlicensed GAA spectrum, the company has the ability to by-pass wireless and cable operators in its entirety (although spectrum capacity is not protected for Tier 3 priority). Tower providers including American Tower and Extenet have also been vocal about the pent-up demand in buildings, stadiums, and other venues that would require indoor small cells, which also have the potential to impact the overall ownership model of the equipment.

While regulators may ultimately see spectrum sharing as lost tax revenue, the CBRS system aims to break-ground on spectral efficiency where the FCC is facing pressures of a finite amount of *Source: Federated Wireless spectrum and an increasing demand for wireless data. Success could play into the structure of other future spectrum band To facilitate the priorities of spectrum sharing, the FCC authorized structures such as the coveted 3.7-4.2 GHz C-Band, which the Spectrum Access System (“SAS”) administrators to manage and FCC is currently developing a strategy for. Wireless & Tower November 2019

By: Michael Robbins

General Industry Developments Public Valuation and Leverage Trends

th Based on data from S&P Market Intelligence as of quarter-end T-Mobile/Sprint Merger—On October 16 , 2019, the FCC voted 6/30/2019, the mean and median public valuations for wireless to formally approve the $26.5 billion merger between T-Mobile carriers were 7.7x EBITDA, an increase of ~.5x turn compared to and Sprint, following the Department of Justice’s formal approval th 12/31/2018. Leverage trends have remained relatively stable on July 26 , 2019. Closing of the deal, however, remains subject through 6/30/2019 compared to 12/31/2018 at ~3.0x. While we to the resolution of a multistate lawsuit from a bipartisan coalition acknowledge the wireless valuation multiples detailed in Exhibit 2 of state attorneys general trying to block the deal (citing unfairness correlate to the “high-end” of the current 6.0x to 7.0x range, the to consumers). Various sources suggest the matter would likely be th large variance in valuations as well as the market comparable of resolved in early 2020 following the December 9 , 2019 trial date. AT&T’s aforementioned asset sale does not warrant a change in our current guidelines. —In July 2019, Dish reached a deal with T-Mobile that it would pay $1.5 billion for the company’s pre-paid Boost Therefore, based on our market observations we are re-affirming Mobile business (~9 million subscribers) as well as $3.5 billion the Wireless (1) Non-Distressed Market Multiples (2) Distressed for 800 MHz spectrum. Combined with its ~$21 billion in existing Multiples and (3) the Distressed Discount of ~30%. spectrum holdings, the company remains subject to its mandate to th build-out a fully-functional 5G network by June 14 , 2023, or pay Exhibit 2: the U.S. Treasury up to $2.2 billion in penalties. EV/Recurring EBITDA Metrics for Publicly Traded Wireless Companies Verizon—Verizon has continued its commitment to building out Company Ticker 12/31/2017 12/31/2018 6/30/2019 fiber backhaul to support its next generation 4G and 5G platform AT&T Inc. T 7.4 7.0 7.4 (through its Corning and Prsymian Group agreements). According Shenendoah Telecommunications Co. SHEN 10.3 11.1 10.9 to Verizon CEO, Hans Vestberg, Verizon is deploying ~1,400 Sprint Corp S 5.0 4.5 5.5 route miles per month across 60 cities as of September 2019. T-Mobile US, Inc. TMUS 7.9 6.9 8.3 US Cellular Corp USM 5.5 5.8 6.1 AT&T—In October 2019, AT&T entered into an agreement with Inc. VZ 6.9 7.7 8.1 Liberty Latin America to sell its wireless and wireline assets in Mean EV/EBITDA Multiple 7.2 7.2 7.7 Puerto Rico and the U.S. Virgin Islands for ~$1.95 billion in cash Median EV/EBITDA Multiple 7.2 7.0 7.7 (~6.5x EBITDA multiple). The company stated the transaction *Sprint: FYE is 3/31 will help the company reduce its leverage profile to the mid 2x *Source: S&P Market Intelligence range by the end of 2019. Regarding FirstNet obligations, AT&T Exhibit 3: has stated it has successfully built out ~650 markets as of August 2019, which equates to ~65% completion of its contracted Debt/Recurring EBITDA Metrics for Publicly Traded Wireless Companies coverage area requirements. AT&T further anticipates ~70% Company Ticker 12/31/2017 12/31/2018 6/30/2019 completion by the end of 2019, with a completion deadline of AT&T Inc. T 3.1 3.2 3.1 12/31/2021. Shenendoah Telecommunications Co. SHEN 3.6 3.1 3.4 Sprint Corp S 3.7 3.6 3.4 Tower Update—The tower industry pipeline continues to be T-Mobile US, Inc. TMUS 3.0 3.0 2.8 supported by the buildouts of FirstNet, prospective sites with Dish US Cellular Corp USM 2.0 1.7 2.0 Network, as well as continued builds with T-Mobile’s 600 MHz Verizon Communications Inc. VZ 2.4 2.6 2.6 endeavors. According to multiple sources, delays in the closing of Mean Debt/EBITDA Multiple 3.0 2.8 2.9 Median Debt/EBITDA Multiple 3.0 3.0 3.0 the T-Mobile/Sprint merger has also delayed some of this *Sprint: FYE is 3/31 anticipated activity (including Dish) for the “Big 3” tower *Source: S&P Market Intelligence companies. However, overall leasing volume remains strong, with impacts from delays in new sites not likely to be significantly felt Exhibit 4: in 2019. While smaller private “built-to-suit” tower companies Wireless Non-Distressed Market Multiples such as Tillman Infrastructure, Uniti Towers, and CitySwich continue to have a presence in various builds (including FirstNet), Low Mid High Comments Marc Ganzi from Digital Bridge states they do not change the Current Run Rate EBITDA 6.00x 6.50x 7.00x Unchanged overall economics of the industry. Specifically, he explained the Wireless Distressed Multiples for LGD Distressed entities are limited in upside with ~1% penetration with macro Low Mid High Discount sites provided the ability to get required permitting. Small cells Current Run Rate EBITDA 4.00x 4.50x 5.00x ~30% continue to show strong leasing growth, with Crown Castle deploying ~30% more sites than last year. Publicly-traded tower companies reflect mean and median valuations of 26.5x and 25.3x EBITDA, an increase from 21.1x and 21.0x at 12/31/2018 (see Exhibit 6). Leverage has followed suit in-line with the strong demand of site builds to mean and Wireless & Tower November 2019

By: Michael Robbins median values of 6.5x and 6.0x, respectively. Similar to our Bibliography conservative approach with wireless companies, we believe that considering the continued headwinds from the pending T- i. “Federated Wireless Announces Industry-First 3.5 GHz CBRS Network to Support Initial Commercial Deployments of Mobile/Sprint merger, we do not recommend a change to the Shared Spectrum Services.” Federated Wireless, September valuations for tower companies at this time, but multiples will be 10, 2019. https://www.federatedwireless.com/federated- re-assessed with the next update. wireless-announces-industry-first-3-5-ghz-cbrs-network-to- support-initial-commercial-deployments-of-shared-spectrum- Therefore, based on our market observations we are re-affirming services/. the Tower (1) Non-Distressed Market Multiples (2) Distressed ii. Hardesty, Linda. “The 3 Main CBRS Use Cases, and Why Multiples and (3) the Distressed Discount of ~40%. Cable May Benefit Most.” FierceWireless, September 20, 2019. https://www.fiercewireless.com/wireless/3-main-cbrs- Exhibit 5: use-cases-and-why-cable-may-benefit-most. iii. Hill, Kelly. “How Fast Is FirstNet Growing?” RCR Wireless EV/Recurring EBITDA Metrics for Publicly Traded Tower Companies News, October 1, 2019. Company Ticker 12/31/2017 12/31/2018 6/30/2019 https://www.rcrwireless.com/20190928/public-safety/how- American Tower Corp. AMT 20.7 20.2 25.3 fast-is-firstnet-growing. iv. “Tower Visionary Marc Ganzi on 5G, Small Cells & Edge Crown Castle International CCI 26.5 21.0 25.0 Computing.” Light Reading. Accessed October 18, 2019. SBA Communications SBAC 24.6 22.3 29.3 https://www.lightreading.com/mobile/5g/tower-visionary- Mean EV/EBITDA Multiple 23.9 21.1 26.5 marc-ganzi-on-5g-small-cells-and-edge-computing/a/d- Median EV/EBITDA Multiple 24.6 21.0 25.3 id/754466. *Source: S&P Market Intelligence v. Hill, Kelly. Private LTE: Making the Enterprise Future-Ready. Report. RCRWireless. July 2018. Exhibit 6: Debt/Recurring EBITDA Metrics for Publicly Traded Tower Companies Company Ticker 12/31/2017 12/31/2018 6/30/2019 American Tower Corp. AMT 4.8 4.7 5.1 Crown Castle International CCI 6.0 5.4 6.0 SBA Communications SBAC 7.7 7.7 8.4 Mean Debt/EBITDA Multiple 6.2 5.9 6.5 Median Debt/EBITDA Multiple 6.0 5.4 6.0 *Source: S&P Market Intelligence Exhibit 7: Tower Non-Distressed Market Multiples Low Mid High Comments Current Run Rate EBITDA 18.00x 20.00x 22.00x Unchanged Tower Distressed Multiples for LGD Distressed Low Mid High Discount Current Run Rate EBITDA 11.00x 12.00x 13.00x ~40% Data Center & Cloud Providers November 2019

By Omar Oronia

Getting SaaS-y Disadvantages of SaaS: SaaS also poses some potential disadvantages, given that The rise of the cloud and cloud computing undoubtedly changed organizations must rely on outside vendors to provide the the way we access and store data. When purchasing a computer, software, keep that software up and running, track and report tablet or cell phone device, storage capacity used to be an accurate billing and enable a secure environment for sensitive important factor in the decision making. The last thing you wanted data. Furthermore, a reliable internet connection becomes critical was to purchase an expensive iPhone and not have enough storage when considering a SaaS application because without it, end users capacity to store your favorite music, photos, and videos. So how cannot access the service offering. This means no internet did we get from underlining storage capacity in our technology connection, no access to applications like Facebook or Mobile choices to essentially putting storage capacity at the bottom of the Banking. A browser based application running on a remote data list? Through one of the service solutions available through cloud center may lack in performance when compared to a similar computing, referred to as Software as a service (“SaaS”). SaaS is application running from an end user’s desktop. As such, the loss a software distribution model in which a third-party provider hosts of control, data security, connectivity requirements and slower applications and makes them available to customers over the speeds are several factors that explain the adoption of a hybrid internet. For example, now a days you can purchase an apple cloud strategy vs fully cloud enabled. iPhone, iPad or MacBook and not worry too much about its hardware storage capacity given you can purchase an iCloud Figure 1: Pizza as a service storage plan from apple for as little as $1 a month for 50GB or $9.99 for 2TB of additional storage via the iCloud.

In addition to data storage, there are SaaS applications for fundamental business technologies, such as email, sales management, customer relationship management, financial management, human resource management, billing and collaboration. In the software on demand SaaS model, the provider gives customers network based access to a single copy of an application that the provider created specifically for SaaS distribution. The application’s source code is the same for all end users and when new features or functionalities are rolled out, they are rolled out to all end users simultaneously via application updates. Some of the leading SaaS providers include, Salesforce, Oracle, SAP, Intuit and Microsoft. SaaS Serving Rural America: Advantages of SaaS: The more high speed internet becomes readily available in rural The main advantage of a SaaS solution is that it removes the need parts of the country, the more opportunities it creates to help for an organization to install and run applications on their own bridge the digital divide. With a reliable internet connection computers or in their own data centers. SaaS eliminates this costly smaller towns can leverage cloud computing and develop city like expense of hardware acquisition, provisioning and maintenance, behaviors. Having a reliable internet connection makes hosting on as well as software licensing, installation and support. An premise applications and hardware less desirable due to the cost to additional advantage of SaaS applications is that rather than install, power and maintain over a SaaS solution. As such, SaaS purchasing software to install or additional hardware to support it, solutions provide small and medium sized organizations end users can subscribe to a SaaS offering paying on a monthly alternatives and tools to operate and scale their businesses. Some basis using a pay-as-you-go model and cancelling at any time. rural communities have leveraged this cloud computing offering Other advantages of SaaS includes the ability to offer high vertical and have deployed their own SaaS solution. Cloud based patient scalability, which gives end users the option to access more, or transportation solution, MedHaul is helping eliminate fewer, services or features on demand. Rather than purchasing transportation barriers for patients living in rural communities. new software, organizations and end users can rely on a SaaS MedHaul is an application platform that connects hospitals and provider to automatically perform updates. This reduces the clinics with quality transportation providers in their rural burden on in-house IT staff. Since SaaS applications are delivered communities. Currently, hospitals must go through their rolodex over the internet, end users can access them from any internet of transportation providers, leaving voicemails and usually settling enabled device and location. That means an organization can scale for the first available provider. The process was inefficient given up and provide application access and persistence to employees that everything was based on a phone call, which often lead to working remotely, which includes rural areas across the country subpar patient care. The transportation providers did not always so long as there is an internet connection available. have accurate patient information.

With MedHaul, caseworkers and nurses log on to the application, add a patient’s basic demographics and caregiver information Data Center & Cloud Providers November 2019

By Omar Oronia

(wheelchair/stretcher requirement) and the application filters the Public Valuation and Leverage Trends top transportation providers that fit that criteria. The chosen provider picks up the ride through the application and receives The publicly traded data center space continues to be characterized details on the patient and an optimized route. The hospital, clinic by stabilized market valuations and moderately increasing or nursing home can track when the driver is on its way, similar to leverage profiles. As the chart in Figure 3 indicates, valuation other ride sharing companies like Uber or Lyft and the caregiver multiples have been stabilizing over the last 3 years. Switch receives updates from the patient for peace of mind. What makes experienced a notable decline in valuation after its initial IPO in MedHaul unique from its competitors across the country is that Q4 ’17 due to a steep decline in stock price driven by soft year end they target the rural communities that need this service the most, performance and trailing behind budget for the majority of 2018. where transportation and healthcare are not easily accessible. Despite some weakness in stock performance in 2018, valuations According to the National Rural Health Association, 670+ rural and data center growth are expected to remain compelling through hospitals are at risk of closing, making transportation a larger issue the rest of 2019. Market observations indicate there seems to be in low income, rural areas. Hospitals and healthcare agencies pay an oversupply in some of the key US markets like Northern for access to the patient transportation management platform on a Virginia, Phoenix, and Dallas which is being driven by hyper scale SaaS model. The client buys a specific ride package for a flat fee cloud digestion and the large onslaught of new competitors driven every month, and refills their rides on a recurring basis. by infrastructure private capital in the space. Nonetheless, the amount of private capital entering the data center space continues In addition to serving rural communities, SaaS applications can be to justify current valuation multiples. Trends to look for in 2020 deployed by rural telecommunications operators to better include the growth of edge markets, the continued demand for strategize and map their fiber expansion buildouts. This service colocation, deployment of private cloud infrastructure, and offering is capitalized by Vetro FiberMap, a cloud based fiber increased demand in software defined technologies. Multi-cloud management Geographic Information System (“GIS”) Mapping adoption continues to drive demand across markets and will be SaaS platform. Vetro FiberMap is a SaaS broadband network, compounded with the arrival of 5G network connectivity. Data planning and management platform designed and purpose built for Centers and Cloud Providers are strategizing their offerings to rural telecommunications providers beginning to deploy fiber. The meet the growing need for long-term flexibility, while providing application enables multiple business units from engineering to in the space and power needed from large users. field contractors, sales, and management to access accurate data from any place at any time using just an internet connection. With Figure 3: Vetro FiberMap, rural telecommunications providers can combine Publicly Traded Total Enterprise Value market intelligence with planning, engineering and existing infrastructure to precisely plan their networks. TEV/LQA Adj. EBITDA Trends Telecommunications providers can let customer demand drive Company FYE '17 FYE '18 Q2'19 their projects and use existing network plant mapping data such as Equinix (EQIX) 19.71x 15.90x 19.21x the location of conduits, poles, and strand paths to steer projects in a profitable and sustainable direction. Additional benefits from Digital Realty Trust (DLR) 20.01x 19.03x 20.06x this SaaS offering enables theses rural CyrusOne (CONE) 18.43x 17.20x 17.97x providers the ability to effortlessly migrate existing network assets Switch (SWCH) 25.13x 12.06x 10.22x into the application to easily plan and design a fiber network in CoreSite Realty (COR) 23.35x 17.92x 22.49x their existing footprint, speed through the design phase with automation, then perfect the design with manual editing all in the QTS Realty Trust (QTS) 19.01x 16.56x 19.15x same simple mapping space. Average 20.94x 16.45x 18.18x

Figure 2: Vetro FiberMap SaaS example The publicly traded data center providers generally command higher trading multiples than privately owned providers due to a number of factors including scale, market position, and quality of contracts. However, CoBank’s guidance for Data Center valuations remains conservatively in line with recent M&A valuations and unchanged as indicated in Figure 4. Based on our market observations we are re-affirming the below Data Center (1) Non Distressed Market Multiples (2) Distressed Multiples and (3) the Distressed Discount of ~35%.

Figure 4: CoBank Valuation Guidelines: Data Centers Low Mid-Point High Current Run-rate EBITDA 12.00x 13.50x 15.00x Data Center & Cloud Providers November 2019

By Omar Oronia

Data Center Distressed Multiples for LGD Distressed Low Mid-Point High Discount Current Run-rate EBITDA 8.00x 9.00x 10.00x 35%

Figure 5 highlights how the publicly traded data centers have managed leverage over the last several years and indicates a modest increase from FYE ’17 to Q2 ‘19 as major M&A deals proliferated and investor capital requirements were less restrictive. However, data centers are typically not levering up beyond 5.5x and have balanced debt with ongoing equity funding. As such, leverage profiles in this sector will remain elevated for the foreseeable future, but the underlying demand and quality of contracts will largely mitigate this risk for most publicly traded data center providers.

Figure 5: Publicly Traded Leverage Total Debt/LQA Adj. EBITDA Trends Company FYE '17 FYE '18 Q2 '19 Equinix (EQIX) 4.50x 4.62x 4.01x Digital Realty Trust (DLR) 5.05x 6.18x 5.79x CyrusOne (CONE) 5.06x 5.45x 5.36x Switch (SWCH) 3.00x 2.83x 2.58x CoreSite Realty (COR) 3.43x 3.81x 4.27x QTS Realty Trust (QTS) 5.36x 5.68x 5.73x Average 4.40x 4.76x 4.62x

Works Cited

Afrotech n.d https://afrotech.com/this-startup-connects-patients-with-rides-to-the-hospital-in- rural-communities n.d. Coresite Quarterly Results. http://investors.coresite.com/financial-information/quarterly- results. n.d. CyrusOne Events & Presentations. http://investor.cyrusone.com/events-and- presentations. n.d. Digital Realty Events & Presentations. http://investor.digitalrealty.com/investor- relations/news-and-events/events-and-presentations/default.aspx. n.d. Equinix Investor Relations. http://investor.equinix.com/phoenix.zhtml?c=122662&p=irol-sec.

Vetro FiberMap n.d https://www.vetrofibermap.com/customers/industries/rural-telephone- companies/ n.d. QTS Quarterly Earnings. http://investors.qtsdatacenters.com/quarterly-earnings. n.d. S&P Capital IQ. www.capitaliq.com.

Software Advice n.d https://www.softwareadvice.com/resources/saas-10-faqs-software- service/ n.d. Switch Events & Presentations. https://investors.switch.com/events-and-presentations.