970 west valley parkway, suite 509 san diego, california 92025 phone: 760.233.2387

970 WEST VALLEY PARKWAY, SUITE 509970 WEST VALLEY PARKWAY, SUITE 509SAN DIEGO, CALIFORNIA 92025SAN DIEGO, CALIFORNIA 92025

PHONE: 760.233.2387PHONE: 760.233.2387FAX: 501.639.6825FAX: 501.639.6825

www.nethercomm.comwww.nethercomm.com

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C O R P O R A T I O N

COMPANY CONFIDENTIAL


Nethercomm BackgroundNethercomm BackgroundNethercomm is a privately-held Delaware corporation based in Southern California and led by start-up veterans who have extensive experience in developing and rolling-out new communications technologies.

Nethercomm plans to deliver the industry’s most capable and lowest cost last-mile communication technology by combining our intellectual property and proprietary technologies with established broadband and natural gas distribution systems.

.



The market for broadband services is enormous The market for broadband services is enormous

• 47 Million US Broadband Subscribers47 Million US Broadband Subscribers• 95 Million Domestic Cable/Satellite TV Customers95 Million Domestic Cable/Satellite TV Customers• 112 Million Residential Telephone Lines in the US112 Million Residential Telephone Lines in the US• Broadband Internet Subscriptions grew over 37% last yearBroadband Internet Subscriptions grew over 37% last year• 20 Million US Homes used Video-on-Demand in 200420 Million US Homes used Video-on-Demand in 2004• Last year 32 Million residences received telephone service from non-RBOCsLast year 32 Million residences received telephone service from non-RBOCs

Adoption of broadband services remains constrained Adoption of broadband services remains constrained

• Today D/L rates average <3 Mbps; by 2009, 57-84 Mbps will be neededToday D/L rates average <3 Mbps; by 2009, 57-84 Mbps will be needed• U.S. pays about $35/month for 1.5Mbps; in Japan, about $25 for 26 MbpsU.S. pays about $35/month for 1.5Mbps; in Japan, about $25 for 26 Mbps• 80% do not have broadband, including half of those earning over $75K80% do not have broadband, including half of those earning over $75K

The residential Broadband Industry will be worth $90B by 2009 representing a seven fold increase in revenue over the next five years. -- ARC Group (www.arcgroup.com)

Broadband BackgroundBroadband Background

.



Nethercomm’s Intellectual Property Enables Delivery of Nethercomm’s Intellectual Property Enables Delivery of Broadband Services Over Natural Gas Distribution PipingBroadband Services Over Natural Gas Distribution Piping

Nethercomm’s proprietary system "piggybacks" high-performance broadband communications over existing natural gas distribution networks

Broadband-in-Gas (BiG) leverages Broadband-in-Gas (BiG) leverages existing natural gas infrastructure to existing natural gas infrastructure to bridge the “last mile” which hampers bridge the “last mile” which hampers other broadband approaches.other broadband approaches.

Nethercomm invented the BiG Nethercomm invented the BiG technology and is developing and technology and is developing and making BiG available through our making BiG available through our development partners and strategic development partners and strategic alliances.alliances.

.



Nethercomm Wireless Transmission:

-- Uses wireless radio frequency (RF) transmission like a conventional radio station broadcasting through the atmosphere

-- Signal travels through the hollow center of existing Natural Gas distribution pipes like a coaxial cable, with the gas being the conductive wire

Broadband in Gas (BiG) Network Technology Harnesses Broadband in Gas (BiG) Network Technology Harnesses Basic Physics For Super-Efficient Signal TransmissionBasic Physics For Super-Efficient Signal Transmission

Using signals inside a buried conduit presents an unlimited private spectrumUsing signals inside a buried conduit presents an unlimited private spectrum- very low-noise within the operating environment, zero conflict with external

applications

.



Ultra Wide Band (UWB) Communication:

Extremely low-power transmission -- tiny fractions of a watt for safe, efficient

transmission in flammable environment

Spreads signal over a block of frequencies -- opposite of conventional radio, which puts

high power into a narrow frequency band

Wide-spectrum signal inherently robust, recoverable, and interference-resistant -- UWB redundancy keeps signal intact even if an external source

“jams” a frequency

Widely used for state-of-the-art commercial wireless and military communications -- high efficiency, high reliability, high performance

“Ultra Wide Band” (UWB) is a Communication Technology Declassified by the US Defense Department

in 1994

Em

itte

d S

ign

al P

ow

er Narrowband Communications

(30KHz bandwidth)

Spread Spectrum Communications(5MHz bandwidth)

Ultra Wideband Communications(Several GHz bandwidth)

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Operational Overview of the Nethercomm System

NODEHUB

NetworkNetworkOperations Operations

CenterCenter

.

Ultra WidebandTransceiver

Ultra WidebandTransceiver

NG Service

Cable TVHDTV/VoD/IPPhone/VoIPBroadband InternetWiFi/WiMAXOther Services



Subscriber homes

“Last Mile” BiG Network

High-Capacity Fiber Optic “First Mile”

Managed Network Operation Center

Neighborhood network bridge

Middle Mile” connection

Sector Aggregation/Routing HubHub

HEADENDNOC

Tier 1 Internet

Node Node Node

Nethercomm Broadband Architecture

Nethercomm is enabling a complete broadband service combining its break-through “last-mile” technology with the best supporting

infrastructure to deliver high-performance Internet, Television, Telephony, HDTV and other applications

Television Feed

Telephone Backbone

w/ CPE hardware

.



Nethercomm Has Compelling Advantages Over Conventional Broadband Technologies

Pro: Uses CATV cable plant, low-cost CPE Con: Shared connection can overload, slow uploads, high OPEX

Pro: Wireless install saves time and trenching costsCon: Weather, buildings, and electronics may cause interferenceFixed

wireless

Hybrid Fiber Coax (Cable)

Fiber tothe home

Digital subscriberLine (DSL)

T1/T3

Satellite

BroadbandIn Gas

0.5 0.5 0.5 0.5

0.5 0.5 0.05 0.05

1.5 1.5 1.5 1.5

19.219.2 4.844.84

1.0 1.0 0.6 0.6

1.51.5 0.130.13

40.9640.96 40.9640.96

Typical Bandwidth (Mbps)

Pro: Near universal coverage reaches inaccessible locationsCon: Expensive service and equipment, high latency, needs LoS

Pro: Link always delivers full bandwidth, good upstream rateCon: Expensive, slower downloads than cheaper alternatives

Pro: Data rates & cable life, low maintenance and power costsCon: Huge deployment costs, no consensus on preferred format

Pro: fast, robust & reliable link enables full broadbandCon: availability limited to areas with natural gas distribution

Pro: Connects via existing phone wiring, multiple ISP resellersCon: Performance drops sharply with range, susceptible to crosstalk

.



Nethercomm Technology Trumps The Competition In Subscriber Deployment

Costs

CO and Distribution Headend

OSP and Transmission Media

CPE + Customer Installation

500

200

300

xDSL

100

1100

300

HFC

500

5000

1500

FTTx

100

0

400

BIG

1000

2000

3000

4000

5000

6000

7000

Per

Su

bsc

rib

er

Dep

loym

ent

Co

sts

($)

0

.



Nethercomm Presents A Compelling Value Proposition With The Lowest Cost and Highest Bandwidth

.

This "Last Mile” solution delivers a uniquely low CAPEX requirement.

Subscriber connection costs are truly incremental allowing the incorporation complementary fiber networks.

Avoided “Last Mile” work significantly shortens time to market and precludes many regulatory restrictions.

Supports Residential, SME and Enterprise offerings on same network delivering shared build-out savings hence a key solution to digital divide initiatives.

Provides added benefits of integrated gas line integrity monitoring, meter reading and tamper prevention.

Bandwidth (Kbps) per Subscriber Deployment costs($)

0

10

20

30

40

50

60

7080

xDSL HFC FTTx BiG



Nethercomm System Capabilities Drive Bottom-Line Benefits

Nethercomm delivers solid value tobroadband, telecom and gas utility providers

Strong Technology Powers Critical Advantages

• "Last Mile” Solution Leverages Current NG Infrastructure • High-Performance Network Delivers Superior Bandwidth• Robust Architecture, Reliable Operation • Excellent Scalability and Flexibility with Existing Plant

Rock-Bottom Cost Basis

• Low CAPEX using Innovative Design and Existing Pipelines • Compact and Efficient Physical Plant Keeps OPEX Small • Subscriber connection cost is truly incremental• Actively incorporates complementary infrastructure

Strong Technology Powers Critical Advantages

Tremendous Revenue Opportunities• Bandwidth Enables Full Range of Advanced Applications• Bundled Services Maximize Revenue Streams• Offers Multiple Product Tiers to Monetize Capacity• Supports Residential, SME, and Enterprise on Same Network

Tremendous Revenue Opportunities

Rock-Bottom Cost Basis

Competitive Position Strong• Avoided “Last Mile” Work Significantly Shortens Time to Market• Novel Architecture Precludes Most Regulatory Restriction• Shared Subscriber Savings in Customer Acquisition, Invoicing• Strong Product Improves Take Rate and Reduces Churn

Competitive Position Strong

.

“Broadband access to the Internet will become as important as electricity was at the turn of the century”

- Business Week

. C O R P O R A T I O NC O R P O R A T I O N

970 west valley parkway, suite 509 san diego, california 92025 phone: 760.233.2387

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