PART TWO OF A FOUR-PART SERIES

Driving

SMALL

BUSINESS

Forward

BROADBAND INNOVATORS

B

usinesses, particularly small and medium-sized businesses (SMBs), are the growth engines of national economies. Small companies are undisputedly the lifeblood of economic prosperity. In the US, there are an estimated 27.9 million small businesses. Competitive carriers continually provide innovative, cost-effective telecommunication services that might otherwise be unattainable for organizations with fewer than 500 employees. Most competitive carriers are also small or mid-sized businesses themselves, so they know first hand the importance of product reliability, excellent customer service and how to deploy cutting-edge technologies that have a sig-nificant positive impact on the national economy.

Historically, small firms account for over 60% of net new jobs created in the US every year -- or about 11.8 mil-lion out of 18.5 milmil-lion net new jobs from 1993 to 2011. Recently, these small businesses have been critical to boosting the economy by creating 67% of net new jobs from mid-2009 to 2011. Technologically-savvy compa-nies are nimble and grow fast, and perhaps not surpris-ingly, small firms that adopt broadband and internet services are the fastest growing segment of the SMB market. Out of approximately $326 billion spent na-tionally on IT budgets, small and mid-sized companies spend $293 billion. However, in a nationwide survey of small businesses, participants wanted more compe-tition among broadband service providers and ranked “the ability to choose from more providers” as one of the most important options for improving their commu-nication and Internet services.

THE ECONOMIC IMPACT

BROADBAND INNOVATORS

PART 2 OF 4

»

DRIVING SMALL BUSINESS FORWARD

Broadband spurs faster business growth:

SMBs are the biggest IT spenders:

Presented by

Source: McKinsey SME Survey. Web Intensity based on McKinsey Web Index.

Source: EarthLink.

$116b

$177b

$33b

SMALL BUSINESS MID-MARKET / ENTERPRISE FORTUNE 1000

$326b

TOTAL NATIONWIDE IT SPEND MARKET LOW WEB INDEX <20% MEDIUM WEB INDEX 20–40% HIGH WEB INDEX >40%

ANNUAL GROWTH (PAST 3 YRS)

WEB INTENSITY

6.2%

7.4%

Competitive carriers offer small businesses highly tai-lored services that scale economically. Generally, small firms favor product reliability and responsive custom-er scustom-ervice and are less conccustom-erned about the name of the provider. To meet the needs of enterprise and small business customers, competitive carriers have con-sistently delivered customized solutions with excellent technical support.

For flexible and reliable services, the SMB market is turning to cloud computing which gives them access to virtual systems. Unlike conventional IT resources that are limited to local hardware that can’t easily be upgrad-ed or expandupgrad-ed, virtualization gives SMBs a connection to shared datacenter resources where companies can better allocate their time and IT budgets. Competitive carriers provide industry leading cloud services that can simplify the process of achieving regulatory com-pliance, and SMBs appreciate the specialized customer service that only competitive carriers provide.

SMBs increasingly want virtual systems — IT resources not tied

down to specific hardware — hosted by service providers

Competitive carriers provide SMBs the tools necessary to meet

their own complex regulatory requirements (PCI, HIPAA, etc.)

SMBs can focus on their core business strengths while service

providers deliver productivity-enhancing communications services

TAILOR-MADE SERVICE

COMPETITIVE CARRIERS DELIVER WHAT SMBs NEED

SOLUTION SNAPSHOT:

TW TELECOM

Organization: Presbyterian Healthcare Services

Operational Challenge: Deploy cost-effective bandwidth

to meet the current and future needs of next-generation, high-performance capability for telemedicine for the newly-built Rust Medical Center in New Mexico

Solution: Business Ethernet from tw telecom with a 2

Gbps network circuit

Benefits: 100% uptime to date, robust communications

network with video conferencing rooms

SMALL BUSINESS MID MARKET / ENTERPRISE FORTUNE 1000

The cost of healthcare is a huge challenge

nationwide, and our organization is determined to keep the cost of healthcare as low as possible for our patients and members. That’s why finding the lowest cost solution for the most amount of bandwidth was an important aspect of the new hospital.

- Marcia Birmingham, Manager of Network

THE ADVANTAGES OF HOSTED VOICE

Multi-site SMBs tend to buy more broadband and IP services and are more likely to buy from non-incumbents, according to a Deloitte study.

ENABLING MULTI-SITE BUSINESS

Voice communications have always played an import-ant role in business’ non-labor expenses. As early as 2006, competitive carriers have done a much better job than incumbents at preparing small and mid-sized businesses for converged communications. According to a Yankee Group study, while only 9% of SMBs served by incumbent telecoms purchased advanced voice ser-vices such as VoIP, 23% of SMBs with service from com-petitive carriers adopted IP-based telecommunications for their phone systems.

Competitive carriers are leading the transition to IP. They have continually promoted the benefits of IP-en-abled services to SMBs to educate their customers about the advantages of next-generation voice solu-tions, while incumbent providers have provided rel-atively scant information about VoIP and hosted voice solutions to small businesses.

INNOVATION SPOTLIGHT:

ADVANCED VOICE SERVICES

Hosted voice revenues are

_{growing rapidly in the small}

business sector:

Source: Insight Reports

Lower startup

costs

& economic

Flexibility

scalability

No on-site

maintenance

expenses

Advanced

controls over

costs for

travelling or

remote workers

Multi-site

coordination

with productivity

benefits

$1400m

2010 11

12

13

14 2015

$1050M

$700M

$350M

$0

Competitive carriers have long-standing relationships with small and medium-sized enterprises and a track record of reliable service — plus the proven ability to provide a comprehensive range of IT infrastructure and applications that SMBs want and need. As a rule of thumb, SMBs distinguish themselves in the market by effective execution with a focus on their operations and customers — areas that large incumbents neglect.

Competitive telcos often serve SMBs as full-service IT solution providers, allowing businesses to concentrate on growing. Competitive carriers are technological allies for small businesses, providing 24/7 service and making sure critical business data is secure, backed up, protected from malware and always accessible.

A CLOUD YOU CAN COUNT ON

COMPETITIVE CARRIERS DELIVER RELIABLE SERVICES

Teleworking is more common

in small businesses:

Businesses report numerous

benefits from cloud services:

Source: Connected Nation

Source: Cbeyond Survey

ALL BUSINESS BREAKDOWN OF BUSINESSES THAT ALLOW TELEWORK SMALL BUSINESS

33%

1.5 miL

SMBs

_{.9 miL}

OTHER

37%

ALLOWS TELEWORK

Cbeyond: The American Business Awards called

Cbeyond a technology ally to small and mid-sized businesses, naming it a Finalist in the Best New Product or Service of the Year (Software category) in the 2013 American Business Awards.

tw telecom: Atlantic-ACM awarded tw telecom

best in class awards in five categories at its 2013 North American Business Connectivity Awards for Sales Reps, Billing, Customer Service, Voice Value, and Data Value.

Forrester Research presented tw telecom with the “2010 voice of the customer” award — the only telco in the finalists list.

XO Communications: 2013 Atlantic-ACM

Customer Choice award — serving Emerging Customers for metro data services excellence Rated by Gartner as one of the top nationwide service providers for meeting the voice and data networking needs of mid-sized and large enterprises. RECOGNITION OF EXCELLENCE

83%

78%

74%

73%

71%

MORE FLEXIBLE MORE PRODUCTIVE MORE RESPONSIVE MORE INNOVATIVE SAVING MORE

The Broadband Coalition represents America’s innovative broadband providers.

For innovations like the ones examined in this document to continue, the Federal Communications Commission’s pro-competitive

rules need to be updated and enforced — regardless of the technology used.

For more information on how to maintain

an innovative broadband environment,

visit

thebroadbandcoalition.com

Moving to XO was the best business decision we ever made.

- Carlos Moya, VP, Operations at Central Alarms Control

SOLUTION SNAPSHOT:

EARTHLINK

SOLUTION SNAPSHOT:

XO COMMUNICATIONS

Organization: HoneyBaked Ham

Operational Challenge: Operate an affordable, scalable &

secure network to reliably connect disparate locations with an agile solution that can adapt to seasonal retail spikes

Solution: Private MPLS network from EarthLink

Busi-ness with a blend of wireline and wireless capabilities to handle permanent storefronts as well as seasonal “pop up” or kiosk locations

Benefits: A uniquely reliable communications network

with wireless EVDO that can expand and contract in a timely manner to accommodate holiday spikes

Organization: Central Alarm Control

Operational Challenge: Install a simplified, reliable and

cost-effective phone system with exceptional customer service responsiveness

Solution: Hosted PBX from XO Communications Benefits: Simplified billing, a single point of contact for

customer service and scalability for the future

CASE STUDY:

CBEYOND

• TotalCloud Phone System — allows SMBs to manage remote workers with a wide range of phone capabilities • TotalCloud Data Center — offers computing power on

demand to SMBs, including security and regulation compliance

Whereas our average customer used to have 12 employees, our new customer has somewhere in the 20s. And these newer customers have

been growing..