Oregon Connections Hood River

1. Oregon ConnectionsHood River October 24, 2013

2. Company Background • Clear Creek Communications • Service Area • 52 Sq. Miles • Founded 1906 • Statistics • Dwindling Access Lines • Stable DSL and Cable Modem Customers (20/80) • Stable Number of Video Customers • Growing Number of Security Customers • We serve no place • Virtually no cities, towns or named communities

3. The Network of the Future • May Not Be Your Own • External Forces Are Changing How Traditional Carriers View the Very Nature of Their Operations • Leveraging Any Available Network is Now Acceptable

4. External Forces Change the Future • Three Drivers of Change • Reductions in Traditional Revenues • Financiers Tighten Credit • Active Regulatory Period • Opportunities Brought by Change • New Revenues and Markets

5. 1.) Reduction in Traditional Revenues • ILEC’s Actions • Traditional Cost Cutting • Can Result In Returned Revenue • Customers Actions • Movement Toward Wireless • Can Result in Uncollected Revenues • Action Of Others • Events Beyond Your Control • Can Result in Lower Revenue

6. ILEC’s Actions • Can’t Manage an ILEC Like a Normal Business • Cost Savings vs Cost Study • Complicated by Two Year Lag • Positive Impact Can Be Short Lived • Frustration and ?#*%&$! Cost Study

7. Customer Action • Adoption of Broadband • Loss of Second Lines • Shift Toward Wireless • Loss of Primary Lines • Recession • Just Trying to Cut Back • Impact on All Services • Expanded Options • Some Customers May NotKnow You

8. Customer Actions • Wireless Drift • Access Line Loss 36% 10% of Annual Revenue Lost

9. Actions of Others • Local Impact Caused By Separation Rules • Returns That Are Driven By Averages • National Average Loop Cost • Local Rate Benchmarks • CAPS • Directly Impacted Our Operations • Heavy Investment In Some Areas Raised NALC • Our Investment Straight Lined • Impacts Our NALC Multiple • Significant Reduction in Support • 20% of Annual Revenue Lost

10. Actions of Others • Exponential Growth • National Average Loop Cost • Increase 7.5%,14%, 10%, 12%, 1% • NACP Grew 3x Faster Than Company 1.7x 1.5x 1.6x 2.1x 1.9x 2.2x

11. 2.) Financiers Tighten Credit • Concerns With Industry Segment • Telephone Business Performance • Regulatory Uncertainty • Result • Cautious Lending • Tighter Covenants • Bottom-Line • Less Capital Available • Loan Pre-Payments

12. Concerns With Industry Segment • Industry Multiples – Jan 2013

13. Credit Impacts Operation • Shifts Importance of Debt Service • 20% Movement in 5 Years • Options Still Exist For Funding • Leverage Must Be Moderate • Business Plan Must be Prudent • Heightened Due Diligence • Will Be Pricing to Risk • Bank Will Have a Greater Focus • Management • Diversification • Performance To Plan

14. 3.) Active Regulatory Period • Pressure on Telco Operations • Limitations on USF Support • Phase Down of Switched Access Cost Recovery • Corporate Operations Expense Limitation • Rate of Return Re-Prescription • And More

15. Pressure on Telco Operations • USF and ICC Reform is Our Reality • Industry Continues to Advocate • We Are Well Represented • Yet That May Not Solve Your Specific Challenge • Some of Us May Have Serious Issues • Regulators Continue to Regulate • They May Not Have Your Best Interest In Mind • Surprise!

16. 4.) New Revenues and Markets • Positive Action Can Be Taken • Revenue Generation Possibilities • Actions We Pursued • Large Scale Project • Security and Home Automation • Leverage Available Networks • Both Wired and Wireless • Partnering

17. Positive Action Can Be Taken • Additional Revenue May Be Generated By • New Services • New Customers • Low Capital Options • Funded Per Customer • Partnerships • Cost Savings • Expertise

18. Revenue Generation Possibilities • Many Carriers Have Developed New Services • Regulated & Non‐Regulated • Monitoring/Security • Home Networking • Computer Literacy/Support • VoIP • Hosted PBX • Ethernet Transport to Wireless • Dark Fiber • Colocation

19. Revenue Generation Possibilities • Or Attempted to Leverage Existing Assets • Assets Owned and Operated • Switching Services • Installation & Repair • Customer Service • Billing & Collection • Accounting/Regulatory/Management • Assets of Others • Wireless Networks • Interconnected Networks • Capital Investment • Labor and expertise

20. Security & Home Automation • ClearView • Next Generation Security • Interactive Security • Energy Management • Home Automation • Video Monitoring • Leverages Wireless and IP Networks • Backhaul on Verizon, ATT, T-Mobile • Video and Secondary on Any IP Connection • Easily Offered Beyond Exchange

21. Industry With Growth Spurt • Projected Annual Revenue Growth

22. Interactive Security • Complete Web Control • A New Reality for Customers

23. Energy Management • Measure Energy Usage • Multiple Measurement Levels • Set Energy Goals • Query Current Usage • emPower • Control Lights • Operate Appliances • Thermostats

24. Home Automation • Intelligent Operations • Smart Schedules • Activity Patterns • Geo-Services • Home Control • Garage Doors • Window Blinds

25. Video Monitoring • Video Is The Most Popular Feature • Live Streaming • Video Alerts • Cloud Storage • Network DVR

26. Leverage Other Networks • Western Independent Networks • Expands Our Reach • Offers Transport Network Throughout Oregon And The Greater Northwest Region • Leverage The Networks Of 25 Shareholder Companies • Expands Our Opportunities • Oregon Broadband Partnership • Participation With Others • Integra • Century Link • Wave Broadband • LS Networks • INDATEL (National Coverage)

27. Partnering • ClearView • Particularly Suited to Working Together • Current Have 7 Partners • Sharing • Common Brand • Knowledge • Marketing • Sales and Technical Staff • Facilitates Quick Entry

28. Partnering • Oregon Cable Group • Created in 1999 • Recently Joined • Current Have 4 Members • Sharing • Headend Equipment • Capital Projects • Knowledge • Technical Staff

29. Partnering • Western Independent Networks • Equity Partner • Network Partnership • Services Utilized • Point to Point Special Access • Ethernet Transport • Internet Backbone Access • IP Voice Aggregation • Peering • NOC and Maintenance Services

30. Partnering • Possibilities Abound • Jointly Provided Services • Infrastructure Sharing • Wholesale Purchasing • Management/Labor Contracts • Look Around You • What’s Happening in Your Neighborhood? • Are You Part of The Discussion?