1. PAETEC Strategic Partnership
How To Leverage PAETEC To
Accelerate Technology ROI
& Increase Project Margins
Mark Lawrence Peay
Director, Business Development
West Region
December 3, 2008December 3, 2008

2. Agenda
ƒƒ PAETEC AtPAETEC At--AA--GlanceGlance
ƒƒ Partnering with PAETECPartnering with PAETEC
ƒƒ Equipment / Software for ServiceEquipment / Software for Service
Accelerated ROI ProgramsAccelerated ROI Programs
ƒƒ Next StepsNext Steps

3. Company Overview
PAETEC is a Leading CommunicationsPAETEC is a Leading Communications
Solutions ProviderSolutions Provider
ƒ Headquartered in Rochester, NY
ƒ NASDAQ: PAET
ƒ 4,000 Employees
ƒ $1.6 Billion Revenues*
ƒ $240 Million EBITDA*
ƒ $100+ million Cash Flow*
ƒ Double digit “organic” growth
* Run-rate business with projected synergies

4. Company Overview (Continued)
ƒƒ Serving 82 of the Top 100 MSAsServing 82 of the Top 100 MSAs
ƒƒ 4.4 Million Access Line Equivalents4.4 Million Access Line Equivalents
ƒƒ Over 115,000 TOver 115,000 T--1s Installed1s Installed
ƒƒ 77 Voice Switches77 Voice Switches
ƒƒ 39 Soft Switches39 Soft Switches
ƒƒ 17,000 Owned Fiber Route Miles17,000 Owned Fiber Route Miles
ƒƒ 3 Network Operation Centers (24x7)3 Network Operation Centers (24x7)
ƒƒ 2 Customer Data Centers2 Customer Data Centers
ƒƒ ISO 9001:2000 CertifiedISO 9001:2000 Certified

5. The PAETEC Difference
ƒƒ National network presenceNational network presence
ƒƒ Focus on businessFocus on business--classclass
customerscustomers
ƒƒ Dedication to providingDedication to providing
unmatched serviceunmatched service
ƒƒ Comprehensive suite ofComprehensive suite of
communicationscommunications--relatedrelated
solutionssolutions
ƒƒ Trusted business partnerTrusted business partner
Our goal is to beOur goal is to be THETHE premierpremier ““National ILEC AlternativeNational ILEC Alternative”” in the U.S.in the U.S.

6. Go-To-Market Strategy

7. Agenda
ƒƒ PAETEC AtPAETEC At--AA--GlanceGlance
ƒƒ Partnering with PAETECPartnering with PAETEC
ƒƒ Equipment / Software for ServiceEquipment / Software for Service
Accelerated ROI ProgramsAccelerated ROI Programs
ƒƒ Next StepsNext Steps

8. ƒƒ Stay Focused on Your Core BusinessStay Focused on Your Core Business
PAETEC provides support throughout the entire sales process, allowing you to
stay focused on your core business.
ƒƒ Utilize PAETECUtilize PAETEC’’s Product Portfolio Sales Team Expertises Product Portfolio Sales Team Expertise
New cutting-edge products enable the applications your clients demand.
Complement your technology solutions with PAETEC network services.
PAETEC’s Equipment for Services (EFS) program provides a solution for
overcoming your customers’ budget constraints.
ƒƒ Exceed Your CustomersExceed Your Customers’’ ExpectationsExpectations
Dedicated Account Management Team focused on your customers.
Customer Care is answered by a person as opposed to an auto-attendant.
ƒƒ Drive More RevenueDrive More Revenue
PAETEC can expand opportunities for your products services
Value-Driven Relationship

9. Agenda
ƒƒ PAETEC AtPAETEC At--AA--GlanceGlance
ƒƒ Partnering with PAETECPartnering with PAETEC
ƒƒ Equipment for Service ProgramsEquipment for Service Programs
Accelerated ROI ProgramsAccelerated ROI Programs
ƒƒ Next StepsNext Steps

10. Old paradigm: budgets, budgets, budgets …
„„ How many deals have you lost because you wereHow many deals have you lost because you were
unable to differentiate yourself from the competition?unable to differentiate yourself from the competition?
„„ How many deals have you lost due to a clientHow many deals have you lost due to a client’’ss
financial restrictions?financial restrictions?
„„ If budget was less of an issue, what equipment orIf budget was less of an issue, what equipment or
software would your clients and prospects purchase?software would your clients and prospects purchase?
„„ What is yourWhat is your mostmost frequent objection?frequent objection?

11. PAETEC = Solutions Partner Personalized Solutions
What if PAETEC could helpWhat if PAETEC could help
EXPANDEXPAND
the clientthe client’’s technology budget?s technology budget?

12. PAETEC = Solutions Partner Personalized Solutions
„„ 1. Comprehensive Telecom Service Auditing1. Comprehensive Telecom Service Auditing
„„ 2. Competitive Voice Data Solutions2. Competitive Voice Data Solutions
„„ 3. Equipment For Services (3. Equipment For Services (EFSEFS) Customer Incentive) Customer Incentive
ProgramProgram
PAETECPAETEC’’ss
Accelerated ROI StrategiesAccelerated ROI Strategies

13. PAETEC = Solutions Partner Personalized Solutions
„„ 1. Audit offered to clients1. Audit offered to clients free of chargefree of charge
„„ 2. Detailed examination of all services from all carriers2. Detailed examination of all services from all carriers
„„ 3. Audit conducted to verify if client billing is3. Audit conducted to verify if client billing is
A. fair accurate,A. fair accurate,
B. for relevant services, andB. for relevant services, and
C. in alignment with contractsC. in alignment with contracts
„„ 4. PAETEC will perform audits free of charge4. PAETEC will perform audits free of charge even ifeven if
the client is under contract or otherwise is not readythe client is under contract or otherwise is not ready
to change carriersto change carriers
1. Comprehensive Telecom Service Auditing1. Comprehensive Telecom Service Auditing

14. PAETEC = Solutions Partner Personalized Solutions
Why Do A Telecom Services Audit?Why Do A Telecom Services Audit?
•• Free valueFree value--added service to create strategic selling advantageadded service to create strategic selling advantage
•• Gain valuableGain valuable intelintel on current voice data network designon current voice data network design
•• ““Bell CompanyBell Company”” billing is a nightmare for most clientsbilling is a nightmare for most clients
•• Carrier bills generated from multiple billing platformsCarrier bills generated from multiple billing platforms
•• Product pricing inProduct pricing in contractscontracts typically not aligned withtypically not aligned with billingbilling
•• IT/Operations/Facilities staff often have limited billing expertIT/Operations/Facilities staff often have limited billing expertiseise
•• Accounting staff often usesAccounting staff often uses ““ stare comparestare compare”” strategystrategy
RESULTRESULT: we often identify 10: we often identify 10--30% overspending30% overspending
in billing errors, obsolete services, outdated configurationsin billing errors, obsolete services, outdated configurations

15. PAETEC = Solutions Partner Personalized Solutions
We help clients go from this:We help clients go from this:

16. PAETEC = Solutions Partner Personalized Solutions
…… to this:to this:
Giving youGiving you ANDAND the client a clearer picture of their currentthe client a clearer picture of their current
expenses, with savings recommendationsexpenses, with savings recommendations

17. PAETEC = Solutions Partner Personalized Solutions
„„ 1. PAETEC Network Solution designed in alignment with1. PAETEC Network Solution designed in alignment with
technology upgrades proposedtechnology upgrades proposed
„„ 2. Innovative Dynamic IP (MPLS/IP/Voice/SIP) services2. Innovative Dynamic IP (MPLS/IP/Voice/SIP) services
can be offered to converge voice data networkscan be offered to converge voice data networks
„„ 3. Competitive usage rates and streamlined network3. Competitive usage rates and streamlined network
solutions typically reduce client costs 20solutions typically reduce client costs 20--30%30%
2. Competitive Voice Data Solutions2. Competitive Voice Data Solutions

18. Products Solutions
Core ServicesCore Services ValueValue--Added Products ServicesAdded Products ServicesSolutions
DataData
CommunicationsCommunications
MPLS VPNMPLS VPN
Dedicated InternetDedicated Internet
AccessAccess
BusinessBusiness
ContinuityContinuity
EE--mail / Web Securitymail / Web Security
Fixed WirelessFixed Wireless
SecuritySecurity
MPLS VPNMPLS VPN
EE--mail / Web Securitymail / Web Security
Network FirewallNetwork Firewall
CPE FirewallCPE Firewall
ManagedManaged
ServicesServices
Managed RouterManaged Router
Expanded RentalExpanded Rental
Network PerformanceNetwork Performance
ReportingReporting
FinancingFinancing
EquipmentEquipment
Allworx Phone Allworx Phone
Network SystemsNetwork Systems
Network EngineeringNetwork Engineering
Consultation Consultation
Network MaintenanceNetwork Maintenance
Support Support
Network Engineering Network Engineering
ConsultationConsultation
Network MaintenanceNetwork Maintenance
Support Support
Allworx Phone Allworx Phone
Network SystemsNetwork Systems
Equipment for ServicesEquipment for Services
Equipment RentalEquipment Rental
ApplicationsApplications
PINNACLEPINNACLE
CommunicationsCommunications
Management SuiteManagement Suite
Data CenterData Center
Colocation ServicesColocation Services
Dedicated ServerDedicated Server
Data Backup Data Backup
RecoveryRecovery
Data Backup Data Backup
RecoveryRecovery
Colocation ServicesColocation Services
Dedicated ServerDedicated Server
Data Backup Data Backup
RecoveryRecovery
Shared Web HostingShared Web Hosting
VoiceVoice
Dynamic IPDynamic IP
Conferencing ServicesConferencing Services
IP Hosted TelephonyIP Hosted Telephony
Trader Voice ServicesTrader Voice Services
Local, Long DistanceLocal, Long Distance
Toll Toll--Free ServicesFree Services
IP Contact CenterIP Contact Center
ServicesServices
TollToll--Free RoutingFree Routing
ServicesServices
Direct Trunk OverflowDirect Trunk Overflow
TollToll--Free RoutingFree Routing
ServicesServices
Direct Trunk OverflowDirect Trunk Overflow
IP Hosted TelephonyIP Hosted Telephony
IP Contact CenterIP Contact Center
ServicesServices

19. 3. Equipment for Services (EFS) Personalized Solutions
W hat is EFS?W hat is EFS?
PAETECPAETEC’’ss EFSEFS programsprograms are profit sharingare profit sharing
mechanisms that provide our customers with amechanisms that provide our customers with a
unique method for acquiring technology forunique method for acquiring technology for
their business.their business.
PAETEC offers prospective clientsPAETEC offers prospective clients
technology upgrade incentivestechnology upgrade incentives
in exchange for extended voice datain exchange for extended voice data
service agreementsservice agreements

20. EFS/SFS Overview
ƒƒ Over $60 million in equipment andOver $60 million in equipment and
software have been funded through oursoftware have been funded through our
EFS programsEFS programs
ƒƒ On average, 70% ofOn average, 70% of ‘‘bundledbundled’’ monthlymonthly
lease payments are subsidizedlease payments are subsidized
ƒƒ Average $ amount financed per EFSAverage $ amount financed per EFS
customer is $16,000customer is $16,000

21. EFS/ SFS Options Personalized Solutions
„„ Fair Market Value and Dollar Buyout options are availableFair Market Value and Dollar Buyout options are available
„„ PAETEC will set up a lease with the finance partner (AEL FinaPAETEC will set up a lease with the finance partner (AEL Financial)ncial)
„„ PAETEC will perform the billing and collecting function for tPAETEC will perform the billing and collecting function for the bank leasehe bank lease
via the customervia the customer’’s PAETEC services invoices PAETEC services invoice
„„ A full or partialA full or partial credit towards the leasecredit towards the lease is then reflected on the customeris then reflected on the customer’’ss
monthly PAETEC invoice once services are installed and actmonthly PAETEC invoice once services are installed and activatedivated
Version 1 ~ BUNDLEDVersion 1 ~ BUNDLED::
Version 2 ~ UNBUNDLEDVersion 2 ~ UNBUNDLED::
„„ PAETEC will apply aPAETEC will apply a monthly incentive creditmonthly incentive credit towards the customertowards the customer’’s invoices invoice
for a purchasefor a purchase –– either made with cash upeither made with cash up--front or secured external fundingfront or secured external funding
Please Note: For the Bundled and Unbundled options, credit canPlease Note: For the Bundled and Unbundled options, credit can be applied to alreadybe applied to already
purchased equipment. Credit will vary based on the individual cpurchased equipment. Credit will vary based on the individual customer’s needs.ustomer’s needs.

22. EFS Finance Partners
AEL Financial is part of the IllinoisAEL Financial is part of the Illinois--based Forsythebased Forsythe
Group of companies. The Forsythe Group includes aGroup of companies. The Forsythe Group includes a
diverse portfolio of companies in numerous industries,diverse portfolio of companies in numerous industries,
including banking, financial services, energy services,including banking, financial services, energy services,
industrial power equipment, sports and entertainment,industrial power equipment, sports and entertainment,
agriculture, and real estate development. AELagriculture, and real estate development. AEL
Financial specializes in the leasing and financing ofFinancial specializes in the leasing and financing of
software and highsoftware and high--technology products through itstechnology products through its
Total Solution Financing programs.Total Solution Financing programs.

23. Clear Invoicing – Bundled EFS
• In this example, the client decided to
incorporate multiple vendor invoices onto one
lease – then bundle it all onto the PAETEC
Network Services invoice for simplicity

24. Clear Invoicing – Bundled EFS
• In many cases, PAETEC can actually
subsidize the entire equipment payment,
inclusive of interest and taxes

25. Clear Invoicing – Unbundled EFS
• If the client prefers to capitalize the
equipment themselves or finance through a
3rd party, PAETEC will offer the incentive as a
monthly recurring credit over the
Network Services agreement term

26. Customer
Referral
Partner
Leasing
Company
PAETEC
Customer Signs
Service Agreement
With PAETEC with
Minimum Monthly Fee
Master Service Agreement
PAETEC pays the Monthly
Lease Payment to Leasing
Company on behalf of the
customer and Acts as a
Billing and Collecting Agent
Leasing Company
Pays Vendor upon
Receipt of Delivery
And Acceptance Form
(DA)
Customer Signs Lease with Leasing Company
Customer Signs Vendor Purchase Agreement
Bundled EFS / SFS Structure: How Does It Work?

27. Why Does PAETEC Offer These Programs?
Benefits to the Partner:Benefits to the Partner:
ƒƒ Market DifferentiatorMarket Differentiator
ƒƒ Reduced Customer Budget ConstraintsReduced Customer Budget Constraints
ƒƒ PAETECPAETEC’’s Network Becomes Technology Solution Enablers Network Becomes Technology Solution Enabler
ƒƒ Longer Term Service Contracts (Services, MAC,Longer Term Service Contracts (Services, MAC,
Maintenance)Maintenance)
ƒƒ Sale of More Equipment At Higher MarginsSale of More Equipment At Higher Margins

28. Why Does PAETEC Offer These Programs?
Benefits to the Client:Benefits to the Client:
ƒƒ UnifiedUnified--vendor solution strategyvendor solution strategy
(equipment/software, network, financing)(equipment/software, network, financing)
ƒƒ Cost savings / reduced budgetary constraintsCost savings / reduced budgetary constraints
ƒƒ Improved network efficiencies effectivenessImproved network efficiencies effectiveness
ƒƒ StateState--ofof--thethe--art technologyart technology

29. Why Does PAETEC Offer These Programs?
Benefits to PAETEC:Benefits to PAETEC:
ƒƒ Significant Market DifferentiatorSignificant Market Differentiator
EFS allows PAETEC toEFS allows PAETEC to ‘‘fight unfairfight unfair’’ against competitors.against competitors.
ƒƒ Strengthen Partner RelationshipsStrengthen Partner Relationships
Instead of paying for expensive ineffective advertising, PAETEInstead of paying for expensive ineffective advertising, PAETECC
increases market share nationwide through Referral Partners byincreases market share nationwide through Referral Partners by
offering to subsidize client technology upgradesoffering to subsidize client technology upgrades
ƒƒ Customer RetentionCustomer Retention
Our programs are designed to create a tiedOur programs are designed to create a tied--in commitment to bothin commitment to both
equipment/software upgradesequipment/software upgrades andand network servicesnetwork services
ƒƒ Longer Contract TermsLonger Contract Terms
With an extended contract term, the lease payment decreasesWith an extended contract term, the lease payment decreases --
allowing PAETEC to subsidize a larger portion of the clientallowing PAETEC to subsidize a larger portion of the client’’ss
monthly lease payment.monthly lease payment.

30. EFS Success Stories
ƒƒ Call CenterCall Center
(1 site)(1 site)
-- Calabasas CACalabasas CA
Total EFS Incentive = $86,481
Contract Term = 60 months
Monthly EFS = $1,771.36
Monthly Revenue = $7,500
ƒƒ Law FirmLaw Firm
(7 sites)(7 sites)
-- Los Angeles CALos Angeles CA
Total EFS Incentive = $150,000
Contract Term = 60 Months
Monthly EFS = $2,500.00
Monthly Revenue = $8,500
ƒƒ Defense ContractorDefense Contractor
(5 sites)(5 sites)
-- Santa Ana CASanta Ana CA
Total EFS Incentive = $88,995.28
Contract Term = 60 months
Monthly EFS = $1,483.25
Monthly Revenue = $25,000
ƒƒ Aluminum ManufacturerAluminum Manufacturer
(23 sites)(23 sites)
-- Monterey Park CAMonterey Park CA
Total EFS Incentive = $330,000
Contract Term = 60 months
Monthly EFS = $5,500.00
Monthly Revenue = $31,000

31. Agenda
ƒƒ PAETEC AtPAETEC At--AA--GlanceGlance
ƒƒ Partnering with PAETECPartnering with PAETEC
ƒƒ Equipment / Software for ServiceEquipment / Software for Service
ProgramProgram
ƒƒ Next StepsNext Steps

32. How do we get started?
ƒƒ Immediate Areas Of OpportunityImmediate Areas Of Opportunity
What do you have in your ‘stuck’ funnel?
Which of your clients/prospects have multiple sites?
What are your hot ‘upsell’ products?
Which clients purchased ‘solution B’ instead of
your original intended design?
Which vertical market segments are you targeting?

33. How do we get started?
ƒƒ Questions for IT Decision MakersQuestions for IT Decision Makers
Is your network ready for Voice / Video over IP?
When was your last voice/data network audit conducted?
How do you manage your voice / data network?
What are some of your biggest network challenges?
What applications leverage your current network?

34. PAETEC Sweet Spot
ƒƒ A qualified prospect will be T1A qualified prospect will be T1--eligible,eligible,
and has one or more of the following:and has one or more of the following:
20-30+ Employees
Multiple offices
Centralized WAN applications
Call center / help desk with toll free numbers

35. Knowing the Score
ƒ What are your sales goals for 2008?
Average revenue / deal
x Number of opportunities
x % of opportunities that close
= Total revenue target
ƒ Improve your ‘score’ by leveraging PAETEC
Have PAETEC conduct an audit for qualified
prospects determine EFS subsidies available
just to see how the numbers play out
Why not also do the same for any qualified clients in
your current base of accounts? Let’s see how many
accounts we can help you upsell!
ƒ Increase average revenue per deal by designing solutions
based on needs not just budget