Compensation Agreement for Traffic Induced - Telefonica Interactiva SA and Telefonica Data Espana SA
COMPENSATION AGREEMENT FOR TRAFFIC INDUCED
Madrid, September 15, 1999
PARTICIPANTS
Party of the first part.
Telefonica Interactiva, S.A., with its principal place of business in Madrid,
Calle Gran Via No. 28 and taxpayer identification number A-82/196080 (hereafter
TI), represented by Juan Perea Saenz de Buruaga, of legal age, a Spanish
national with Identity Card number 14.601.736-W, duly represented herein by
virtue of a power of attorney issued before Jose Antonio Escartin Ipiens, notary
of Madrid, on the fourteenth of December, 1998, numbered 5,399 in his notarial
record book, in his capacity as Chief Executive Officer.
Party of the second part.
Telefonica Data Espana, S.A., with its principal place of business in Beatriz de
Bobadilla No. 18 and taxpayer identification number A-81/057390 (hereafter TDE),
represented by Carlos Marinas Lage, of legal age a [Spanish] national with
Identity 32.382.574-Tand domiciled in Beatriz de Bobadilla No. 18, duly
represented herein by virtue of a power of attorney issued before Jose Antonio
Escartin Ipiens, notary of Madrid, on the twenty-fourth of March, 1999, numbered
1,309 in his notarial record book, in his capacity as Managing Director.
The two parties mutually acknowledge the capacity necessary to commit themselves
and enter into this contract, and to that end
<PAGE> 2
THEY SET FORTH
I. That TDE is a Spanish company duly organized, whose corporate object is
the provision of international data, voice and image transmission
services, that provides, among other services, Infovia Plus Directo and
Infovai Plus Basico.
II. That TI is a duly organized company existing under Spanish law, which
provides, among other services, Internet access.
III. That in order to provide Internet Access Service, TI has contracted with
TDE for the Infovia Plus Services listed in Annex I.
IV. That TDE is prepared to compensate TI for the induced traffic, which TI
generates and routes to TDE'S network.
CLAUSES
1. PURPOSE
1.1 The purpose of this agreement (hereafter the "Agreement") is to set forth
the terms and conditions whereby TDE will compensate TI for traffic
induced by TI and routed to TDE'S network.
1.2 The compensation for traffic induced is compensation related to the use of
the Infovia Plus Directo and/or Infovia Basico Services that TDE provides
to TI.
1.3 This compensation, based on the commercial principles of business
generation for TDE, is a marketing activity freely and jointly agreed to
by TI and TDE.
<PAGE> 3
2. DURATION
This Contract will bear today's date and become effective on October 1,
1999, and will have an initial duration of three years, which may be
tacitly renewed for successive periods of one year each, unless one party
notifies the other party to the contrary 60 days prior to the termination
date of the initial period or its successive renewals, notwithstanding the
right of termination referred to in Clause 8.
3. TDE'S OBLIGATIONS
3.1 TI will be compensated based on the total volume of telephone traffic
induced by TI originating on the Telefonica de Espana (TdE) network or
other networks connected to it and that is completed on access numbers to
the IP Network of Telefonica Data Espana (TDE). The amount of monthly
compensation will be determined by the total number of minutes of induced
traffic per month, multiplied by the compensation agreed to based on the
table provided in this clause.(1)
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Compensation agreed to in pesetas Total volume of traffic
per minute
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0.4 From 0 up to 83,333,000 minutes per month
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0.5 From 83,333,001 up to 208,333,000 minutes
per month
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0.6 From 208,333,001 up to 416,667,000 minutes
per month
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0.7 From 416,667,001 up to 625,000,000 minutes
per month
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0.8 From 625,000,001 up to 833,333,000 minutes
per month
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(1) For example, a monthly traffic of 100,000,000 minutes in one month will
equal a compensation of 0.5 pesetas per minute multiplied by 100,000,000
minutes, or 50,000,000 pesetas.
<PAGE> 4
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0.9 From 833,333,001 up to 1,041,667,000
minutes per month
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1.0 From 1,041,667,001 up to 1,250,000,000
minutes per month
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1.1 1,250,000,001 or more minutes per month
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3.2 It is expressly set forth that the terms and conditions as to compensation
have been determined by the two parties in the above-described amounts
based on prices for interconnection that will be determined by Telefonica
Data Espana, S.A., and Telefonica de Espana, S.A., in an Agreement that is
scheduled to be completed next.
Therefore, if the interconnection prices for completion of calls contained
in the Interconnection Agreement that will be signed by Telefonica de
Espana, S.A., and Telefonica Data de Espana, S.A., referred to in the
preceding paragraph, are altered during the effective period of this
Agreement by:
- Administrative decision of a binding nature.
- A significant change in market conditions in terms of providing the
services that are the subject of this Agreement.
Then, in that event, the compensation provided for in this clause will be
adjusted to the new circumstances upon request of any of the parties.
In any case, TI will always enjoy the status of preferred customer to the
extent that its compensation can never be less favorable than that of any
other customer of Telefonica Data Espana, S.A., under equal conditions.
<PAGE> 5
4. TI'S OBLIGATIONS
4.1 Collaborate with TDE in reconfiguring the access software for TI'S end
users in order to keep the access numbers of TDE'S IP Network up-to-date,
as long as TDE requests it.
4.2 Provide service to end users with the necessary level of quality...
4.3 Keep payments for Infovia Plus Directo and/or Infovia Plus Basico
up-to-date.
5. COMPUTATION OF TRAFFIC INDUCED
5.1 Only the total traffic induced by TI will be counted during a monthly
compensation period (hereafter "compensation period") and expressed in
total minutes.
5.2 In order to compute the total number of minutes per month, the information
contained in the files generated by the "Log Radius" from TDE'S IP Network
and belonging to the mnemonics contracted and routed by TI will be used as
a basis. The set of mnemonics used for the computation of total minutes
must be the property of the legal entity signing this agreement and the
agreements for Infovia Plus Directo and/or Infovia Plus Basico associated
with it.
5.3 For purposes of this agreement the mnemonics routed by TI will be
considered those listed in Annex II.
5.4 Every six months if TI believes that for that period there is a difference
between the computation made by TDE and the one made by TI, which is
greater than or equal to 2%, TI will inform TDE of said circumstance by
verifiable method, obliging TDE, at its discretion, to either recognize
the difference in the month immediately following or perform an external
audit, the cost of which will be assumed by the party whose computation
the auditor deems erroneous, the finding of whom will
<PAGE> 6
be accepted by the parties. In any case, the parties agree to maintain the
strict confidentiality of the results of the audit and not to use them for
any other purpose than the one for which the audit was performed.
<PAGE> 7
5.5 For the designation of said auditor, TI will select one of three auditors
that TDE proposes for this purpose. It is essential that the auditors
designated by TDE be of established prestige in this area.
5.6 All traffic by users for whom telephone rates based on connection time and
origin are not applicable is expressly excluded from the computation.
6. SETTLEMENT AND PAYMENT
6.1 The "compensation period" is established as one calendar month.
6.2 TDE will issue an invoice within thirty (30) days after the close of the
month to be compensated. Said invoice will have a due date of thirty (30)
days, the date on which it will be paid by TDE.
7. AMENDMENTS TO THE AGREEMENT
7.1 This contract may not be amended except by the express will of the two
parties, save for the exception indicated in Clause 3.2 of this agreement.
8. TERMINATION
8.1 This contract may be terminated for those reasons established by law for
termination of contracts.
8.2 A breach by one of the parties of any of the obligations set forth in this
Contract will give to the other party the right to legally terminate the
agreement by merely informing the party in breach in writing of its desire
to terminate the agreement, while the party in breach will be obliged to
compensate for damages caused to the other party.
<PAGE> 8
8.3 This agreement will terminate immediately if the services agreement with
TDE, mentioned in Item III and listed in Annex I, is also terminated for
any of the reasons provided therein, notwithstanding any payment pending
as of that date.
8.4 In any event, in order to avoid a sudden curtailment in traffic, to the
detriment of users, the parties will agree to a suitable procedure for
termination.
9. ASSIGNMENT OF THE CONTRACT
9.1 The parties to the agreement pledge that they will not assign to a third
party the rights and obligations agreed to in this agreement, except by
mutual consent of the two parties. For purposes of this clause, other
entities that are directly or indirectly controlled by any of the parties
are not considered third parties.
10. TAXES, LEVIES, ETC.
10.1 All taxes, levies etc., incurred by virtue of or as a consequence of this
Contract will be paid by the parties according to Spanish law.
11. JURISDICTION AND APPLICABLE LAW
11.1 The parties, expressly waiving any jurisdiction that might be applicable,
are expressly subject to the jurisdiction of the courts and tribunals of
Madrid to resolve any disputes that might arise with regard to the
interpretation and performance of this agreement.
11.2 The law applicable to this Contract will in all cases be Spanish law.
<PAGE> 9
12. NOTICES
12.1.1. For purposes of communication between the parties by reason of this
agreement, the following persons and domiciles are designated to that
end:
For Telefonica Interactiva, S.A.: Da. Cristina Lamana
Via de als Dos Castillas, 33
Complejo Atica, Edificio 1
POZUELO DE ALARCON
28224 - Madrid
For Telefonica Data Espana, S.A.: D. Jose Fco. Estevez
Beatriz de Bobadilla, 18
28040 - Madrid
To signify agreement, two copies are signed in the location and on the date
indicated in the heading of this Contract.
Telefonica Interactiva
By authority.
s/Juan Perea Saenz de Buruaga
Chief Executive Officer
Telefonica Data Espana
By authority.
s/Carlos Marinas Lage
Managing Director
<PAGE> 10
ANNEX I
<PAGE> 11
TELEFONICA
Telefonica Data
Espana
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TECHNICAL- ECONOMIC
PROPOSAL
Communications
Infrastructure
for
Telefonica
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REFERENCE: VALTEL V31
EDITION: Version 3.1
Registered Company [stamp]
<PAGE> 12
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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DATE: 4/29/99
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
2
Beatriz de Bobadilla, etc.
<PAGE> 13
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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TABLE OF CONTENTS
1. INTRODUCTION 4
2. CURRENT SITUATION AT JULIAN CAMARILLO 6
3. CURRENT SITUATION AT TELEFONICA INTERACTIVA 9
4. CURRENT TRANSFER RATES UNDER CONTRACT 11
5. TELEFONICA INTERACTIVA'S NEEDS 12
6. SOLUTION PROPOSED TO TELEFONICA INTERACTIVA 14
7. EQUIPMENT TO BE INSTALLED FOR TELEFONICA INTERACTIVA 17
[8.] ECONOMIC EVALUATION
8.1 Comments 20
9. GENERAL CONDITIONS 21
9.1 Service Terms and Conditions 21
9.2 Commitment to Service Quality 22
10. DESCRIPTION OF NETWORK NODE SERVICE 25
11. ANNEX I. NETWORK MANAGEMENT SERVICE [Error] Undefined.
11.1 Evaluation [Error] Undefined.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
3
Beatriz de Bobadilla, etc.
<PAGE> 14
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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1. INTRODUCTION.
Telefonica SCR has currently a number of services that it provides
to its customers through TSAI. These services are based on the InfoVia
Plus Directo Service and Telefonica Internet Data Transmission. Until now,
all of Telefonica Interactiva's traffic has used TSAI'S network
infrastructure so that both service quality and transfer rate changes are
under TSAI'S control. Therefore, Telefonica Interactiva is thinking of
putting in place its own communications infrastructure so that it can
control all its communications and request transfer rate changes directly
from TTD.
This entire environment has undergone changes recently with the
birth of Telefonica Data, such that now TTD, TSAI and VSAT have combined
to form Telefonica Data Espana, and it can, therefore, provide Telefonica
Interactiva with the best technical and economic proposal. Thus, because
of major growth in the number of customers forecast for Telefonica
Interactiva in the next few months, from T. Data's point of view, it has
the opportunity to use and develop a series of services within the IP
network framework for Telefonica Interactiva, which will allow it to grow
in a more reasonable and flexible manner while eliminating the limitations
of the InfoVia Plus Directo service.
Therefore, this document describes phase one of a more comprehensive
plan than the one Telefonica Interactiva and T. Data have called Phase 0
and
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
4
Beatriz de Bobadilla, etc.
<PAGE> 15
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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that consists of the installation of an independent communications
infrastructure based on the contents of a Portal service.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
5
Beatriz de Bobadilla, etc.
<PAGE> 16
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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2. CURRENT SITUATION AT JULIAN CAMARILLO.
T. Data currently has a Passport 160 network node within Telefonica
Interactiva's installations with which it supports X.25, Frame Relay and
ATM communications. This network has the following equipment:
- Control processor (Slot 0)
- E1-NB Card (Slot 1)
- E1-NB Card (Slot 2)
- V.35 8 ports Card (Slot 7)
- V.35 8 ports Card (Slot 8)
- V.35 8 ports Card (Slot 9)
- V.35 8 ports Card (Slot 10)
- ATM E3 Card (Slot 11)
- ATM E3 Card (Slot 12)
- ATM E3 Card (Slot 13)
- ATM E3 Card (Slot 14)
- Redundant control processor (Slot 15)
The functions of each one of these cards are:
- Links to the two DPNs of TSAI (Slot 1 and 2, E1-NB)
- Several Frame Relay lines for a number of customers (Slot 7, 8, 9
and 10, 8-V.35).
- E3 ATM Cards
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
6
Beatriz de Bobadilla, etc.
<PAGE> 17
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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- Slot 11 (Port 0: Link to 34M network Port 1: Free Port 2: Free).
- Slot 13 (Port 0: Link to 34M network Port 1: ADSL TSAI Port 2:
Internet TSAI).
- Slot 14 (Port 0: Link to 34M network Port 1: Free Port 2: Free).
The above configuration may be shown as a graphic, as follows:: [see
original for diagram]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
7
Beatriz de Bobadilla, etc.
<PAGE> 18
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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As shown in the above diagram, the network node is connected through
three 34-Mbps links.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
8
Beatriz de Bobadilla, etc.
<PAGE> 19
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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3. CURRENT SITUATION AT TELEFONICA INTERACTIVA.
For the type of customer that TSAI has been until recently, all of
Telefonica Interactiva's communications use the communications
infrastructure made available to serve its customers. Seem schematically,
we have the following diagram: [see original for drawing]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
9
Beatriz de Bobadilla, etc.
<PAGE> 20
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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That is, Internet access for Telefonica Interactiva's customers and
users is provided by the Internet link still currently available from
TSAI.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
10
Beatriz de Bobadilla, etc.
<PAGE> 21
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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4. CURRENT TRANSFER RATES UNDER CONTRACT.
On 2/5/99, and keeping in mind that TSAI is constantly changing
transfer rates, we had the following transfer rates under contract:
- InfoVia Plus Directo transfer rate for Telefonica Interactiva:
bidirectional 14 Mbps.
- InfoVia Plus Directo transfer rate for TSAI: bidirectional 11
Mbps.
- Internet transfer rate for TSAI: 20-Mbps Ibernet entry and 25-Mbps
Ibernet exit. Based on this transfer rate, it was 14 Mbps upon entry
and 14 [Mbps] upon exit for Telefonica Interactiva.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
11
Beatriz de Bobadilla, etc.
<PAGE> 22
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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5. TELEFONICA INTERACTIVA'S NEEDS.
Telefonica Interactiva would like to have a completely independent
network infrastructure in order to have better control over the services
offered to its customers. It would like to offer its customers two very
different types of services within two very different environments.
- The ISP, which would offer Internet access to its customers upon
payment.
- The Portal, which would offer content to both Internet and InfoVia
users.
A schematic view shows the following scenario: [see original for
drawing]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
12
Beatriz de Bobadilla, etc.
<PAGE> 23
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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In terms of interconnection requirements for the two environments,
the intent is to have communication between the Portal and the ISP so that
ISP users may obtain portal content as shown below: [see original for
drawing]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
13
Beatriz de Bobadilla, etc.
<PAGE> 24
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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6. SOLUTION PROPOSED TO TELEFONICA INTERACTIVA.
T. Data uses the network infrastructure that Telefonica Interactiva
provides at Julian Camarillo. Thus, installation of one of the Passport
nodes and one of the 34-Mbps lines will not be necessary, since these
elements are already installed at this location, with the resulting cost
savings for Telefonica Interactiva.
With the all of the above in mind, the solution to be adopted for
Phase 0 of Telefonica Interactiva's comprehensive plan uses T. Data's
infrastructure.
The proposal is the following: the idea is to use the current
Passport 160 as well as the current 3 34-Mps. links, which will be used
both to provide service and as a backup. On the other hand, given
Telefonica Interactiva's needs in terms of redundancy, a Passpor[t] 50 and
an additional 34-Mps. line will be installed, which will be used by
Telefonica Interactiva. This Passport 50 will be connected to this new
link and to another of the 34-M links already installed. The equipment for
the two Passports will be the following.
Passport 160:
- The equipment will remain the same except the E3 ATM board of Slot 11
will move to Passport 50.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
14
Beatriz de Bobadilla, etc.
<PAGE> 25
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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Passport 50 will have the following components:
- Passport 50 AC Floor Mount Package 5 slot
- Redundant power supply
- Redundant control processor
- 3 ports E3 ATM module (2 units. One new unit and one other currently in
Slot 11 of Passport 160)
- Blank for FR'S (1 unit)
Seen graphically, the configuration will be as follows: [see original for
drawing]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
15
Beatriz de Bobadilla, etc.
<PAGE> 26
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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[blank page]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
16
Beatriz de Bobadilla, etc.
<PAGE> 27
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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7. EQUIPMENT TO BE INSTALLED FOR TELEFONICA INTERACTIVA.
With all of the above in mind, the equipment to be installed at
Julian Camanillo No. 6 will be the following:
2 7505/4x2 Cisco routers (Dual Power, 2 RSP4, 2 CyBus, 7 slot) and each
will have the following equipment:
- VIP2-50 Interface Processor (2 units)
- PA-A-E3 ATM port adapter (2 units)
- PA-2FEISL-TX 2 port Fast Ethernet port adapters (2 units)
- IOS WAN
- IOS IP
- MEM-VIP250_128M-D (2 units)
- MEM-VIP250_8M-S (2 units)
- MEM-RSPA_128M (2 units)
1 Passport 50 network node with the following equipment:
- Passport 50 AC Floor Mount Package 5 slot
- Redundant power supply
- Redundant control processor
- 3 ports E3 ATM module (2 units. One new unit and the other will be from
the T. Data' Passport 160)
- Blank for FR'S (1 unit)
1 34-Mbps network link.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
17
Beatriz de Bobadilla, etc.
<PAGE> 28
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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[blank page]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
18
Beatriz de Bobadilla, etc.
<PAGE> 29
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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8. ECONOMIC EVALUATION.
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Item No. Installation Per Month
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Network Accesses
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Zone A 34-Mbps ATM Access 2 units 4 400 000 Pts 1 510 072 Pts
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Total network accesses 4 400 000 Pts 1 510 072 Pts
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Transfer rates for ISP
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Transfer rate to IP Network-InfoVia Plus 1 Mbps 150 000 Pts 1 275 627 Pts
Directo associated
Transfer rate to Internet upon exit 1 Mbps 20 000 Pts [illegible]
(leave Ibernet network) of 1 Mbps
Transfer rate to Internet upon entry 1 Mbps 20 000 Pts [illegible]
(entry to Ibernet network) of 1 Mbps
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Total for ISP transfer rates 190 000 Pts 3 275 255 Pts
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Transfer rates for Portal
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Transfer rate to IP Network + InfoVia 1 Mbps 0 Pts 355 809 Pts
associated anonymous accesses
Transfer rate to Internet upon exit 1 Mbps 20 000 Pts 999 914 Pts
(exit from Ibernet network) of 1 Mbps
Transfer rate to Internet upon entry 1 Mbps 20 000 Pts 999 514 Pts
(entry to Ibernet network) of 1 Mbps
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Total for Portal transfer rates 40 000 Pts 2 355 437 Pts
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Network Node in customer's location
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Passport 50 AC Floor Mount Package 5 1 unit 686 984 Pts 46 973 Pts
slot (Ref. TTD-M82)
Redundant power supply (Ref. TTD-R02) 1 unit 0 Pts 7 681 Pts
Redundant control processor (Ref. 1unit 0 Pts 34 270 Pts
TTD-R01)
Network access module E3 ATM 3
ports (Ref. TTD-M02) 2 units 0 Pts 242 251 Pts
Blank for FR to (Ref. TTD-001) 1 unit 0 Pts 355 Pts
PP 50 Management 1unit 0 Pts 31 910 Pts
Redundancy with PP 160 network node 1unit 0 Pts 343 492 Pts
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Total for network nodes 686 984 Pts 708 932 Pts
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Routers
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2 7505/4x2 Cisco routers (Dual Power, 2 2 units 1 866 122 Pts 1 190 175 Pts
RSP4, 2 CyBus, 7 slot) con.
VIP2-50 Interface Processor (2 units)
PA-A-E3 ATM port adapter (2 units)
PA-2FEISL-TX [2]port Fast Ethernet port
adapters (2 units)
IOS WAN
IOS IP
MEM-VIP250_128M-D (2 units)
MEM-VIP250_8M-S (2 units)
MEM-RSPA_128M (2 units)
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Total for routers 1 866 122 Pts 1 190 175 Pts
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Total for network infrastructure [illegible]
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15% Discount
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Total [illegible]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
19
Beatriz de Bobadilla, etc.
<PAGE> 30
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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8.1 Comments.
o Only installation of 34-Mbps access will be acquired.
o The effective transfer rates for Portal(1) traffic during the first
two months of the contract will be double those requested, thus
these two months will be billed accordingly. This situation will
return to normal during the third billing period, that is, billing
will be according to the actual transfer rate assigned to each
service.
o Prices of transfer rates will be reviewed at the request of
Telefonica Interactiva, coinciding with its change of address.
o The monthly equipment charge for nodes and routers will include
"GOLD" quality (24 hours per day, 365 days per year) management and
maintenance.
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(1) These transfer rates were instituted and configured as of February 15, 1999.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
20
Beatriz de Bobadilla, etc.
<PAGE> 31
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
--------------------------------------------------------------------------------
9. GENERAL CONDITIONS.
This offer will be valid for one (1) month following the date
indicated on the document.
All prices are without VAT.
This documentation is the property of TELFONICA DATA ESPANA, is
confidential and may not be reproduced in whole or in part, processed by
computer or transmitted in any form or by any method, whether electronic,
mechanical, by photocopy, record or any other. At the same time, it may
not be lent, rented or its use assigned in any other way without the prior
written approval of TELFONICA DATA ESPANA, owner of the copyright. Failure
to comply with the restrictions indicated by any person with access to the
documentation will be prosecuted according to the law.
9.1 Service Terms and Conditions.
During the service provision phase, a 900 number (900 111002) to
TELFONICA DATA ESPANA'S Help Desk will be available to the customer 24
hours/day, 365 days/year. This number will act as the only point where
service incidents are collected.
--------------------------------------------------------------------------------
The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
21
Beatriz de Bobadilla, etc.
<PAGE> 32
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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The service includes management and maintenance of all elements
associated with the provision of service: network resources and circuits
point-to-point access, as well as the equipment installed in the
customer's location, which have been leased through a lease agreement. In
the event the service includes an option to purchase the equipment in the
customer's location, the customer may opt for a maintenance and management
service agreement for this equipment.
When a problem arises that adversely affects the operation of the
service, whether reported by the customer, or as a result of the
supervisory procedures that are part of the Network Management, a feature
of the service, a report on the breakdown will be opened, and as of that
moment, the procedures put in place for the handling and resolution of
such incidents will be triggered.
The service schedule for resolution of breakdowns is 24 hours for
each element of the network. For resolution of breakdowns of the remaining
network access elements and of equipment or nodes in the customer's
location, the schedule is Monday to Friday (except holidays) between the
hours of 8:00 a.m. and 6:00 p.m. and Saturdays ( except holidays) between
the hours of 8:00 a.m. and 3:00 p.m. As an option on holidays, a service
for resolution of breakdowns will be available to customers under the same
terms and conditions as for breakdowns at other times, with rates for
service available upon request by the customer.
9.2 Commitment to Service Quality.
--------------------------------------------------------------------------------
The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
22
Beatriz de Bobadilla, etc.
<PAGE> 33
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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The commitment to service quality is based on the availability of
connections to the Service contracted by the customer. Availability of the
customer's network, which is calculated monthly, is defined as the mean
availability of all access interfaces, that is, [see original for
equation]:
Availability (monthly)=
where:
o Ttotal = total time of the period considered (minutes)
o Tnodisp. = time access interface is unavailable [illegible] within
the interval Ttot considered (minutes)
o n = number of access interfaces of the customer's network
The availability guaranteed by the Service is based on the following
conditions:
1. Service interruptions for reasons attributable to the customer will
not be counted as unavailable time.
2. The customer is obliged to provide access to its departments to
personnel designated by TELEFONICA DATA ESPANA for resolution of
breakdowns or operation of the Service as required. Any delay in
said permission will not be counted as part of availability.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
23
Beatriz de Bobadilla, etc.
<PAGE> 34
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
--------------------------------------------------------------------------------
3. Line equipment of the access connection will be continuously powered
on for all interfaces of the customer's network.
4. The customer's network will include a minimum of 10 access
interfaces. Otherwise, the customer's network will be considered to
include a number of additional "fictitious" ports, up to a total of
10 accesses, such that these fictitious ports will be in a state of
continuous availability.
5. TELEFONICA DATA ESPANA reserves the right to perform, with advance
notice to the customer, technical shutdowns that will not be counted
in the calculation of availability.
6. Service interruptions due to acts of God (for example, natural
disasters) are excluded.
A minimum monthly availability of 99% is guaranteed for the network node
service, considering only established links between the DPN equipment, [the]
Passport installed in the customer's location and the TTD presence point.
This availability reaches 99.5% with Backup and 99.8% with the Customized
Management Center.
When the cumulative Availability value for a calendar year is less
than the value in the Service commitment, the customer will be indemnified
for 0.2% of the total year's billing for the network, by each hundredth
deviation from said value, but in no case will such indemnification exceed
30% of the total amount billed.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
24
Beatriz de Bobadilla, etc.
<PAGE> 35
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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10. DESCRIPTION OF THE NETWORK NODE SERVICE.
The Network Node Service provides for the introduction of a Managed
Network Node at the customer's residence for the exclusive use of the
customer. This network is similar to those comprising TTD'S own transport
network and it acts as the Service Concentrator of Services provided over
the Network Node Service. At the present time, two different node models
are being used on TTD'S network: the Magellan DPN model and the Magellan
Passport model manufactured by Nortel. Each platform will have some
limitations and its own characteristics. These nodes will be connected to
the rest of TTD'S network by one or more links, thus having the capability
of linking to another Network Node in the customer's same residence.
The Network Node Service allows different services from TTD in the
customer's own location without having to provide additional access
circuits for each service desired by the customer. The services that can
be provided are as follows:
1. Data Services with Dedicated Access:
o Iberpac Basic and Iberpac Plus Services
o Service One
o Frame Relay Service
o ATM Service
2. Services with Customer Data Equipment:
o InterLAN Service
3. Services with Customer Multimedia Equipment:
o Data and Voice Service
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
25
Beatriz de Bobadilla, etc.
<PAGE> 36
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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4. Value-added Services:
o Services forwarded to other networks:
- Connection to InfoVia Service
- Connection to Internet Service
The major advantages of the Network Node Service are:
o diversification by various means of the communications it provides
or that are provided at the customer's Host.
o eliminate problems and reduce connection time of the customer's
equipment to the network extension node we have installed in its
departments.
o reinforce, through dedication of exclusive nodes, the customer's
network where it is most critical, that is, in the Host connections.
o easy placement at the customer's disposal of innovations
introduced into the Service arising from improvements in the
equipment that makes up the network infrastructure.
Access to the service: The links between the Network Node in the
customer's location and the rest of TTD'S network nodes will be performed
with Leased Digital Circuits and with internal protocols similar to those
used internally in the network. The links will be owned by TTD. The links
to be established between various Network Nodes installed in the
customer's same location, or in distinct customer locations, are included
in the Network Node Service and can be established with local connections
(Network Nodes in the customer's same location) or with point-to-point
lines.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
26
Beatriz de Bobadilla, etc.
<PAGE> 37
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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For all types of contracts, service maintenance will be performed
according to the standard terms and conditions for handling the incidents
described in the Customer Service procedures. For all types of contracts,
Service Management will be performed from the CNC(2) of TTD.
----------
(2) National Control Center.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
27
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<PAGE> 38
TELEFONICA SCR
Services and Content by Network
[address/tel./fax]
TELEFONICA DATA
Mr. Francisco Elorday
Calle Julian Camarillo, 6-5th planta
28037 Madrid
Madrid, June 16, 1999
Dear Francisco:
We hereby accept the technical plan and economic budget of the Proposal to
Extend the Communications Infrastructure for Telefonica Interactiva, reference
Va[l]tel_V40 (version 1.0).
At the same time, we hope that this proposal is provided within a period of no
more than two weeks.
Sincerely,
s/Isidor Fernandez Gonzalez
<PAGE> 39
TELEFONICA
Telefonica Data
--------------------------------------------------------------------------------
ECONOMIC-TECHNICAL PROPOSAL
Extension of
Communications
Infrastructure
for
Telefonica
--------------------------------------------------------------------------------
REFERENCE: VALTEL V40
EDITION: Version 1.0
DATE: 6/14/99
<PAGE> 40
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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[blank page]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
2
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<PAGE> 41
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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TABLE OF CONTENTS
1. INTRODUCTION 4
2. CURRENT SITUATION AT JULIAN CAMARILLO 5
3. SOLUTION PROPOSED TO TELEFONICA INTERACTIVA 6
4. EQUIPMENT TO BE INSTALLED FOR TELEFONICA INTERACTIVA 7
5. ECONOMIC EVALUATION 8
6. COMMENTS 9
6.1 Comments on the evaluation 9
6.2 Comments on the application 9
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
3
Beatriz de Bobadilla, etc.
<PAGE> 42
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
--------------------------------------------------------------------------------
1. INTRODUCTION.
Telefonica Interactiva currently has a contract with Telefonica Data
Espana for a communications infrastructure, which it uses to provide its
customers with services to navigate the Internet and InfoVia and other
value-added services.
The anticipated enormous increase in demand for its new services by its
current and future customers, in addition to the fact that its current
34-Mbps circuits are already almost at capacity, makes installation of a
new link necessary, which will support higher capacity in terms of band
width and will allow more flexible growth up front when new services such
as ADSL are implemented.
Telefonica Data Espana will also install a new 155-Mbps circuit at its
Julian Camarillo network that will replace 2 of the existing 34 Mbps When
this is complete, it will have greater band width and greater capacity to
offer Backup for all Telefonica Interactiva's links.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
4
Beatriz de Bobadilla, etc.
<PAGE> 43
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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2. CURRENT SITUATION AT JULIAN CAMARILLO.
Telefonica Interactiva at the present time has at Telefonica Data Espana's
installations a Passport 50 network node with the following equipment:
- Control processor
- Redundant control processor
- ATM E3 Card
- ATM E3 Card
The network interconnection with network one and with Telefonica
Interactiva's routers is accomplished with these cards in order to provide
both Internet and InfoVia service.
In addition, Telefonica Interactiva is using Telefonica Data Espana's
communications infrastructure to provide Backup1 with Passport 160 and two
34-Mbps links.
----------
(1) Although it is providing backup for all transfer rates, this backup in the
event of [illegible] of one of the links will be degraded since the 4 ATM
34-Mbps links are very saturated.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
5
Beatriz de Bobadilla, etc.
<PAGE> 44
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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3. SOLUTION PROPOSED TO TELEFONICA INTERACTIVA.
Telefonica Data Espana is proposing that Telefonica Interactiva replace
the two 34-Mbps links with a 155-Mbps link that will allow more flexible
growth and the use of another 155-Mbps link, which Telefonica Data Espana
plans to install in the near future to provide backup for all its
infrastructure.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
6
Beatriz de Bobadilla, etc.
<PAGE> 45
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
--------------------------------------------------------------------------------
4. EQUIPMENT TO BE INSTALLED FOR TELEFONICA INTERACTIVA.
With all of the above in mind, the equipment to be installed at Julian
Camarillo for Telefonica Interactiva would be as follows:
- 2 STM1 ports on the 7507 routers. These ports will replace the two
current E3 ports of each one of the routers.
- 2 boards of 3 STM1 ports that will replace the two boards of 3 E3 ATM
ports of the Passport 50.
- 155-Mbps access that will replace the two current 34-Mbps links.
--------------------------------------------------------------------------------
The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
7
Beatriz de Bobadilla, etc.
<PAGE> 46
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
--------------------------------------------------------------------------------
5. ECONOMIC EVALUATION.
The components necessary to startup the new 155-Mbps network link are
evaluated in the following table.
The total of the table after the discount represents the increase in
pesetas that the new link assumes and its startup with regard to the items
evaluated in the economic-technical proposal whose reference is
VALTEL_ 31, version 3.1, dated 4/29/99.
--------------------------------------------------------------------------------
Item No. Installation Per Month
--------------------------------------------------------------------------------
Network Accesses
--------------------------------------------------------------------------------
Replace 34-Mbps ATM access with
155-Mbps ATM Zone A 1 unit 3 200 000 Pts 858 525 Pts
--------------------------------------------------------------------------------
Total network accesses 3 200 000 Pts 858 525 Pts
--------------------------------------------------------------------------------
Network Node in customer's location
--------------------------------------------------------------------------------
Replace network access module E3 ATM
with STM1 ATM 3 ports 2 units 0 Pts 80 667 Pts
--------------------------------------------------------------------------------
Total for network nodes 0 Pts 80 667 Pts
--------------------------------------------------------------------------------
Routers
--------------------------------------------------------------------------------
Replace 2 PA-A E3 ATM with 2
PA-A3-OC3SMI of 7507/4X2 router 2 units 0 Pts 49 316 Pts
--------------------------------------------------------------------------------
Total for routers 0 Pts 49 316 Pts
--------------------------------------------------------------------------------
Installation Per Month
------------------------------
--------------------------------------------------------------------------------
Total for network infrastructure [illegible]
--------------------------------------------------------------------------------
15% Discount [illegible]
--------------------------------------------------------------------------------
Total [illegible]
--------------------------------------------------------------------------------
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
8
Beatriz de Bobadilla, etc.
<PAGE> 47
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
--------------------------------------------------------------------------------
6. COMMENTS.
6.1 Comments on the evaluation.
In the evaluation, as can be seen from the above section:
o Only the difference between an installation of 34-Mbps access
and 156-Mbps access will be acquired.
o It will not be acquired for actions in the Passport 50 node or
in the routers.
o The same discount agreed to for the first evaluation
(VALTEL_V31) has been considered.
6.2 Comments on the application.
With regard to the application for installation, it is especially
important for Telefonica Interactiva, given the forecast for
enormous short-term growth in traffic, to request the startup of
this extension as soon as possible in order to avoid potential
congestion problems caused by unnecessary delays in the correct
implementation of this solution.
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
9
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<PAGE> 48
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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ANNEX II [translator's note: no idea what this refers to without more context].
Nemotechnics in use and reserved.
1. teleline1
2. teleline2
3. telelineb
4. telelinej
5. telerdsi
6. bbvnet
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
10
Beatriz de Bobadilla, etc.
<PAGE> 49
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Telefonica TECHNICAL- Telefonica
-------------------------- ECONOMIC ---------------------------
Telefonica Data PROPOSAL Telefonica Interactiva
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[duplicate page]
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The information contained in this document is confidential.
Any use other than for evaluation by the customer
must be authorized by Telefonica
11
Beatriz de Bobadilla, etc.