News Release

NextLevel Systems, Inc. and Cisco Systems, Inc. to Develop an Interoperable MCNS-Based, "Two-Way" Cable Modem Network

Pact to Speed Development, Market Acceptance of Standards-Based Cable Modems While Supporting Installed Base
Dec 08, 1997

SAN DIEGO, Calif. -- December 8, 1997 -- NextLevel Systems (NYSE: NLV), the market leader in broadband communications equipment, announced today that it has signed an agreement with Cisco Systems Inc. (NASDAQ: CSCO), the leader in networking for the Internet, to develop interoperable two-way cable modem network solutions based on the MCNS DOCSIS specification. The NextLevel/Cisco solution will also be able to support NextLevels existing SURFboard cable modem customers, enabling broadband operators to smoothly migrate to MCNS-based two-way systems without having to interrupt a subscribers service or replace existing equipment.

The pairing of Ciscos broadband head-end equipment, the Cisco uBR7246 Universal Broadband Router, with NextLevels cable modems is designed to provide broadband operators a complete, end-to-end network over which they can offer subscribers high-speed data services. NextLevel will develop its MCNS-based two-way SURFboardTM cable modems to be interoperable with the Cisco uBR 7246 for use in cable system head-ends. Prototypes of NextLevel's MCNS cable modem products will be demonstrated at the Western Cable Show in Anaheim, Calif., December 10 - 12, 1997.

Cisco and NextLevel will develop products based on the Multimedia Cable Network System (MCNS) Data Over Cable Service Interface Specification (DOCSIS). Cable Television Laboratories, Inc. (CableLabs.), a cable industry consortium, manages the DOCSIS process. Released in March 1997 by CableLabs, the DOCSIS specification calls for the interoperability of cable modems and associated networks manufactured by different suppliers. Interoperability speeds time to market by reducing risk for equipment purchasers and consumers, and creates economies of scale for broadband network operators by creating multiple product sources.

In addition to offering two-way over cable services, SURFboard MCNS cable modems will be developed to enable cable-forward, telephone-return communications, thereby offering operators multiple network configurations supporting both upgraded and non-upgraded cable plants. Importantly, NextLevel will design these new modems by leveraging innovative technology that was first introduced in its SB1000 and SB1100 internal and external cable modems. Additionally, the companies have agreed to develop an interface for the Cisco uBR 7246 that will support NextLevels existing telco-return SURFboard cable modem network installations and the next generation MCNS cable modems.

"Partnering with Cisco is an aggressive move forward in our development of MCNS-based, two-way cable modems," said Tom Lynch, Vice President and General Manager of the Satellite Data Networks unit of NextLevel Systems. "Together, we will create a world-class system by combining Ciscos expertise in data networking with our knowledge of, and experience with broadband communications networks.

"Additionally, with the headend interface supporting existing telco-return SURFboard installations, cable operators will be able to seamlessly upgrade their SURFboard cable modem network to an MCNS two-way network without having to do a fork lift upgrade. This will allow them to continue to serve existing SURFboard cable modem subscribers while offering an even more compelling service in areas served by two-way cable," Lynch added.

"Cisco is pleased to be working with NextLevel on DOCSIS-based cable modems," said Charlie Giancarlo, vice president of Global Alliances for Cisco. "The availability of standards-based equipment for both consumers and system operators will greatly accelerate the market for Internet and other advanced services over cable."

One of NextLevels major contributions to the MCNS DOCSIS specification was the design of a sophisticated cable TV transmission system providing robust upstream and downstream communications between the cable modem user and cable headend. Working closely with CableLabs, NextLevel engineers developed the system design by drawing upon digital cable experience, SURFboard product field performance, and extensive network testing. As a result, the upstream and downstream communications system is designed to be reliable over a wide range of cable systems, which vary in network quality.

NextLevel will submit its MCNS SURFboard cable modem products to CableLabs to be tested. The rigorous battery of tests undertaken by CableLabs is designed to assure cable operators that equipment from multiple vendors is truly interoperable.

"We are delighted to have Cisco and NextLevel Systems developing modem products to meet the MCNS/DOCSIS interoperability goal," said Dr. Richard R. Green, President and CEO of CableLabs.

Consumer demand for high-speed data services could drive as many as 3.4 million household subscriptions by the year 2000, estimates The Yankee Group, a communications research and consulting firm.

"Developments like this will help propel the cable industry toward accessing the opportunity that exists in the marketplace, and establishing cable as the preferred source of high speed Internet services," said Bruce Leichtman, broadband and media analyst for the Yankee Group .

Currently, more than 1 million cable homes are passed by high-speed networks that offer Internet/data service using NextLevel's SURFboard cable modems. SURFboard network customers include cable operators MediaOne, Comcast and Adelphia. Additionally, @Home Network has selected NextLevel Systems as the preferred vendor to provide SURFboard cable modems for delivery of @Homes high-speed Internet and multimedia services.

About NextLevel Systems

NextLevel Systems, Inc. (NYSE: NLV) is a leading worldwide supplier of systems and components for high-performance communications networks delivering video, voice and Internet/data services. Created in the three-way split of General Instrument Corporation, NextLevel Systems comprises three businesses that are leaders in distinct global growth markets: the Broadband Networks Group, based in Hatboro, Pa.; Satellite Data Network Systems, based in San Diego, Calif.; and Next Level Communications, based in Rohnert Park, Calif. NextLevel Systems, headquartered in Chicago, posted revenues of $1.8 billion in 1996 and employs more than 8,300 people worldwide.
Visit the NextLevel Systems Web site at

Cisco Systems

Cisco Systems, Inc. (NASDAQ: CSCO) is theworldwide leader in networking for the Internet. at

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