News Release

IP Services Takes Aim at Traditional Telephony in Tier III Markets Across the Country

Company's Cisco-based Internet Protocol Networks and Cisco Powered Network Designated Services Offer Communications Versatility That Will Render Legacy Telecom Infrastructure Obsolete
Oct 31, 2000

DENVER, OCTOBER 31, 2000 - IP Services, a provider of local toll, long distance and data communications services over end-to-end Internet Protocol (IP) networks, today announced plans to bring advanced IP telephony services to Tier III cities* across the country. Tier III cities have a high market demand for fast, advanced communications services - creating a strong business opportunity for IP Services. The new IP telephony services will be delivered over an end-to-end IP+ATM network infrastructure from Cisco Systems, Inc. and have therefore received the Cisco Powered Network designation. Additionally, IP Services has secured a lease facility of $2.5 million from Cisco Systems Capital for the purchase of networking equipment.

Residential and commercial customers in Colorado and Maryland today enjoy local toll, long distance and data communications services from IP Services. The company will offer its services in Delaware by the first quarter of 2001, and plans to complete a nationwide roll out by 2003. While IP Services' communications services are familiar, the Cisco-based IP+ATM packet networking technology used to deliver them represents the cutting-edge future of telecommunications infrastructure.

Unlike traditional circuit-switched networks, IP Services' networks use advanced packet-switching and routing technology to transmit voice and data through a network of routers and IP switches instead of the existing telecommunications infrastructure. This alternative technology cuts connection and transmission costs significantly, enabling companies like IP Services to serve markets often overlooked by traditional carriers. And IP+ATM packet technology introduces unprecedented communications versatility that ultimately will render today's legacy circuit-switched networks obsolete.

"The circuit-switched networks of traditional telephony are fast becoming relics of the past," said Dennis Graham, Executive Chairman of IP Services, "a fact reflected in the current share price of many traditional carriers and networking companies. IP technology is rewriting the rules to the detriment of those companies that have invested heavily in existing infrastructure, and IP Services will use it to set new industry standards for service, quality and cost."

IP Services' new advanced IP telephony services will be powered by Cisco routers and switches including the Cisco AS5300 Voice Gateway; Cisco BPX 8680-IP+ATM core switches; Cisco 6160 IP DSL Switches, which offer a new caliber of premium, managed IP+ATM data, voice and video services; Cisco 7200 series high-performance multi-function routers; and Cisco 6400 Carrier-Class Broadband Aggregator. The equipment enables IP Services to deliver a host of Cisco Powered Network approved communications services including voice, DSL, virtual private networks and IP Centrex services, easily and cost effectively, by bypassing the existing telecommunications network.

IP Services works with networking giants like Cisco Systems, WorldCom, and Dimension Data to provide local toll, intrastate and interstate long distance voice telephony and high-speed data communications. Because the services are data-centric, as opposed to voice-centric, IP Services offers customers unprecedented benefits, including desktop provisioning through online connections, quality assurance through active network monitoring, and cost-savings through the reduction of access and call termination fees associated with traditional telecom networks. By deploying IP equipment from Cisco Systems at customer sites, end-users do not require any specially configured equipment to enjoy these IP benefits.

The Cisco Powered Network designation signals to IP Services' customers that IP Services is delivering industry-leading technology solutions and services over reliable, high-performance and secure Cisco networking infrastructure. As a Cisco Powered Network member, IP Services can participate in joint marketing and technology sharing activities with Cisco.

A team of experienced telecommunications veterans who have built their careers in the industry leads IP Services. "IP Services is about delivering communications cleanly and efficiently through an unobstructed path to the intended recipient," said Martin McDermott, President and Chief Operating Officer of IP Services. "IP technology marks the most significant telecommunications advancement in network design and service delivery since the development of circuit switching a century ago."

* Tier III markets are cities with a population of less than 500,000.