Pathnet Dials Up Customer Wins With New Cisco End to End Solution.

Business Editors

SUPERCOMM 2000

ATLANTA--(BUSINESS WIRE)--June 6, 2000

Delivering Industry's First Packet-Based Local

Access Service Spanning Pris, Xdsl,

Voip and Private Lines For Under-Served Markets

Pathnet, a privately held "next generation" carrier's carrier, and Cisco Systems, Inc., the worldwide leader in networking for the Internet, today announced Pathnet's new service that uses a new Cisco packet-based Signaling System 7 (SS7) Primary Rate Interface (PRI) gateway solution. It extends the reach of Pathnet's carrier customers by offering a rich set of New World Internet services to untapped markets across the country, at cost savings of as much as 50 percent.

The Pathnet VPOP (Virtual Point of Presence) Plus service is the industry's first deployment of packet-based local access service that combines high capacity transport with dial, PRI, digital subscriber line (DSL), Voice over Internet Protocol (VoIP) and dedicated private line technologies. This was announced at the SuperComm 2000 trade show at the Georgia World Congress Center.

Along with this innovative service Pathnet also introduced three customers -- NaviPath, I-Link and DSLi.com -- who already have adopted its VPOP Plus services for end-user customers. The VPOP Plus service specifically targets the nation's second- and third-tiered markets, comprising approximately 500 cities.

Pathnet's ability to quickly deliver this innovative service at a significant discount is due to a unique Cisco New World network architecture, which combines DSL, media gateway, softswitch, router, access server, and optical transport solutions over a network backbone that employs the latest OC-192 fiber optics and SONET microwave technology.

"Our carrier customers are demanding that Pathnet bring them the absolute latest in technology at the lowest possible rates, wherever they may need it. Our aim is not only to deliver on this requirement, but to take it one step further and deliver the next requirement before they have to ask for it," said Dick Jalkut, Pathnet's chief executive officer. "Cisco was the only vendor that offered end-to-end carrier-grade packet solutions which demonstrates they understand our mission. By meeting and exceeding our customers' requirements, together we have created a New World network in these markets that will be difficult to duplicate."

"Today's network service providers are in a fiercely competitive market," said Kevin Kennedy, senior vice president, service provider line of business at Cisco. "The entrance of aggressive, non-traditional competitors has changed the playing field for success. Pathnet can now deliver advanced services to carriers with a New World solution that delivers functionality, flexibility, and most importantly, profitability to them and their customers. We are very excited to be working with service providers such as Pathnet who are leading the pack in accelerating the delivery of their packet services."

As part of the rollout, Pathnet will deploy the Cisco 6160 IP DSL Switch, the Cisco 6400 carrier-class broadband aggregator, the Cisco ONS 15454 evolutionary optical transport platform, the Cisco MGX 8260(TM) Media Gateway and the VSC Virtual Switch Controller 3000 softswitch and a full range of Cisco routers. This innovative blend of integrated network elements delivers a powerful solution set of access options for DSL, private line, and PRI. With Pathnet's cost-effective fiber-based transport, the services based on these packet-enabled access methods positions Pathnet as one of the nation's first packet-based inter-exchange carriers.

Solution components

Pathnet's implementation of the Cisco SS7 PRI gateway solution, using the Cisco MGX 8260 Media Gateway and the Cisco Virtual Switch Controller 3000 for PRI services, is the first of its kind to offer such high-density, and presents a major economic competitive advantage in serving smaller markets where companies with traditional circuit-switched architectures simply cannot compete today. With this open, packet-based distributed architecture, Pathnet can deploy cost effective networks to enter new markets quickly.

The Cisco MGX(TM) 8260 Media Gateway is the only gateway capable of performing all the functions required for packet and Time Division Multiplex (TDM) network convergence - high-density local TDM switching, SS7-PRI offload and a foundation for packet telephony services. The Cisco MGX 8260 Media Gateway is based on industry standard open interfaces, including the media gateway control protocol (MGCP), offering carriers a mix of new services and call control functions.

Coupled with Cisco award winning media gateways, the Cisco Virtual Switch Controller VSC 3000 is a telco-grade, MGCP-enabled softswitch that performs intelligent call routing, signaling mediation, services access, gateway control and centralized management. It demonstrates how Cisco is leading in SS7, building on the success of the SC2200 SS7 Dial Platform which is deployed in 32 countries on five continents with more than 50 ISUP variants available. The Virtual Switch Controller VSC 3000 enhances the SC 2200 capabilities by adding new application strength which introduces call control capabilities to switch and intelligently route calls. The introduction of the Virtual Switch Controller VSC 3000 continues to underscore how Cisco is committed to open standards and the Cisco Open Packet Telephony architecture.

The Cisco 6000 IP DSL Switch family provides breakthrough solutions that deliver premium, IP- and Asynchronous Transfer Mode (ATM) based, managed data, voice and video capabilities to service providers. Powered by Cisco IOS(R) software, the products enable service providers to differentiate themselves competitively and increase customer loyalty and revenue by delivering the industry's broadest, most feature-rich set of managed multi-service applications on a single platform. The IP DSL Switch family enables service providers to deliver MPLS-based virtual private networks (VPNs), secure firewalls, multicast video, web caching, and voice services for both business and consumer entertainment applications.

The Cisco ONS 15454 is an evolutionary next generation transport manager that integrates 3/1 cross connect functionality with SONET transport and high speed data aggregation and switching. Unlike traditional SONET solutions, the Cisco ONS 15454 integrates all of the SONET transport features into a common platform. In addition to managing bandwidth via traditional time division multiplexing for DS1 and DS3 circuits, the Cisco ONS 15454 also integrates statistical multiplexing to better utilize each STS1 in a data intensive SONET network. The Cisco ONS 15454 provides users with multi-service options and can act as either a SONET transport system, digital cross-connect or data switch.

"We are extremely pleased with our Cisco relationship and look forward to mutual success introducing service providers to the opportunities in the second- and third- tier markets," said Bob Rouse, Pathnet's chief operating officer. "With Cisco beside us and the first VPOP Plus in service, we are well on our way to building a bridge over the digital divide."

New World Ecosystem partners

In addition to enabling new carrier services, Cisco works closely with a number of ecosystem partners to deliver network service solutions. Pathnet's New World service will rely on billing software from ACECOMM, a member of the Cisco New World Ecosystem program. The Cisco New World Ecosystem is a community of technology partners enabling service providers to rapidly deploy innovative networking services. Cisco and its partners offer a wide range of solutions for Packet Telephony, Voice Applications, OSS/BSS, Broadband and System Integration/Deployment. Cisco's New World Ecosystem partners support open, standards-based architectures and a shared commitment to interoperable, multi-vendor implementations.

About Pathnet

Pathnet is a `next generation carriers' carrier' providing competitive local access services and high capacity, digital transport to under served, second- and third-tier U.S. cities. Pathnet and its parent company, Pathnet Telecommunications, Inc., provides service to inter-exchange carriers, local exchange carriers, Internet service providers, Regional Bell Operating Companies, cellular operators and resellers. Pathnet currently has 6,900 route miles of completed network and 1200 route miles of network under construction. Additional information about Pathnet can be found on the company's web site at: www.pathnet.net.

About Cisco Systems

Cisco Systems, Inc. (NASDAQ: CSCO) is the worldwide leader in networking for the Internet. News and information are available at www.cisco.com.

Cisco, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners.

The statements made by Pathnet in this press release may be forward-looking in nature. No assurance can be given that future results will be achieved; actual results may differ materially from those projected in forward-looking statements. Pathnet believes that its primary risk factors include, but are not limited to: signing additional agreements with private network operators and others; offering services to telecommunication service providers; entering into partnering arrangements; and building a digital network. Additional information concerning these and other potential important factors can be found within Pathnet's periodic reports filed with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Statements in this release should be evaluated in light of these important factors.