Bay Networks First to Ship L2TP Compliant Products.

ATLANTA--(BUSINESS WIRE)--June 9, 1998--

Company broadens end-to-end VPN solution with support for L2TP across Router, RAS and Extranet Switch product lines; Unveils enhanced

features in V6.0 of Versalar(TM) Remote Access Software

Bay Networks, Inc. (NYSE:BAY) today announced that it has strengthened its VPN offerings with the introduction of Layer 2 Tunneling Protocol (L2TP) support across three of its product lines. The announcement marks Bay Networks as the first networking vendor to ship products, for both tunnel initiation and termination, that support the L2TP draft specification, an extension to PPP that authenticates dial-up users and provides a secure routed connection to a network-based server.

Offering products that support both Site-to-Site and Extranet VPNs with L2TP tunneling, Bay Networks is enabling service providers to take advantage of the emerging standard by saving on costs and increasing revenue-generating services. With products architected for high performance, flexibility, directory-enabled provisioning and superior management, Bay Networks' L2TP support is available in the Contivity(TM) Extranet Switch product family, and also available through a software upgrade for each of the Bay Networks BN(TM), BCN(TM), and ASN(TM) Routers, running release 12.10 or later. With version 6.0 of Bay Networks Versalar remote access software, the Versalar(TM) Remote Access Concentrator (RAC) family rounds out the end-to-end L2TP solution by providing support for the tunnel initiation.

"This announcement showcases the cohesiveness of our product groups including router and RAS, and we are proud of our combined product development," said Michael Feinstein, vice president of product management for Bay Networks Access Division. "This is a very attractive offering for service providers in that we provide L2TP compliance for each of the dial, dedicated and backbone platforms. We can play in both worlds, at the origination of the tunnel, and at the end of the tunnel."

As the only tunneling protocol that supports multiple sessions, L2TP gives Service Providers control over tunnel origination which allows for wholesale dial access. In addition, L2TP has security features not available in PPTP, including the ability to work with IPsec.

Through Bay Networks site-to-site VPN capabilities with L2TP tunneling, traditional leased line applications are replaced. The Versalar Remote Access Concentrator is now available as a LAC (L2TP Access Concentrator) with the ability to initiate the L2TP tunnel. The Bay Networks BN/BCN/ASN Router works as an LNS (L2TP network server) which terminates the L2TP tunnel and handles all the management and security associated with the tunnel.

"Bay Networks remains committed to the support of open industry standards," said Feinstein. "Our customers are seeing a convergence in the industry toward L2TP, and our support furthers Bay Networks' ability to provide standards-based, interoperable business class VPN Internet services in a multi-vendor environment."

Bay Networks Strengthens Versalar Remote Access Software

As part of its comprehensive VPN and remote access solution, Bay Networks is also announcing its Versalar software version 6.0 for the Versalar 5000 access switch and Versalar 8000 remote access concentrator system. This new software release contains multiple features optimized for adding value to service provider or corporate networks.

"Release 6.0 enables service providers to increase revenues by offering subscribers a series of new and premium services, while giving enterprise customers an important addition to their security services," said Shyam Jha, director of product management, Bay Networks Access Division. "Based on feedback from our customer base, we have added those features that optimize our remote access concentrators for quick and easy usage."

Supporting the needs of Competitive Local Exchange Carriers (CLECs), one of the version 6.0 feature sets give CLECs equal access to the critical data such as billing and call duration information which resides at the Central Office (CO). With support for Feature Group B and D, CLECs gain the ability to utilize valuable services such as Automatic Number Identification (ANI) and Dialed Number Identification Service (DNIS).

"As a test site for this software release, the added capabilities and applications have been invaluable in our quest to provide best-in-class service to our customers," said Jerermy Maynard, director of Internet services at Coast to Coast, a Michigan based CLEC and Internet service provider (www.coast.net). "In particular, support for Feature Group D which gives us important statistical data puts us on a level playing field with ILECs in terms of our ability to understand our customer needs and respond accordingly with optimal service."

Additional new features include:

Versalar Config Utility - is a JAVA-based, World Wide Web-enabled graphical user interface (GUI) for managing the Versalar 5399 remote access concentrator module and Versalar 8000 remote access concentrator system, featuring embedded HTML server support.

L2TP tunneling protocol support - enables the tunneling of the link layer of PPP protocol between the "L2TP Access Concentrator" (LAC) and the "L2TP Network Server" (LNS).

Dial-out client - allows the Versalar remote access concentrators to serve as a pool of dial-out modems. This functionality allows enterprise users to dial out from their networked PCs to their service providers without the expense of individual phone lines for each PC, resulting in enterprise customers reducing expensive telephone line charges.

PPP call-back - allows the remote access device to return a call from a user to a pre-determined telephone number. The incoming and outgoing call may be either an analog modem call or an ISDN call. The user calls the ISP and the security host authenticates the user. If the user is set up for call-back, the information (call-back number) is sent from the security host to the remote access device. The device terminates the call and calls the user back at the pre-determined number. The device can then, optionally, authenticate the user again.

For the enterprise customer, call-back provides enhanced security by limiting authentication to a distinct list of numbers. Service providers receive a cost benefit from PPP call-back because dial-out only trunks utilized by PPP call-back are dramatically less expensive than dial-in and dial-out trunks.

RADIUS enhancements - adds flexibility to the current RADIUS support by supporting authentication based on a US Robotics implementation. This feature allows for a smooth migration for customers migrating to a Versalar remote access solution from their current US Robotics access solution.

IGMP multicasting support - provides for the efficient support of emerging technologies such as LAN TV, collaborative computing, desktop conferencing and Internet gaming. All of these applications require the ability to communicate from one to many or many to many hosts. The simplest technique for addressing this need -- the establishment of multiple communication paths -- is wasteful of expensive bandwidth. This inefficiency, when coupled with the high-bandwidth requirements of these applications, necessitated the development of a more efficient communication protocol. Release 6.0 supports this protocol.

Pricing and Availability

Release 6.0 of the Versalar software will be available in late June, 1998 via CD or from the Web for software subscription customers. Bay Networks support for L2TP on the BN/BCN/ASN is available immediately through a software upgrade for all users running BayRS(TM) 12.10.

About Bay Networks

Bay Networks - Where Information Flows(TM). Bay Networks, Inc. (NYSE:BAY) is a leader in the worldwide networking market, providing a complete line of products that serve corporate enterprises, service providers and telecommunications carriers. The company offers frame and ATM switches, routers, shared media, remote and Internet access solutions, IP services and network management applications, all integrated by Bay Networks' Adaptive Networking strategy. With headquarters in Santa Clara, California, Bay Networks markets its products and services around the world, providing 7x24 support coverage. For additional information visit the company's World Wide Web site at http://www.baynetworks.com or call 800-8-BAYNET.

This release, other than historical financial information, may consist of forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. For instance, factors which could cause results to differ from future events include the rate of adoption of new technology, competitive pricing actions and marketing programs, among others. Readers are referred to the documents filed by Bay Networks with the S.E.C., specifically the most recent reports on forms 10-K and 10-Q, which identify important risk factors which could cause actual results to differ from those contained in the fnc. Other brand and product names are registered trademarks or trademarks of their respective holders.

CONTACT: Bay Networks, Inc.

Jeff Young

[phone]

[e-mail]

or

FitzGerald Communications, Inc.

Laura Fischman

[phone] ext. 226

[e-mail]