CAIS Internet, Inc. Raises $11.5 Million in Private Placement of Series A Convertible Preferred Stock.

WASHINGTON--(BUSINESS WIRE)--March 2, 1999--

- Company to use Proceeds to Accelerate Deployment of its

OverVoice Technology -

CAIS Internet, Inc., a provider of high-speed Internet solutions for hotels, multi-dwelling units and single family homes, today announced that it has completed a $11.5 million private placement of Series A Convertible Preferred Stock. With the proceeds from the private placement, CAIS Internet will accelerate the deployment and distribution of its patented OverVoice data networking technology for its clients, which include Hilton Hotels Corp. (NYSE: HLT) and OnePoint Communications Corp. In addition, CAIS Internet will be able to aggressively move forward with the rollout of its HyperDSL service, the Company's dedicated Internet access service that uses digital subscriber line (DSL) technology.

"We are pleased to complete this private placement which will enhance our products and services distribution," said Ulysses G. Auger II, chairman and chief executive officer of CAIS Internet. "In particular, this placement will allow us to accelerate the Company's rollout of OverVoice and HyperDSL services nationwide."

In January, Hilton Hotels Corp. and CAIS Internet announced an agreement to install CAIS Internet's OverVoice in hotels owned, operated or franchised by Hilton Hotels Corp. in the United States, Canada and Mexico.

In February 1999, CAIS Internet entered into an agreement with OnePoint Communications Corp. to market high-speed Internet service to selected multi-dwelling unit buildings where OnePoint Communications Corp. has a preferential right of entry to provide Internet and other communications services.

CAIS Internet's High-Speed Internet Services

OverVoice is CAIS Internet's patented data networking solution that uses a telephone's existing copper wire infrastructure to simultaneously transmit voice and data at speeds of up to 300 times faster than conventional 28.8K dial-up modems. This enables an OverVoice user to have both dedicated high-speed Internet access and complete use of the telephone at the same time. The OverVoice solution works with any existing dedicated high-speed connection, such as DSL, T1, wireless, or cable, to create a Local Area Network (LAN) that can be shared by multiple users in a hotel, multi-dwelling unit, or single family home. Because OverVoice transmits data using standard Ethernet protocols along with a building's existing wiring infrastructure, it is a more cost-effective solution than competing technologies, which require expensive rewiring or costly equipment upgrades.

HyperDSL is CAIS Internet's branded dedicated, high-speed Internet access service that uses DSL technology. Unlike traditional forms of high-speed dedicated Internet access, DSL technology uses a customer's existing copper voice telephone wire to deliver high-speed Internet access. HyperDSL represents one of the most economical, dedicated, high-speed Internet solutions for commercial and residential customers. The combination of HyperDSL and OverVoice provides a complete end-to-end high-speed networking and Internet access solution for markets that require multiple points of access, including commercial customers, hotels, multi-dwelling units and single family homes.

Private Placement Details

Chancery Lane, LP, an affiliate of R. Theodore Ammon, a director of the Company, and CAIS-Sandler Partners, L.P., a Delaware limited partnership, invested $11.5 million in the Company in exchange for shares of the Company's Series A Convertible Preferred Stock.

Company Description

CAIS Internet, Inc. is a provider of high-speed end-to-end data networking solutions and is a tier one Internet Service Provider. Its patented OverVoice networking solution uses existing telephone copper wire to simultaneously transmit voice and data at speeds up to 300 times faster than conventional methods. CAIS Internet provides the most cost-effective, dedicated high-speed Internet connections to commercial and residential customers primarily using digital subscriber line technology and patented OverVoice technology. OverVoice enables the Company to offer a multi-user, dedicated high-speed Internet solution to residential customers by creating an Ethernet local area network in a hotel, multi-dwelling unit or single family home more cost-effectively than alternative technologies, including cable modems or Category 5 ("CAT5") rewiring upgrades. Additionally, CAIS Internet, in conjunction with Covad Communications Group, Inc. (Nasdaq: COVD) and Bell Atlantic Corp. (NYSE: BEL), offers customers dedicated high-speed Internet access, including the new HyperDSL services.

CAIS Internet, Inc. is headquartered in Washington, DC. To learn more about CAIS Internet visit the website at www.cais.com.