CAIS Internet & 3Com Announce Multi-Faceted Ground-Breaking Alliance.

Business Editors/Hi-Tech Writers

WASHINGTON--(BUSINESS WIRE)--March 20, 2000

3Com Intends to Invest in CAIS & Launch New Business Traveler Initiative on CAIS Platform; CAIS To Integrate 3Com Connection Devices

Into CAIS Hotel Solutions; Companies To Jointly Develop & Market

Products on CAIS Visitor-Based Networks in Hotels

In a multi-faceted deal that launches innovative business traveler Internet services on the CAIS platform and creates a breakthrough for uniting business devices with connectivity in hotels -- CAIS Internet announced today that it has a ground-breaking agreement with 3Com Corporation.

3Com agreed to make a $20 million dollar investment in CAIS (pronounced "case") -- also providing commercial agreements for developing joint business traveler products, marketing campaigns, and plans to integrate 3Com industry-leading connection products, including personal digital assistants (PDAs) and other handheld Internet access devices.

"3Com is an obvious leader in business devices and technology, and we believe this joint CAIS/3Com partnership complements CAIS's market position to define the hotel business traveler visitor-based network and connectivity market," said Ulysses G. Auger II, CEO, CAIS Internet. "CAIS has the lion's share of master agreements to deliver broadband solutions and portal to hotels, and we're pleased to offer a scaleable platform that expands for value-added services like those we will jointly develop and market with 3Com."

"CAIS Internet's market leadership offers 3Com a unique experience for us to launch our new business traveler technology initiative in a top position," said Amir Eldad, Vice President and Division Manager of 3Com Corporation's Visitor-Based Networking Division. "With this deal, we enter the market with a framework that provides the widest distribution of our services with CAIS Internet as their connectivity and portal services are rolled-out in hotels nationwide."

CAIS Internet, the leading broadband access solutions provider for hotels, apartments and businesses, announced the agreement today with 3Com on the company's quarterly earnings call. The alliance provides for the joint development of CAIS/3Com products & marketing where business travelers connect to the Internet using CAIS.

The deal takes advantage of CAIS Internet's position as it pursues roll-out of broadband services over the next three years in meeting rooms at more than 9,000 properties nationwide, and 1.2 million guest rooms (currently under master agreement) with most major hotel brands.

As part of the agreement, CAIS will work with a variety of 3Com technology and products to enhance CAIS solutions, including converged set-top boxes that will enable IP-based connectivity options to access voice, video, data and entertainment through the telephone wire.

CAIS is currently testing video solutions in its labs, and has plans to launch bundled voice, video and data access in 2000 using its existing telephone copper wire solution, which does not require end-user equipment or building rewiring (explained below).

CAIS and 3Com will be announcing additional joint initiatives over the next few months.

CAIS Internet, the market leader in multi-user solutions in buildings, currently has master agreements to bring its broadband access services, kiosk services, and portal content, totaling more than 10,000 properties nationwide, or to more than 1.3 million sets of eyeballs in guest rooms and apartment homes.

CAIS continues to have trial agreements with the remaining major hotel corporations and real estate trusts.

CAIS solutions can utilize a variety of technologies to create an in-building Internet-ready network to connect to its nationwide backbone, but the company primarily uses a patented technology that retrofits the existing telephone lines to accommodate both voice and data traffic - without rewiring.

With its solution, CAIS can open up unused frequencies on copper wire at the source of the telephone signal to allow both Ethernet and voice traffic to pass on the same line, at the same time, without expensive end-user equipment. CAIS currently has plans to expand the telephone wire to also traffic laser quality video signals.

While the concept is similar to DSL, the CAIS solution should not be confused with DSL. Unlike DSL, this CAIS service is proprietary and does not require an end-user modem.

CAIS Internet has master agreements to deliver broadband access with major hotel chains like Hilton Hotels, John Q. Hammons Hotels, Carlson Worldwide Properties, Staybridge Suites by Holiday Inn, Cendant Corporation and Bass Hotels - which include brands like Hilton, Hilton Garden Inn, Radisson, Embassy Suites, Doubletree Suites, Ramada, Hampton Inn, Crowne Plaza, and Intercontinental.

CAIS has contracts with apartment community real estate corporations like United Dominion Realty Trust, One Point Communications, Tarragon Realty and Town and Country Trust.

About CAIS Internet

CAIS Internet, Inc. (Nasdaq: CAIS) is a leading broadband solutions company. CAIS provides customers with comprehensive Internet solutions while at home in apartments, at work in small-to-medium businesses, or on-the-go at hotels, airports, travel plazas, cruise ships, and retail stores.

Whether it's an innovative solution for DSL & leased-line daytime business customers, creating an in-building network for multiple users, or providing a public area Internet kiosk, the company delivers a cost-effective, easy and convenient Internet experience.

The customer experience is the result of a one-stop, integrated solutions package of innovative CAIS network access and technologies, award-winning IPORTTM software, customer support, portal, and systems. CAIS Internet currently is the designated Internet access solution for more than 1.2 million hotel rooms, or more than 9,000 properties, which will also carry CAIS meeting room and IPORT kiosk access solutions.

CAIS is also the leader in agreements to deliver Internet solutions to more than 700 apartment communities, or more than 215,000 residences. Additionally, CAIS recently unveiled its portal with 110 leading Internet content partners, which upon full installation of its properties will be the widest viewed in the hospitality and apartment industries.

Kohlberg Kravis Roberts (KKR) recently announced an up to $200 million investment and up to 26 percent capital interest in CAIS Internet, taking two seats on the CAIS Internet Board of Directors. Qwest Communications also took a 5 percent equity stake in the broadband solutions provider in 1999.

CAIS Internet is headquartered in Washington, DC, with two subsidiaries in California, CAIS Software Solutions and Business Anywhere. CAIS Internet operates a Cisco-Powered, clear-channel Internet and ATM Network, and peers with public and private partners, and at national exchange points.

This release contains statements relating to CAIS's future expectations and business strategies or other "forward-looking" information. Those statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contemplated by the statements.

Important factors that may cause actual results to differ from projections include, among others: changes in business conditions; changes in the Internet services industry and the general economy; our limited operating history; our ability to manage rapid growth; our ability to enter into joint ventures and other strategic relationships with companies on terms acceptable to us; and the impact of computer and related problems that may arise from the Year 2000 problem on our business.