Cable Web Services Founded to Accelerate Market for Cable Internet Access; Launches HomeStream Service to Stimulate Stalled Market.

PHILADELPHIA--(BUSINESS WIRE)--Oct. 5, 1998--Cable Web Services (CWS), a Philadelphia-based corporation, has been formed to accelerate the market for high-speed cable Internet access -- a market that has stalled as the industry grapples with hardware and software standards issues and the costs of upgrading millions of miles of cable plant for two-way service.

CWS is the only manufacturer and provider of cable data services and systems ready to deliver broad, rapid market penetration. Through its unique service and system offerings, CWS provides high-speed cable Internet access for subscribers, today, regardless of their location, and rapid revenue generation for cable operators, utilizing their existing cable plant, with zero capital investment -- a combination that all others have been unable to deliver to date.

"Even after huge capital investments by reputable public companies, no company has solved the challenge of providing affordable and reliable high-speed Internet access over cable on a large scale," said Steve Getz, co-founder and chief technology officer of Cable Web Services. "The preoccupation with two-way cable service has stalled the market to a point that invites simpler, practical solutions," he continued.

Cable's Opportunity

Demand for worldwide Internet access is expected to quadruple over the next five years, and consumers are clamoring for faster, more reliable access to the Internet. Due to their existing broadband infrastructure and market penetration, cable affiliates are in a unique position to capitalize on one of the most promising new service opportunities in the history of cable -- high-speed Internet access.

Industry analysts predict that cable modem technology will be the leading broadband solution for Internet access, and by the year 2002, cable data service subscribers will account for 80% of the worldwide residential broadband subscriber population. (Source: Forrester Research, Inc., 1998)

Cable's Circumstances

To date, the market for high-speed cable access to the Internet has been characterized by a focus on the DOCSIS two-way standard for headend and modem technologies. The two-way standards movement, which was meant to coalesce the industry and speed market acceptance of cable Internet access, has had the opposite effect of delaying cable modem deployment, despite market demand. In fact, as of September 1998, CableLabs had not certified a single cable modem or headend system as `standards-compliant.'

Operators, both large and small, are beginning to recognize the technical and business consequences of offering two-way service, such as:

- the potential major network traffic management problems of

implementing multiple DOCSIS standards in their network (1.0 and

1.1), - the potential risks of supporting equipment from multiple vendors

on a shared network, - the high costs of upgrading their entire network to support

two-way Internet access services, - the impact of Internet networking and service provision on their

existing business model, and - the viability of the retail modem sales model.

The DOCSIS approach has failed to stimulate the market. Today, only 300,000 subscribers out of 62 million basic cable subscribers have high-speed cable Internet access -- that's less than 1/2 of 1 percent. This poor market performance is the result of a misunderstanding of the market dynamics that require a sensible, low-cost approach to cable data service -- one that satisfies users now.

The Two-Way Business Case -- Not Here, Not Yet

There has been a general industry prejudice against one-way, telco-upstream thinking, mainly because it's not the "always-on" solution that many think should prevail. But two-way service is out of sync with build-out plans and the ability to support mass-market adoption. For most mid-sized and smaller cable operators, two way service is not the most rational next step. Cable operators are beginning to see the one-way potential not as a mere stopgap, but as a vital and necessary step in the evolution of cable Internet access. It's an attainable solution that generates ongoing revenue to pave the way for two-way build out.

(An in-depth analysis of the effects of standards and the build-out of two-way cable infrastructure on the cable Internet access market can be found in the Market Guide, "Accelerating the Market for High-Speed Cable Internet Access While the Two-Way Strategy Stalls," October, 1998, available from CWS.)

HomeStream(SM) -- Cable Web Services' Answer

Cable Web Services was founded by experts in the design and integration of high-speed data management systems. Their clear vision of the service model and the systems needed to make widespread Internet access over cable a reality drove the development of a breakthrough cable data system technology, the result of a 2-1/2 year, multi-million dollar research and development effort.

CWS offers a practical revenue-generating alternative to the DOCSIS-based model which meets the requirements of home PC users and cable affiliates alike -- speed, broad availability, low cost, convenience, reliability, and comprehensive system management.

Cable Web Services delivers its turnkey HomeStream cable data service to cable subscribers through partnerships with cable affiliates. A unique service model, HomeStream, can provide consumers with high-speed cable Internet access, today, regardless of their location, and with no equipment costs. In addition, HomeStream allows cable affiliates to quickly enter the lucrative cable Internet access market, realizing immediate revenue and quickly reaching market penetration rates as high as 15% of basic cable subscribers, with zero capital investment.

The HomeStream service features CWS' innovative one-way HS-1000 Cable Data System, which includes FREE hardware and software for both subscribers and cable operators, and HS-1000 System Manager software that delivers tiered service, network bandwidth management, comprehensive tracking and reporting, security, and plant wide status monitoring.

CWS has built an impressive team of experts in Internet networking, cable services, customer support, and technical services to provide comprehensive support services for HomeStream cable affiliates and their subscribers. This allows CWS' cable partners to concentrate on their core business, while CWS applies its expertise to their new high-value business -- high-speed cable Internet access.

"A one-way telco-upstream solution will be the key adaptation that cable operators use to introduce subscribers to high-speed cable data services," said Geri Gleeson, vice president of marketing for Cable Web Services. "More than an interim strategy, `one-way' is a key market enabler and a huge opportunity for cable operators and subscribers," she said.

(Additional information on CWS' HomeStream high-speed cable Internet access service can be found in the companion press release, "Cable Web Services Launches HomeStream", October 5, 1998.)

Cable Web Services

Cable Web Services (CWS) is the only manufacturer and provider of high-speed cable data services and systems ready to deliver broad, rapid market penetration. CWS was founded in September 1995 to address the need for commercially viable products and services that deliver high-speed Internet access via cable to homes, home offices, and small businesses. To that end, CWS is partnering with cable affiliates, applying its field-proven, HS-1000 cable data system technology, a clear understanding of consumer market requirements, and its unique service offering -- HomeStream -- to achieve rapid, widespread market penetration. HomeStream is convenient and affordable for consumers, while easy to implement and quickly profitable for cable affiliates. The hallmark of the HomeStream service is the offer of FREE cable modems for subscribers and free headend equipment for cable operators, thus stimulating market demand. Cable Web Services is headquartered in Philadelphia, PA. The company can be reached via phone at 610-238-0109, via FAX at 610-238-0221, via e-mail at [e-mail], or via the Internet at www.cable-web.com.

HomeStream is a service mark of Cable Web Services, Inc. "Get There Now" and "Powering Cable Internet" are trademarks of Cable Web Services, Inc. All other brands or product names are trademarks or registered trademarks of their respective holders.