Digital Island Strengthens Content Peering Strategy; Open Architecture Helps Telcos and Service Providers Lower Costs, Expand Global Reach and Accelerate Performance.

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--July 19, 2001

Digital Island (Nasdaq:ISLD), a leading provider of Internet infrastructure services, today unveiled a strategy enabling telecommunications companies and service providers to lower costs and accelerate performance by providing global access to content delivery services via content peering.

Content peering links content delivery infrastructure between multiple service providers to improve the performance of Web sites and support interoperability. Like bandwidth peering, content peering links complementary service and technology providers together to create more efficient, cost-effective use of global networks.

Digital Island's content peering strategy takes a two-pronged approach, leveraging both "private content peering" relationships between telcos, content delivery companies, hosting providers, streaming media service providers, and ISPs, as well as "public content peering" exchanges, such as the Content Bridge(TM) alliance, an alliance of more than 20 industry-leading technology and service providers dedicated to enabling the next generation of content distribution services.

According to Greg Howard, principal analyst and founder at HTRC Group, LLC, "Content peering is critical for the advancement of the CDN industry and Digital Island's involvement with bilateral CDN and public content peering alliances will help drive the industry forward by addressing important business and technical content peering challenges."

Private content peering provides key advantages to telcos and service providers because it improves performance and eliminates the need for overlapping capital expenditures for global infrastructure. Unlike proprietary content delivery networks, Digital Island enables companies to connect to virtually any service provider using an open architecture. By privately peering with key service providers on a one-to-one basis, Digital Island enables ISPs, telecommunications companies, and carriers to take full advantage of Digital Island's global infrastructure and its underlying intellectual property to optimize the performance of each company's infrastructure. Each participant receives a share of the revenue based on the amount of traffic they generate and serve.

In addition, Digital Island is ensuring that its network of private peering partners are also able to leverage broad-based industry initiatives by extending its role in emerging industry alliances and public peering initiatives. Public peering is designed to establish exchanges that enable a wide range of vendors, including hosting, content delivery providers, and equipment vendors to interconnect and potentially resell each other's capacity through clearinghouses such as the Content Bridge alliance.

"Digital Island's partners gain a significant time-to-market advantage in achieving global scale without the time and expense of continuing their own build out," said Ruann Ernst, chairman and CEO of Digital Island, Inc. "The goal of Digital Island's content peering strategy is to trim costs, bring together complementary vendors, and create incremental revenues for each participant."

Private Content Peering Strategy

As the cornerstone of the company's private peering strategy, Digital Island is introducing a new content peering program called the Footprint(R) Private Content Exchange (PCX), which incorporates Digital Island's existing NextEdge(TM) initiative, plus Digital Island's patented and patent pending technologies such as Footprint Best Distributor Selection (BDS) technology.

NextEdge participants have linked their customers to Digital Island's content delivery network to provide Internet users with a fast, reliable on-line experience. Digital Island has partnerships in more than 300 networks with more than 100 ISPs and telecommunications companies including Excite@Home, America Online, British Telecom, Belgacom, Carrier One, Cable & Wireless, ePLDT, Energis, Focal, GTS, Hi-Net, JENS, KPNQwest, NTT, Nextra, Level 3, PCCW, 1-Net, Roadrunner, SCV, SoNet, Sprint, Thrunet, Versatel, WebTV, J-Stream and Primestream.

The PCX program accommodates service providers that need to operate a regional content delivery network and want to leverage Digital Island's reach when a request for content is made outside of their network presence. Digital Island interconnects the Footprint network to the carrier's network to facilitate exchange as needed.

Both elements of Digital Island's strategy -- public peering and private peering -- enable service providers, carriers and their customers to take advantage of the scale of Digital Island's global Footprint network. However, private peering under the PCX program integrates a higher level of customization and technology features, including policy based routing between networks based on geographic routing rules and edge server load; intelligent redirection, which finds the fastest path routing between edge servers and end-users; and cache coupling, which enables carrier-deployed caches to be managed by the Footprint network.

Public Content Peering Strategy

As a central part of its public content peering strategy, Digital Island has been chosen to assume the role of operator for Content Bridge and is responsible for quality of service for performance, operational support, billing and settlement for content delivery among Content Bridge member networks. Digital Island will leverage the reach of its Footprint content delivery network, intellectual property and operational expertise to reduce time to market to deploy and implement content delivery services.

"Digital Island's expertise in building and managing a global, high performance content delivery network makes them the ideal operator for Content Bridge alliance services," said Peter Galvin of Inktomi, chair of the Executive Advisory Board of the Content Bridge alliance. "Digital Island's expanded role ensures Content Bridge alliance members will receive dedicated operations and support, meaningful service level agreements, advanced billing and reporting, and a range of peering options to meet their business needs."

Content Bridge allows hosting providers, content delivery network service providers, and access providers to share usage of networks at the content and application level. Each Content Bridge hosting provider will originate content for delivery to all other members, each content delivery network will deliver all traffic sent to it, and each access provider will terminate traffic destined for its subscriber base.

Digital Island expects several key companies to establish both public and private peering relationships. Julf Helsingius, CTO of KPNQwest said, "As one of Europe's leading providers of data-centric services, KPNQwest has a strong interest in working closely with other leading companies to integrate content delivery with our own infrastructure and hosting services on a global basis. We believe public content peering will grow rapidly and greatly support Digital Island's decision to take Content Bridge to the next level through the elements of their content peering initiatives," said Helsingius.

Digital Island And Other Standardization Efforts

Another element of Digital Island's public content peering strategy is participation in industry standards groups including the IETF and the Content Alliance, which consists of more than 70 companies that are committed to creating technical standards to interconnect equipment and service providers, including Cisco, America Online, AT&T, Sun and Walt Disney Internet Group.

The IETF has formed a Content Distribution Internetworking (CDI) Working Group, jointly led by members of Content Bridge and Content Alliance, that will concentrate on request routing to the delivery CDN, content distribution between peering CDN's, and usage accounting, including billing settlement among the peering CDN's. Digital Island is exploring ways to contribute its full range of intellectual property and expertise to the content delivery community in the key focus areas that the IETF CDI Working Group has outlined.

About Digital Island

Digital Island is the leading provider of managed Internet infrastructure for enterprises that need to give their customers a great Web experience in order to drive e-Business transactions. The company integrates managed hosting, content delivery and network services to bypass Internet congestion and guarantee fast and relevant interactions. Digital Island is headquartered in San Francisco, and its global e-Business delivery network reaches 35 countries. www.digitalisland.net

Important Notice

Digital Island and Footprint are registered trademarks of Digital Island, Inc. NextEdge are trademarks of Digital Island. All other trademarks are properties of their respective owners.

This press release contains information about the plans, objectives and expectations of the management of the Company that may constitute forward-looking statements. Important factors which could cause actual results to differ materially from those in the forward-looking statements, include but are not limited to: the operational difficulty of developing, deploying and delivering the Company's complex range of products and services; the potential lack of market acceptance of such products and services; competition from presently existing and new competitors; the risks associated with international operations and expansion; delays in raising or the unavailability of additional capital to fund operating losses and capital investment, the possibility of decreased growth in demand for Internet services in general and other factors detailed in the Company's periodic filings with the Securities and Exchange Commission. The Company assumes no duty to update information contained in this press release.