Elastic Networks' EtherLoop Platform Selected by Verizon Avenue for Broadband Services Deployment.

Business Editors & Technology Writers

ATLANTA--(BUSINESS WIRE)--June 5, 2001

Elastic Networks (NASDAQ: ELAS) announced today that Verizon Avenue, a subsidiary of Verizon Communications and a leading provider of telecommunications and data services to multi-dwelling units (MDUs), has selected EtherLoop(TM) technology as the enabling platform for a nationwide rollout of high-speed broadband services.

Verizon Avenue plans to deploy Elastic Networks' Storm System(TM) Intelligent IP over Ethernet products to multi-tenant dwellings in 31 states.

The Elastic Networks' Storm System(TM) of Intelligent IP-based solutions deliver bi-directional bandwidth at speeds up to 6 Mbps over existing copper telephone lines without the need for rewiring. Comprised of the BitStorm(TM) IP Access Multiplexer, and the StormPort(TM) 620 Modem, the Storm System transforms regular telephone twisted pair wiring into a high-speed, IP-based Local Area Network, capable of supporting lifeline voice services as well as voice over IP, secure network-based VPNs, multicast streaming audio and video, interactive gaming, enhanced chat rooms, and other multi-media services for business and consumers.

"We are very pleased that Verizon Avenue has selected EtherLoop as their platform for IP multi-media services deployment in the multi-tenant broadband services market," said Guy Gill, president and CEO of Elastic Networks. "Verizon Avenue is visionary in next generation network deployment. By utilizing EtherLoop Ethernet-based technology for their edge copper access deployment, they are well positioned for a seamless Ethernet connection to optical Ethernet metropolitan networks of the future as fiber deployment drives deeper and deeper into the access network."

Elastic Networks solutions are deployed on thousands of lines worldwide. Based on Ethernet, the most pervasive data networking protocol in the world, carriers and service providers value the system's simple deployment, reliable performance, and plug and play ease of use. As high-speed services become more prevalent, telephone companies and service providers recognize the growing importance of the Storm System's spectral compatibility - a unique capability that allows the system to overcome the interference, or `crosstalk,' generated by other services in a binder cable, such as T-1 or ADSL. The Storm System's underlying EtherLoop technology senses interference in a binder, then adjusts to avoid the interference. This enables service providers to successfully deploy EtherLoop where conventional xDSL services fail and eliminates the need for binder management.

About Elastic Networks, Inc.

Elastic Networks is a broadband leader in first-mile Ethernet access solutions, deploying its patented EtherLoop technology across a variety of products and high-speed multi-media applications. With the introduction of the Storm System family of intelligent IP-over-Ethernet products, Elastic Networks has successfully addressed the needs of the carrier, enterprise, MDU/MTU and hospitality markets for high-speed first-mile access solutions that deliver top quality service to end users while eliminating costly deployment and complicated support issues for service providers. Additionally, Elastic Networks is building strategic relationships with distributor, chip manufacturing and data networking partners.

The company has offices in Alpharetta, GA, Toronto, and Hong Kong. For more information about Elastic Networks and its patented EtherLoop technology and products, visit www.elastic.com or contact Elastic's U.S. headquarters in Alpharetta, Georgia at 678-297-3100. For investor information, e-mail our Investor Relations group at [e-mail], or call 678-297-3100.

Elastic Networks forward looking statements

Certain statements contained in this release are forward-looking statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described. With respect to such forward-looking statements, the Company seeks the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include, without limitation, (1) that the Company may fail to be competitive with existing and new competitors, (2) that the Company may not maintain or grow its level of revenues, given its currently limited customer base, (3) that the Company's limited number of product offerings may fail to achieve widespread market acceptance, (4) that negative changes in customer demands and requirements regarding our prices, technology and products may occur, (5) that DSL technology may fail to achieve widespread market penetration, (6) that interruptions or disruptions in our product shipments and/or our various arrangements with our distributors, manufacturers or resellers may negatively impact our ability to make sales and/or minimize our costs, (7) that the Company may not adequately respond to technological and regulatory developments impacting the telecommunications industry, (8) that needed financing may not be available to the Company if and as needed, (9) that a decline in the size and potential growth of the MTU, carrier and international markets for our technology may occur, (10) that a significant reversal in the trend toward increased usage of the Internet may occur, (11) that a drastic, negative change in the U.S. economy or market conditions may occur, and (12) that some other unforeseen difficulties may occur from time to time. This list is intended to identify certain of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere herein. These factors are not intended to represent a complete list of all risks and uncertainties inherent in the Company's business, and should be read in conjunction with the more detailed cautionary statements included elsewhere in the Company's most recent filings with the SEC.