Elastic Networks Introduces 10Mbps EtherLoop.

Business Editors

ALPHARETTA, Ga.--(BUSINESS WIRE)--Sept. 10, 2001

Latest advance from R&D labs boosts bandwidth 66%

Elastic Networks (NASDAQ: ELAS) announced today the release of chipsets that boost the company's innovative EtherLoop(TM) technology to 10Mbps.

The new 10Mbps chipsets provide higher data rates while delivering EtherLoop's built-in intelligence to adapt to real-world conditions of imperfect copper loops and spectral interference.

The 10Mbps chipset is the latest milestone in the company's continuing development of EtherLoop technology towards its vision of delivering 100Mbps over existing copper telephone wires. Over the last nine months, the company's R&D labs have extended EtherLoop performance from 4Mbps to 6Mbps, and now to 10Mbps.

"When we first introduced EtherLoop, we knew it was important to deliver LAN speeds over the local loop," said Patrick Stanley, chief technology officer at Elastic Networks. "We're very proud to have reached this important step, which further enables the delivery of advanced bandwidth-intensive applications, including broadcast television and video on demand to multiple set-tops. And our development efforts to reach this milestone have led to a new understanding of the potential for this technology. Our original goal for 10Mbps in the local loop has grown into a new vision: 100Mbps EtherLoop(2) (TM), which our R&D team will deliver in 2002."

"Elastic Networks was one of the first companies to recognize the tremendous potential for using Ethernet to deliver broadband services in the local loop," said Berge Ayvazian, president and CEO of the Yankee Group. "This latest advance demonstrates the company's expertise and ability to innovate in order to fulfill that potential. They are well-positioned and capable to deliver their next-generation EtherLoop(2) technology in 2002."

The 10Mbps chipsets will be incorporated into Elastic Networks' Storm System(TM) family of intelligent IP-over-Ethernet products. The chipsets will also be incorporated into products in development by Elastic Networks technology licensing partners, including Beijing-based Keval On-Line and Hitachi Telecom USA.

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(TM) 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, 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 of the 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.