Elastic Networks Introduces 10Mbps Products With IP Multicast Support; Demonstration of Advanced Video Applications at Networld+Interop 2001.

Business Editors/High-Tech Writers

ALPHARETTA, Ga.--(BUSINESS WIRE)--Sept. 11, 2001

Elastic Networks (Nasdaq:ELAS) announced today the BitStorm(TM) 10306 Modem Card and the StormPort(TM) 1020 CPE Modem, two new products based on the company's innovative 10Mbps EtherLoop technology. The products also provide full support for IP Multicast applications. The company is demonstrating the products this week at Networld+Interop 2001 in Atlanta.

The BitStorm 10306 Modem Card and the StormPort 1020 CPE Modem work in tandem to provide 10Mbps to end users over ordinary telephone wires. The BitStorm 10306 operates in the existing BitStorm 1900 platform. The modem card provides 6 ports, each operating at 10Mbps. The StormPort 1020 resides at the customer premise, connecting to customer devices simultaneously through its Ethernet and USB ports. Both products include EtherLoop's unique built-in intelligence that adapts to real-world conditions of imperfect copper loops and spectral interference.

"Our product team is very proud to deliver this milestone," said Matthew Toth, vice president of engineering at Elastic Networks. "We have listened closely to our customers to ensure that the 10Mbps platform does more than just provide new bandwidth. By incorporating IP Multicast support, our Storm System is a best-in-class solution for leveraging new revenue opportunities with IP Television, including broadcast television and video on demand."

Elastic Networks will begin shipments of the BitStorm 10306 and StormPort 1020 to customers in September, 2001. The first customer to receive these products will be Hargray Communications, an industry-leading incumbent telephone company located in Hilton Head, SC.

"Hargray is pleased to lead the way in deployment of Elastic's new 10 Mbps Storm System products," said Gerald Coleman, general manager of Hargray Communications. "This continues the evolution of our end-to-end Ethernet broadband network."

Elastic Networks will be demonstrating the new products at Networld+Interop 2001 at the World Congress Center in Atlanta, GA from September 11-13, in booth 5553. The booth will include the company's award-winning speed-up AMERICA RV that will be demonstrating IP Television applications to multiple set-tops over a single copper loop.

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.