IIJ Introduces the IIJ Internet-LAN Service; Providing Corporate Customers with a Low-Price, High-Quality Broadband Ethernet Service.

TOKYO -- Internet Initiative Japan Inc. (IIJ, NASDAQ: IIJI), one of Japan's leading Internet-access and comprehensive network solutions providers, today announced that on October 11, 2005, it will release the IIJ Internet-LAN Service, a service that uses broadband access lines, such as NTT's FLET's, to create a low-cost and maintenance-free broadband Ethernet WAN.

The IIJ Internet-LAN Service provides a dedicated, virtual Ethernet space by using IIJ's Internet backbone to create a secure private network that connects offices nationwide like a traditional corporate LAN. Using common ADSL or FTTH access lines, customers can easily build a low-cost broadband Ethernet WAN.

The IIJ Internet-LAN Service is implemented by using a combination of IIJ's proprietary SEIL router and the SEIL Management Framework (SMF), IIJ's unique network management system. Using the L2TPv3(*1) protocol that is embedded in the SEIL, an Ethernet connection is established with all locations nationwide over the Internet, which enables the building of a virtual layer 2 network. Layer 2 networks do not depend on Internet Protocol (IP), and give customers the flexibility to use a variety of protocols such as IPX, AppleTalk, SNA, etc. and create VLANs (*2) for every corporate division. The IIJ Internet-LAN Service uses these special characteristics of a broadband Ethernet to provide a highly secure, flexible Ethernet VPN.

Network configuration settings, system operation, and maintenance are centrally managed through the SMF system, which automatically configures and maintains the service adapter (SEIL router) that is installed at each location. Customers can begin using their Ethernet WAN just by connecting the service adapter at each location. There are no complicated settings that require an engineer. Network administrators can check network status at any time through a special Web interface.

The IIJ Internet-LAN Service includes a feature that sends a Service Driver (*3) to rush and replace hardware within 2 hours (*4) if hardware happens to malfunction at the customer's premises.

IIJ will continue to expand its service lineup and provide high-quality network environments that meet the diverse challenges of corporate networks.

(*1) L2TPv3 (Layer 2 Tunneling Protocol Version 3): A protocol used to create a virtual tunnel over public networks, such as the Internet, and thus build a VPN. This protocol enables the tunneling of Layer 2 frames over an IP network.

(*2) Virtual LAN (VLAN): The creation of a virtual group of terminals, independent of their physical connections in a corporate network (LAN).

(*3) Service Driver: A service person who visits the customer's premises to install a new service adapter.

(*4) Two hours is the expected time between the hours of 9 AM and 5 PM.

IIJ Internet-LAN Service Features

--Easily create a broadband Ethernet WAN just by connecting service adapters.

--Uses low-cost broadband access lines (customers must acquire their own access lines)

--L2TPv3, IPsec encrypted connection and IIJ's proprietary SMF technology ensure high security.

--Traffic monitoring and e-mail failure notices are standard

--Hardware replacement within two hours by Service Driver

IIJ Internet-LAN Service Fees
----------------------------------------------------------------------
    Product          Compatible Access Line     Initial Fee   Monthly
                                                               Fees
----------------------------------------------------------------------
    Type DSL    FLET's, ADSL (NTT East and West)            26,500 yen
    --------------------------------------------            ----------
Hub             B-FLET's (NTT East and West)    80,000 yen
    Type FA     BBIQ (Kyushu Communication                  38,500 yen
                    Network)
                Commufa (Chubu Electric Power)
    ------------------------------------------------------------------
    Type Other  Other than those listed above   Ask for an  Ask for an
                                                 estimate.   estimate.
----------------------------------------------------------------------
    Type DSL    FLET's, ADSL                                14,000 yen
    --------------------------------------------           -----------
Port            B-FLET's (NTT East and West)    40,000 yen
    Type FA     BBIQ (Kyushu Communication                  26,000 yen
                    Network)
                Commufa (Chubu Electric Power)
    ------------------------------------------------------------------
    Type Other  Other than those listed above   Ask for an  Ask for an
                                                 estimate.   estimate.
----------------------------------------------------------------------

--A separate contract is required for the Hub (which acts as the customer's network center) and the Port (located at the remote locations), depending on type of access line.

--Access line costs are not included. The prices shown do not include tax.

--For information on compatible access lines, please contact IIJ.

About IIJ

Founded in 1992, Internet Initiative Japan Inc. (IIJ, NASDAQ: IIJI) is one of Japan's leading Internet-access and comprehensive network solutions providers. The company has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ and its group of companies provide total network solutions that mainly cater to high-end corporate customers. The company's services include high-quality systems integration and security services, Internet access, hosting/housing, and content design.

The statements within this release contain forward-looking statements about our future plans that involve risk and uncertainty. These statements may differ materially from actual future events or results. Readers are referred to the documents furnished by Internet Initiative Japan Inc. with the SEC, specifically the most recent reports on Forms 20-F and 6-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.