Next Level Comments on FCC Unbundling Decision; Order Clears Path for Multi-Service Broadband Deployment.

Business Editors/High-Tech Writers

ROHNERT PARK, Calif.--(BUSINESS WIRE)--Feb. 21, 2003

Next Level Communications (Nasdaq:NXTV) responded today to the FCC's announcement of rules changes that affect how the Incumbent Local Exchange Carriers (ILECs) lease their networks and equipment to competitors. The FCC's ruling will effectively deregulate broadband, eliminating set pricing requirements for use of the fiber and hybrid fiber/copper-based networks that deliver broadband services. The unbundling requirements that previously existed under the Telecommunications Act of 1996 reduced the incentive for ILECs to invest in the networks and equipment necessary to deliver broadband services, which resulted in slowed broadband deployment and ultimately limited the availability of broadband services to consumers. The FCC's order should result in a significant increase in ILEC investment in broadband deployments nationwide.

"This is an important day for broadband infrastructure providers" said Matt Davis, director of broadband access technologies for the Yankee Group. "While there have been uniformly negative reactions from the larger carriers regarding UNE-P, they have largely greeted the broadband unbundling concessions with optimism. Once the order is finalized, we anticipate that it will bring a higher level of certainty to the market that will stimulate new investment. As an established player with a mature hybrid copper/fiber platform, Next Level is well-positioned to reap the benefits of these events."

Next Level's equipment is positioned particularly well in the new regulatory environment. The company's Full Service Access Platform allows telephone companies to enjoy a maximum return on investment in their networks by appreciating revenue from cable-competitive digital TV services, video-on-demand, high-speed Internet and other interactive services over their existing infrastructures. Faced with growing competition from cable and wireless companies, telephone companies are showing an increasing interest in delivering services like television, that fall outside of their traditional offerings. Uncertainty about how new services would be regulated if delivered over existing networks have led telcos to delay investment, and, in recent weeks, publicly consider alternative delivery methods like satellite. The FCC announcement should clear the path for use of Next Level's technology to deliver the full complement of bundled services that consumers are demanding -- video, data and voice -- through fiber upgrades that feed existing last-mile copper networks.

"We're at the dawn of a new age of competition between cable companies and telephone companies," said J. Michael Norris, chief executive officer of Next Level. "The FCC's decision levels the broadband playing field for telcos, allowing them to freely invest in broadband deployment and effectively recoup their investments. Telcos now have more incentive than ever to utilize Next Level's unrivalled technology to deliver powerful new service offerings, like cable-competitive television and video-on-demand services, that will accelerate the returns on these new investments and solidify their relationships with subscribers."

About Next Level Communications

Next Level is a world leader in integrated broadband access platforms for delivering any combination of voice, high-speed data and multi-stream digital video services into the home or office. Next Level offers a unified multi-service, multi-band platform that lets communications service providers enter a more profitable broadband market segment by delivering a virtual communications and entertainment center over existing copper telephone lines. Next Level's highly scalable networking products, management tools and support assistance allow communications service providers to deliver a range of subscriber services, and realize significant new revenue streams. Founded in 1994 and headquartered in Rohnert Park, Calif., the company has deployed its state-of-the-art systems for more than 100 communications service providers worldwide. For additional information, visit http://www.nlc.com.

Next Level Communications, the NLC logo, NLevel3, NLevel3 - The Unified Access Platform, BDT, USAM, BNU, N3 Residential Gateway and N3 ETHERset are trademarks or registered trademarks of Next Level Communications in the United States and other countries.

This release contains "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are generally preceded by words including, without limitation, "will," "plans," "expects," "believes," "anticipates" or "intends." Investors are cautioned that all forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from current expectations. Factors that realistically could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in our Form 10-K for the year ended December 31, 2001.

Note: In "NLevel3" the 3 should be superscript.