PF.Net Announces Second Strategic Agreement with Lucent Technologies; Two Agreements Valued at up to $550 Million to Deploy End-To-End IP Network - Lucent's WaveStar family of network switches, PF.Net's fiber-optic network - Company Business and Marketing

Cambridge Telcom Report, Nov 15, 1999

PF.Net, a communications company constructing a nationwide fiber-optic network, announced Monday it has completed its second strategic agreement with Lucent Technologies, the world's largest developer of communications systems, valued at up to $350 million. The combined value of the agreements between the two companies can reach $550 million.

The most recent contract consists of a five-year agreement valued at up to $350 million to design, construct and support PF.Net's new end-to-end, nationwide broadband network for Internet service providers and wholesale carriers of data, video and voice. Earlier this year, PF.Net signed a three- year, $200 million contract with Lucent to provide its industry-leading TrueWave RS (Reduced Slope) Fiber.

PF.Net will purchase Lucent's portfolio of industry-leading products and services to construct an Internet Protocol (IP) backbone capable of delivering data, video and voice services.

"Lucent's complete data and optical networking solutions and NetCare Professional Services support will give PF.Net a competitive network as it moves into the growing world of broadband services," said Bill Plunkett, vice president for Emerging Service Providers at Lucent Technologies. "We are pleased to be working with PF.Net to help place its network at the forefront of the convergence of emerging technologies."

"To handle the exponential growth in network traffic, PF.Net will deliver the most advanced bandwidth applications and access technologies to our customers nationwide," said John Warta, PF.Net co-founder and director. "Working with Lucent enables PF.Net to become 'The Network to the Net'."

PF.Net will use the Lucent Technologies softswitch, a Bell Labs-developed software switch for IP networks that will provide a full range of IP-based communications services unsurpassed in quality and ease of use.

The products in Lucent's WaveStar* family will give PF.Net an optical networking system capable of transmitting up to 400 gigabits of information per second. According to Warta, that is the equivalent of transmitting over 6,000 volumes of an encyclopedia while simultaneously transmitting the data contained on 36 CD ROMs over a single strand of fiber, in one second, with tremendous cost performance.

"We are building our network based upon the increasing Internet popularity which has created an exploding market for high-bandwidth transmission capacity. Lucent Technologies was the clear choice for our end-to-end network because of its continuous advances in fiber-optic transmission, the depth and breadth of its networking experience and support from Bell Labs," said George Damiris, director of PF.Net and senior vice president of Koch Telecom Ventures, Inc.

Lucent's NetCare Professional Services, the largest such organization in the industry, will assist with network design, engineering, consulting, installation, technical support, maintenance and network surveillance.

PF.Net's IP based network will provide long-haul fiber-optic communications technology to national access points and more than seventy cities including the five largest telecommunications markets in the United States. The nationwide network will connect more than twenty states including California, Texas, Illinois, Florida and New York. Construction of the 6,400 mile IP based fiber-optic network has begun and will be completed during the fourth quarter of 2001.

Over the life of the five-year agreement, Lucent will provide up to $350 million of financing to fund the buildout of the network, subject to meeting certain conditions.

PF.Net is constructing an IP based fiber-optic network expanding roughly 6,400 miles which will connect to national access points and more than 70 cities including the five largest telecommunications markets in the United States. PF.Net is a facilities-based provider of fiber optic communications infrastructure to communications carriers, Internet service providers (ISP's), corporations with enterprise network needs and government entities. The company was formed by PF Telcom, LLC and Koch Telecom Ventures, Inc., a wholly owned subsidiary of Koch Industries, Inc., and has recently received the financial backing of Odyssey Investment Partners, LLC. Visit PF.Net's web site for more information about the company and its partners at http://www.pf.net.

Lucent Technologies, headquartered in Murray Hill, N.J., designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronic components. Bell Labs is the research and development arm for the company. More information about Lucent Technologies can be found on the company's web site at http://www.lucent.com.