(I don’t normally just pass along press releases, but this one looked too important and I didn’t want to take the chance that you would miss seeing it.)

Wednesday October 8 4:55 AM EDT
Company Press Release

Nortel (Northern Telecom) and Norweb Communications Achieve Technology Breakthrough That Will Open a New Wave of Internet Growth

LONDON, Oct. 8 /PRNewswire/ – Nortel (Northern Telecom) and Norweb Communications, a business unit of United Utilities plc. of Great Britain, today announced that they have developed jointly a new technology that allows data to be transferred over electrical power lines into the home at speeds of more than one megabit per second-up to 10 times faster than ISDN, currently the fastest generally available speed. The breakthrough has the potential to open a new wave of demand for Internet services in the UK and Europe.

Nortel has developed the technology at its European Research and Development laboratories in Harlow, UK, in co-operation with Norweb Communications. Recent trials on the Norweb Communications network have been completed successfully and the technology is available for deployment.

The technology, which enables electrical companies to convert their power infrastructures into information access networks, will be initially marketed in the UK, Europe and Asia Pacific.

It allows electrical companies to provide a service that solves the three major problems facing international Internet market acceptance-access to consumers’ homes, data transmission rates and capital cost:

– By giving customers access to the Internet through their existing electrical supply system, the technology is available to virtually anyone. It offers permanent on-line connection with the potential for lower charges;

– The new technology enables data to be transmitted at rates of more than one megabit per second by using a patented technology that screens the data from electrical interference on the host power line, a long sought-after goal in telecommunications;

– Investment costs for the electrical companies are low compared to those envisioned for other broadband data access systems. Due to the nature of this technology, it can be rolled out in discrete, targeted phases. Utilities not wishing to operate data services also have the option of charging a right-to-use fee to an operating company for accessing their plant. End users require a computer card comparable in cost to a conventional ISDN terminal adapter, but offering 10 times the peak bandwidth.

The new technology will enable the introduction of Internet-based applications such as electronic commerce, teleworking, web broadcast media, entertainment and Internet telephony on a mass market scale.

The two companies have been working together on this development for the last three years and it is subject to a number of patents filed by Nortel and Norweb Communications. Norweb Communications is widely recognized within the power sector as a leader in research into broadband communications over power lines, having started work in this area in 1990.

Electricity utilities in Europe and the Asia Pacific region have already expressed significant interest.

Peter Dudley, a vice-president of Nortel, comments: “The rate of Internet take up and the volume of data traffic carried over the Internet has been one of the most striking business developments of the current decade, but speed of access remains a bottleneck for most users. As one of the first practical low-cost answers to the problem of high-speed access to the Internet this new technology will unleash the next wave of net growth.”

Mark Ballett, Managing Director of Norweb Communications, comments: “Norweb Communications has championed the use of electrical networks for voice and data services for several years and we are delighted to now be in a position to announce the launch of the first commercial products. This technology will allow us to use existing infrastructure to establish a strongly differentiated service offering in the northwest residential and small business market.”

Nortel will be opening a conformance center in Harlow, UK, for hardware and software suppliers who are interested in certifying their products for use on this new service.

Norweb Communications, part of United Utilities plc, provides an extensive range of advanced voice and data services and has achieved significant success in providing resilient networks for businesses throughout the northwest region of the UK. The company plans to use power line technology to provide public access networks for residential customers in the region.

United Utilities has combined capability in electricity, gas and telecom. This new technology will strengthen its competitiveness as a multi-utility service provider.

Nortel had a 1996 turnover of $US 3 billion in Europe, operating both independently and through its joint ventures with the Lagardere Group in France (Matra Communications and Nortel Matra Cellular), Olivetti SpA in Italy (Sixtel) and Daimler-Benz Aerospace AG in Germany (Nortel Dasa Network Systems). The company employs approximately 16,000 people across Europe in Research and Development, manufacturing and sales.

Nortel works with customers worldwide to design build and integrate digital networks – for information, entertainment, education and business – offering one of the broadest choices of network solutions in the industry.

Nortel had 1996 revenues of $US 12.8 billion and has approximately 68,000 employees worldwide.