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October 19, 2005 09:00 ET

Mid-Atlantic Broadband Cooperative Chooses Nortel Solutions to Extend Broadband Services to Rural Southside Virginia

DANVILLE, Va.--(CCNMatthews - Oct 19, 2005) -

Virginia Becomes First State to use Tobacco Settlement Funds to Build Open-Access Broadband Network

The Mid-Atlantic Broadband Cooperative (MBC) is deploying a Nortel (NYSE:NT)(TSX:NT) packet-optical solution to extend broadband communication services to underserved rural communities in Southside Virginia.

Called the Regional Backbone Initiative (RBI) for Southside Virginia, the 700-mile network will enable broadband connectivity to 700,000 residents and 19,000 businesses in five cities, 20 counties, and 56 industrial parks through a high-speed open-access infrastructure. The availability of broadband services is expected to ignite commerce and economic growth in the region by allowing communities to more effectively compete for new jobs, attract technology-based industry and retain skilled labor.

"We are creating a network that will connect most of rural Virginia to the global marketplace," said David Hudgins, vice-chairman of MBC. "It will open new markets for entrepreneurs, enhance the competitiveness of our existing businesses and attract the types of new employers we need to prepare our communities for the Information Economy of the 21st century."

Funding for MBC to build the new broadband infrastructure will come from the Roots of Progress Initiative - a strategic partnership between the Virginia Tobacco Indemnification and Community Revitalization Commission (VTICRC), the U.S. Department of Commerce's Economic Development Agency, and the office of Virginia Governor Mark R. Warner. With the initiative, Virginia is the first state to use funds made available through federal tobacco lawsuit settlements for creative economic development projects such as building this advanced, open-access telecommunications network.

"Access to information and technology are critical elements for competing in today's national and global economy," said Philippe Morin, general manager, Optical Networks, Nortel. "MBC's deployment of a Nortel packet-optical solution will help bridge the technological and opportunity gap between rural and urban communities in Virginia."

MBC's deployment of the optical infrastructure across Southside Virginia is approximately 35 percent complete. The network will encourage competition by allowing service providers of all kinds to offer new broadband services. The Virginia Department of Transportation will also use the network to support advanced traffic technologies such as roadway cameras, traffic sensors, traffic signal synchronizations and other systems that are used to help motorists reach their destinations more safely and quickly.

The broadband network will be based on the Nortel Optical Multiservice Edge 6500 and Optical Metro 3500 platforms. Deployed in more than 1,000 customer networks in 65 countries, Nortel's end-to-end optical networking portfolio includes next generation SONET/SDH, optical switching, wavelength division multiplexing and Optical Ethernet products. Nortel has deployed more than 320,000 optical network elements globally.

About Mid-Atlantic Broadband Cooperative

Charged with heading the Regional Backbone Initiative for Southside Virginia, the Mid-Atlantic Broadband Cooperative was established in November 2003 to provide the leadership and technology infrastructure necessary to support the economic revitalization efforts of Southside Virginia. MBC works closely with Local, Regional and State economic development groups to bring new jobs and investment to the region and to highlight the competitive advantage of doing business in Southside Virginia. For more information, visit MBC on the Web at www.mbc-va.com, or contact them at (434) 766-6788.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events.

Factors which could cause results or events to differ from current expectations include, among other things: the outcome of regulatory and criminal investigations and civil litigation actions related to Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity, and any related potential dilution of Nortel's common shares; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal control over financial reporting and the conclusion of Nortel's management and independent auditor that Nortel's internal control over financial reporting is ineffective, which could continue to impact Nortel's ability to report its results of operations and financial condition accurately and in a timely manner; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission (SEC); ongoing SEC reviews, which may result in changes to Nortel's and NNL's public filings; the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in April 2004; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004 and December 14, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions;

cautious or reduced spending by Nortel's customers; increased consolidation among Nortel's customers and the loss of customers in certain markets; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's monitoring of the capital markets for opportunities to improve its capital structure and financial flexibility; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's ability to integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization and consolidation in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel's customers and the impact of customer financing and commitments; general stock market volatility; negative developments associated with Nortel's supply contracts and contract manufacturing agreements, including as a result of using a sole supplier for a key component of certain optical networks solutions; the impact of Nortel's supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; any undetected product defects, errors or failures; and the future success of Nortel's strategic alliances.

For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

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