September 28, 2005 11:16 ET

Nortel CEO Urges Change in U.S. Approach to Cybersecurity; Industry Experts Speak at Washington Policy Event

WASHINGTON--(CCNMatthews - Sep 28, 2005) -

Nortel (NYSE:NT)(TSX:NT) yesterday hosted a discussion on Capitol Hill for policymakers and industry representatives focusing on the need to prepare and respond more effectively to cybersecurity threats.

At the event, Bill Owens, vice chairman and chief executive officer of Nortel, discussed how industry trends such as increased use of wireless access and new multimedia devices create new security challenges. He urged the United States to change its approach to cybersecurity, adopting a more alert and engaged posture.

"It's time to pay attention," Owens said. "Every bit of our critical infrastructure must be resilient from the ground up. We need to be prepared with appropriate precautions for cybersecurity to protect and insulate ourselves from incidents that could impact national safety and productivity."

In addition to Owens' remarks, today's discussion on "Recent Developments in Cybersecurity Technology and Policy" also featured Rep. Dan Lungren (R-CA), chairman, Economic Security, Infrastructure Protection, and Cybersecurity Subcommittee of the House Homeland Security Committee; Andy Purdy, acting director, National Cybersecurity Division, Department of Homeland Security; and Dave McCurdy, president, Electronic Industries Alliance.

Panelists debated ways to make critical infrastructure more secure and the roles that both government and industry must play.

"Individual Americans must do their part, but it is a shared responsibility," Purdy said. "We, as consumers, have to demand that those who develop hardware and software do their part to lessen the vulnerability of the end user."

Lungren called on the Department of Homeland Security to analyze and develop a planned response. "We have to enhance our national cyber warning system and establish standard definitions and thresholds to identify cyber-based threats," he said. "This requires a long-term commitment from the Department of Homeland Security. They must aggressively move to improve the public and private sectors' coordinated response to cybersecurity threats."

McCurdy echoed this point. "It is incumbent upon us to do what we can to ensure that disasters such as 9-11 and Katrina do not cripple our infrastructure," he said. "The government must share with the private sector what they are doing to make sure that the infrastructure is viable."

A replay of the event will be available later this week at

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 For the latest Nortel news, visit

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; stock market volatility generally and as a result of acceleration of the settlement date of Nortel's forward purchase contracts; 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.

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