NextWeb, SkyPipeline to Merge, Creating Nation's Largest Wireless Internet Service Provider

Combined Company to Provide Service to Country's Largest, Most Lucrative

Broadband Services Market

Feb 24, 2004, 00:00 ET from NextWeb, Inc.

    FREMONT, Calif. and CAMARILLO, Calif., Feb. 24 /PRNewswire-FirstCall/ --
 California's broadband fixed wireless leaders NextWeb and SkyPipeline
 announced today that they have entered into a definitive agreement to merge,
 creating the largest Wireless Internet Service Provider (WISP) in the country.
 The deal, valued at more than $25 million, paves the way for businesses in
 California to benefit from nearly ubiquitous, cost-effective Internet service
 based on fixed wireless broadband technology. The combined company will
 operate under the NextWeb name.
     In 2003, the two companies pioneered the SkyWeb Alliance, a
 ground-breaking partnership that brought a cost-effective broadband
 alternative to a broad set of small- and medium-sized businesses currently
 accessing the Internet through cable and telephone service providers. With the
 merger of NextWeb and SkyPipeline, it is now possible for enterprise customers
 across California to get business-class broadband Internet service
 cost-effectively in a number of days rather than the typical weeks or months,
 with traditional carriers.
     "We are at the dawn of a whole new era in high-speed business Internet
 service," said Graham Barnes, CEO of Fremont-based NextWeb and the President
 and CEO of the combined company. "Our business model will leverage our larger
 network, based on licensed and unlicensed wireless equipment, to bypass the
 local telephone and cable company infrastructure, and bring high-speed,
 scalable Internet service to enterprise customers of all sizes throughout the
 State. NextWeb and SkyPipeline, more than any other WISPs in the country, have
 not only proven that this business is extremely viable, but that it also
 delivers a tremendous product and value advantage to the market. As a single
 company, we intend to strongly leverage that advantage to become the dominant
 player in the California business broadband service market, and beyond."
     NextWeb operates throughout key markets in Northern and Southern
 California, and SkyPipeline has a network covering the majority of Santa
 Barbara, Ventura and Los Angeles Counties. The combined service area will
 cover more than 2,700 square miles and reach hundreds of thousands of
 businesses in population centers that include nearly 25 million households.
     "When we started SkyPipeline three years ago, we knew that it was possible
 to use fixed broadband wireless technology to break the stranglehold that
 large service providers had on the business broadband market," said
 Ryan Blair, CEO of Camarillo-based SkyPipeline. "With this merger, NextWeb and
 SkyPipeline are demonstrating that this is not only possible, but that it is
 achievable on a significant scale. We are delighted to be joining NextWeb to
 create the largest, most powerful WISP in the country."
     Leading research firms forecast dramatic overall growth in the WISP market
 over the next few years, estimating that total US WISP revenues will reach
 nearly $2 billion by the year 2008.
     "The Yankee Group has been following this market for quite some time, and
 we believe that consolidating the WISP market is a great step for the
 industry," said Lindsay Schroth, Analyst, Broadband Access Technologies, The
 Yankee Group. "The focus on offering a flexible, lower-cost solution to
 business customers is a great strategy, and this merger should be closely
 watched by other WISPs. By creating a scaleable company with brand recognition
 and greater buying power, we believe that NextWeb is poised for success in the
     NextWeb and SkyPipeline's service offerings give business broadband
 customers unprecedented flexibility in their Internet service. Customers will
 get precisely the bandwidth they need and can scale it higher as their
 business needs change. As with current service from each company, the new
 NextWeb business-class broadband can be installed as quickly as the next day,
 as opposed to the weeks or months after signing up with traditional service
 providers. NextWeb installation and service requires no equipment purchases,
 and there are no local loop charges, hidden taxes or fees -- potentially
 saving enterprise customers hundreds or thousands of dollars each month on
 their Internet service.
     "The value proposition for wireless service is very clear," said
 Umrao Mayer, President of Kush Games, developer of the popular ESPN College
 Hoops and ESPN NHL Hockey video games. "We installed SkyPipeline service at
 our headquarters in Camarillo," Mayer added. "Once the service was up and
 running, we were blown away by the quality. We are a big bandwidth user, and
 we need our Internet service to work perfectly. SkyPipeline has delivered in
 both quality and service. Signing up with them has been a 'Slam Dunk' and I
 would recommend them to anyone that values the quality and speed of their
 Internet connection. We are very happy with our service, and are excited for
 SkyPipeline and NextWeb to be doing this deal."
     This is NextWeb's fourth merger or acquisition in the last 14 months, and
 both parties expect the deal to be completed rapidly. The two companies will
 integrate their operations on a "best practices" model, using the best
 business and operational techniques, and drawing on marketing and sales
 expertise from each company.
     About NextWeb
     NextWeb, Inc. is California's largest and fastest growing wireless
 Internet service provider, providing high-speed service to more than
 1000 enterprise customers in Northern and Southern California. NextWeb's
 service is available in over 50,000 business locations in more than 60 cities.
 Typically installed in just three to seven days, NextWeb's service is
 30 percent faster than a T1 at approximately half the cost, easily scaling to
 six times the speed of a T1. The company is generating positive earnings and
 is backed by leading venture and strategic investors including Monet Capital,
 Kaiser Permanente, Asset Management Company and Sunsino Venture Group.
 Additional company information is available at
     About SkyPipeline
     SkyPipeline, Inc. is a leading Southern California provider of broadband
 services to business and high-end residential customers. SkyPipeline provides
 reliable and scalable wireless broadband service to more than 800 business
 customers using off-the-shelf equipment from leading suppliers such as Cisco
 Systems, Motorola, and others. The company's state-of-the-art, carrier-class
 network extends over a 220 mile backbone, and covers Santa Barbara, Ventura
 and Los Angeles counties, SkyPipeline has received funding from Chaos
 Ventures, Sage Venture Partners, The Cambria Group and Falcon Capital. To
 contact the company, call 866-SKY-PIPE (866-759-7473 toll-free), or visit the
 SkyPipeline website at:

SOURCE NextWeb, Inc.