In a world where the Internet can't keep up with the demand to deliver high-bandwidth, rich media content, Enron Broadband Services is moving boldly to establish a global platform for premium broadband delivery services.

		ENRON BROADBAND SERVICES
		The Internet is too slow and unreliable to support high-bandwidth content and the rich media needs of eCommerce.
		ENRON ASKS WHY?
		click here

Enron Broadband Services is leveraging a pure fiber optic domestic network with exceptional applications to make high-bandwidth content delivery--such as video and intensive data transfer--more efficient, cost-effective and convenient than ever before possible.

High-bandwidth content delivery is the next level of Internet performance and an essential platform for eCommerce. Today, graphic-intensive rich media ads account for 1 percent of Internet ads. By 2002, 60 percent of all Internet banner ads will be rich media, according to Jupiter Communications, which will heighten the demand for faster data delivery. The market for premium broadband delivery services is expected to soar by 150 percent annually from 2000 to 2004.

We are a unique, single source for every broadband service: a mixture of hardware, software, market-making, finance and applications. Virtually anyone involved in communications is a potential customer--content providers, application developers, network carriers, Internet service providers and corporate end-users. We are approaching this sizable market with the same scale and scope we successfully bring to every single Enron business.

Three components lie at the heart of Enron Broadband Services:

• The Enron Intelligent Network. A state-of-the-art high-capacity fiber optic network, based on a distributed server architecture, the Enron Intelligent Network's global fiber and satellite distribution and embedded software intelligence sets it apart from other network providers. The Enron Intelligent Network bypasses traditional fragmented and bottlenecked public Internet routes to deliver faster, higher-quality data. Enron's Broadband Operating System (BOS) provides the intelligence to the Enron Intelligent Network and connects to all physical and software network elements.

• Bandwidth intermediation for real-time bandwidth-on-demand. Unless it travels a dedicated network, data must pass through a relay of several separate network operators to its final destination. It can take months to negotiate capacity purchases with so many parties involved. Enron can serve as a bandwidth market-maker, buying pooling-point-to-pooling-point bandwidth inventory that it will resell on an as-needed basis at real-time market rates. Buyers will dramatically cut costs by paying for only the bandwidth they use, at prices that reflect the current market.

• Enron's content services for managing and delivering high-bandwidth applications. The Enron Intelligent Network and Enron's BOS enable a new genre of application services, called ePowered^TM Services, which transport rich media and live, streaming video up to 50 times faster than the public Internet. A carrier using Enron's technology could transmit a broadcast-quality five-gigabyte video file, such as a full-length movie, in 16 seconds--something that takes seven hours on a T-1 line. Customers for ePowered Services include media and entertainment, financial services, general enterprise and technology companies.

The Enron Intelligent Network

Enron Broadband Services has gained instant credibility, striking alliances with the biggest and brightest names in the industry, including Lucent Technologies, Cisco Systems and Inktomi. In a move to accelerate development of the business, Sun Microsystems has agreed to help build out the Enron Intelligent Network. Enron and Sun will jointly market Enron Intelligent Network services to enterprises, software developers and service providers.

Our history and our track record also adds credibility. We have proven that we can make markets that others thought impossible, such as in electricity, natural gas and pulp and paper. We have, or have acquired, the requisite skills to develop new types of broadband services, to market bandwidth capacity and to launch ePowered applications. We have the intellectual capital to build this business.

A network business model gives Enron Broadband Services scalability and flexibility. In the United States, we own or have contractual access to a 14,300-mile network, which is scheduled to expand to 18,000 miles in 2001. The network connects to every major U.S. city and soon will be linked to Tokyo and six major European cities.

Bandwidth Intermediation

From this asset base, we are building a robust merchant operation. Bandwidth intermediation opportunities are enormous. Analysts predict that the market will exceed the combined markets for electricity and natural gas. As the first-mover, Enron is shaping this market as it emerges. We are creating the "pooling points," where data is transferred from the public Internet to broadband fiber networks. Pooling points are to bandwidth what Henry Hub is to gas and COB is to electricity--a city gate uptake and download, a necessary reference point on which to base trading.

We completed the first bandwidth trade in December, a monthly incremental contract for DS-3 bandwidth between New York City and Los Angeles on a Global Crossing network. (DS-3 can move 45 megabits per second, enough for streaming video.) We are establishing and pricing that contract as a benchmark. In the second quarter, we will launch a second benchmark, a monthly contract between New York and London. In 2000 we know that bandwidth trading will gain acceptance in the market, and by 2001 we believe the market will reach critical mass.

The same skills apply to the bandwidth market as to merchant energy services, and we have transferred some of our most dynamic trading professionals from our North American and European energy networks to Enron Broadband Services. Our plans call for providing risk management products, structured finance, investment and bandwidth portfolio management to the broadband market. We envision working with data-dependent customers to outsource their broadband assets and needs. As quickly as this market develops, we will introduce more innovative products and services.

Content Services

Enron Broadband Services is strategically positioned where traditional television broadcast and the web converge. Companies want to stream entertainment and information on the Internet, and we can make it happen. Deploying ePowered applications over the Enron Intelligent Network, we can convey rich media content at high quality with no delay. Using our services, media companies can deliver broadcast-quality programming on the web, and financial services firms can present more compelling content. The Country Music Association used the Enron Intelligent Network to webcast additional footage from its annual Country Music Awards in 1999. We also facilitated a simulcast webcast of Warner Brothers' The Drew Carey Show last fall. Latinsoccer.net, a premier Latin American Internet portal for soccer fans, has selected Enron to carry live soccer matches to viewers' desktops.

The entertainment market is only the beginning. eCommerce looms large as a driver of demand. Not only can Enron enable retailers to enhance their shopping sites with video, we also can help them manage data with storing and archiving assistance. In an information-based society, broadband services is becoming an essential, high-growth business.