Press Release

ENRON AND BLOCKBUSTER TO LAUNCH ENTERTAINMENT ON-DEMAND SERVICE VIA THE ENRON INTELLIGENT NETWORK

Editor’s Note: Visit www.ebentertainmentondemand.com for more information.

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SBC, Verizon, Qwest, Covad, Telus and ReFlex to Provide “Last Mile” DSL Connections to Consumers’ Homes

Blockbuster to Sell New Entertainment Service and DSL Through its Nationwide Store Network

HOUSTON -- Enron Broadband Services, a wholly-owned subsidiary of Enron Corp. (NYSE: ENE), and Blockbuster Inc. (NYSE: BBI), a publicly traded subsidiary of Viacom Inc. (NYSE: VIA, VIA.B), announced today a 20-year, exclusive agreement to deliver a Blockbuster entertainment service, initially featuring movies on-demand, via the Enron Intelligent Network™. The agreement brings together for the first time a global, end-to-end solution that can effectively deliver a wide variety of secure, on-demand entertainment.

Initial distribution providers SBC Communications Inc. (NYSE: SBC), Verizon (NYSE: VZ), formed by the merger of Bell Atlantic and GTE, Qwest, Covad Communications, (NASDAQ: COVD), Telus and ReFlex will offer a secure infrastructure for the on-demand service that will deliver entertainment to consumers’ televisions through high-speed digital subscriber lines (DSL). Enron and Blockbuster also will identify additional distribution providers and delivery methods to reach a broad range of customers.

Enron and Blockbuster plan to introduce the entertainment on-demand service in multiple U.S. cities by year-end. Beginning in 2001, Blockbuster expects to extend the service to other domestic and international markets.

For the first time, customers will be able to choose from a large library of movies through their TV screens and enjoy VHS-quality or better with VCR-like control (pause, rewind, stop). The service will be expanded to other entertainment choices, including games and Internet services, which can be accessed either through the television or PC.

“The ultimate winners in entertainment on-demand will be determined by marketing expertise and brand strength, resources, innovation and commercial alliances. Blockbuster, Enron and our distribution providers are uniquely positioned to succeed,” said John Antioco, Blockbuster chairman and CEO. “These agreements give first-mover advantage to the involved companies that should enable each of us to capture a significant share of what industry experts project will be a multi-billion dollar annual business. It’s the ultimate ‘bricks, clicks and flicks’ strategy.”

“Entertainment on-demand is perhaps the most visible example of the power of Enron’s broadband applications. With Blockbuster’s extensive customer base and content, and Enron’s network delivery application and the capabilities of the distribution providers, we have put together the ‘killer app’ for the entertainment industry,” said Kenneth L. Lay, chairman and CEO of Enron Corp.

Under the agreement, Blockbuster will provide content for the entertainment service and market the service to its customer base of 65 million households worldwide. Additionally, Blockbuster will sell DSL through its nationwide network of stores.

Enron will encode and stream the entertainment over its global broadband network infrastructure, provision bandwidth on-demand, store the entertainment content and provide an unparalleled quality of service. The Enron Intelligent Network is designed to allow the scalability necessary to deliver secure, high-bandwidth content to a large population of simultaneous users. Enron’s broadband delivery platform includes a distributed server architecture, software intelligence, and network monitoring and control.

Distribution providers SBC, Verizon, Qwest, Covad, Telus and ReFlex will design the architecture of the high-performance network to deliver a complete service package, including both entertainment on-demand and high-speed access to the Internet.

“This video on-demand market trial reinforces SBC’s commitment to bringing next-generation broadband applications to the mass market,” said James D. Gallemore, executive vice president, SBC Strategic Marketing. “As a leading DSL provider, SBC’s alliance with Blockbuster and Enron will enable our customers to benefit from value-added applications that enhance the broadband experience.”

“Blockbuster’s service highlights the true strengths of DSL when compared to other broadband alternatives,” said Fred D’Alessio, president – advanced services for Verizon. “The appeal of this service is destined to make it indispensable for home entertainment.”

Blockbuster Inc. (NYSE: BBI) is a publicly traded subsidiary of Viacom Inc. and is the world’s leading renter of videos and video games with approximately 7,200 stores in the United States, its territories and 26 other countries. The company can be found on the Web at http://www.blockbuster.com. Viacom Inc. is one of the world’s largest entertainment companies and a leading force in nearly every segment of the international media marketplace.

Enron Broadband Services is a leading provider of high quality, high bandwidth delivery and application services. The company’s business model combines the power of the Enron Intelligent Network, Enron’s Broadband Operating System, bandwidth trading and intermediation services, and high-bandwidth applications to fundamentally improve the experience and functionality of the Internet. Enron’s Broadband Operating System allows application developers to dynamically provision bandwidth on demand for the quality of service necessary to deliver broadband content. Enron is also creating a market for bandwidth that will allow network providers to scale to meet the demands required by increasingly complex applications. Enron Broadband Services can be found on the Web at www.enron.net.

Enron is one of the world’s leading electricity, natural gas and communications companies. The company, which owns approximately $37 billion in energy and communications assets, produces electricity and natural gas, develops, constructs and operates energy facilities worldwide, delivers physical commodities and financial and risk management services to customers around the world, and is developing an intelligent network platform to facilitate online business. Fortune magazine has named Enron “Most Innovative Company” for five consecutive years, the top company for “Quality of Management” and the second best company for “Employee Talent.” In addition, Enron ranks in the top quarter of Fortune's “Best 100 Companies to Work For in America.” Enron’s Internet address is www.enron.com. The stock is traded under the ticker symbol “ENE.”

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For additional information please contact:

Shelly Mansfield

Enron Broadband Services

713-853-4589

Randy Hargrove

Blockbuster Inc.

214-854-3721

Steve Kauffman

SBC Communications Inc.

210-352-6954

Joan Rasmussen

Verizon

212-395-2051

Martha Sessums

Covad Communications

408-844-7508