Com21 Hit on DOCSIS Snub

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Com21 Inc. shares got pounded last week after the cable
vendor again failed to win industry interoperability certification for its standards-based
cable modem.

Sharing the pain was Com21 vice president of engineering
Ken Gorman, a 28-year engineering veteran who was replaced by Com21 executive Paul Gordon
and who will be leaving the company.

Com21 shares dropped more than 40 percent at one point in
NASDAQ trading last Thursday after Cable Television Laboratories Inc. announced the
results of the latest testing wave for compliance with the Data Over Cable Service
Interface Specification. "We're obviously disappointed," Com21 spokeswoman Mia
Bradway said.

The company indicated that it would resubmit its
"DOXport 1010" modem for testing in the next wave, but it had no further
comment.

Com21's absence from the June 24 CableLabs certification
announcement also caused a big sell-off in its shares at that time.

DOCSIS certification is considered a key element in
creating a mass retail market for cable modems. With 11 manufacturers now certified,
others face the prospect of falling further behind in a market that analysts expect to
accelerate in the coming year.

Giant Motorola Inc. also failed again to win initial
certification for its DOCSIS modem, but the impact was much greater on Com21, a
significantly smaller, less diversified vendor.

Com21 noted that it had won interoperability certification
from cable Internet service Excite@Home Corp. and from Cisco Systems Inc. for that
company's widely deployed "Universal Broadband Router."

Com21 has also been named to the short list of recommended
suppliers to the so-called EuroModem Consortium of 13 European MSOs, which are expected to
buy up to 300,000 standards-based cable modems in 2001.

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