Content-Delivery Test Enters Second Phase

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Wave Systems Corp. has completed the first phase of a PC-based entertainment
service delivering full-screen digital-video channels to the desktop via cable
plant, and it is readying for a wider system test.

The New York-based Internet-protocol-technology provider announced that it
successfully completed the trial in Missouri and Idaho cable systems with
cablers USA Media Group and News-Press & Gazette Co.

A group of friendly users in N-P&G's St. Joseph Cablevision and USA's
Osburn, Idaho, systems subscribed to the company's 'Wavexpress' PC-based
entertainment service for access to a range of full-screen video. The content
was then delivered during overnight off-peak bandwidth hours to subscribers'
PCs, where it was stored.

Attached to the PCs is Wave System's 'Embassy' device, which provides and
tracks the individual transactions for viewing the secured, cached content.

The next phase of the test to begin shortly will originate content from the
AT&T Digital Media Center, which will serve as the network-operation center,
to cable headends. That is intended in part to demonstrate that the Wavexpress
service can offer scalable IP delivery nationwide.

A usability study involving 50 or more users will follow, and plans are to
commercially roll out the service in 2003.

'We have demonstrated a high-speed Internet experience that is both more
compelling for customers and more cost-efficient for cable operators,' said
Steven K. Sprague, chairman and CEO of Wavexpress. 'The next phase of our trials
will increase our focus on vital operational factors such as
scalability.'

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