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FCC Adopts Rules for Broadband over 
Power Lines to Increase Competition; 
Telkonet Comments

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Telkonet Comments on FCC's Milestone Decision to Affirm Widespread Deployment of Broadband over Powerlines Decision Expected to Accelerate Adoption of Broadband over Powerline Technology 

Germantown, MD – November 1, 2004 - Telkonet, Inc. (Amex: TKO), the leader in providing in-building broadband access over existing electrical wiring, commented today on the recent groundbreaking decision by the Federal Communications Commission to affirm the widespread deployment of Broadband over Powerline (BPL) services and technology.

“The FCC’s milestone decision validates Telkonet’s business model and underscores the potentially enormous value of our patented technology for providing in-building broadband access over existing electrical wiring. We expect the decision to accelerate the adoption of BPL as the broadband solution of choice in a wide variety of applications,” said Ron Pickett, president and CEO of Telkonet. “By confirming existing technical rules and implementing important new rules for BPL deployment, the FCC's decision strengthens Telkonet's competitive position and enhances the value proposition we offer to customers in our target hospitality, multiple dwelling, and government markets.”
 

Bruce Romano
(202) 418-2124

FCC Adopts Rules for Broadband over Power Lines
to Increase Competition and Promote Broadband
Service to All Americans

October 14, 2004 - Washington, DC - As part of its goal to promote access to broadband services for all Americans and to encourage new facilities-based broadband platforms, the Federal Communications Commission today adopted changes to Part 15 of its rules to encourage the development of Access Broadband over Power Line (Access BPL) systems while safeguarding existing licensed services against harmful interference.  Access BPL is a new technology that provides access to high speed broadband services using the largely untapped communications capabilities of the nation’s power grid.  By facilitating access to BPL, the Commission takes an important step toward increasing the availability of broadband to wider areas of the country because power lines reach virtually every home and community.  In areas where consumers already have broadband access, BPL can enhance competition by providing another broadband alternative.  Access BPL will also facilitate the ability of electric utilities to dynamically manage the power grid itself, increasing network reliability by remote diagnosis of electrical system failures.  

In the Report and Order (Order) adopting these changes, the Commission recognized the significant concerns of some licensed radio service users regarding the potential of Access BPL systems to cause interference to their operations.  The Commission stated that its intention in adopting the Part 15 rule changes was to ensure that Access BPL operations do not become a source of harmful interference to licensed radio services.  Based on extensive research and analyses, as well as experience, it concluded that the interference concerns of licensed radio users can be adequately addressed and that Access BPL systems will be able to operate successfully on an unlicensed, non-interference basis under the Part 15 model.  The rule changes in the Order establish specific technical and administrative requirements for Access BPL equipment and operators to ensure that interference does not occur and, should it occur, to provide for a timely resolution of that harmful interference without disruption of service to Access BPL subscribers.  The Order also sets forth procedures to measure the radio frequency (RF) energy emitted by Access BPL equipment.  

Specifically, the Order by the Commission:

  • Sets forth rules imposing new technical requirements on BPL devices, such as the capability to avoid using any specific frequency and to remotely adjust or shut down any unit;
  • Establishes “excluded frequency bands” within which BPL must avoid operating entirely to protect aeronautical and aircraft receivers communications; and establishes “exclusion zones” in locations close to sensitive operations, such as coast guard or radio astronomy stations, within which BPL must avoid operating on certain frequencies; 
  • Establishes consultation requirements with public safety agencies, federal government sensitive stations, and aeronautical stations. 
  • Establishes a publicly available Access BPL notification database to facilitate an organized approach to identification and resolution of harmful interference.
  • Changes the equipment authorization for Access BPL systems from verification to certification; and
  • Improves measurement procedures for all equipment that use RF energy to communicate over power lines.
Action by the Commission, October 14, 2004 by Report and Order  (FCC 04-245).  Chairman Powell, Commissioners Abernathy, Martin, and Adelstein with Commissioner Copps dissenting in part and approving in part.  Joint statement issued by Chairman Powell and Commissioner Abernathy, separate statements issued by Commissioners Copps, Martin, and Adelstein. 

ET Docket No. 04-37
Office of Engineering Technology Contact: Anh T. Wride, 202-418-0577.

Telkonet's PlugPlus™ system is an innovative solution that uses patented powerline communications technology to deliver broadband Internet and data access over a building’s existing electrical wiring.  The system uses a building's existing infrastructure, which means that no new construction is required and installation is inexpensive.

“Telkonet’s technology can be installed within days in virtually any commercial, industrial, government or military building that requires high speed Internet access. In addition, our PlugPlus system is designed to accept the Internet signal from a DSL line, T1 line, cable or satellite connection, and is encrypted to provide the highest-level of security for its users,” Ron Pickett explained.

About Telkonet 
Telkonet's products provide connectivity over existing electrical wiring and do not require the costly installation of additional wiring or major disruption of business activity. In many situations, the Telkonet system can be implemented more quickly and less expensively than adding dedicated wiring or installing a wireless system. The Telkonet PlugPlus™ family of networking and internetworking products offers a viable and cost-effective alternative to the challenges of hardwiring and wireless local area networks (LANs). Telkonet PlugPlus products are designed for use in commercial and residential applications, including multi-dwelling units and the hospitality and government markets. For more information, please visit www.telkonet.com.

Statements included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and the Company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues in the sponsoring client. Further information on potential factors that could affect the Company's financial results, can be found in the Company's Registration Statement and in its Reports on Forms 8-K filed with the Securities and Exchange Commission (SEC). 

Contact:

Telkonet, Inc.
20374 Seneca Meadows Pkwy.
Germantown, Maryland  20876-7004
240.912.1800 Sales Office
www.telkonet.com
sales@telkonet.com

Also See: Telkonet’s High-Speed Internet Access System Selected by MHI Hotels and ANM Hospitality / September 2004
Telkonet Expands Marketing Reach into Hospitality Industry; Telkonet to Offer High-Speed Internet Access to Best Value Inn, Hospitality International, and Historic Hotels of America / August 2004
Telkonet’s New Internet Pricing Packages Help Smaller Hotels Attract More Business Travelers / August 2004
Telkonet Gains Hospitality Market Traction; Hotels In 30 States Under Contract To Install Telkonet's High-Speed Internet System / December 2003
Is PLC the easiest way to high-speed Internet in the guest room?  / One-on-One Audio Interview with
David Powell / October 2003
WyteStone Suites in Fredericksburg, Virginia Was Built in 1995 with Standard CAT 3 Wiring; Read How
the Owner Made this Hotel High-Speed-Ready / November 2003
Telkonet and ILC Provide High-Speed Internet Access to the Canadian Market; Field Trials in Process with two Major Hotels in Vancouver / November 2003
Telkonet’s High-Speed Internet Access System Featured at Historic Hotels Annual Meeting; PlugPlusInternet System Enables Easy Installation for Internet Access / October 2003
Telkonet to Showcase High-Speed Internet Access Solution at HFTP Annual Conference / October 2003
Telkonet Receives First Order From Noment Networks; Delivers High-Speed Internet Access to Luxury High-Rise Apartment / Oct 2003




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