PAIX Readies for Domestic and Global Expansion

SAN JOSE, Calif., June 21, 1999 AboveNet Communications Inc. (Nasdaq: ABOV), the architect of a global one-hop network that brings together high-bandwidth content sites, ISPs, and Application Service Providers in centralized co-location facilities, today announced that it has received regulatory approval to complete the acquisition of the Palo Alto Internet Exchange (PAIX) from Compaq Computer Corporation. The completed acquisition gives PAIX the resources to expand its business model domestically and globally. In a related release today, PAIX announced the expansion of its Palo Alto facility, which doubles its capacity.

"The huge prospective customer waiting list at PAIX makes it clear that ISPs want the open business model on which PAIX has built its worldwide reputation," Sherman Tuan, CEO and Chairman of AboveNet. "As a company, AboveNet's growth depends on the growth of the Internet. By supporting PAIX's expansion strategy, we are insuring our future, the future of our customers, as well as the future of all the companies using the Internet."

PAIX will be managed as a separate entity, with Laura Z. Hendriksen as General Manager. In addition, to ensure its neutrality, PAIX will have its own board of directors and an advisory board led by Paul Vixie, one of the founding architects of PAIX. AboveNet and PAIX will work together to help grow the infrastructure of the Internet by supporting open business policies that promote superior performance and reliability.

"Of the three network access points on the Internet with global-brand name recognition MAE EAST, MAE WEST and PAIX, only PAIX supports neutrality," said Warren J. Kaplan, president and Chief Operating Officer at AboveNet. "Business policies built on neutrality will keep the Internet expanding. We are very pleased to support PAIX, the crown jewel of the Internet, and continue its model of excellence."

"PAIX will continue to be the best place on the Internet for ISPs to exchange traffic," said Laura Z. Hendriksen, General Manager of PAIX. "PAIX will continue to cater to the needs of ISPs. By not competing with our customers, PAIX will continue to encourage the participation of large and small ISPs and local and long distance carriers."

PAIX is the only major commercial Internet Exchange that is not owned by a telecommunications company. This independence allows it to maintain a neutral business policy giving those ISPs co-located at its facility the freedom to peer privately or publicly with each other. These peering relationships between ISPs, which are reciprocal agreements between ISPs to carry each other's traffic, make it possible for Internet traffic to move quickly and efficiently. They influence the quality of the Internet experience for end users and are a critical factor in the expanding growth and acceptance of the Internet as a medium for communications and commerce. PAIX also offers ISPs a choice of telecommunications companies from whom they may purchase lines and the flexibility to negotiate and purchase lines from multiple carriers for greater redundancy and reliability, and cost management.

About The Palo Alto Internet Exchange

The Palo Alto Internet Exchange, PAIX, was conceived and built by the Network System Laboratory of Digital Equipment Corporation's research group, formerly part of Compaq Computer Corporation, and began operations in July 1996. As a vital part of the Internet infrastructure, PAIX offers high-speed, scalable, reliable co-location, and it serves as a packet switching center for Internet Service Providers. Its facilities are secure, with faulttolerant power, cooling, fire protection and earthquake resistance. They are accessible 24 hours, seven days a week, 365 days a year, and offer "remote hands" service. PAIX is unique among Internet Exchange (IX) points. It is the only major commercial IX that is neutral and not owned by a telecommunications carrier. This neutrality enables ISPs at PAIX to form public and private peering relationships with each other, and it allows PAIX to offer its customers access to telecommunications services from multiple carriers for zero-mile local loop provisioning. PAIX is owned by AboveNet Communications, Inc. To ensure its neutrality, it is managed as a separate entity with its own management, board of directors and advisory board. PAIX is located in Palo Alto, California. For additional information about PAIX, call 650-688-1306

About AboveNet Communications Inc.

AboveNet Communications Inc. is a premier provider of co-location and Internet connectivity solutions for high-bandwidth and mission-critical operations. AboveNet is the architect of the Internet Service ExchangeTM (ISXTM)-- a world class network that provides co-location services for ISPs and Content providers interested in developing business and strategic partnerships. The unique global One-Hop network design delivers fast, reliable connections to the Internet and improves the Internet experience for all end-users. With its Tier 1 status and ISO 9002 certification, AboveNet is positioned to serve the global community of the Internet. For more information on AboveNet and its service offerings visit the company's Web site at

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AboveNet, Internet Service Exchange and ISX are trademarks of AboveNet Communications, Inc. All other company or brand names may be trademarks of the respective companies with which they are associated.

The statements contained in this press release that are not purely historical are forward looking statements within the meaning of section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the company's expectations, beliefs, hopes, intention or strategies regarding the future. Factors that could cause or contribute to such differences include risks related to intense competition, the emerging market for co-location and connectivity services, risks related to International expansion, the uncertainty of the acceptance of the Company's services, network scalability and other factors and risks discussed in the company's registration statement on form S-1, as amended, initially filed with the Securities and Exchange Commission on September 10, 1998 and other reports filed from time to time with the Securities Exchange Commission

For Further Information Contact:

Tiffany Francis
The Weber Group

Rose Marr
AboveNet Communications