In arguments before a federal appeals court, EarthLink, Time Warner and other Internet service providers, or ISPs, challenged a Federal Communications Commission decision to lift regulations that required companies that run wireline phone networks to sell access to competing sellers of broadband service.

``It's going to create havoc,'' Time Warner attorney David P. Murray said of the FCC's decision, which took effect recently. It freed AT&T Inc., Qwest Communications and Verizon Communications Inc. to refuse to sell access to wireline phone networks to companies selling high-speed Internet services that rival the phone companies' DSL products.

The U.S. Third Circuit Court of Appeals took the case under advisement and will issue a written decision on the case, one that Murray said jeopardizes the future of independent Internet services.

``Ultimately, competitive Internet-access services are going to fall by the wayside,'' the lawyers said.

Until the FCC changed the rules, the phone companies had to sell network access on a wholesale basis to competing ISP providers, at prices considered reasonable. Now it's an open market, which the phone companies say will promote competition and new technology.

Michael K. Kellogg, attorney for the phone companies, says the end of the ``regulatory straitjacket'' will push the development of satellite, power line and other forms of transmission to carry high-speed signal.

The FCC order ``has been in place for some time, and the sky has not fallen,'' Kellogg said.

The phone companies have ``every incentive'' to keep selling access on the wireline system to wholesale customers like EarthLink and AOL, he said.

``We are signing wholesale contracts,'' Kellogg told a three-judge panel that must decide whether to leave the FCC rule change in place or tell the agency to take a second look.

A lawyer for EarthLink, however, said AT&T refused to offer a term sheet for a wholesale deal during months when the rule change was being hammered out at the FCC. As a result, EarthLink and its customers can be held hostage by the operating telephone companies, EarthLink attorney Donna Lampert said.

``Anticompetitive conduct is not only possible, it's likely,'' Lampert said.

The FCC said new technologies mean there's no longer a need to require the wireline companies to open their networks to ISPs.

``There are plenty of people who are looking at alternative ways,'' said James M. Carr, the lawyer representing the FCC.

Carr said the agency did a ``market analysis'' before shaking up the regulatory scheme, although not an analysis that relied on ``static data.''

``It's a joke,'' said Time Warner attorney Murray, referring to the FCC's claim that it conducted an adequate market analysis.

For many areas of the country and much of the business world, it's the phone lines or nothing when it comes to high-speed data transmission, lawyers said.

Time Warner attorney Murray said the wireline phone companies effectively have monopoly control of the ``pipes'' that carry signals to medium size and large businesses.

Sutus Inc. Secures $5 million in Series A Funding

March 5, 2007, Vancouver, BC – Sutus Inc., developer of Business Central, a complete
office communications solution designed specifically for small businesses, today announced it
closed $5 million in Series A funding from two of Canada’s leading investors, the Working
Opportunity Fund, managed by GrowthWorks Capital, and BDC Venture Capital. The proceeds
from the funding will be used to fund general company operations, build the sales channel,
and initiate manufacturing through general availability of its solution.

Founded in 2001, with over $5.5 million invested into its technologypre-Series A, Sutus is
preparing to commercialize its office communications solution targeted at the small business
market. Sutus’ Business Central consolidates three key business applications; voice, data, and
networking into one easy-to-use enterprise-quality solution. Designed to be affordable, secure,
and easy to install, use, and manage, Business Central is targeted at businesses with fewer
than 25 users.

“This marks an important milestone for us as we transition from a development to a sales and
marketing company,” said Jerry Meerkatz, CEO of Sutus. “The small business market is
underserved and hungry for a simple, easy to understand communications solution that is
affordable. Business Central not only meets this demand, but has been designed to be
distributed through Cable Companies, Telephone Companies, and Internet Service Providers,
all of which have current relationships with small businesses and are looking for value-added
solutions that not only increase revenues but also enable future services and create customer
loyalty.”

“We were impressed with the technical and engineering depth of the team when we first
engaged with Sutus,” commented Joe Timlin, Vice President Investments of GrowthWorks.
“We knew they had the potential to build world class communications solutions based on their
past successes. This, combined with the positive feedback from channel partners on the
functionality and ease of use of the product compared to other available offerings, caught our
attention and led us to believe that this company has strong growth potential.”

“Our due diligence confirmed that Business Central is extremely easy to use and that Sutus
has a technical lead over its competition,” commented Geoff Catherwood, Director of BDC
Venture Capital. “BDC is pleased to be supporting such a strong management team and is
equally impressed with the commitment of Sutus’ incoming chairman, Greg Aasen of PMC Sierra.”

Joe Timlin from GrowthWorks Capital and Geoff Catherwood from BDC Venture Capital will be
joining Sutus’ board of directors.

About GrowthWorks

GrowthWorks* (www.growthworks.ca) is a recognized leader in venture capital fund
management with proven experience in the raising and managing of capital. GrowthWorksä
managed funds have $800 million in combined assets and include the Working Opportunity
Fund, GrowthWorks Canadian Fund, GrowthWorks Commercialization Fund and GrowthWorks
Atlantic Venture Fund. GrowthWorks has a team of skilled and knowledgeable investment
professionals with a combined 200 years of experience. The investment team has a proven
track record of identifying, analyzing, and structuring investments in emerging sectors.

*GrowthWorks refers to affiliates of GrowthWorks Ltd.

About BDC Venture Capital

BDC Venture Capital is a major venture capital investor in Canada, active at every stage of the
company’s development cycle, from start-up through expansion, with a focus on technology-
based businesses that have high growth potential and that are positioned to become dominant
players in their markets. BDC Venture Capital has been involved in venture capital since 1975
and has to date invested in more than 400 different companies. It currently manages over
$550 million in venture capital assets invested in the areas of biotechnology, medical and
health related technology, telecommunications, information technology and electronics.

About Sutus

Sutus Inc. (www.sutus.com) is a five-year-old North Vancouver company that provides small
businesses an enterprise-quality telephone and office network infrastructure, with a cost-
effective all-in-one solution that significantly reduces the need for third-party installation and
management. Sutus Business Central product offerings have been developed around
affordability, ease of installation, and simple management. With Sutus Business Central, small
businesses are able to completely install an enterprise-quality telephone system and office
network without needing any technical expertise. As a result, they benefit from improved
communications with minimal impact on their operating cash, more control of their office and
its infrastructure, and a system that is flexible and scalable enough to grow with their
business.

Corporate Contacts:

Jerry Meerkatz, CEO
604-987-8866 ext. 2105 jmeertatz@sutus.com