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BILLERICA, Ma. - Nortel Networks* (NYSE:NT/TSE:NTL), Ericsson and General DataComm Industries, Inc., (GDC), today announced a successful interworking demonstration of constraint-based routing using the label distribution protocol (LDP), a key component in the much anticipated Multiprotocol Label Switching (MPLS) standard to deliver high-performance wide area internetworking. Constraint-based routing using LDP allows for Traffic Engineering through the setup of Explicit Routes in an MPLS domain. In addition, it allows for the setup of paths based on other "attributes" or "constraints" such as QoS, Preemption (setup/holding priorities), etc. This is a contribution to the effort of building a better standard for carrier class IP Networks.

The interoperability demo, which took place at the Nortel Networks facilities in Billerica, MA, successfully demonstrated an integrated MPLS solution. The solution greatly simplifies the traffic management and traffic engineering of future high performance internetworking systems that can enable support of Quality of Service (QoS) based applications.

Interoperability of the emerging MPLS standard was demonstrated operating across a combination of Backbone Node* (BN) multiprotocol router and Passport* 6000/7000 switching platforms from Nortel Networks, the AXD and AXI IP and ATM switching systems from Ericsson, and the GDC APEX® ATM switch platform from GDC. The demonstration of interoperability among the three companies' equipment is the result of an agreement previously announced between Ericsson and Bay Networks*, and Ericsson and GDC earlier this year (March 16, 1998).

The cooperative, standards-based approach will provide Telecom Operators, Service Providers, Internet Service Providers and Enterprises with open, best-of-breed, end-to-end IP/ATM based Wide Area Network Solutions. This approach is seen as one of the key enablers in a merged telecom and Datacom scenario. Nortel Networks, Ericsson and GDC have drafted a proposal for the constraint-based routing for MPLS together with a group of industry leaders in the MPLS area. This proposal was well received by the MPLS working group at the recent IETF meeting in Orlando, Florida, and was adopted as a working group document.

About MPLS

MPLS is an emerging Internet Engineering Task Force (IETF) protocol standard. The primary benefits of MPLS are that it combines layer 2 performance with layer 3 connectivity and network services while simultaneously reducing complexity and operational costs compared to other IP/ATM connectivity options. Additionally, when used with ATM, MPLS enables ATM based Quality-of-Service contracts providing all types of service providers with telecom-class traffic engineering and capacity planning features. At the same time Network Service Providers and Enterprises can enable voice and video services on the same network infrastructure thereby increasing capacity utilisation, reducing total investments, lower total cost of ownership to increase revenue and profit potential.

Ericsson is the leading provider in the new telecoms world, with communications solutions that combine telecom and datacom technologies with the freedom of mobility for the user. With more than 100,00 employees in 140 countries, Ericsson simplifies communications for its customers - network operators, service providers, enterprises and consumers - the world over.

Please visit Ericsson's Press Room at: http://www.ericsson.se/pressroom

GDC (http://www.gdc.com) is an acknowledged leader in the design, development, and manufacture of multiservice communications systems for service providers and enterprise businesses. GDC is headquartered in Connecticut, USA, and has an extensive network of subsidiaries and partners located throughout North America, South America, Europe, the Middle East, Asia and the Pacific Rim.

Nortel Networks works with customers worldwide to design, build, and deliver telephony and IP-optimized networks. Customers include public and private enterprises and institutions; Internet service providers; local, long-distance, cellular and PCS communications companies, cable television carriers, and utilities.

Nortel Networks' common shares are listed on the New York, Toronto, Montreal, Vancouver, and London stock exchanges. Nortel Networks had 1997 revenues of US$15.5 billion and Bay Networks, a wholly owned subsidiary of Nortel Networks, had revenues of US$2.4 billion during its most recent fiscal year. The combined company's workforce totals approximately 80,000 employees worldwide.

*Nortel Networks, the Nortel Globemark, Passport and How the World Shares Ideas are trademarks of Northern Telecom *Bay Networks and BN are trademarks of Bay Networks, Inc.