FOR IMMEDIATE RELEASE
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Colonial Pipeline Announces New Telecom Venture with Pathnet

November 10, 1999

Telecommunications Entry Part of Strategic Business Expansion Plan

Atlanta – Colonial Pipeline Company, the nation’s largest transporter of petroleum products, today announced that it has entered into agreements in which it will acquire a significant ownership stake in Pathnet, a privately-held provider of digital telecommunications bandwidth and access services to under-served small and medium-sized markets. At the heart of this venture, Colonial will grant Pathnet exclusive access to its rights-of-way, extending from Texas to New York and all metropolitan areas along its pipeline route. Once prepared for telecommunications services, Colonial’s right-of-way network will enable Pathnet to construct a state-of-the-art fiber optic network as part of its growing nationwide service. The final investment is subject to regulatory and other approvals.

This venture is part of a larger transformation in Colonial’s business structure, which centers around the diversification of company offerings in ways that complement its core pipeline business. Preparation of the right-of-way for Pathnet’s fiber optic network begins this fall. Legs scheduled for construction later this year and over the next three years will involve communities along Colonial’s fourteen-state pipeline system.

“This exciting partnership is a great opportunity for Colonial’s stakeholders, customers and employees as we grow and implement our future strategy,” says Dave Lemmon, president and CEO of Colonial Pipeline Company. “Pathnet’s impressive track record and strong leadership convinced us that this is the telecommunications company to join forces with, as we reach beyond our core business with exciting and complementary services.”

The decision announced today was, in part, based on research conducted by industry analysts at the Yankee Group. Yankee’s findings supported the selection of Pathnet as the telecom company with the talents and business philosophies that best complement Colonial’s key competencies. The alliance positions both companies for strong potential growth in the burgeoning telecommunications market.

As a result of the company’s expanding focus and its new relationship with Pathnet, Colonial has created a telecommunications subsidiary called TelePath Services, LLC, which will support Pathnet’s efforts to utilize partner agreements in building out a nationwide, high capacity telecommunications network.

“Both companies stand to gain a lot from this relationship. It’s a classic business opportunity,” says Brad Bradshaw, director of energy communications for the Yankee Group. “Colonial has the ambition, capital and proven ability to execute large projects -- a combination that can’t be undervalued. In exchange, Pathnet is an emerging telecom company with a differentiated business strategy and has a superior management team in place to see the process through, including a CEO who previously oversaw the entire NYNEX Telecommunications Group. The timing is perfect for both companies.”

Richard A. Jalkut, president and CEO of Pathnet, agrees. “This is a highly complimentary relationship,” says Jalkut. “Working together to develop Colonial’s extensive pipeline system will accelerate the execution of Pathnet’s business strategy of providing high capacity bandwidth and access services to underserved and second- and third-tier markets. It enables both companies to leverage their respective strengths and create a win-win situation for everyone involved, especially our customers.”

About Colonial Pipeline Company

Colonial Pipeline Company, an Atlanta-based operator of the world’s largest refined petroleum products pipeline, delivers a daily average of 80 million gallons of gasolines, kerosenes, home heating oils, diesel fuels and national defense fuels.

Colonial’s 5,349 mile pipeline system transports fuels from Texas, Louisiana, Mississippi and Alabama to 236 marketing terminals located near the major population centers throughout the Southeast and along the Eastern Seaboard to New York Harbor. In addition, Colonial provides a portfolio of information and logistics management services to its customers.

About Pathnet

Pathnet is a carrier’s carrier providing high capacity, digital bandwidth and access services to under-served and second- and third-tier U.S. markets. It provides service to inter-exchange carriers, local exchange carriers, Internet service providers, Regional Bell Operating Companies, cellular operators and resellers. Pathnet currently has 6,100 route miles of completed network and 1,400 route miles of network under construction. The company’s headquarters are located in Washington, D.C., at 1015 31st Street, NW, Washington, D.C. 20007. For additional information about Pathnet, visit the company Web site at www.pathnet.net.