2455 Horse Pen Road, Suite 220
Herndon, VA 20171
Ph: 703-787-7785
Fax: 713-758-8601

Chris K. Walczak, President & CEO
Tim Byrne,
Dale Weiderman,

Product Line or ServiceConnectUSA is building a managed network of second-generation Internet TV set-top devices, linked to a TV-optimized online service, the 8 million households in rural America that WebTv and AOL didn’t reach. We are partnering with 100’s of telephone companies and Internet Service Providers for local connectivity, content, and customer support, and providing them with an Internet service they can not build or run individually. We aggregate a valuable network of rural telephone companies and ISPs into a national service reaching 10’s of millions of homes.

We earn revenue from three sources. Our local ISP partners pay an initial license fee for the ConnectUSA service. In addition, we recover monthly subscriber service fees, plus advertising and e-commerce opportunities from running our online service. Serving local communities and aggregating millions of homes into a national network presents business opportunity for ConnectUSA and our partners and our investors.

Technology/Proprietary RightsConnectUSA builds and maintains a central server network for managing a network of set-top devices. The ConnectUSA hub site is  optimized for viewing with TV, similar to WebTv, and co-branded with the locla service provider. We use industry-leading software technology licensed from Network Computer Inc. that fully integrates Internet access with TV programming to create a superior “enhanced TV” service compatible with both dial-up and high-speed networks.

Market OpportunitiesWebTv is currently the dominant provider of enhanced Internet TV with over 700,000 homes with 1.54 milion subscribers in their network. However, WebTv is not locally accessible in over 8% of U.S. households and users in these unserved areas pay a $15 a month premium over regular Internet TV service for these 8 million inserved homes. ConnectUSA will be the primary Internet TV service for the 8 million unserved homes.

Marketing/Sales and Distribution  The target market is rural utility companies who are also Internet Service providers (RISP) in areas unserved by WebTv and the other national networks. Telephone companies are the most desirable partners because they control local access lines needed for dial-up connections to the Internet. Rural electric cooperatives (REC) are the second most desirable partner primarily because they have a commitment to serving their communities as a utility, and level the expense of running an ISP with their core activities serving local customers. Lastly, wherever there is the lack of an RISP the focus the focus will be on other ISPs that are non-utility companies.

Manufacturing ConnectUsa does not manufacturer products. We act as a master distributor for set-top boxes to our ISP partners. Set-top boxes are available from several manufacturers licensed to build equipment for Network Computer Systems, Inc.

Competition — The most sophisticated competitor to ConnectUSA is the WebTV network and other players interested in building a network of set-top boxes such as Websurfer, and Meternet. AOL and US West will launh enhanced Internet TC products this year, although none will compete directly in our primary target market area. These competitors have made a conscious decision not to pursue the rural market because reaching these markets is far less efficient than reaching the mass markets in the U.S. and around the world. WebTv has the most successful Internet TV service to date, having shipped over 700,000 Internet TV units in its first two years and a half of business. WebTV’s success has validated the appeal of a high-quality, enhanced Internet TV service.

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