TELOCITY DELAWARE INC, S-8, 2000-06-14

TELOCITY DELAWARE INC
S-8, 2000-06-14
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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REGISTRATION NO.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

TELOCITY DELAWARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 77-0467929
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>

10355 NORTH DE ANZA BOULEVARD
CUPERTINO, CALIFORNIA 95014
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

TELOCITY DELAWARE, INC.
2000 EQUITY INCENTIVE PLAN
2000 EMPLOYEE STOCK PURCHASE PLAN
2000 OUTSIDE DIRECTORS STOCK PLAN
(FULL TITLE OF THE PLAN)

SCOTT MARTIN, EXECUTIVE VICE PRESIDENT,
CHIEF ADMINISTRATIVE OFFICER & CORPORATE SECRETARY
TELOCITY DELAWARE, INC.
10355 NORTH DE ANZA BOULEVARD
CUPERTINO, CALIFORNIA 95014
(NAME AND ADDRESS OF AGENT FOR SERVICE)

TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE: (408) 863-6600.

This registration statement shall hereafter become effective in accordance
with Rule 462 promulgated under the Securities Act of 1933, as amended.

CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED(1) REGISTERED(2) PER SHARE(3) PRICE(3) REGISTRATION FEE
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<S> <C> <C> <C> <C>
2000 Equity Incentive Plan
Common Stock............................... 53,000 $ 1.50 $ 79,500 $ 20.99
Par Value $.001............................ 84,400 $ 3.00 $ 253,200 $ 66.85
14,300 $ 9.00 $ 128,700 $ 33.98
365,490 $ 12.00 $ 4,385,880 $ 1,157.87
33,200 $ 10.31 $ 342,292 $ 90.37
189,500 $ 5.50 $ 1,042,250 $ 275.15
10,425,350 $7.3275 $ 76,391,752 $20,167.42
7,162,116(4) $7.3275 $ 52,480,404 $13,854.83
2000 Outside Directors Stock Plan
Common Stock............................... 80,000 $ 5.50 $ 440,000 $ 116.16
Par Value $.001............................ 320,000 $7.3275 $ 2,344,800 $ 619.03
2000 Employee Stock Purchase Plan
Common Stock............................... 2,500,000 $6.2284 $ 15,571,000 $ 4,110.75
Par Value $.001
TOTALS........................... 21,227,356 $153,459,778 $40,513.40
</TABLE>

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(1) The securities to be registered include options and rights to acquire Common
Stock.

(2) Pursuant to Rule 416(a), this registration statement also covers any
additional securities that may be offered or issued in connection with any
stock split, stock dividend or similar transaction.

(3) Estimated pursuant to Rule 457 solely for purposes of calculating the
registration fee. As to shares subject to outstanding but unexercised
options under the 2000 Equity Incentive Plan and the 2000 Outside Directors
Stock Plan the price is computed on the basis of their respective exercise
prices. As to the remaining shares under the 2000 Equity Incentive Plan and
the 2000 Outside Directors Stock Plan, the $7.3275 share price is based upon
the average of the high and low prices of the Common Stock on June 8, 2000,
as reported on the Nasdaq National Market. The 2000 Employee Stock Purchase
Plan establishes a purchase price equal to 85% of the fair market value of
the Company's Common Stock, and, therefore, the price for shares under this
plan is based upon 85% of the average of the high and low prices of the
Common Stock on June 8, 2000, as reported on the Nasdaq National Market. As
to the shares under the 2000 Equity Incentive Plan and offered for resale,
the registration fee is based pursuant to Rule 457(b)(3) and Rule 457(c)
upon the average of the high and low prices of the Common Stock on June 8,
2000, as reported on the Nasdaq National Market.

(4) These shares are offered for resale and were originally issued under the
2000 Equity Incentive Plan.
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<PAGE> 2

PART I

EXPLANATORY NOTE

Telocity Delaware, Inc. has prepared this registration statement in
accordance with the requirements of Form S-8 under the Securities Act of 1933 to
register 11,165,240 shares of common stock that may be issued under our 2000
Equity Incentive Plan, 400,000 shares of common stock that may be issued under
our 2000 Outside Directors Stock Plan and 2,500,000 shares of common stock that
may be issued under our 2000 Employee Stock Purchase Plan.

In addition, we include under cover of this Form S-8 a reoffer prospectus
prepared in accordance of Part I of Form S-3 under the Securities Act. Pursuant
to General Instruction C to Form S-8, this reoffer prospectus and this
registration statement are intended to register for reoffer and resale up to
7,162,116 shares of common stock we have issued under our 2000 Equity Incentive
Plan.
<PAGE> 3

REOFFER PROSPECTUS

7,162,116 SHARES OF

TELOCITY DELAWARE, INC.

COMMON STOCK

This reoffer prospectus covers 7,162,116 shares of common stock, 0.001 par
value, of Telocity Delaware, Inc. This prospectus relates to the reoffer and
resale of shares of common stock that have been acquired pursuant to the 2000
Equity Incentive Plan of Telocity Delaware, Inc., by certain of our officers,
directors, employees and consultants. We will not receive any proceeds from
these sales.

The selling stockholders described in this prospectus may reoffer and
resell the shares from time to time. The shares may be offered at prevailing
market prices, at prices related to such prevailing market prices, at negotiated
prices, or at fixed prices.

The common stock is listed on the Nasdaq National Market under the symbol
"TLCT." On June 13, 2000, the last reported sale price of the common stock on
the Nasdaq National Market was $7.687 per share.

Investing in the common stock involves risks. See "Risk Factors" beginning
on page 6.

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THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. PROSPECTIVE
PURCHASERS SHOULD CAREFULLY REVIEW THE MATTERS SET FORTH IN "RISK FACTORS"
BELOW.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is June 14, 2000.
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TABLE OF CONTENTS

<TABLE>
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PAGE
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<S> <C>
WHERE YOU CAN FIND MORE INFORMATION......................... 3
DOCUMENTS INCORPORATED BY REFERENCE......................... 4
ABOUT TELOCITY.............................................. 5
RISK FACTORS................................................ 6
RISKS RELATED TO OUR OPERATIONS AND FINANCIAL RESULTS....... 9
RISKS RELATED TO OUR INDUSTRY, TECHNOLOGY AND NETWORK....... 11
OTHER RISKS RELATED TO OUR BUSINESS......................... 16
RISKS RELATED TO THIS OFFERING.............................. 19
USE OF PROCEEDS............................................. 21
SELLING STOCKHOLDERS........................................ 21
PLAN OF DISTRIBUTION........................................ 22
LEGAL MATTERS............................................... 22
EXPERTS..................................................... 23
</TABLE>

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<PAGE> 5

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission ("SEC") a
registration statement on Form S-8 under the Securities Act with respect to the
shares of common stock registered hereby. This prospectus, which constitutes a
part of the registration statement, does not contain all of the information set
forth in our registration statement and the exhibits filed therewith. You may
refer to the registration statement, and the accompanying exhibits and schedules
for more information about us and our common stock. Statements contained in this
prospectus regarding the contents of any agreement or any other document to
which reference is made are not necessarily complete, and, in each instance,
reference is made to the copy of such agreement or other document filed as an
exhibit to the registration statement, each such statement being qualified in
all respects by such reference.

You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information about the public reference
rooms. Our SEC filings are also available to the public from the SEC's website
at http://www.sec.gov.

Since March 28, 2000, we have been subject to the information and periodic
reporting requirements of the Securities Exchange Act of 1934, and, in
accordance therewith, file periodic reports, proxy statements and other
information with the SEC. Such periodic reports, proxy statements and other
information will be available for inspection and copying at the SEC's public
reference rooms and the SEC's website, which is described above.

As used in this prospectus, the terms "we," "us," "our," "the Company" and
"Telocity" mean Telocity Delaware, Inc. and the term "common stock" means our
common stock, par value $0.001 per share.

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<PAGE> 6

DOCUMENTS INCORPORATED BY REFERENCE

The SEC allows us to "incorporate by reference" information that we file
with them which means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is
an important part of this prospectus and information we later file with the SEC
will automatically update and supersede this information. The following
documents filed by us with the SEC are incorporated in this prospectus by
reference:

(a) The Company's latest prospectus filed pursuant to Rule 424(b)
under the Securities Act of 1933, as amended containing audited financial
statements for the Company's latest fiscal year ended December 31, 1999.
The prospectus is included in the Company's Registration Statement on Form
S-1 (No. 333-94271, effective March 28, 2000).

(b) All other reports filed pursuant to Section 13(a) or 15(d) of
Securities Exchange Act of 1934, as since the end of the fiscal year
covered by the registrant document referred to in (a) above.

(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on March 27, 2000 under
the Exchange Act, including any amendment or report filed for the purpose
of updating such description.

We also incorporate by reference all documents and reports filed by us
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus and prior to the date of termination of
this offering. We will provide free of charge to each person, including any
beneficial owner, to whom this prospectus is delivered, upon written or oral
request, a copy of any or all of the documents incorporated by reference in this
prospectus. Please direct such requests to Investor Relations, Telocity
Delaware, Inc., 10355 N. De Anza Boulevard, Cupertino, California 95014. Our
telephone number if 408-863-6600.

This prospectus, including the information we incorporate by reference,
includes forward-looking statements with in the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
You can identify our forward-looking statements by the words "expects,"
"projects," "estimates," "believes." "anticipates," "intends," "plans,"
"budgets," "estimates" and similar expressions.

We have based these forward-looking statements relating to our operations
on our current exceptions, estimates and projections. We caution you that these
statements are not guarantees of future performance and involve risks,
uncertainties, and assumptions that we cannot predict. In addition, we have
based many of these forward looking statements on assumptions about future
events that may prove to be inaccurate. Accordingly, our actual outcomes and
results may differ materially from what we have expressed or forecast in the
forward looking statements.

When you consider these forward-looking statements, you should keep in mind
the risk factors and other cautionary statements in this prospectus. Our
forward-looking statements speak only as of the date made. Neither Telocity, nor
any person acting on Telocity's behalf, undertakes any obligation to update any
forward-looking statements included or incorporated by reference in this
prospectus.

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ABOUT TELOCITY

The Company develops, markets, and delivers to the residential market
online services and content designed for use over high speed, or broad band
connections.

Our executive offices are located at 10355 North De Anza Boulevard,
Cupertino, California 95014, and our telephone number is (408) 863-6600. We
maintain websites at www.telocity.com, www.telocity.net, and
http://telocity.snap.com. Information contained on our websites does not
constitute part of this prospectus.

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RISK FACTORS

The discussion in this report on Form S-8 contains forward-looking
statements that involve risks and uncertainties. The statements contained in
this prospectus that are not purely historical are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, including
statements regarding our expectations, beliefs, intentions or strategies
regarding the future. All forward-looking statements included in this document
are based on information available to us on the date hereof, and we assume no
obligation to update any such forward-looking statement. Our actual results
could differ materially from those described in our forward-looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to:

- We have an unproven business model and a limited operating history in a
new and rapidly evolving industry; we may not be able to implement our
business plan;

- We have incurred losses since our inception and expect future losses for
the foreseeable future. Accordingly, we may not be able to achieve
profitability, and even if we do become profitable, we may not be able to
sustain profitability; and

- Our failure to manage our growth could harm our ability to retain and
grow our customer base and expand our service offerings.

In addition, to the other information in this prospectus, investors should
consider carefully the following risk factors in evaluating the Company and its
business before purchasing shares of common stock.

RISKS RELATED TO OUR OPERATIONS AND FINANCIAL RESULTS

WE HAVE AN UNPROVEN BUSINESS MODEL AND A LIMITED OPERATING HISTORY IN A NEW AND
RAPIDLY EVOLVING INDUSTRY, AND WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS
PLAN.

Our business model is still in development and our limited historical
financial and operating data are not a good indication of how our business is
doing or how it is evolving. You must consider our business and prospects in
light of the risks and difficulties typically encountered by companies in new
and rapidly evolving industries such as ours. We may not adequately address
these risks, and if we do not, we may not be able to implement our business plan
as we intend. In addition, you should not expect future growth in operations,
revenue, employees or other benchmarks to be comparable to our recent
developments in those areas.

We were incorporated in August 1997 and first began offering residential
broadband services commercially in Chicago in July 1999. We have been offering
our services on a wider basis since November 1999, when we started our rollout
in the Southeast. As a result of the expansion of our services and the
accompanying buildout of our network, we grew from 36 employees at December 31,
1998 to 256 employees at February 29, 2000. Of our entire current executive
management team of eleven, only four members were with us at December 31, 1998.

WE HAVE INCURRED NET LOSSES SINCE OUR INCEPTION AND EXPECT FUTURE LOSSES FOR THE
FORESEEABLE FUTURE. ACCORDINGLY, WE MAY NOT BE ABLE TO ACHIEVE PROFITABILITY,
AND EVEN IF WE DO BECOME PROFITABLE, WE MAY NOT BE ABLE TO SUSTAIN
PROFITABILITY. IF WE CONTINUE TO INCUR LOSSES, THE VALUE OF OUR STOCK COULD
DECLINE, AND WE MAY NOT BE ABLE TO RAISE SUFFICIENT CAPITAL TO FINANCE OUR
BUSINESS IN THE FUTURE.

We have incurred net losses in every quarter and annual period since our
incorporation in August 1997 and expect to continue to operate at a loss for the
foreseeable future, primarily as a result of the expansion of our network and
operations. If these losses continue, they could cause the value of our stock
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to decline and they may impair our ability to raise capital. Although we intend
to increase our expenditures and operating expenses rapidly and substantially as
we expand our network and operations, we do not expect our revenues to increase
as rapidly and as substantially. We cannot forecast with any degree of accuracy
exactly when, or if, we will become profitable. This is true because of the
following:

- we had negative cash flow from operating activities of $5.4 million in
1998 and $29.5 million in 1999 and 27.6 million for the three months
ended March 31, 2000;

- we had an annual interest and amortization expense relating to the
expansion of our network and operations of approximately $3.2 million in
1999 and expect this expense to increase significantly in the future;

- we had an annual charge to earnings relating to employee stock-based
compensation and non-employee option and warrant grants of approximately
$3.6 million in 1999 and expect this expense to increase significantly in
the future; and

- as of March 31, 2000, we had an accumulated deficit of approximately
$103.2 million.

OUR FAILURE TO MANAGE OUR GROWTH COULD HARM OUR ABILITY TO RETAIN AND GROW OUR
CUSTOMER BASE AND EXPAND OUR SERVICE OFFERINGS.

We may not be able to install management information and control systems in
an efficient and timely manner, and our current or planned personnel, systems,
procedures and controls may not be adequate to support our future operations.
Failure to manage our future growth effectively could harm our ability to retain
and grow our customer base and expand our service offerings which would
materially and adversely affect our business, prospects, operating results and
financial condition. Our expansion to date has strained our management,
financial controls, operations systems, personnel and other resources. From time
to time, we have had difficulty effectively deploying our network operations and
expanding our network on extremely short deadlines while providing adequate
customer service and efficient provisioning of new customers. For example, we
experienced a 30 day delay in delivery time of network connections in the Miami
region. While this delay did not cause us to lose existing customers, it did
result in lost revenue for that 30 day period. Although this delay did not
materially harm our business, future delays may be more severe and adversely
affect our financial performance.

Any future rapid expansion will likely increase these strains. If our
marketing strategy is successful, we may experience difficulties responding to
customer demand for services and technical support in a timely manner and in
accordance with customer expectations.

Furthermore, we may make mistakes in operating our business. We may make
inaccurate sales forecasts, overtax our most talented and capable personnel,
inadequately test our network deployments or devote insufficient resources for
new markets, material planning and financial reporting.

OUR ABILITY TO SUSTAIN OR GROW OUR BUSINESS, ESPECIALLY THE DEVELOPMENT OF OUR
CONTENT OFFERINGS, MAY BE HARMED IF WE ARE UNABLE TO PERFORM OUR OBLIGATIONS
UNDER OUR AGREEMENTS WITH NBCI AND ITS AFFILIATES.

Our business, especially the development of our content offerings, is
substantially dependent upon our ability to perform our obligations under our
agreements with NBCi and its affiliates, which provide for the joint development
and design of services and content branded by both companies, such as
entertainment, electronic commerce, gaming, search applications and other
features designed for broadband users. Customers currently can use our existing
gateway to access this content. If NBCi terminates its agreements or fails to
perform its obligations under its agreements, we may not be able to sustain or
grow our business.

- NBCi may terminate its operating agreement with us if one of a number of
named NBC or NBCi competitors acquires more than 33% of us.

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- NBCi may terminate the promotional exclusivity provisions of the
operating agreement if certain performance milestones are not met, or if
Ms. Hart leaves Telocity by December 2002.

- NBCi or NBC may terminate their advertising agreements with us in the
event of a change in control, an uncured material breach of the
agreements or bankruptcy related events of our company.

If our agreements with NBCi or its affiliates are terminated, we will need
to seek out and develop other strategic relationships. We may not be able to
form other strategic relationships in the future, and even if we do, the
strategic agreements we enter into may not be successful. Also, the amount and
timing of resources that our strategic partners devote to our business is not
within our control. Our strategic partners may not perform their obligations as
expected. We cannot be certain that any revenue will be derived from these
strategic relationships.

IF WE FAIL TO MAKE SIGNIFICANT SALES OF OUR ADDITIONAL SERVICES TO OUR
CUSTOMERS, OUR OPERATING MARGINS MAY SUFFER.

We have based our business model upon our customers purchasing not only our
basic services package but also our additional services. We currently expect
these additional services, including online gaming, virtual private networks,
and various utility services, will be available to our customers during 2000.
While future content both we and NBCi are currently developing will not require
any upgrade, some of these new services will require software upgrades or the
addition of new technology to our network while others will require the
utilization of our next-generation residential gateway, which we expect to
release during 2000. These additional services will allow us to generate greater
financial margins from each customer. If our customers only pay for our basic
service package or choose not to upgrade to our next generation gateway to
receive additional services, our operating margins will suffer.

BECAUSE OUR CUSTOMER ACQUISITION COSTS ARE HIGH, IF WE FAIL TO RETAIN CUSTOMERS
LONG ENOUGH TO PAY BACK OUR UP FRONT INVESTMENT, WE MAY NOT ACHIEVE
PROFITABILITY.

Our customer acquisition costs comprise a significant portion of our
operating costs, including advertising, order fulfillment, installation,
customer care and the cost of our residential gateway. Because of our
significant up-front investment in each customer, if our customers fail to renew
their subscriptions with us or otherwise terminate their relationships with us
before we recover our up front costs, we may fail to generate a profit. In
addition, if we fail to reduce our customer acquisition costs, including by
increasing the efficiency of our customer care organization and reducing the
costs associated with the development and production of our gateways, our
operating results will suffer.

IF WE CANNOT CONTROL THE COSTS OF GOODS AND SERVICES WE RECEIVE FROM OUR
SUPPLIERS, WE MAY INCUR LOSSES OR PASS ALONG HIGHER COSTS TO OUR CUSTOMERS.

We expand significant capital on our residential gateway, on the
installation charges for our customers who cannot self install their residential
gateway on their existing telephone lines and on the order fulfillment fees that
we pay to our DSL access providers. If we fail to reduce the overall
manufacturing and components costs, installation fees and order fulfillment
expenses charged to us by our suppliers, we may be forced either to accept
greater operating losses over a longer period of time than currently estimated
or pass along greater up front activation and other installation fees to our
customers, which would harm our ability to compete in our market.

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OUR MANAGEMENT TEAM IS NEW, AND IF THEY ARE UNABLE TO WORK TOGETHER EFFECTIVELY,
OUR BUSINESS COULD BE SERIOUSLY HARMED.

Our productivity and the quality of our services and content may be
adversely affected if our team does not learn to work together quickly and
effectively. We employed only four members of our current management team at the
beginning of 1999. In particular, Patti Hart, our President and CEO, joined us
in June 1999, Jim Morrissey, our Executive Vice President and Chief Marketing
Officer, joined us in September 1999, Scott Martin, our Executive Vice President
and Chief Administrative Officer, joined us in December 1999 and Edward Hayes,
our Executive Vice President of Finance and Chief Financial Officer, joined us
in January 2000. These individuals have not previously worked together as a
management team and have had only limited experience managing a rapidly growing
company.

OUR GROWTH DEPENDS ON OUR ABILITY TO HIRE AND RETAIN HIGHLY QUALIFIED EMPLOYEES
AND SENIOR EXECUTIVES.

The loss of the services of any of our senior management team, all but one
of whom are at-will employees, or the failure to attract and retain additional
key employees could harm the continued deployment of our services and content,
the marketing of our services and the development of new services, our brand and
our strategy. Our future growth and ability to sustain this growth depend upon
the continued service of our executive officers and other key engineering,
sales, operations, marketing and support personnel. Competition for qualified
personnel in our industry and in the San Francisco Bay Area, as well as the
other geographic markets in which we recruit, is extremely intense and
characterized by rapidly increasing salaries and equity positions, which may
increase our operating expenses or hinder our ability to recruit qualified
candidates. Furthermore, we must compete with companies in earlier stages of
their development, that can offer substantially greater equity positions to
current and potential employees. For these reasons, we may be unable to retain
or recruit qualified candidates, much less the most highly qualified.

WE MAY EXPERIENCE DIFFICULTIES IN THE INTRODUCTION OF OUR NEXT-GENERATION
GATEWAY AND IN OUR DEVELOPMENT OF NEW OR ENHANCED TECHNOLOGIES THAT COULD DELAY
THE LAUNCH OF NEW SERVICES THEREBY INCREASING EXPENSES AND DECREASING REVENUE.

The introduction of our next-generation gateway during 2000 will require us
to manage a transition from older equipment and technology, minimize disruption
in customer ordering patterns and ensure that adequate supplies of new equipment
can be delivered to meet anticipated customer demand. Despite testing, our
next-generation residential gateway may contain undetected or unresolved errors
when it is first released. These errors could result in:

- delays in or loss of market acceptance and sales;

- diversion of development resources;

- injury to our reputation; and

- increased service, warranty and other operating expenses.

In general, the development of new or enhanced equipment, systems, services
and content, such as electronic commerce, communications, and utility services,
is a complex and uncertain process requiring the accurate anticipation of
technological and market trends, as well as precise technological execution. We
may experience in the future design, development, implementation or other
difficulties that could delay or prevent our introduction of new or enhanced
services or content. These delays could cause our expenses to increase and our
revenues to decline. In addition, because technical innovations and enhancements
are inherently complex and require long development cycles, we will have to
incur most research and development expenses before the technical feasibility or
commercial viability of enhanced or new services can be ascertained. Our
revenues from future or enhanced services may not be sufficient to recover our
associated development costs.
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OUR OPERATING RESULTS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY FROM PERIOD TO
PERIOD WHICH MAY CAUSE OUR STOCK PRICE TO BE EXTREMELY VOLATILE. WE MAY ALSO
FAIL TO MEET OR EXCEED THE EXPECTATIONS OF SECURITIES ANALYSTS OR INVESTORS,
CAUSING OUR STOCK PRICE TO DECLINE.

Our operating results are likely to fluctuate significantly in the future
on a quarterly and an annual basis due to a number of factors, many of which are
outside our control. If we experience such fluctuation, we may fail to meet or
exceed the expectations of securities analysts or investors, causing our stock
price to decline or be extremely volatile.

In addition, most of our operating costs are fixed and based on our revenue
expectations. Therefore, if we have lower revenues than we were expecting, we
may be unable to reduce our expenses in the same period in which the operating
costs were incurred, resulting in lower quarterly operating results for that
period. For example, during 1999 we hired approximately 150 employees, moved
into significantly larger facilities and greatly increased our operating
expenses in anticipation of an increase in revenue; however, we do not know
whether our business will grow rapidly enough to absorb these costs.

IF SALES FORECASTED FOR A PARTICULAR PERIOD ARE NOT REALIZED IN THAT PERIOD DUE
TO THE LENGTHY DEVELOPMENT AND TESTING CYCLES OF OUR TECHNOLOGIES AND SERVICES,
OUR OPERATING RESULTS FOR THAT PERIOD WOULD BE ADVERSELY AFFECTED.

We cannot forecast with any degree of accuracy our revenues in future
periods or how quickly customers will select our services, if at all. In view of
these factors, we may not be able to achieve or sustain profitability which
could cause our stock price to decline. Our ability to achieve profitable
operations on a continuing basis will depend on a number of factors, many of
which are beyond our control.

WE MAY BE UNABLE TO RAISE ADDITIONAL CAPITAL IN THE FUTURE TO SUPPORT OUR
GROWTH, AND EVEN IF WE ARE ABLE TO RAISE ADDITIONAL CAPITAL, IT MAY BE ON
UNACCEPTABLE TERMS, MAY DILUTE YOUR OWNERSHIP OR MAY RESTRICT OUR FLEXIBILITY IN
RUNNING OUR BUSINESS.

We intend to seek substantial additional financing in the future to fund
the growth of our operations, including funding the significant capital
expenditures and working capital requirements necessary for us to complete our
nationwide rollout. This rollout calls for us to expand our services across the
United States, beginning with major markets, and provide services in our
targeted markets. In order to accomplish this nationwide rollout, we must expand
our network into geographic areas throughout the country, beginning with major
markets, establish relationships with local access providers in those areas and
launch targeted marketing campaigns in those regions. If we are unable to raise
additional capital or are able to raise capital only on unfavorable terms, we
may not be able to complete our network's coverage across the country, develop
or enhance our gateway and services, take advantage of future opportunities or
respond to competitive pressures or unanticipated requirements, any or all of
which could hurt our ability to support our growth. We expect that our existing
capital resources coupled with the proceeds of this initial public offering will
be sufficient to meet our cash requirements through September 2001. However, we
have a limited operating history on which to base these estimates. As a result,
these estimates may not be accurate.

If additional capital is raised through the issuance of equity securities
or by incurring convertible debt, the percent ownership of our existing
stockholders will be reduced and those stockholders may experience dilution in
net book value per share. Any debt financing, if available, may involve
covenants limiting or restricting our operations or future opportunities or
pledging our assets as security for borrowings.

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RISKS RELATED TO OUR INDUSTRY, TECHNOLOGY AND NETWORK

OUR SERVICES ARE NEW AND CUSTOMERS MAY NOT ACCEPT THESE SERVICES. IF OUR
SERVICES DO NOT GAIN BROAD MARKET ACCEPTANCE, WE WILL NOT BE ABLE TO INCREASE
OUR REVENUES AND BUILD OUR BUSINESS AS ANTICIPATED.

Residential broadband Internet access and the related services we support
through our platform is a new and emerging business, and we cannot guarantee
that our services will attract widespread demand or market acceptance. If this
market fails to develop or develops more slowly than anticipated, we will not be
able to increase our revenues and build our business as anticipated.

THE SCALABILITY, RELIABILITY AND SPEED OF OUR NETWORK REMAIN LARGELY UNPROVEN
AND MAY NOT SATISFY CUSTOMER DEMAND.

We may not be able to scale our network and operational support system to
meet our projected customer numbers while achieving and maintaining superior
performance. This risk will continue to exist as long as we expand our services
geographically to increasing numbers of customers. Our failure to achieve or
maintain high-speed digital transmissions would significantly reduce customer
demand for our services, resulting in decreased revenues and the inability to
build our business as planned. To date, we have deployed our network in more
than 50 metropolitan statistical areas in the Southeast, Northeast, upper
Midwest and Mid-Atlantic states. Most of this deployment has taken place in the
last few months. By the end of 2000, we expect that we will offer services in
approximately 150 of the nation's 349 metropolitan statistical areas which we
estimate will allow us to make our services available to at least 20% of all
U.S. households. Our maximum potential market is limited by the number of homes
that are DSL-capable, meaning homes that are within approximately 2 1/2 and 3
miles from a local telephone office that has equipment necessary to support DSL
service and have voice grade copper telephone lines that are in good condition.
We believe that currently 1.4% of all U.S. households receive DSL service and
30% of all U.S. households are DSL-capable, with the percent of DSL-capable
households growing to 50% in 2001 and 75% in 2002. The ability of our network
and operational support system to connect and manage a substantial number of
online customers at high speeds on a national scale is still unknown.

FACTORS OUTSIDE OF OUR CONTROL MAY ADVERSELY AFFECT OUR TRANSMISSION SPEED.
LOWER SPEEDS MAY RESULT IN CUSTOMER DISSATISFACTION AND ULTIMATELY A LOSS OF
CUSTOMERS.

Peak digital data transmission speeds currently offered across our networks
when utilizing DSL are 1.5 megabits per second. However, the actual data
transmission speeds over our networks can be significantly slower. These slower
speeds may result in customer dissatisfaction and ultimately in the loss of
customers and revenues. The speeds over our networks depend on a variety of
factors, many of which are out of our control, including:

- the distance an end-user is located from a central office;

- the configuration of the telecommunications line being used;

- the quality of the telephone lines provisioned by traditional telephone
companies;

- the inside wiring of our customers' homes; and

- the limitations of our customers' computers.

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WE FACE INTENSE COMPETITION FROM, AMONG OTHERS, PROVIDERS OF ONLINE SERVICES,
INTERNET SERVICE PROVIDERS, CABLE MODEM SERVICE PROVIDERS AND TELECOMMUNICATIONS
SERVICE PROVIDERS WHICH COULD LIMIT THE NUMBER OF CUSTOMERS WHO CHOOSE AND PAY
US FOR OUR SERVICES.

We experience strong competition in all of our target service areas,
including from providers of online services, Internet service providers, cable
modem service providers, interactive television providers, Internet portal or
content sites, telecommunications service providers, wireless and satellite
service providers, and consumer electronics and appliance manufacturers. We
expect this competition to intensify and we may be unable to generate a
significant number of new customers or retain existing customers. Many of these
competitors have longer operating histories, greater name recognition, better
strategic relationships and significantly greater financial, technical or
marketing resources than we do. As a result, these competitors:

- may be able to develop and adopt new or emerging technologies and respond
to changes in customer requirements or devote greater resources to the
development, promotion and sale of their products and services;

- may form new alliances to rapidly acquire significant market share; and

- may be able to undertake more extensive marketing campaigns, adopt more
aggressive pricing policies and devote substantially more resources to
developing high-speed broadband services.

For example, telecommunications service providers, including traditional
telephone companies and competitive carriers, have an established brand name and
reputation for high quality in their service areas, possess sufficient capital
to deploy DSL equipment rapidly, have their own telephone lines and can bundle
digital data services with their existing analog voice services to achieve
economies of scale in serving customers. Cable modem service providers such as
Excite@Home, and AOL through its merger with Time Warner, may have the ability
to leverage their existing positions in their service markets to exclude
competition.

OUR FAILURE TO MEET CHANGING CUSTOMER REQUIREMENTS AND EMERGING INDUSTRY
STANDARDS WOULD LIMIT OUR ABILITY TO ATTRACT AND RETAIN CUSTOMERS.

The market for high-speed broadband access is characterized by rapidly
changing customer demands and short life cycles for services and content. If
enhancements to our existing services, such as broadband Internet access, e-mail
and storage for web pages, or development of new services, including electronic
commerce, communications and utility services, take longer than planned,
customer requirements and industry standards may have changed, which would
adversely affect our ability to sell our services and cause our results of
operations and financial condition to suffer.

WE DEPEND ON SINGLE AND LIMITED SOURCE SUPPLIERS FOR KEY COMPONENTS OF OUR
GATEWAY WHICH MAKES US SUSCEPTIBLE TO SUPPLY SHORTAGES OR PRICE FLUCTUATIONS
THAT COULD ADVERSELY AFFECT OUR OPERATING RESULTS.

We rely on Wellex Corporation to produce our proprietary residential
gateway device and we will not have another supplier for at least three months.
In the event of any significant delay, disruption, capacity constraint or
quality control problem in its manufacturing operations, gateway shipments to
our customers could be delayed, which would negatively affect our net revenues,
competitive position and reputation. Should Wellex cease to be our contract
supplier for any reason, we would then need to qualify a new gateway supplier
and we may be unable to find a gateway supplier that meets our needs or that can
source components as cost-effectively as Wellex. Qualifying a new gateway
supplier and commencing volume production is expensive and time consuming.
Transferring production operations can significantly disrupt gateway supply. If
we are required or choose to change gateway suppliers, we may lose sales and may
experience increased production or component costs, and our customer
relationships may suffer.

If any of our sole-source manufacturers delays or halts production of any
of the components or equipment that we use in our residential gateway we would
be unable to manufacture and ship our
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gateway, and, as a result, our revenues and operating results would decline and
our customer relationships may suffer. Furthermore, we expect to incorporate
additional sole-source components into our next generation gateways planned for
release during 2000, thereby increasing our sole-source supplier risks. We
currently depend on single source suppliers for a number of key components, such
as chipsets, processors and unique tooled plastics. For example, there is only
one supplier available for our processor and our chip set is a specific model
which we have designed and is built by a single manufacturer. Should either of
these suppliers become unavailable, we will be required to undertake a redesign
of our gateways such as the layout of the board or the pin connections.

There are a number of other risks associated with our dependence on a
single third party supplier, including the following:

- reduced control over delivery schedules and quality assurance;

- manufacturing yields and costs;

- the potential lack of adequate capacity during periods of excess demand;

- limited warranties on products supplied to us;

- increases in prices; and

- the potential misappropriation of our intellectual property.

IF WE FAIL TO PREDICT ACCURATELY OUR SUPPLY REQUIREMENTS, WE COULD INCUR
ADDITIONAL COSTS OR EXPERIENCE DELAYS WHICH COULD RESULT IN A SIGNIFICANT
DECREASE IN OUR REVENUES AND GROSS MARGINS.

We provide Wellex with rolling forecasts of our gateway requirements based
on anticipated orders. Wellex uses these forecasts to purchase components for
our gateway. Our component requirement forecasts may not be accurate. If we
overestimate our component requirements, Wellex may have excess inventory, which
would increase our costs. Also, because lead times for materials and components
that we require vary significantly and depend on a variety of factors, if we
underestimate our requirements, Wellex may have inadequate inventory, which
could interrupt their manufacturing of our gateways and result in delays in
system shipments. Any of these events could harm our business and results of
operations.

AT PRESENT, WE CANNOT PROVIDE OUR SERVICES UNLESS DSL ACCESS PROVIDERS SUPPLY US
WITH DSL CONNECTIONS AND COOPERATE WITH US FOR THE TIMELY PROVISION OF DSL
CONNECTIONS FOR OUR CUSTOMERS.

We must obtain DSL connections from traditional telephone companies and new
competitive carriers and have their continuing cooperation for the timely
provision of DSL connections for our customers in order for us to provide our
services. DSL operates over local telephone lines, which are under the control
of traditional telephone companies and new competitive carriers and requires a
special connection from our network to the telephone lines. We rely on them to
provide us with these DSL connections, and if we were unable to use these
connections, we would not be able to provide our services. In addition, we
depend on traditional telephone companies and new competitive carriers to test
and maintain the quality of the DSL connections that we use. An inability to
obtain adequate and timely access to DSL connections on acceptable terms and
conditions from traditional telephone companies and competitive carriers and to
gain their cooperation in the timely provision of DSL connections for our
customers could harm our business, as could their failure to properly maintain
the DSL connection we use.

WE WILL COMPETE WITH OUR DSL ACCESS PROVIDERS IN PROVIDING BROADBAND INTERNET
ACCESS, WHICH MAY CAUSE DELAYS OR INCREASE EXPENSES.

Because in some instances our DSL access providers will also provide
broadband Internet access and other services, we will compete with them.
Although our DSL access providers are required to provide

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DSL connections to us on a non-discriminatory basis under the Telecommunications
Act of 1996, they may nevertheless be reluctant to cooperate with us. Compelling
these DSL access providers to meet the regulatory requirements may be expensive
and time consuming and could result in delays and increased expenses associated
with providing our services and content on a wider scale, which in turn could
harm our business.

OUR SERVICES MAY NOT BE DELIVERED EFFECTIVELY, OR AT ALL, BECAUSE OF DISTANCE
SENSITIVITY OF DSL TECHNOLOGY, THE PHYSICAL LIMITATIONS OF OUR CUSTOMERS'
TELEPHONE LINES, OR BECAUSE THE TELEPHONE LINES WE RELY UPON MAY BE UNAVAILABLE
OR IN POOR CONDITION.

Because DSL technology is distance sensitive and operates over local telephone
lines, we will not be able to provide services to customers whose homes are
outside a maximum distance.

Our ability to provide services to potential customers using DSL
connections through the telephone network over which DSL must operate depends on
the length of our customers' local telephone lines. It also depends on the
quality, physical condition, availability and maintenance of those telephone
lines, all of which are within the control of traditional telephone companies.
DSL technology is distance sensitive and, in many cases, the homes of our
potential customers may be located outside the maximum distance from the
telephone company central switching office for the proper function of the DSL
technologies we currently use. Our existing customers are all within this
maximum distance, as we cannot provide our services to customers beyond this
maximum distance. Currently, 70% of U.S. homes are not DSL-capable, meaning they
are more than approximately 2 1/2 to 3 miles from a local telephone office that
has equipment necessary to support DSL service or do not have voice-grade copper
telephone lines that are in good condition. Many traditional telephone companies
are rapidly deploying additional equipment in central offices and we work with
our DSL access providers to identify new locations in which we would like to
offer our services. Nevertheless, our DSL access providers may fail to expand
their equipment. If the homes of a significant number of customers that desire
our service continue to be located beyond this maximum distance, it could
materially inhibit our ability to deploy our broadband services to those homes,
which would harm our business.

If we receive inaccurate information regarding the distances of customers from
the central telephone office, we will incur additional expenses that will harm
our operating results.

Although we work with our DSL access providers to identify in advance of
accepting orders those customers who are close enough to a central office, we
sometimes find that the information given to us is inaccurate. In the past, our
historical experiences of finding inaccurate information have caused us to incur
expenses such as costs associated with sending a technician to enable a
potential customer's telephone line that cannot be DSL enabled. Although to date
these expenses have not materially harmed our operating results, if we cannot
reduce the number of these false positive customer identifications as we expand
our operations on a larger scale, we will continue to incur significant expenses
that will harm our operating results.

If the telephone lines of our customers are in poor condition, we may not be
able to provide our services to those customers.

The current condition of local telephone lines may be inadequate to permit
us to provide our services to all of our customers utilizing current DSL
technologies. Because the copper telephone lines are owned by other companies
and because the number of copper lines is so large and often inside a potential
customer's house, the condition of the lines can only be determined on a
case-by-case basis. The copper telephone lines that we rely upon to provide
service to our customers' homes may not be of sufficient quality or they may not
be adequately maintained by the traditional telephone company for proper DSL
functionality, which could significantly inhibit our ability to deploy our
broadband services to those homes, which would harm our business.

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Our ability to provide DSL-based services to customers whose homes are
connected to telephone networks that do not use copper lines will be limited
because DSL-based services are not be available to those customers.

Some telephone companies use technologies other than copper lines to
provide telephone services between the traditional telephone company central
switching office and the customer's residence and DSL-based services will not be
available to those customers. If a significant number of the homes of customers
that desire our service are connected to the telephone network with non-copper
local access connection, it could materially inhibit our ability to deploy our
DSL-based services to those homes and would harm our business.

ALWAYS CONNECTED INTERNET SERVICES, SUCH AS OURS, MAY BE SUBJECT TO ADDITIONAL
SECURITY RISKS WHICH COULD CAUSE US TO LOSE EXISTING CUSTOMERS, DETER POTENTIAL
CUSTOMERS AND HARM OUR REPUTATION.

Since our services allow customers to be connected to the Internet at all
times, unauthorized users may have a greater ability to access information
stored in our customers' computer systems. Always connected Internet services
may give unauthorized users, or hackers, more and longer opportunities to break
into a customers computer or access, misappropriate, destroy or otherwise alter
data through the Internet. We are currently developing data security systems
that protect a customer's computer from unauthorized access through the
Internet, but we cannot ensure that the security risks will be eliminated.

A SYSTEM FAILURE OR BREACH OF NETWORK SECURITY COULD CAUSE DELAYS OR
INTERRUPTIONS OF SERVICE TO OUR CUSTOMERS WHICH COULD HURT OUR BRAND IMAGE, LEAD
TO A LOSS OF CUSTOMERS AND RESULT IN A SIGNIFICANT DECREASE OF REVENUES.

Although we have not experienced any system failures or breaches of network
security that materially affected us, if we experience one or more of the
problems described below in the future, our financial performance and results of
operations could be materially affected at that time.

Our operations depend on our ability to avoid damages from fires,
earthquakes, floods, power losses, excessive sustained or peak user demand,
telecommunications failures, network software flaws, transmission cable cuts and
similar events. The occurrence of a natural disaster or other unanticipated
problem at our network operations center, our operational support system, our
managed network of leased communication lines or any metropolitan hubs or
collocation facilities could cause interruptions in the services provided by us
and these interruptions could result in the loss of customers and the attendant
reduction of revenue. Additionally, if a traditional telephone company, new
competitive carrier or other service provider fails to provide the
communications capacity we require, as a result of a natural disaster,
operational disruption or any other reason, then this failure could interrupt
our services.

Our network may be vulnerable to unauthorized access, computer viruses and
other disruptive problems. Providers of Internet services, including us, have in
the past experienced, and may in the future experience, interruptions in service
as a result of accidental or intentional actions of Internet users, current and
former employees and others. For example, we have experienced unintentional down
time as a result of upgrading our services and equipment. Other technologies
similar to our own have been subject to service outages. The consequence of
these interruptions in service may be that some customers terminate our service
and that some potential customers to reject our service. Moreover, we may be
required to give discounts to customers who experience service interruption.
Interruptions of service may therefore result in decreased revenues and customer
base. Unauthorized access could also potentially jeopardize the security of
confidential information stored in the computer systems of our customers, which
might cause us to be liable to our customers, and also might deter potential
customers. Eliminating computer viruses and alleviating other security problems,
including problems created by our or a vendor's employee, may require
interruptions, delays or cessation of service to our customers.

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OTHER RISKS RELATED TO OUR BUSINESS

A GENERAL ECONOMIC DOWNTURN COULD RESULT IN CUSTOMERS CANCELING OUR SERVICES AND
CONTENT OR THE DECISION BY PROSPECTIVE CUSTOMERS NOT TO USE OUR SERVICE.

To the extent the general economic health of the United States or of
certain regions in which many of our customers reside declines from recent
historically high levels, or to the extent customers fear a decline is imminent,
these customers may reduce expenditures for services such as ours. Any decline
or concern about an imminent decline could also delay decisions among certain of
our customers to renew our services or to add new services or could delay
decisions by prospective customers to make initial evaluations of our services.
Since many consumers may perceive our services as unnecessary or as a "luxury"
item, we could be particularly hard hit by an economic downturn. Any reduction
of or delays in expenditures would harm our business.

OUR BUSINESS IS SIGNIFICANTLY AFFECTED BY THE LEGISLATIVE, REGULATORY AND
JUDICIAL RULES APPLICABLE TO TELECOMMUNICATIONS SERVICES AND THE BROADBAND
MARKETPLACE.

Changes in existing laws and regulations applicable to our business may not
be favorable to us and may require us to direct time and money toward legal and
regulatory matters. Since 1996, telecommunications laws have been in a state of
particularly rapid change. We rely on our ability to purchase DSL access from
both traditional telephone companies and new competitive carriers, vendor
channels that may not remain open to use, or for which prices may rise, if the
regulatory status of these service providers changes in the future. In order to
protect our market options and business flexibility, we may also be required to
participate in legislative, regulatory and judicial proceedings, or proceedings
may be instituted against us by competitors seeking to harm our business, all of
which could entail the diversion of substantial funds and management attention.

We may be prevented from or delayed in providing asymmetric digital subscriber
line, or ADSL, access to our customers if the FCC does not grant our
application for a waiver from compliance with the requirements for connecting
ADSL equipment to the public telephone network.

We currently provide ADSL access to some of our customers. On February 28,
2000, the FCC set forth guidelines streamlining the process for obtaining
waivers from compliance with the requirements for connecting ADSL equipment to
the public telephone network. We have submitted our application for a waiver and
expect to receive this waiver in the near future because we believe we have met
the requirements for receiving the waiver. However, we cannot assure you that we
will obtain this waiver. If we do not obtain this waiver, the FCC may enjoin us
from providing ADSL service. If this occurs, we would be prevented from or
delayed in providing ADSL access to our customers.

Our services might be determined to be subject to price regulation at the
federal or state level and may affect our pricing structure and decrease our
profits.

If the current laws and regulations governing our business change, we may
become subject to price regulation at the state or federal level. Such price
regulation could adversely impact our profitability.

Federal, state, local or foreign governments may impose taxation on the
Internet and the services we offer, which would decrease our revenues an harm
our operating results.

Future legislation affecting our business could subject us to taxation due
to the services we provide. This taxation may decrease our revenues and harm our
operating results.

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The competition among our DSL providers could be adversely affected by changes
in existing laws and regulations and that could increase our costs and lower
our profit margin.

If existing laws and regulations change, the competition among our DSL
providers that we rely on to maintain efficiently priced and high quality DSL
connections, could be adversely affected. In addition, if the Telecommunications
Act of 1996 and recent decisions by the Federal Communications Commission
implementing portions of the Act that have opened the existing telephone network
to competition are stayed, reversed or modified by appellate courts, if the laws
and decisions requiring traditional telephone companies and competitive carriers
to sell DSL connections to companies like our are changed or vacated, or if new
regulatory mandates degrade competition, our costs will increase and we will
have lower profit margins.

AS A PROVIDER OF CONTENT-BASED INTERNET SERVICES, WE MAY FACE POTENTIAL LEGAL
EXPOSURE BECAUSE OF THE NATURE OF SOME OF THE CONTENT WE PROVIDE.

We may be subject to claims for defamation, negligence, copyright or
trademark infringement, including contributory infringement, or other claims
relating to the information contained on our Internet sites, whether written by
us or third parties which could cause us to make unexpected legal expenditures
and significantly increase our costs. These types of claims have been brought
against providers of online services in the past and can be costly to defend
regardless of the merit of the lawsuit. Although recent federal legislation
protects online services from some claims when the material is written by third
parties, this protection is limited. Furthermore, the law in this area remains
in flux and varies from state to state, and from country to country.

We may also face potential legal exposure associated with the provision of
content-based Internet services in such areas as obscenity and indecency,
advertising, gaming, privacy, child Internet privacy, the use of personal
information gathered online and trademark or copyright infringement. Many of the
rules in these areas are ambiguous and rapidly evolving, making definitive
assessment of legal risks difficult.

OUR INTELLECTUAL PROPERTY PROTECTION MAY BE INADEQUATE TO PROTECT OUR
PROPRIETARY RIGHTS WHICH COULD ALLOW COMPETITORS TO DEVELOP TECHNOLOGY SUPERIOR
TO OUR OWN AND ATTRACT CUSTOMERS AWAY FROM US.

The steps we have taken to protect our technology or other intellectual
property may be inadequate. As a result, competitors may develop technology
superior to our own and attract customers away from us. We may be unable to use
intellectual property protection to prevent other companies from competing with
us. While we have developed some proprietary techniques and expertise, we
believe that many of our activities and systems are not protectable as
proprietary intellectual property. Accordingly, we may be unable to prevent
third parties from developing techniques that are similar or superior to our
technology. Likewise, we may be unable to prevent third parties from designing
around our copyrights, patents and trade secrets, or from utilizing our
intellectual property without detection or without adequate remedy.

We claim common law trademark protection for a limited number of marks and
have applied for federal registrations for only two. Our trademark strategy has
shifted in the past and may again in the future as we choose to abandon old
marks and utilize new ones, which might have the effect of diluting our branding
strategy, or confusing our customers. Because we have had no systematic process
in the past for the identification of patentable inventions, we may have
overlooked important technologies that could have been, but have not yet been
patented by us. Some of these inventions may no longer be patentable. We have
not undertaken any patent searches to determine whether key patents exist that
might prevent us from manufacturing, selling or using our gateway devices or
other services. We therefore might infringe patents of third parties. We also
rely on unpatented trade secrets and know-how to maintain our competitive
positions, which we seek to protect, in part, by confidentiality agreements,
strategic alliances and contracts with employees, consultants and others. The
steps we have taken may not have been adequate to protect these trade secrets.

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WE ARE VULNERABLE TO CLAIMS THAT ANY ELEMENT OF OUR SERVICE DEPLOYMENT PLATFORM
INFRINGES THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, AND ANY RESULTING CLAIMS
AGAINST US COULD BE COSTLY TO DEFEND OR SUBJECT US TO SIGNIFICANT DAMAGES.

Infringement claims could materially harm our business. From time to time,
we may receive notice of claims of infringement of third parties' proprietary
rights. The fields of telecommunications and Internet communications are filled
with patents, both pending and issued. We may unknowingly infringe such a
patent. We may be exposed to future litigation based on claims that our platform
infringes the intellectual property rights of others, especially patent rights.
Someone, including a competitor, might file a suit with little merit, in order
to harm us commercially, to force us to re-allocate resources to defending such
a claim, or extract a large settlement. In addition, our employees might utilize
proprietary and trade secret information from their former employers without our
knowledge, even though we prohibit these practices.

Any litigation, with or without merit, could be time consuming to defend,
result in high litigation costs, divert our management's attention and resources
or cause us to delay deployment of related technology. A jury or judge may
decide against us even if we had not in fact infringed. If we lose or are forced
to settle, we could be required to remove or replace allegedly infringing
technology, to develop non-infringing technology or to enter into royalty or
licensing arrangements. These royalty or licensing arrangements, if required,
may not be available on terms acceptable to us, or at all.

ANY ACQUISITIONS WE MAKE COULD DISRUPT OUR BUSINESS AND HARM OUR FINANCIAL
CONDITION.

We may make investments in complementary companies, products or
technologies. Should we do so, our failure to successfully manage future
acquisitions could seriously harm our operating results. In the event of any
future purchases, we will face additional financial and operational risks,
including:

- difficulty in assimilating the operations, technology and personnel of
acquired companies;

- disruption in our business because of the allocation of resources to
consummate these transactions and the diversion of management's attention
from our core business;

- difficulty in retaining key technical and managerial personnel from
acquired companies;

- dilution of our stockholders, if we issue equity to fund these
transactions;

- assumption of operating losses, increased expenses and liabilities; and

- our relationships with existing employees, customers and business
partners may be weakened or terminated as a result of these transactions.

OUR HEADQUARTERS AND SUPPLIERS ARE ALL LOCATED IN NORTHERN CALIFORNIA WHERE
NATURAL DISASTERS MAY OCCUR WHICH COULD DAMAGE OUR FACILITIES AND RENDER US
UNABLE TO PROVIDE SERVICES TO OUR CUSTOMERS.

Currently, our corporate headquarters, network operations center and the
only manufacturer of our residential gateway are all located in Northern
California. Northern California historically has been vulnerable to natural
disasters and other risks, such as earthquakes, fires and floods, which at times
have disrupted the local economy and posed physical risks to our property and
the property of the manufacturer of our residential gateway. In the event of
such disaster, our business would suffer. We presently do not have redundant,
multiple site capacity in the event of a natural disaster.

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RISKS RELATED TO THIS OFFERING

INSIDERS TO HAVE SUBSTANTIAL CONTROL OVER US AND COULD DELAY OR PREVENT OUR
ENGAGING IN A CHANGE OF CONTROL TRANSACTION AND AN OPPORTUNITY FOR YOU TO SELL
YOUR STOCK AT A PREMIUM TO ITS THEN CURRENT MARKET VALUE.

Our officers, directors and five percent or greater stockholders
beneficially own or control, directly or indirectly, approximately 60,747,952
shares of common stock, which in the aggregate will represent approximately
72.2% of the outstanding shares of common stock. These stockholders, if acting
together, will have the ability to control all matters submitted to our
stockholders for approval, including the election and removal of directors and
the approval of any business combinations.

OUR RELATIONSHIP WITH NBCI COULD DELAY OR PREVENT A CHANGE IN OUR ENGAGING IN A
CHANGE OF CONTROL TRANSACTION AND YOUR ABILITY TO REALIZE A PREMIUM ON YOUR
STOCK.

Provisions in our agreements with NBCi and its affiliates could delay or
prevent a change in our control, including a change that shareholders might find
beneficial. As part of our relationship with NBCi, we entered into an investor
rights agreement that provides, among other things, that if we receive an offer
to buy 20% or more of our outstanding shares or we receive a third party offer
to buy all or substantially all of our assets, so long as either NBC or NBCi own
at least 2,500,000 shares of our common stock, we will negotiate exclusively
with either NBC or NBCi with respect to the offer for a period of 30 days and
may not sell our company or our assets to a third party on terms that are more
favorable to us than those last offered by NBC and NBCi. Furthermore, NBCi may
terminate its operating agreement with us if one of a number of named NBCi
competitors acquires more than 33% of us, and NBCi or NBC may terminate their
advertising agreements with us in the event of a change in control of our
company. These provisions may deter someone from acquiring or merging with us,
including a transaction that results in stockholders receiving a premium over
the market price for the shares of common stock held by them.

PROVISIONS OF OUR CHARTER DOCUMENTS MAY HAVE ANTI-TAKEOVER EFFECTS THAT COULD
PREVENT A CHANGE IN OUR CONTROL AND YOUR ABILITY TO REALIZE A PREMIUM ON OUR
STOCK.

Provisions of our amended and restated certificate of incorporation and
bylaws in effect after completion of this offering, and Delaware law, could make
it more difficult for a third party to acquire us, even if doing so would be
beneficial to our stockholders. These provisions include:

- authorizing the issuance of blank check preferred stock;

- providing for a classified Board of Directors with staggered, three-year
terms; and

- requiring a super-majority stockholder vote to effect certain amendments.

In addition, provisions of the Delaware General Corporation Law may deter
someone from acquiring or merging with us, including a transaction that results
in stockholders receiving a premium over the market price for the shares of
common stock held by them. Section 203 of the Delaware General Corporation Law
also imposes certain restrictions on mergers and other business combinations
between us and any holder of more than 15% and less than 85% of our common
stock.

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OUR STOCK PRICE MAY BE VOLATILE AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES AT
OR ABOVE THE PRICE YOU PAID.

The market price of our common stock may fluctuate significantly in
response to factors, some of which are beyond our control, include the
following:

- actual or anticipated fluctuations in our operating results;

- changes in market valuations of other Internet and technology companies;

- announcements by us or our competitors of significant technical
innovations, contracts, acquisitions, strategic partnerships, joint
ventures or capital commitments;

- additions or departures of key personnel;

- future sales of common stock,

- any deviations in net revenues or in losses from levels expected by
securities analysts; and

- trading volume fluctuations, which are particularly common among highly
volatile securities of Internet-related companies.

THE PRICE OF OUR COMMON STOCK MAY DECLINE DUE TO SHARES ELIGIBLE FOR FUTURE
SALE.

Sales of substantial amounts of common stock in the public market following
this offering, or the appearance that a large number of shares is or will be
available for sale, could adversely affect the market price for our common
stock. The number of shares of common stock available for sale in the public
market is limited by lock-up agreements that were entered into in connection
with our initial public offering. Under such lock-up agreements, the holders of
over 95% of our outstanding shares of common stock agreed not to sell or
otherwise dispose of any of their shares until 180 days after the date of the
initial public offering. However, Merrill Lynch may, in its sole discretion and
at any time without notice, release all or any portion of the securities subject
to such lock-up agreements. In addition to the adverse effect a price decline
could have on holders of common stock, that decline would likely impede our
ability to raise capital through the issuance of additional shares of common
stock or other equity securities."

WE HAVE NOT PAID AND DO NOT INTEND TO PAY DIVIDENDS.

We have not paid any dividends, and we do not intend to pay cash dividends
in the foreseeable future.

IF WE ARE REQUIRED TO REGISTER AS AN INVESTMENT COMPANY, WE WOULD BECOME SUBJECT
TO SUBSTANTIAL REGULATION WHICH WOULD INTERFERE WITH OUR ABILITY TO CONDUCT OUR
BUSINESS ACCORDING TO OUR BUSINESS PLAN.

If the Investment Company Act required us to register as an investment
company, we would become subject to substantial regulation with respect to our
capital structure, management, operations, transactions with affiliated persons
and other matters. Application of the provisions of the Investment Company Act
to us would harm our business. As a result of this offering and our previous
financings, we have substantial cash, cash equivalents and short-term
investments. We plan to continue investing the excess proceeds of these
financings in short-term instruments consistent with prudent cash management and
not primarily for the purpose of achieving investment returns.

Investment in securities primarily for the purpose of achieving investment
returns could result in our being treated as an investment company under the
Investment Company Act of 1940. The Investment Company Act requires the
registration of companies that are primarily in the business of investing,
reinvesting or trading securities or that fail to meet certain statistical tests
regarding their composition of assets and sources of income even though they
consider themselves not to be primarily engaged in investing, reinvesting or
trading securities.
20
<PAGE> 23

We believe that we are primarily engaged in a business other than investing
in or trading securities and, therefore, are not an investment company within
the meaning of the Investment Company Act.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of shares of common
stock by the selling stockholders pursuant to this reoffer prospectus.

SELLING STOCKHOLDERS

This reoffer prospectus covers the reoffer and resale of shares of common
stock acquired by the selling stockholders under the 2000 Equity Incentive Plan
of Telocity. The selling stockholders are officers, directors employees or
consultants of Telocity.

The selling stockholders may sell pursuant to this prospectus up to all of
the shares of common stock they acquired under the plan in one or more
transactions from time to time as described below under "Plan of Distribution."
However, the selling stockholders are not obligated to sell any of the shares of
common stock offered by this prospectus.

The following is a list of the selling stockholders and the amount of
shares to be offered

<TABLE>
<CAPTION>
NUMBER OF
SELLING STOCKHOLDER SHARES OFFERED
------------------- --------------
<S> <C>
Alexander-Docter, Marie............................. 100,000
Benton, Tom......................................... 13,000
Betts, Andrew....................................... 17,500
Brownell, Peter..................................... 50,000
Buerger, Michael.................................... 35,000
Buerger, Sabrina.................................... 11,000
Chen, Zongbo........................................ 15,000
Chrone, Robert...................................... 15,000
Donahue, David...................................... 17,500
Foshee, Vicki....................................... 85,000
Frazee, David....................................... 70,000
Funk, Jason......................................... 14,900
Green, Howard....................................... 75,000
Grundy, Kevin....................................... 150,000
Harris, Joseph...................................... 75,000
Hart, Patricia...................................... 3,226,274
Hayes, Ned.......................................... 370,000
Hodge, Samuel....................................... 20,000
Huh, Stephen........................................ 15,000
Hunneke, Sally...................................... 50,000
Keliher, Nathan..................................... 20,000
Kuzmeski, Carson.................................... 14,900
Lannan, Sean........................................ 100,000
Leakan, Caroline.................................... 50,000
Manzo, Michael...................................... 80,000
Martin, Scott....................................... 245,000
McKeon, Sharon...................................... 15,000
Miller, Thomas...................................... 50,000
</TABLE>

21
<PAGE> 24

<TABLE>
<CAPTION>
NUMBER OF
SELLING STOCKHOLDER SHARES OFFERED
------------------- --------------
<S> <C>
Morrissey, Jim...................................... 800,000
Nizamuddin, Nadir................................... 150,000
Notthoff, Nancy..................................... 20,000
Obenhuber, Thomas................................... 155,142
Olson, Peter........................................ 90,000
Quintana, Elizabeth................................. 12,000
Robinson, Andrew.................................... 200,000
Rohrer, James....................................... 200,000
Ross, Patrick....................................... 30,000
Senapati, Anante.................................... 25,000
Shih, Jennifer...................................... 21,000
Strahan, Randall.................................... 50,000
Talis, Elana........................................ 12,000
Wiedemann, Regina................................... 240,000
Wilde, Shawn........................................ 12,000
Williams, Joel...................................... 30,000
Wilson, David....................................... 100,000
Zoffada, Gina....................................... 14,900
Total............................................. 7,162,116
</TABLE>

PLAN OF DISTRIBUTION

The shares of common stock covered by the prospectus may be offered or sold
from time to time on the Nasdaq National Market by the selling stockholders, or
by pledgees, donees, transferees or other successors in interest. The shares
will be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act. Such sales may be made in block trades, pursuant to purchases by
a broker or a dealer as principal, in private transactions, in negotiated
transactions or otherwise, at prices and at terms then prevailing or at
negotiated prices. The Company will not receive any of the proceeds from sales
by the selling stockholders.

Any broker or dealer involved in the offer or sale of the shares included
herein may receive brokerage commissions or discounts. To our knowledge, there
is currently no agreement with any broker or dealer respecting such
transactions. Upon sale of such shares, the selling stockholders or anyone
effecting sales on behalf of the selling stockholders may be deemed an
underwriter, as that term is defined in the Securities Act. Each selling
stockholder does not believe that he or she is an underwriter within the meaning
of the Securities Act. All expenses of the registration of the common stock
covered by this prospectus are to be borne by us.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for us by Gray Cary Ware & Freidenrich LLP, Palo Alto, California. As of
the date of this prospectus, Gray Cary Ware & Freidenrich LLP, GCWF Investment
Partners, an investment partnership composed of some current and former members
of Gray Cary Ware & Freidenrich LLP, and some individual members of Gray Cary
Ware & Freidenrich LLP, beneficially own an aggregate of 102,168 shares of our
common stock.

22
<PAGE> 25

EXPERTS

The financial statements incorporated in this prospectus by reference to
the registration statement on Form S-1 (No. 333-94271) have been so incorporated
in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

23
<PAGE> 26

[LOGO OF TELOCITY DELAWARE, INC.]

7,162,116 Shares

Common Stock

-------------------------

REOFFER PROSPECTUS
-------------------------

June 14, 2000
<PAGE> 27

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

Telocity Delaware, Inc. (the "Company") hereby incorporates by reference in
this registration statement the following documents:

(b) All other reports filed pursuant to Section 13(a) or 15(d) of
Securities Exchange Act of 1934, as amended (since the end of the fiscal
year covered by the registrant document referred to in (a) above.

All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment to this registration statement which indicates that all securities
offered hereby have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.

ITEM 4. DESCRIPTION OF SECURITIES

The class of securities to be offered is registered under Section 12 of the
Exchange Act.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

Legal Opinion. The validity of the shares of Common Stock to be offered
hereunder has been passed upon for the Company by Gray Cary Ware & Freidenrich,
LLP ("GCWF"). As of the date of this prospectus, Gray Cary Ware & Freidenrich
LLP, GCWF Investment Partners, an investment partnership composed of some
current and former members of Gray Cary Ware & Freidenrich LLP, and some
individual members of Gray Cary Ware & Freidenrich LLP, beneficially own an
aggregate of 102,168 shares of our common stock

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 102(b) of the Delaware General Corporation Law authorizes a
corporation to provide in its Certificate of Incorporation that a director of
the corporation shall not be personally liable to corporation or its
stockholders for monetary damages for breach or alleged breach of the director's
"duty of care." While this statute does not change directors' duty of care, it
enables corporations to limit available relief to equitable remedies such as
injunction or rescission. The statute has no effect on a director's duty of
loyalty or liability for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, illegal payment of
dividends or stock redemptions or repurchases, or for any transaction from which
the director derives an improper personal benefit. As permitted by the statute,
the Company has adopted provisions in its Certificate of Incorporation which
eliminate to the fullest extent permissible under Delaware law the personal
liability of its directors to the Company and its stockholders for monetary
damages for breach or alleged breach of their duty of care.

II-1
<PAGE> 28

Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers, directors, employees and agents of
a corporation. The Bylaws of the Company provide for indemnification of its
directors, officers, employees and agents to the full extent permitted by
Delaware law, including those circumstances in which indemnification would
otherwise be discretionary under Delaware law. The Company's Bylaws also empower
it to enter into indemnification agreements with its directors and officers and
to purchase insurance on behalf of any person whom it is required or permitted
to indemnify. The Company has entered into agreements with its directors and
certain of its executive officers that require the Company to indemnify such
persons to the fullest extent permitted under Delaware law against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
(including expenses of a derivative action) in connection with any proceeding,
whether actual or threatened, to which any such person may be made a party by
reason of the fact that such person is or was a director or an executive officer
of the Company or any of its affiliated enterprises. The indemnification
agreements also set forth certain procedures that will apply in the event of a
claim for indemnification thereunder.

Section 145 of the General Corporation Law of the State of Delaware
provides for indemnification in terms sufficiently broad to indemnify such
individuals, under certain circumstances, for liabilities (including
reimbursement of expenses incurred) arising under the Securities Act.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED

The shares to be offered and sold under the reoffer prospectus were
initially issued by the company in transactions deemed exempt from registration
under the Securities Act in reliance on either (1) Rule 701 promulgated under
the Securities Act as offers an sales of securities pursuant to an employee
benefit plan or contract relating to compensation or (2) Section 4(2) of the
Securities Act as transactions by an issuer not involving any public offering.

ITEM 8. EXHIBITS

See Exhibit Index.

ITEM 9. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

provided, however, that paragraphs (1)(i) and (l)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.

II-2
<PAGE> 29

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE> 30

SIGNATURE

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cupertino, State of California, on June 14, 2000.

TELOCITY DELAWARE, INC.

By: /s/ EDWARD HAYES
------------------------------------
Edward Hayes
Chief Financial Officer

SIGNATURES AND POWER OF ATTORNEY

The officers and directors of Telocity Delaware, Inc. whose signatures
appear below, hereby constitute and appoint Patti Hart and Edward Hayes and each
of them, their true and lawful attorneys and agents, with full power of
substitution, each with power to act alone, to sign and execute on behalf of the
undersigned any amendment or amendments to this registration statement on Form
S-8, and each of the undersigned does hereby ratify and confirm all that each of
said attorney and agent, or their or his substitutes, shall do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ PATTI HART President and Chief Executive June 14, 2000
-------------------------------------------------------- Officer
Patti Hart

/s/ EDWARD HAYES Executive Vice President and June 14, 2000
-------------------------------------------------------- Financial Officer
Edward Hayes

/s/ PETER OLSON Director June 14, 2000
--------------------------------------------------------
Peter Olson

/s/ MICHAEL SOLOMON Director June 14, 2000
--------------------------------------------------------
Michael Solomon

/s/ EDMOND SANCTIS Director June 14, 2000
--------------------------------------------------------
Edmond Sanctis

/s/ DAVID COWAN Director June 14, 2000
--------------------------------------------------------
David Cowan

/s/ ANDREW RAPPOPORT Director June 14, 2000
--------------------------------------------------------
Andrew Rappoport
</TABLE>

II-4
<PAGE> 31

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ RANDALL STRAHAN Director June 14, 2000
--------------------------------------------------------
Randall Strahan

/s/ CHRISTIE HEFNER Director June 14, 2000
--------------------------------------------------------
Christie Hefner

/s/ LEO J. HINDERY, JR. Director June 14, 2000
--------------------------------------------------------
Leo J. Hindery, Jr.
</TABLE>

II-5
<PAGE> 32

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 Certificate of Incorporation of the Company is incorporated
by reference to Exhibit 3.1 to the Company's to amendment
No. 1 to Registration Statement on Form S-1 filed with the
Securities and Exchange Commission on February 16, 2000 (
No. 333.94271).
4.2 Bylaws of the Company are incorporated by reference to
Exhibit 3.2 to Amendment No. 1 to the Company's Registration
Statement on Form S-1 filed with the Securities and Exchange
Commission on February 16, 2000 (No. 33394271).
4.3 Agreement and Plan of Merger dated March 24, 2000 between
Telocity, Inc. and the Company is attached hereto as Exhibit
4.3.
5 Opinion re legality
23.1 Consent of Counsel (included in Exhibit 5)
23.2 Consent of PricewaterhouseCoopers
24 Power of Attorney (included in signature pages to this
registration statement)
</TABLE>