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<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>For folks interested in this sort of thing…<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoBodyText3 align=left style='margin-bottom:6.0pt;text-align:left;
line-height:150%'><b><font size=2 face="Times New Roman"><span
style='font-size:10.0pt;line-height:150%;font-weight:bold'>Germantown, MD,
Telkonet, Inc. (AMEX: TKO), the leader in providing powerline carrier (PLC)
networking solutions using existing electrical wiring, </span></font></b><font
size=2><span style='font-size:10.0pt;line-height:150%'>today announced that
Telkonet, in partnership with First Step Internet, has deployed the Telkonet
iWire System in Washington State University’s student housing units. Telkonet
and First Step Internet, an Internet Service Provider, are joining forces to
market broadband Internet access to multidwelling units in northern <st1:State
w:st="on">Idaho</st1:State> and eastern <st1:State w:st="on"><st1:place w:st="on">Washington</st1:place></st1:State>.
Under the partnership, First Step Internet will provide the Internet service
and Telkonet will deliver broadband Internet access using its proven powerline carrier
communications technology. The Telkonet iWire System™, with its patented
PLC technology, provides in-building broadband Internet and network access over
a building’s existing electrical wiring.<o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-bottom:6.0pt;line-height:150%'><font size=2
face="Times New Roman"><span style='font-size:10.0pt;line-height:150%'>First
Step Internet’s first installation of the Telkonet iWire System was
completed in July at the Terrace Apartments, part of <st1:place w:st="on"><st1:PlaceName
w:st="on">Washington</st1:PlaceName> <st1:PlaceType w:st="on">State</st1:PlaceType>
<st1:PlaceType w:st="on">University</st1:PlaceType></st1:place>’s
student housing. Mike Hall, Area Sales Manager of First Step Internet,
commented, “The Telkonet iWire System is ideal for older apartments, such
as the Terrace that was built in the late 1950’s, where it would be cost-prohibitive
to retrofit with CAT-5 or even to install wireless. As Telkonet’s system uses
a building’s existing electrical infrastructure for Internet delivery, it
eliminates the need to install new wiring. By offering the Telkonet iWire
System, we can now round out our offerings to provide both old and new
complexes with Internet service.”<o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-bottom:6.0pt;line-height:150%'><font size=2
face="Times New Roman"><span style='font-size:10.0pt;line-height:150%'>Bob
Tattershall, Director of Housing and Conference Services, explained, “We
initially installed wireless in some of our student housing complexes, but
found we were constantly getting complaints from unhappy users due to
inconsistent coverage. There are many different complicated factors involved
when providing wireless access in a large complex, and these cannot be totally overcome.
Wireless requires a new infrastructure to be deployed throughout an entire
complex, but with Telkonet, the electrical infrastructure already exists. The comparative
cost for Telkonet’s system was about 20% that of wireless, and best of
all, we can provide students with secure and reliable Internet access from
every power outlet in every room. Furthermore, students do not need a land line
with the Telkonet system – a major plus since many students only have cellular
phones. When word got out that the Terrace apartment complex was offering wired
Internet access, two families moved from their apartment complex into the
Terrace complex – a true testament to the demand for reliable and secure
high-speed Internet access.”<o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-bottom:3.0pt'><strong><b><font size=2
face="Times New Roman"><span style='font-size:10.0pt'>About First Step Internet</span></font></b></strong><strong><b><font
size=2 face="Times New Roman"><span style='font-size:10.0pt;font-weight:normal'><o:p></o:p></span></font></b></strong></p>
<p class=MsoNormal style='margin-bottom:6.0pt;line-height:150%'><a
name="OLE_LINK3"><font size=2 color=black face="Times New Roman"><span
style='font-size:10.0pt;line-height:150%;color:black'>First Step Internet began
offering dial-up Internet access in 1994 with the idea of making Internet
access available to virtually everyone. First Step Internet enabled the
communities of the Inland Pacific Northwest to take advantage of the new opportunities
arising in e-commerce. First Step Internet has matured to being an ISP that
services areas in Central Washington and </span></font></a><st1:State w:st="on"><st1:place
w:st="on"><font size=2 color=black><span style='font-size:10.0pt;line-height:
150%;color:black'>Idaho</span></font></st1:place></st1:State><font size=2
color=black><span style='font-size:10.0pt;line-height:150%;color:black'>. With
the rise in broadband, the products of First Step Internet have grown to
include Frame Relay, DSL and Fixed Wireless Internet service. Through
continuous expansion, First Step Internet has grown to be the region's largest
local user based Internet service provider by supplying the lowest cost and
highest quality connectivity available. </span></font><font size=2><span
style='font-size:10.0pt;line-height:150%'>First Step Internet has installed
wireless and wired networks in over 3,500 apartments. For more information
please visit www.fsr.com.<o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-bottom:3.0pt'><b><font size=2
face="Times New Roman"><span style='font-size:10.0pt;font-weight:bold'>About
Telkonet</span></font></b><font size=2><span style='font-size:10.0pt'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-bottom:6.0pt;line-height:150%'><font size=2
face="Times New Roman"><span style='font-size:10.0pt;line-height:150%'>Telkonet
develops and markets technology for the transmission of high-speed voice, video
and data communications over the existing electrical wiring within a building.
The revolutionary Telkonet iWire System<sup>™</sup> utilizes proven
powerline communications (PLC) technology, which enables the delivery of
commercial high-speed broadband access from an IP “platform” that
is easy to deploy, reliable and cost-effective by leveraging a buildings
existing electrical infrastructure. <o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-bottom:6.0pt;line-height:150%'><font size=2
face="Times New Roman"><span style='font-size:10.0pt;line-height:150%'>The
building’s existing electrical wiring becomes the backbone of the local
area network, which converts virtually every electrical outlet into a
high-speed data port, without the costly installation of additional wiring or
major disruption of business activity. <o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-bottom:6.0pt;line-height:150%'><font size=2
face="Times New Roman"><span style='font-size:10.0pt;line-height:150%'>The
Telkonet iWire System can be installed rapidly and offers a viable and
cost-effective alternative to the challenges of hardwiring and wireless local
area networks (LANs). Telkonet’s products are designed for use in commercial
and residential applications, including multi-dwelling units and the
hospitality and government markets. Applications supported by the Telkonet
“platform” include but are not limited to: VoIP telephones,
Internet connectivity, local area networking, video conferencing, closed
circuit security surveillance and a host of other information services. For
more information, please visit www.telkonet.com.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Sincerely,<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Mike Hall<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>Area Sales Manager<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>First Step Internet<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>888-676-6377 Ext. 540<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'>208-882-8869<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><a href="http://www.fsr.com/">http://www.fsr.com</a><o:p></o:p></span></font></p>
<p class=MsoNormal><font size=2 face=Arial><span style='font-size:10.0pt;
font-family:Arial'><a href="mailto:mikech@fsr.com">mikech@fsr.com</a></span></font><o:p></o:p></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
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