-----Original Message-----
From: 	Schmidt, Ann M.  
Sent:	Friday, October 26, 2001 10:51 AM
To:	Denne, Karen; Philipp, Meredith; Palmer, Mark A. (PR); Kean, Steven J.; Meyer, Vance; Hiltabrand, Leslie; Radford, Pat
Subject:	Enron Sues Microsoft Over Failed Broadband Services Deal

DJ Enron Sues Microsoft Over Failed Broadband Services Deal<ENE.N><MSFT.O>
   By Michael Rieke
   Of DOW JONES NEWSWIRES

    HOUSTON (Dow Jones)--In a July conference call with analysts when Jeff Skilling
was still chief executive of Enron Corp. (ENE), he threw out a ray of hope for
his company's foundering broadband business.

    Enron Broadband Services had just signed a long-term deal to provide bandwidth
for MSN, Microsoft Corp.'s (MSFT) online Internet service, Skilling said. Enron
would give more details on the deal later.

    After three months without farther word on the deal, Enron has broken its silence
by suing Microsoft.

    In a suit filed Thursday in the district court of Harris County, Texas, Enron
claimed Microsoft has failed to live up to terms of the deal.

    The agreement, signed June 25, called for Enron Broadband to develop and provide
network capacity and other services to support Microsoft's offering of high-speed
Internet service, according to the lawsuit.

    Microsoft was required to develop an electronic ordering and billing system for
use with all regional Bell telephone companies during an initial phase of the
deal, according to the lawsuit.

    Microsoft has failed to provide that system and other items required in the deal,
so Enron isn't required to deliver operational broadband services for the deal,
the lawsuit said.