The telecommunications market in the United States has grown and changed dramatically during the past twenty years. The United States Telecommunications Act of 1996 (the 1996 Act), the first comprehensive communications legislation since 1934, became law on February 8, 1996. The principal objective of the 1996 Act is to stimulate competition in all segments of the telecommunications industry in the United States.

Nortel expects the 1996 Act to have a positive impact on telecommunications equipment suppliers generally. In addition to allowing industry participants to enter new businesses, the 1996 Act should also result in new market entrants providing telecommunications services and an expanded market for telecommunications equipment.

Clearly, our U.S. operations play a vital role in our overall corporate strategy. Our long-standing leadership position in the United States helped establish Nortel as a world-scale technological innovator and helped us expand into international markets. As the world's leading supplier of digital network solutions and services, Nortel is playing a strategic role in the progress of America, creating the electronic infostructure of the networked digital economy of the 21st century.

Today, Nortel has employees in more than 100 locations across the United States. Major operations are located in Atlanta, Georgia; Mission Park, California (near San Jose); Nashville, Tennessee; Research Triangle Park, North Carolina (near Raleigh-Durham); and Richardson, Texas (near Dallas).