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ERFW News Bankers Deploying ERF Wireless' CryptoVue(TM) Encryption System with Motorola's Broadband Technology to Add Secure Bandwidth, Reduce Costs

LEAGUE CITY, Texas--(BUSINESS WIRE)--ERF Wireless Inc.’s (OTCBB:ERFW) specialized data encryption solution is being deployed along with Motorola Inc.’s wireless broadband technology by banks in Gulf Coast states to upgrade bank branch financial transaction and data processing capacity while preventing service interruptions caused by hurricanes and other natural disasters.

As recently as July 2006, Iberville Bank became the fifth multi-bank branch operator in the region to launch an encrypted wireless financial network that interconnects the bank’s headquarters and processing center with its 11 branches in southwest Louisiana. Previously, the bank had leased numerous land-based data transmission lines to link its facilities dotting a 500-square-mile area.

The secure, point-to-point wireless financial network, which is the backbone for all the bank’s retail ATM network, teller systems, and other financial transaction data transmissions, also transports digital images of checks and financial documents from the various branches to a central processing center. Two key elements make up the network: CryptoVue^™, a patent-pending proprietary data encryption system with biometric controls developed and deployed exclusively for high-security networks by ERF Wireless, combined with Motorola’s Canopy^® wireless broadband technology.

“The combination of CryptoVue and Canopy provides a unique solution for the banking industry while raising the prospect for other information security-conscious industries that could benefit from such a combination,” said Craig Newman, a market development manager with Motorola’s Networks and Enterprise business. Canopy solutions are part of Motorola’s overall broadband approach to total coverage which includes its MOTOwi4^™ portfolio of innovative wireless broadband solutions and services that create, complement and complete IP networks.

John Burns, a banking technology expert and now CEO of ERF Wireless Inc.’s Enterprise Network Services subsidiary, explains how digital images of checks -- not the actual pieces of paper -- are transported from place to place for settlement. Until just a few years ago, the original paper check had to be physically transported back to the payee bank for payment. That meant engaging ground and air couriers to hand-carry cancelled checks to the respective issuing banks -- a costly venture considering the actual cost of transport. Compounding that cost, however, was the cost of float -- the time during which the bank that cashed the check does not have access to the funds and the interest income that otherwise could be generated while in possession of those funds. Check processing centers operated by the nation’s Federal Reserve Banks and numerous privately operated check processing correspondent banks situated along the route of the returning check were able to short-circuit some of the negative effects of float, but not entirely.

“For most banks, the technology of choice has been leased frame circuits or T1 lines to their remote locations,” says Burns. “But telco circuits are expensive and they do not have the capacity to support the growing volume and complexity of present-day bank transactions and the new digital applications being deployed. And as we learned here last year with not one but two powerful hurricanes, land circuits don’t stand up very well to high winds and flood waters. Many telephone and cable circuits were down for weeks -- some even months. And the one lesson we all learned is that people are very clear on what they need in a hurricane situation: water, ice, food, communications and access to their money.”

CryptoVue devices are installed along with the Canopy radios at each bank branch in the network. The devices employ biometrically-controlled 3-DES data encrypted IPSec tunnels to encapsulate Layer 3 data LAN to LAN over the WAN network to each location. The devices also have a packet-filtering firewall to block the propagation of any traffic on the WAN network from any device other than a CryptoVue. The devices route encrypted packets of traffic to other authenticated CryptoVues on the WAN between the branch LANs and multiple internal LAN subnets across the network.

Iberville Bank President Larry Melsheimer says the deployment of his bank’s new network directly addresses a number of financial operations issues. For example, Melsheimer’s bank was paying $7,000 to $8,000 a month to interconnect its branches with T1s. Typical data throughputs over T1s, especially fractional T1s, can only provide connectivity of up to 1,536 Kilobits per second. "But none can compare to the 14 Megabits-per-second speeds available with our Canopy links," says Melsheimer. Another major cost to Iberville Bank -- the $70,000 it was being charged annually by couriers to deliver checks and other paper-based documents to processing centers -- has been eliminated.

Last year, on September 24, when Hurricane Rita smashed into the Texas-Louisiana border region, Brent Courrege saw first-hand the destructive force of a Category 3 hurricane and what something like that can do to disrupt local and regional commerce. Courrege, the chief operations officer at Jeff Davis Bank in Louisiana’s Lake Charles area, oversees operations for the bank’s 16 locations across some 800 square miles, all of which are tied together by a Motorola-ERF Wireless encrypted wireless broadband network.

“We lost about half the towers in the storm but the main network backbone and our operations center stayed up even during the most intense winds and rains,” he recalls. “We lost power at most of our locations. There were mandatory evacuations -- all Lake Charles people were locked out. However, we got permission to go back in and within a day after the hurricane hit, we got busy and the affected branches were back up and running in no time. In fact, we were up and back in business before most other banks -- banks that had to wait for the local telephone company to restore their T1 connections.”

Courrege and his team used rented generators to power the branches and his Motorola-ERF Wireless network while they waited for the local electrical utility to restore service. Since the hurricane, the bank has replaced failed towers with ones designed to withstand a Category 4 storm. Generators now are permanently installed at key branch locations, while a supply of portable units is available for immediate deployment should they be needed.

“These technologies were developed to satisfy both stringent auditing standards and federal banking regulations covering enterprise wireless network security. We believe we have the only wireless terrestrial systems that have been subjected to rigorous audits, banking examinations and vulnerability assessment tests necessary to carry sensitive financial data,” says Burns. “In addition, ERF Wireless provides encrypted satellite failover circuits to satisfy a redundancy requirement soon to be mandated by federal regulators.”

About ERF Wireless

ERF Wireless Inc. is a fully reporting public corporation (OTCBB:ERFW) that specializes in providing secure wireless broadband product and service solutions to banking and commercial clients on a national basis. Its principals have been in the network integration, Internet banking, and encryption technology businesses for over twenty years and have constructed encrypted, wireless broadband networks as well as secure Internet banking solutions for hundreds of banks across America. For more information about ERF Wireless, please visit www.erfwireless.com or call 281-538-2101. (ERFWG)

Forward-looking statements in this release regarding ERF Wireless Inc. and Motorola Inc. are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company's products, increased levels of competition, new products and technological changes, the company's dependence upon third-party suppliers, intellectual property rights, and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.

CryptoVue is a trademark of ERF Wireless and incorporates several patent-pending technologies filed with the US Patent & Trademark Office.