Citizens Communications Calls for Reduction in Costly and Needless Regulation; Customers Paying for Paperwork, Not Service, Two Months Out of Year.

STAMFORD, Conn.--(BUSINESS WIRE)--April 19, 1999--

Nearly two months of Citizens Communications customers' annual telephone bills pay for regulation, and not for service, Citizens Communications Vice President of Regulatory and Governmental Affairs Wayne Lafferty stated today.

A study conducted by the independent community-based communications provider of its customers and released today shows that Citizens Communications' customers paid an average of $23.40 per telephone line per year last year simply to defray the company's costs of complying with largely unnecessary regulatory activities. For Citizens Communications' customers, that amounted to a record $21.7 million in 1998, compared with $18.4 million in 1997.

"In a time of heightened competition that dictates we provide more services more efficiently to our customers, it is regrettable that our customers must bear this kind of cost and receive absolutely no value in terms of service," said Lafferty. "I do not believe that the spirit and logic of the Telecommunications Act ever intended for our customers to be unduly penalized with increases in these costs."

Lafferty was in Washington, D.C., last week to share the results of the study with senior Federal Communications Commission officials and to urge for the reduction of such wasteful regulation.

"The FCC has several pending opportunities to reduce the regulatory burdens on customers of telecommunications companies such as Citizens Communications," Lafferty said. "Our message to the FCC, and Congress this week, is for them to demonstrate their commitment to the spirit of the Telecommunications Act by reducing these unnecessary and onerous regulatory requirements and allowing the natural competitive forces to do their job," Lafferty said.

The irony is that free-market forces indeed are in play for Citizens Communications, despite the regulatory burdens it carries, Lafferty said. Citizens Communications has more than 150 competitors interconnected to its network and sharing its facilities.

"The presence of these competitors in our facilities clearly demonstrates that competition is alive and growing in our rural and suburban communities," he said. "The regulatory burdens that the company is asking be reduced or eliminated serve little purpose in ensuring the development of competition. In fact, they make it significantly more difficult for Citizens Communications, and other rural telephone providers, to maintain or enhance their investments in the network infrastructure when millions of dollars every year go to fund regulatory paperwork.

"It is entirely unacceptable that the cost of regulatory requirements grew 18 percent between 1997 and 1998 at a time when telephone service providers are expected to operate in a free-market manner," Lafferty concluded. "The intent of the Telecommunications Act was to reduce these kinds of regulatory requirements so that the free market could provide a natural control of pricing and potential competitive abuses."

Citizens Communications, one of the nation's largest community-based communications providers, offers local telephone, advanced calling features, business services and long distance to its 1 million customers in 13 states and Internet, cellular, high-speed data services, and teleconferencing in selected markets. Citizens Communications is part of Citizens Utilities (NYSE:CZN, CZNPr), a growth company that also provides natural gas, electric, water and wastewater treatment services throughout the United States.