Compromise Solution Offered to Bell Companies to Save Americans $11+ Billion in Telecom Costs.

Business Editors/High-Tech Writers

QUINCY, Mass., MELVILLE, N.Y. & LOUISVILLE, Kent.--(BUSINESS WIRE)--April 16, 2004--Granite Telecommunications, LLC, InfoHighway Communications Corporation, and Lightyear Network Solutions, LLC, await a response to their April 9 proposed solution for wholesale access to the unbundled network element platform (UNE-P). The proposal was submitted to the four Bell companies and Sprint. This latest proposal is in response to the Federal Communications Commission's (FCC) call for carriers to renew their efforts to voluntarily agree to terms for network access in order to bring more choice, product innovation, and lower cost for consumers.

The solution, offered by the three providers seeks to eliminate costly, drawn-out court proceedings, streamline network operations, and ultimately provide a wide range of telecommunications products at competitive price. The proposal would establish a nationwide, all-inclusive flat-rate for UNE-P affording the ILECs an approximate 20% price increase for a contract period of five to seven years. A flat rate would simplify processes and reduce the number of billing disputes, enabling both sides to reduce their administrative costs. A simplified rate structure also facilitates the development of national rate plans similar to what consumers have enjoyed on the cellular wireless industry. National rate plans have proven to be very popular with consumers and highly successful in promoting competition.

The proposed solution calls for the ILECs to agree to continue providing UNE-P throughout the term of the existing agreement, barring any changes or disruptions in the law. The parties would no longer be subject to further UNE-P litigation at the state utility commissions, the FCC, or in federal courts. During these negotiations, all parties would continue to operate under existing contracts and would suspend any pending actions to amend or terminate existing agreements.

Granite, InfoHighway, and Lightyear are 100% committed to negotiating with the incumbent carriers to establish a comprehensive resolution to UNE-P access without further litigation. Rob Hale, CEO and President, Granite Telecommunications, challenged the Bell companies to do the same. "We look forward to immediate negotiations with the ILECs to work together to secure the benefits of lower prices and higher quality services for our customers and for all Americans."

Peter Karoczkai, Senior Vice President, InfoHighway Communications and Chairman of the PACE Coalition, believes that the guarantee of stability will help CLECs and their customers, despite the increased costs and loss of UNE-P for some customer markets. "This deal would allow InfoHighway to focus more on long-term business strategy and customer satisfaction and less on playing constant defense in the courts and regulatory agencies across the country. UNE-P continues to demonstrate its unique ability to bring needed competition to the forgotten American, the average residential and small business consumer."

Kevin Shady, Vice President of Local Development, Lightyear, agreed. "While Lightyear would be paying more to the ILECs than we should have to, some of the increased cost would be offset by reduced costs for lobbying and litigation." "A flat-rate is exactly the type of outside-the-box proposal that makes perfect sense in market-oriented negotiations but that never would be developed through fifty-one separate state commissions applying regulatory pricing methodologies."

Under the proposed solution, the ILECs would agree to provide their DSL services to CLEC UNE-P customers. Currently, most Bell companies do not provide their service to consumers unless they are signed up for local telephone service with that Bell company. By allowing consumers to select the broadband and voice providers of their choice, this solution would promote both broadband adoption and voice competition.

The proposal emphasizes that the negotiation process must be transparent and open, and that all agreements are made public. Confidential agreements would make it impossible for carriers and regulators to determine whether the incumbent carriers are offering service in a nondiscriminatory manner, as required by the Communications Act of 1934.

"If UNE-P were to be eliminated there would be a dramatic reduction in competitive activity that would result in higher prices for all customers, with the greatest burden being shouldered by residential and small business customers," said Karoczkai. "At this time," he continued, "it is clearly up to the Bells to respond quickly to reach a solution with us that is in the best interest of the consumer."

About InfoHighway Communications Corporation: InfoHighway Communications Corporation is a leading Integrated Communications Provider ("ICP") offering competitively priced and state-of-the-art local, long distance voice and data telecommunications and Internet services to small- to medium-sized businesses in the Northeastern and Mid-Atlantic United States. Services are currently offered in major metropolitan markets in New York, New Jersey, Massachusetts, Pennsylvania, Maryland, Delaware, Washington, D. C., Virginia, Maine, New Hampshire, Vermont, Rhode Island, Connecticut and Texas. For additional information, please visit our website www.infohighway.com or call [phone].

About Lightyear Network Solutions, LLC: Lightyear Network Solutions, LLC was founded in 1993 by J. Sherman Henderson, III as a national sales and marketing organization providing telecommunication services and solutions to both commercial and residential customers. Lightyear provides a full suite of business and residential communications services including local, long distance, data and Internet, and offers one bill and complete customer care for services over a number national and regional carriers, which are tailored to meet the customer's specific needs. Lightyear serves more than 200,000 customers nationwide generating annual revenue of $120M through an independent national sales force of Lightyear Agent Partners. For additional information, please visit our website www.lightyearcom.com or call [phone].

About Granite Telecommunications, LLC: Granite Telecommunications is a UNE-P Wholesaler based in Quincy, Massachusetts servicing small and large business customers in 49 states. The headquarters and Operations Center is in Quincy, MA with sales offices in NY, FL, and RI. Granite provides customers bundled services at competitive prices. For more information please visit www.granitenet.com or call (866)-847-1500.