CORETEL ASKS U.S. COURT OF APPEALS TO OVERTURN FCC RECIPROCAL COMPENSATION GUIDELINES
-- CoreTel argues FCC ignored Court's previous instructions --

Annapolis, MD, June 5, 2001 - - Core Communications, Inc. ("CoreTel") has asked the U.S. Court of Appeals for the District of Columbia Circuit to vacate the Federal Communications Commission's (FCC) April 27, 2001 guidelines on reciprocal compensation.

In a petition for enforcement filed late yesterday with the U.S. Court of Appeals, CoreTel argues that the FCC ignored the Court's earlier instructions in the case of Bell Atlantic Telephone Companies v. FCC. In that ruling, the Court remanded the FCC's previous rules on reciprocal compensation back to the FCC for further clarification. CoreTel argues that the April 27, 2001 reciprocal compensation order issued by the FCC does not address the Court's previous concerns.

In its petition, CoreTel has requested that the Court:

• Enforce the mandate of Bell Atlantic v. FCC;

• Vacate the FCC's April 27, 2001 order on reciprocal compensation;

• Issue a writ compelling the FCC to hold that ISP-bound traffic is subject to Section 251(b) reciprocal compensation.

The Telecommunications Act of 1996 requires that local exchange carriers (LECs) compensate each other for terminating telephone calls that originate on another LECs network. In the 1996 Act, this provision - better known as reciprocal compensation or 251(b) - included all "local telecommunications traffic" including calls to and from ISPs.

Since the passage of the 1996 Act, the usage of the Internet has grown exponentially. Many LECs - especially the Incumbent Local Exchange Carriers (ILECs) such as Verizon -- now argue that they should not have to pay CLECs to terminate ISP traffic. In its April 27 ruling on reciprocal compensation, the FCC sided with ILECs and ruled that ISP-bound dial-up calls are not eligible for reciprocal compensation. The FCC also abandoned its previous reasoning on reciprocal compensation and, in violation of Section 251(b) of the Telecommunications Act, made up an entirely new theory, namely that ISP-bound traffic is "information access service" in order to deny reciprocal compensation to CLECs that carry ISP traffic.

"By creating an arbitrary new category in its April 27 reciprocal compensation ruling, the FCC not only pulled a fast one on CLECs that carry ISP bound traffic and who, for the past five years, have followed the letter and spirit of the 1996 Act in creating their business plans, but the Commission has blatantly ignored the Court of Appeals and Congress by coming up with their own rules on reciprocal compensation," said Bret Mingo, chief executive officer of CoreTel. "If the FCC truly means to encourage telecommunications competition, then we need a consistent and fair approach on the issue of reciprocal compensation."

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About Core Communications, Inc.

Core Communications, Inc. ("CoreTel") is a Competitive Local Exchange Carrier (CLEC) headquartered in Annapolis, Maryland. CoreTel competes directly with Verizon - Maryland, Inc. and other CLECs in the highly contested data communications marketplace. CoreTel relies on its expertise with integrating the Internet and telephone networks to provide targeted services to data-focused customers. As a CLEC, CoreTel is the product of the Telecommunications Act of 1996, which deregulated local exchange telecommunications nationwide, as well as the pro-competition policies of the Maryland Public Service Commission. CoreTel's investors include Charles Ross Partners, LLC. For more information, please visit CoreTel's web site at www.coretel.net.

FOR MORE INFORMATION CONTACT:

Robin Buckley
Buckley & Kaldenbach, Inc.
703.533.9805

Reporters who would like a copy of the petition may contact:

Stephanie A. Joyce
Patton Boggs, LLP
202.457.6000 (extension 6194)