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Focal and Verizon Agree on Compensation Rates

Broadband communications provider Focal Communications Corporation (Nasdaq: FCOM) today announced it has signed interconnection agreements with Verizon Communications, Inc. (NYSE: VZ), establishing inter-carrier compensation rates for Internet traffic exchanged between the two companies.

The agreement covers seven Focal markets including Baltimore, Boston, New Jersey, New York, Northern Virginia, Philadelphia and Washington D.C.

It establishes two levels of compensation for traffic exchanged between the companies through September 2002. For traffic below a 10-to-1 ratio of originating to terminating traffic, the average rate is .15 cents per minute throughout the life of the agreement. For traffic that exceeds the ratio, the average rate is .12 cents per minute of use.

In addition, the agreement provides for the most advanced form of interconnection at interconnection points within geographically-relevant areas between the two local networks throughout the region.

The parties intend that these agreements would not be affected by subsequent FCC or Congressional action.

"We are pleased with the progress that has been made with Verizon on many issues. This landmark agreement incorporates a framework to advance the technical interconnection standards, and at the same time it consolidates all of our interconnection terms," commented Robert Taylor, president and CEO of Chicago-based Focal. "This is part of a continuing market trend for the industry. It provides us with a level of certainty for reciprocal compensation in several of our largest markets."