TelePacific Communications to Acquire Mpower, Creating Leading Competitive Local Exchange Carrier Serving Customers in Western U.S.

Los Angeles, California, 5/5/2006 - TelePacific Communications, which provides telecommunications services to businesses throughout California and Las Vegas, Nevada, and Mpower Communications Corp. (AMEX: MPE), which provides business, residential and wholesale telecommunications services throughout California, Las Vegas, Nevada and Chicago, Illinois, today announced that they have signed a definitive merger agreement pursuant to which TelePacific will acquire Mpower.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, TelePacific will pay $1.92 in cash per Mpower share, which equates to a total equity value of approximately $204 million. The acquisition will be financed through a fully committed senior credit facility arranged by Credit Suisse and Bank of America.

The combination of TelePacific and Mpower will create a more effective and efficient provider of retail, wholesale and residential telecommunications services - including local, long-distance, private line and data networking services - in California, Las Vegas and Chicago. Upon completion of the transaction, TelePacific will rank as one of the leading competitive local exchange carriers (CLEC) in the Western United States.

"This transaction brings together two solid, very well-run companies that share a focus on offering a meaningful competitive choice to small and medium sized business customers," said Dick Jalkut, president and CEO of TelePacific, who will lead the combined company in the same positions. "Mpower has an outstanding network, great employees and a strong record in terms of product innovation and quality of services. These strengths, added to those of TelePacific, will improve our ability to provide advanced, high-quality telecommunications services to a broader range of customers and increase the growth opportunities available to us. Along with the numerous customer benefits, we believe the proposed transaction will yield substantial financial benefits from synergies for its investors."

The combined businesses will gain significant network synergies and efficiencies. Today, the companies' service territories overlap in all markets except Chicago. As a result of the acquisition, TelePacific customers will gain access to Mpower's valuable fiber assets and colocation facilities. Mpower has metro fiber rings throughout its California and Las Vegas markets and a long-haul fiber route connecting all major markets across the state of California. TelePacific plans to leverage Mpower's extensive fiber-optic network assets to expand its wholesale private line service offerings. In addition, Mpower has 297 on-net and 184 off-net colocation facilities across California, Las Vegas, and Chicago. A deeper and denser network will allow TelePacific to deliver more products and better service to present and future customers in its markets.

Rolla Huff, chairman and CEO of Mpower, said, "Customers in the companies' market footprint seeking a real alternative to the incumbent providers like AT&T, Verizon and Sprint will benefit from the expertise of the professionals who work at both companies, along with the combination of advanced product offerings and more robust networks. The new combined company will have substantial resources to better serve all of its customers."

Closing of the transaction is subject to customary closing conditions, approval by Mpower's shareholders and receipt of applicable state and federal regulatory approvals. The transaction is expected to close in the third quarter of 2006.

Lars Haegg, a Managing Director of Investcorp, the global investment firm that is TelePacific's largest shareholder, said, "Investcorp and Clarity Partners have been pleased to support Dick Jalkut and the TelePacific team as they have built the company both organically and through acquisitions. The merger with Mpower will establish the combined enterprise as one of the leading CLECs in the Western U.S. and position it to generate significant value for its constituencies."

TelePacific was advised by Brown Brothers Harriman & Co. and Credit Suisse. Gibson, Dunn & Crutcher LLP provided legal counsel. Morgan Stanley, Evercore Partners and Shearman & Sterling LLP advised Mpower.

About TelePacific Communications
With more than 15,000 business customers, TelePacific Communications is a leading provider of business telecommunications network solutions providing local, long-distance, data and Internet services to small-to-medium sized businesses in California and Nevada. Headquartered in California with local sales consultants, service, support and facilities, TelePacific offers solutions, provisions service and provides customer service where its customers do business.

About Mpower
Founded in 1996, Mpower Communications (AMEX: MPE) is a leading facilities-based broadband communications provider offering a full range of data, telephony, Internet access and Web hosting services for retail business and wholesale customers. Further information about the company can be found at www.mpowercom.com.

About Investcorp
Investcorp is a global investment group with offices in New York, London and Bahrain. The firm has four lines of business: private equity, real estate investment, hedge funds and venture capital. It was established in 1982 and now manages total investments in alternative assets of approximately $9.5 billion.

In the United States, Investcorp and its clients currently own corporate investments that include American Tire, CCC Information Services and SourceMedia. In Europe, Investcorp and its clients currently own corporate investments that include Polyconcept, APCOA, Hilding Anders and Autodistribution. Further information is available at www.investcorp.com.

About Clarity Partners L.P.
Clarity Partners is a private equity investment firm based in Los Angeles, California, which invests exclusively in media, communications, and related technologies and services. The firm's partners have extensive experience in successfully creating, investing in, managing, and financing companies at all stages of development. Clarity works with its portfolio companies' management teams to establish or grow dynamic companies with leading positions in their target market segments. Further information can be found at www.claritypartners.net.

 
Cautionary Language Concerning Forward-Looking Statements
We have included or incorporated by reference in this document financial estimates and other forward-looking statements. These estimates and statements are subject to risks and uncertainties, and actual results might differ materially from these estimates and statements. Such estimates and statements include, but are not limited to, statements about the benefits of the merger, including future financial and operating results, the combined company's plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the management of TelePacific Communications and Mpower and are subject to significant risks and uncertainties outside of our control.

The following factors, among others, could cause actual results to differ from those described in the forward-looking statements in this document: the ability to obtain governmental approvals of the merger on the proposed terms and schedule; the failure of Mpower's shareholders to approve the merger; the risk that the businesses of TelePacific and Mpower will not be integrated successfully or as quickly as expected; the risk that the cost savings and any other synergies from the merger may not be fully realized or may take longer to realize than expected; disruption from the merger making it more difficult to maintain relationships with customers, employees or suppliers; and competition and its effect on pricing, spending, third-party relationships and revenues.

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