Mpower Agrees to Sell Assets and Customers to McLeodUSA

Mpower has entered into a definitive agreement to sell certain of its assets and its customer accounts in the Chicago area to McLeodUSA Incorporated. The sale will enable Mpower and its affiliates that do business as TelePacific ommunications (TelePacific), to focus solely on serving business enterprises throughout the Western region.

“I believe that this transaction is very positive for TelePacific as it better positions the company to pursue its core growth strategy in California, Nevada and throughout the Western region,” said Dick Jalkut, president and chief executive officer of TelePacific.

Jalkut said, “TelePacific is uniquely positioned for solid growth by continuing to leverage the broadest network in California and Nevada. In addition to our traditional enterprise customers, we are building strong customer relationships through our wholesale business as a result of Mpower’s previous acquisition of ICG and its robust fiber network.”

In connection with the sale transaction, McLeodUSA will acquire approximately 5,000 customers and certain network assets in the Chicago area.

Closing of the transaction, which is expected in the second quarter of 2007, is subject to customary closing conditions and receipt of any applicable state and federal regulatory approvals.

Mpower was advised by Brown Brothers Harriman & Co. and Credit Suisse. Gibson, Dunn & Crutcher LLP provided legal support to Mpower.

About TelePacific Communications

TelePacific Communications is a competitive carrier that serves customers throughout California and Las Vegas, Nevada and in Chicago through its subsidiary Mpower Communications of Illinois. Headquartered in Los Angeles, the Company is the leading competitive carrier in California and Las Vegas, with customer care centers in Los Angeles and Stockton in California and Las Vegas in Nevada. In business since 1998, TelePacific provides services through a combination of TelePacific-owned switches and network infrastructure, including its robust fiber-optic network assets. Offering local and long distance voice, dedicated Internet access, private networking and data transport services as well as bundled voice and Internet solutions and wholesale services, TelePacific manages more than 75,000 customer accounts with 930,000 access lines.

About McLeodUSA

McLeodUSA provides managed internet protocol-, or IP-, based communications services to small-and medium-sized enterprises, and traditional circuit-switched telephony services to commercial and residential customers in the Midwest, Rocky Mountain, Southwest and Northwest regions of the nation. McLeodUSA delivers an extensive array of broadband IP-based voice and data solutions, targeting primarily small and medium-sized enterprises and multi-location commercial customers.

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Compare Telepacific’s voice rates to other providers here

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