February 18, 2002 -- Z-Tel Technologies, Inc. (Nasdaq/NM:ZTEL), a provider of local and long distance phone services to small business and residential customers, announced its support of the New York Public Service Commission's tentative settlement agreement with Verizon as a move that will foster a vibrant, competitive market for New York consumers. The proposed regulatory incentive plan, expected to be formally adopted later this month, directly addresses the availability of the Unbundled Network Element (UNE) Platform statewide and Verizon's current retail and wholesale rates.

Under the proposed settlement, any New York customer in Verizon territory with fewer than 18 lines will have access to UNE Platform-based telecommunications services, such as those Z-Tel offers. Z-Tel utilizes the UNE Platform to provide its New York customers local service, and the expansion of its availability as a market entry method could expand the company's business opportunities throughout the state. The plan also introduces a retail performance plan for Verizon that includes penalties should Verizon violate the plan.

"This settlement continues the crucial pro-competition momentum that the Commission has generated with its recent unanimous vote to reduce UNE rates in New York," said Gregg Smith, President and Chief Executive Officer for Z-Tel. "It is valuable to all parties involved, from the residential and business telecom customers in New York to the providers serving them. For Z-Tel, the agreement, if implemented fully, would greatly enhance our ability to compete, particularly with respect to the provisions that expand the availability of unbundled local switching and the UNE Platform. As a result, we plan to increase our emphasis in the New York market. We are also considering moving up the New York launch of our small business product, Z-LineBUSINESS(TM)."

Commenting on the Commission's resolution, Don Davis, Z-Tel's Vice President, Strategic Planning, stated, "We laud the New York PSC Staff and Judges for their efforts to settle this matter. Their work on UNE rates and the Verizon incentive plan establishes a critical framework for ensuring a pro-competitive landscape in New York."

Smith added, "The expansion of UNE Platform availability represents a significant victory for telecom consumers throughout New York and for companies like Z-Tel. We battle issues like these throughout the country every day to secure the competitive prospects that the Telecommunications Act of 1996 promised. Policymakers nationwide, including the FCC, should take notice of the substantial commitment the New York PSC has made to expand access to the UNE Platform and the key role this method of entry plays in promoting the pro-competitive, deregulatory environment envisioned by the Telecom Act."

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