Corvis Buys Focal Communications

COLUMBIA, Md. -- Corvis Corporation (Nasdaq:CORV - News), a leading provider of intelligent optical networking solutions, today announced that it has signed an agreement to acquire Chicago-based competitive local exchange carrier (CLEC) Focal Communications Corporation, a nationwide provider of voice and data solutions for enterprises, carriers and resellers.

"We believe that Focal meets all the criteria we've previously discussed for a strategic acquisition. Clearly, Focal will help further support our growth strategy for Broadwing," said Dr. David Huber, Corvis chairman and CEO. "Focal will help us expand our nationwide network footprint and reduce our access costs. They will also help add valuable customers and revenue without putting undue stress on our balance sheet."

Broadwing Communications built and operates a one-of-a-kind, ultra-long haul, all-optical network and award-winning IP backbone that provides networking solutions for voice, video and data applications used by carriers and enterprises. Focal is a competitive local exchange carrier with 4,000 enterprise and wholesale/carrier customers. Focal operates in 23 Tier 1 markets from Boston to Miami and New York to Los Angeles. Focal also has its own metro fiber footprint in nine Tier 1 national markets.

The Company said it has agreed to acquire Focal for a total consideration of $210 million, which will be comprised of approximately $101 million in equity to be issued to Focal's existing equity holders and the assumption or payment of approximately $109 million of Focal's existing debt and other long-term capital lease obligations.

Focal expects to report annual revenues of approximately $320.0 million for fiscal 2003. As of December 31, 2003, Focal had cash and cash equivalents of $24.9 million.

Focal Communications will expand the reach of Broadwing's 18,500-mile nationwide all-optical network into targeted local markets throughout the United States. The addition of these metropolitan markets will help further support the company's market attack plan with enterprise and strategic carrier customers.

"This is a combination that makes great business sense. Our operations clearly complement each other and we both have a reputation for and dedication to excellent customer service," said Kathleen Perone, president and CEO of Focal Communications.

The Company also stated that Focal Communications would help accelerate its progress with its Voice over Internet Protocol (VoIP) services offering and its "Access Forward" cost initiative, which is aimed at reducing local loop or access charges. The Focal acquisition will help reduce planned capital expenditures for Broadwing's current voice network platform due to the synergies expected with Focal's state-of-the-art voice network. In turn, Broadwing will enable Focal to offer bundled data and voice services to its existing customers who subscribe primarily to voice services today. The Broadwing network is expected to significantly lower Focal's current long-haul transport and switching costs.

Corvis Corp.

Focal Communications Corp.