FCC DECLARES VONAGE® VOIP SERVICE IS INTERSTATE, PREEMPTS STATES FROM REGULATING VOIP

Vonage CEO Jeffrey A. Citron Says Increased Clarity in the Broadband Telephone Marketplace Means Subscribers Will Enjoy More Innovation, Greater Savings

Washington, D.C., November 9, 2004 - Today the Federal Communications Commission (FCC) found that Vonage's Voice over Internet Protocol (VoIP) phone service is "interstate" in nature, meaning that individual states cannot regulate Vonage as it would a traditional telephone company, nor regulate the rates, terms and conditions of Vonage's service.


Vonage CEO Jeffrey A. Citron responded to the news. "This forward -thinking decision from the FCC assures that competition from VoIP is here to stay. Now we can focus our resources exclusively on building an even better service -rolling out E -911 for all our subscribers, innovating new features and new devices for VoIP, and expanding aggressively around the globe. Because the FCC has acknowledged the reality of the Internet -which knows no state boundaries and no borders -more people will enjoy the benefits of Internet phone service."

"Clarity for the VoIP industry benefits not only the U.S. economy, but will also drive broadband penetration. The value proposition is clear -our customers pay less for the combination of high -speed Internet and Vonage phone service than they do for traditional phone service plus clunky dial -up Internet. It's an upgrade that saves consumers money, simplifies their lives and gives them features they can't get from traditional phone service. The FCC has ensured that more consumers will enjoy the benefits of this upgrade by providing clarity in the marketplace," added Citron.

The vote was 3 in favor, with 2 concurring votes, leading to a unanimous declaration that that Vonage's form of IP -to -PSTN communications is an interstate service, asserting their sole jurisdiction over its Internet -based service. The ruling is the third in a series of IP -enabled services petitions, which establish the role of the FCC in the regulation of the changing telecommunications landscape. The order is expected to be issued in two to three weeks. Please visit www.fcc.gov for more information about this landmark ruling.

About Vonage®

Vonage is redefining communications by offering consumers and small businesses an affordable alternative to traditional telephone service. The fastest growing telephony company in North America, Vonage is sold directly through www.vonage.com and retail partners such as Amazon.com, RadioShack, Best Buy, Circuit City, Staples, Fry's Electronics and Office Depot. With more than 300,000 lines in service, over 5 million calls per week are made using Vonage, the easy -to -use, feature -rich, flat rate phone service. Vonage is headquartered in Edison, New Jersey. For more information about Vonage's products and services, please visit www.vonage.com or call 1 -VONAGE -HELP.

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