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FCC Fines N.Car. Provider $15K For Blocking Vonage: Page 2 of 3

In a phone interview, Vonage CEO Jeffrey Citron said his company "is very pleased by the FCC's swift action. It sends a clear and strong message that [VoIP] blocking is not going to be tolerated by the government."

In an e-mail reply, Steve Vanderwoude, chairman and CEO of Madison River Communications, said: "We are in a quiet period due to our S-1 on file with the SEC, we will have
no comment."

According to a recent report in the Triangle Business Journal, a local business publication for the Raleigh, N.C. area where Madison River's headquarters is located, the company's planned IPO may be a move to make itself more attractive for a possible acquisition. According to its latest financial report, Madison River had $194.4 million in revenues during 2004.

Madison River Communications operates four rural telephone companies, in the states of Alabama, Georgia, North Carolina and Illinois, which offer local phone service, long distance, and DSL-based broadband Internet access. Vonage's Citron said the blocking incident affected approximately 200 Vonage customers in "more than one state," but said that the incident the company thoroughly investigated occurred in Alabama.

According to Vonage, its customers said that representatives of Madison River's phone companies had admitted that they were blocking Vonage, which Madison River called a "competing phone service." A spokesperson for GulfTel Communications, Madison River's Alabama-based operation, declined to comment, referring all questions to the corporate office.