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LecStar Telecom Signs Agreement to Offer Customers High-Speed Data and VoIP Over Utility Power Lines

Posted on: Thursday, 3 June 2004, 06:00 CDT

LecStar Telecom Inc., a regional telecommunications company and wholly owned subsidiary of Fonix(R) Corp. (OTC BB: FNIX), announced today that it has signed an agreement with an undisclosed regional electric utility to participate in a six-month field trial to test a new technology known as Broadband over Power Lines (BPL).

BPL is an exciting new technology that will allow LecStar to deliver high-speed Internet and voice services to its residential and business customers over the existing power lines of the electric utility. LecStar will be one of the first local exchange carriers to offer Voice over Internet Protocol (VoIP) over BPL service to customers in the United States. LecStar expects to expand its offering to customers in areas where electric utilities have made BPL upgrades to the power lines, enabling the delivery of this service wherever the technology offers a cost-effective alternative to traditional methods of reaching customers.

"This trial positions LecStar as a pioneer in the delivery of BPL technology to telecommunications customers," said W. Dale Smith, LecStar Telecom president and CEO. "The offering of BPL technology will advance our corporate strategy of partnering with electric utilities to jointly market voice and data services using traditional methods of service delivery. Going forward, LecStar's experience developing channel marketing through local and regional utility companies will be extremely valuable in capitalizing on the BPL technology as a cost-efficient, reliable alternative for the delivery of high-speed data and voice services."

Delivering High-Speed Data Over BPL Infrastructure

As part of the trial, LecStar will offer approximately 30 utility customers high-speed data services, which will operate as fast as upgraded cable systems and at multiple times faster than standard DSL services. The offering has numerous advantages over traditional high-speed services, including the flexibility of enabling every outlet in the home to be used as a portal to the Internet. The product is designed to be "synchronous," meaning that the service is as fast at both uploading and downloading information. This synchronous speed is typically not the case with other services (DSL and cable) where the download speed is faster than the speed of uploading data.

Transmitting Voice Over BPL - A New Frontier

Roughly 20 percent of the test customers will also test LecStar's new Voice over Internet Protocol (VoIP) service over power lines. LecStar, in conjunction with its electric utility partners, is optimistic that this technology will continue to gain acceptance as customers recognize that this solution can provide quality, speed and flexibility of use, along with low cost.

"We are excited about the potential of this new technology to open up a new dimension for high-speed data and voice services to customers," said Michael Britt, LecStar VP of Channel Development. "BPL's speed, convenience and flexibility is truly unique. Once the field study is completed in late fourth quarter of 2004, we will solidify the business and revenue model to allow for a broad distribution of these services."

About LecStar Telecom Inc.

LecStar Telecom Inc. is a wholly owned subsidiary of Fonix(R) Corp. LecStar is a facilities-based integrated communications carrier (ICC) certified by the Federal Communications Commission and by nine states (Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee) as a competitive local exchange carrier (CLEC) to provide regulated local, long distance and international telecommunications services. In close alliance with its agents and local electric utility company partners, LecStar offers a full array of fixed wire-line voice, data, Internet and operator services to business and residential customers throughout BellSouth's southeastern operating territory. LecStar was recently acquired by Fonix Corp., an industry leader in delivering conversational speech solutions to consumer systems and devices for everyday use. Manufacturers and developers incorporate Fonix's award-winning technology to provide their customers with an easy, convenient and reliable user experience. Fonix currently offers voice technology for mobile/wireless devices; computer telephony systems; games, game consoles, toys and appliances; the assistive market and automobiles. For more information regarding LecStar Telecom Inc., its products or services, please contact LecStar at 404-659-9500 or visit www.lecstar.com.

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