PACW PacWest Bancorp

Pac-West Telecomm Comments on FCC Decision To Remove Reciprocal Compensation Growth Caps STOCKTON, Calif., Oct. 11 /PRNewswire-FirstCall/ -- Pac-West Telecomm, Inc. (NASDAQ:PACW), a provider of communications services to service providers and enterprise customers in the Western U.S., applauds Friday's FCC decision to remove growth caps and the new market rule for dial-up Internet traffic. Pac-West's network averages over 120 million minutes of voice and data traffic per day, and carries an estimated 20% of the dial-up Internet traffic in California. Hank Carabelli, Pac-West's President and CEO, said, "This decision upholds the position we have advocated since the introduction of the FCC's Intercarrier Compensation Order in April of 2001, that artificial annual growth limits on compensable minutes of use are illogical and anti- competitive. These provisions have been used by carriers such as Verizon and SBC as justification for withholding payments to Pac-West for call termination services provided. It is our belief that this action by the FCC removes these artificial limits. We are currently assessing the potential financial impacts of this decision, both ongoing and retroactive." John Sumpter, Pac-West's Vice-President of Regulatory, commented, "It has always been our position, and in the spirit of the 1996 Telecom Act, that cost-based reciprocal compensation is the appropriate policy for carriers for completing each others calls. In order to promote competition, and encourage investment, carriers must be compensated for the work they perform. The introduction of growth caps in the FCC ISP Order was contrary to this goal and harmful to competition. We are hopeful that this signals the FCC's intent to create rational and non-discriminatory cost-based compensation for all carriers." About Pac-West Telecomm, Inc. Founded in 1980 and first incorporated in 1981, Pac-West Telecomm, Inc. has been offering telephone service to its customers since 1982. Pac-West is currently one of the largest competitive local exchange carriers headquartered in California. Pac-West's network averages over 120 million minutes of voice and data traffic per day, and carries an estimated 20% of the dial-up Internet traffic in California. In addition to California, Pac-West has operations in Nevada, Washington, Arizona, and Oregon. For more information, please visit Pac-West's website at http://www.pacwest.com/. Forward-Looking Statements In this press release, our use of the words "outlook," "expect," "anticipate," "estimate," "forecast," "project," "likely," "objective," "plan," "designed," "goal," "target," and similar expressions is intended to identify forward-looking statements. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important risk factors that are described in our Annual Report on Form 10-K for the period ended December 31, 2003, as filed with the SEC on March 30, 2004, which may be revised or supplemented in subsequent reports filed by us with the SEC. Such risk factors include, but are not limited to: our substantial indebtedness; an inability to generate sufficient cash to service our indebtedness; regulatory and legal uncertainty with respect to intercarrier compensation payments received by us; the declining rate at which intercarrier compensation payments are determined; the inability to expand our business as a result of the unavailability of funds to do so; adverse affects on our operations as a result of covenants in agreements related to our borrowings; the loss of key executive officers could negatively impact our business prospects; the possible delisting of our common shares from the Nasdaq SmallCap Market; and our principal competitors for local services and potential additional competitors have advantages that may adversely affect our ability to compete with them. DATASOURCE: Pac-West Telecomm, Inc. CONTACT: Investor and Media, Reid Cox of Pac-West Telecomm, +1-209-926-3417, Web site: http://www.pacwest.com/

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