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Zhone's Market Leading Multi-Service Access Platform Selected by Cornerstone Telephone Company

Zhone's MSAP Selected to Deliver Premium Voice and High-Speed Data Throughout the Northeast

Oakland, CA — September 11, 2007 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global provider of advanced communications equipment and a leader in VoIP, IPTV, and Ethernet over copper and fiber access lines, today announced that Zhone's market leading multi-service access platform (MSAP) was selected by CornerStone Telephone Company to support the company's SkySphere™ virtual enterprise service in addition to providing voice and ultra high-speed data to customers throughout the Northeast. CornerStone selected Zhone's MALC™ to deliver new residential and business services in areas of New York, Pennsylvania and Massachusetts making advanced digital services available in some regions for the first time.

"In addition to the ability to rapidly expand our service portfolio, Zhone's MALC provides across- the-board network efficiencies in size, port density and power use," said Don Walsh, co-founder of CornerStone Telephone Company. "We now have the flexibility to offer our customers premium communication services, bundled to ensure the very best value."

Zhone's MALC multi-service access platform simplifies the provisioning and management of the full range of multi-play services. Designed for today's evolving network infrastructures, Zhone's consolidated platform strategy lets operators deliver voice, video and data services via fiber or copper. Service providers can provision Gigabit Passive Optical Networks (GPON), Ethernet in the First Mile (EFM) A/DSL and traditional TDM services from one streamlined system.

"As a fast-growing carrier, CornerStone requires a platform strategy that is both adaptable and scaleable," said Michael Fischer, vice president of North American sales for Zhone. "By selecting Zhone's MALC, CornerStone can provide a comprehensive range of services over any media now and into the future."

About CornerStone Telephone Company

CornerStone Telephone Company is a facility based integrated communications provider specializing in services for business customers. The company provides its customers with the highest level of customer support while offering competitive rates and products. CornerStone has over 45,000 access lines, providing local and long distance telephone service and high-speed Internet access. The company services customers in New York, Massachusetts and Pennsylvania. Established in 2001, CornerStone has over 115 employees and 8,000 customers. The company is headquartered in Troy, New York with offices in Poughkeepsie, Syracuse, New York City, Nyack, Oneonta and Amsterdam. For more information, visit www.cornerstonetelephone.com

About Zhone Technologies — Access for a Converging World

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a provider of advanced communications equipment to more than 600 operators worldwide. The company's broad line of access and transport networking solutions enables the full range of multi-play services, including residential and business broadband, VoIP, IPTV, and Ethernet. Zhone's converged access platform improves network agility and reduces costs, allowing operators to rapidly deploy premium services on their existing copper and fiber infrastructure while providing a seamless migration path to an efficient, all-IP network. www.zhone.com

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