Lucent Technologies' Microelectronics Group (NYSE: LU) and C-Phone Corporation (Nasdaq: CFON) announced today that Lucent's AVP*-III videoconferencing chip is being incorporated into the C-Phone Home** Video Phone. The resulting video phone will offer better quality video and audio than competing products on the market.

C-Phone Home is a self-contained TV "set-top box" operated by a wireless remote control. The system is as easy to hook up to any standard TV set as a VCR, and uses the TV for the video call. With the TV set turned on, a video call can be speed-dialed or answered with the C-Phone Home handheld remote control by pushing just one button. Easy-to-use on-screen text menus allow the user to operate and configure the system. C-Phone Home is approximately the size and shape of a cable TV converter box.

Lucent's AVP-III codec chip provides videoconferencing over regular telephone lines in compliance with the H.324 international standard. Lucent's H.324 software, AVP-III codec chip and full-duplex echo cancellation technology -- all of which were developed by Bell Labs -- have been integrated into C-Phone Home's consumer TV Video Phone. The Lucent-based video phones will begin shipping by early July.

"The AVP-III chip is one of the most advanced videoconferencing engines available in the world today," said Daniel Flohr, Chairman and CEO of C-Phone Corporation. "Because it is twice as fast as the nearest competitor, performing up to 16 billion operations per second, and because it includes a hardware-based motion estimator, the AVP chip gives C-Phone Home a distinct video quality advantage. Additionally, the chip delivers to us a clear cost savings and requires much less external memory than other solutions."

The use of Lucent chips will permit C-Phone to reduce the manufacturer's suggested retail price of C-Phone Home to $299.95, when purchased with a video network service agreement whereby the consumer pays $9.95 per month for the network service and $0.29 per minute for all video calls made in the continental United States.

"What is intriguing about working with C-Phone Corporation is having the opportunity to take our H.324 technology, which had previously been used on PC cards and configure it to run in a stand alone set-top configuration," said Jim Rank, marketing manager of visual communications integrated circuits at Lucent.

"The end result of this joint effort is a significant improvement in video phone technology," Mr. Rank continued. "We believe C-Phone Home's low-cost and innovative marketing strategy will help accelerate the market penetration of consumer video phones," added Rank.

C-Phone Corporation, is a North Carolina-based videoconferencing systems manufacturer. The Company has gained recognition as an innovator and provider of scalable, flexible, practical and easy-to-use PC-based videoconferencing products. C-Phone business products are currently being used by a broad range of industries. Most notable is a videoconferencing project with Mirage Resorts, Inc. which, in its current state, is the world's largest public videoconferencing network and is featured on slot machines at Treasure Island in Las Vegas. More general information about C-Phone Corporation is available from its Web site at www.cphone.com.

Lucent Technologies designs, builds and delivers a wide range of public and private networks, communications systems and software, consumer and business telephone systems and microelectronics components. Bell Laboratories is the research and development arm of Lucent. Lucent's Microelectronics Group designs and manufactures integrated circuits, optoelectronic components and power systems for the communication industries.