Lynch Interactive Announces Addition To Agenda For Annual Meeting; Company To Update Shareholders On False Claims Lawsuit

Lynch Interactive (AMEX: LIC) today announced that in
addition to a shareholder vote on a proposal to de-list the company
and a report on recent results of operations, it will address issues
surrounding a false claims lawsuit in which it is a defendant at its
annual meeting on October 31.
   The company said it intends to defend itself vigorously against
the suit, which it believes is frivolous, without merit and an abuse
of the whistleblower laws.
   Lynch Interactive Corporation will bring shareholders up-to-date
on the law suit, which is being conducted against the company and
others by three groups of contingency lawyers who have banded
together: Mr. R.C. Taylor III, John Phillips of Phillips & Cohen
speaking on behalf of Mr. Taylor; and Williams & Connolly working with
Phillips and Cohen.

   Small Business - Affirmative Action

   As part of an Omnibus Budget Reconciliation Act of 1993 ("OBRA
'93"), the FCC was directed to conduct spectrum auctions as a means of
allocating radio spectrum for commercial mobile radio communications
services ("CMRS"). Prior to this period, spectrum was given away for
free. The government recognizing the significant money the auctions
could generate from the sale of spectrum, as well as the large amount
of capital needed to participate, included provisions for affirmative
action and small businesses. Specific rules were established by the
FCC for the inclusion of women and minorities. Lynch Interactive
Corporation participated in these auctions in a role similar to that
of a venture capital partnership.
   In the conduct of these auctions, Lynch Interactive and the
designated entities followed the spirit and the letter of the law,
using internal and highly qualified external counsel, Latham &
Watkins, to insure compliance with all Federal Communication
Commission requirements. Licenses were granted by the FCC, which
approved all license applicants. Notably, the Department of Justice
has declined to intervene in the case. The suit, a form of legal
extortion, (for further background, refer to Forbes, March 14, 2005,
The Dark Side of Whistleblowing) seeks to undermine the credibility of
the women and minority participants in these auctions. In this case,
the unintended consequence of the whistleblowing litigation is that
contingency lawyers are hurting people who were brought into the
auction process by the government, including possibly forcing them
into bankruptcy. Lynch Interactive is committed to fighting this abuse
of the whistleblower laws.

   Lynch's Role

   Management's job is to make money for Lynch's investors.
   Lynch served as a service provider to these companies and acted as
an investor and supporter in their efforts, as well as acting as a
service provider to GGCP (affiliated with Lynch's Chairman and CEO) in
its investment role as a venture capital organization.
   "This lawsuit is particularly ugly, as it seeks to extract money
by assaulting the character and competence of minority and female
entrepreneurs and small business people who did nothing wrong and who
were only seeking to participate in a process the U.S. government was
encouraging them to enter," said Mario Gabelli, Chairman & CEO of
Lynch Interactive. "It is unconscionable for a group of contingency
lawyers to attack these individuals in this way in an effort to give
themselves a big payday."
   Mr. Gabelli added, "That people like Trent Tucker, who shared with
me his ambition to own a business after his many years of success in
the NBA, find themselves as defendants in this lawsuit is tremendously
unfair. Mr. Tucker had every right to pursue ownership and operation
of a wireless system and participate in these auctions and in no way
deserves to have his motivations and integrity questioned or his
actions falsely portrayed for the sake of a frivolous lawsuit. The
same is true of all the other individuals who have been targeted by
this suit."

   Our Annual Meeting

   As previously announced, Lynch has mailed its proxy to
shareholders for a vote on October 31, associated with its annual
meeting. Shareholders will be asked to approve a proposal to have the
company de-list itself from the American Stock Exchange. The company
has said that given the size of its market capitalization the cost of
complying with new regulatory requirements are burdensome both in
terms of direct incremental expense and the time and energy of its
management team. Lynch also expects to report preliminary results for
third quarter operations at the meeting.

   This release contains certain forward-looking information within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 194, as amended.
   Lynch Interactive is a holding company with subsidiaries in
multimedia and actively seeks acquisitions, principally in existing
business areas.
   Lynch Interactive is listed on the American Stock Exchange under
the symbol LIC. Interactive's World Wide Web address is:
http://www.lynchinteractivecorp.com