----

|   |   |   |   |   |
|--------|--------|--------|--------|--------|

|   | x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|--------|-----------------------------------------------------------|

|   | SECURITIES EXCHANGE ACT OF 1934 |
|--------|---------------------------------|

|   | o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|--------|------------------------------------------------------------|

|   | SECURITIES EXCHANGE ACT OF 1934 |
|--------|---------------------------------|

|   | GCI, INC.                                              |   |
|--------|--------------------------------------------------------|--------|
|   | (Exact name of registrant as specified in its charter) |   |

|   | State of Alaska                 |   | 91-1820757          |   |
|--------|---------------------------------|--------|---------------------|--------|
|   | (State or other jurisdiction of |   | (I.R.S Employer     |   |
|   | incorporation or organization)  |   | Identification No.) |   |

|   | 2550 Denali Street                      |   |       |   |
|--------|-----------------------------------------|--------|------------|--------|
|   | Suite 1000                              |   |       |   |
|   | Anchorage, Alaska                       |   | 99503      |   |
|   | (Address of principalexecutive offices) |   | (Zip Code) |   |

|   | Registrant’s telephone number, including area code: (907) 868-5600 |
|--------|--------------------------------------------------------------------------|

|   | Not Applicable                                                                   |   |
|--------|----------------------------------------------------------------------------------|--------|
|   | Former name, former address and former fiscal year, if changed since last report |   |

| Large accelerated filer o                                                        | Accelerated filer o         |
|----------------------------------------------------------------------------------|-----------------------------|
| Non-accelerated filer  x (Do not check if a smaller reporting company) | Smaller reporting company o |

----

|                                                      |                                                 |                                                                                                                   |   |   | Page No. |
|-----------------------------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|
|                                                      |                                                 |                                                                                                                   |   |   |     |
| Cautionary Statement Regarding Forward-Looking Statements | 3                                                    |
|                                                      |                                                 |                                                                                                                   |   |   |     |
| Part I.  FINANCIAL INFORMATION                  |                                                 |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      | Item I.                                              | Financial Statements                                                                                                   |   |   |     |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      |                                                 | Consolidated Balance Sheets (unaudited) as of September 30, 2010 and December 31, 2009 (unaudited)                     |   |   | 4        |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      |                                                 | Consolidated Income Statements for the three and nine months ended September 30, 2010 (unaudited) and 2009 (unaudited) |   |   | 6        |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      |                                                 | Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 (unaudited) and 2009 (unaudited)    |   |   | 7        |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      |                                                 | Condensed Notes to Interim Consolidated Financial Statements (unaudited)                                               |   |   | 8        |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      | Item 2.                                              | Management’s Discussion and Analysis of Financial Condition and Results of Operations                            |   |   | 22       |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      | Item 3.                                              | Quantitative and Qualitative Disclosures About Market Risk                                                             |   |   | 43       |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      | Item 4.                                              | Controls and Procedures                                                                                                |   |   | 44       |
|                                                      |                                                 |                                                                                                                   |   |   |     |
| Part II.  OTHER INFORMATION                     |                                                 |                                                                                                                   |   |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      | Item 1.                                              | Legal Proceedings                                                                                                      |   |   | 45       |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      | Item 6.                                              | Exhibits                                                                                                               |   |   | 45       |
|                                                      |                                                 |                                                                                                                   |   |   |     |
|                                                      | Other items are omitted, as they are not applicable. |                                                                                                                   |   |   |
|                                                      |                                                 |                                                                                                                   |   |   |     |
| SIGNATURES                                                |                                                 | 46                                                                                                                     |

----

----

|                                                                           |   |          |      |   |         |        |
|--------------------------------------------------------------------------------|--------|---------------|-----------|--------|--------------|-------------|
| PART I. FINANCIAL INFORMATION                                                  |   |
| ITEM 1. FINANCIAL STATEMENTS                                                   |   |
|                                                                           |   |          |      |   |         |        |
| GCI, INC. AND SUBSIDIARIES                                                     |   |
| CONSOLIDATED BALANCE SHEETS                                                    |   |
| (Unaudited)                                                                    |   |
|                                                                           |   |          |      |   |         |        |
| (Amounts in thousands)                                                         |   |          |      |   |         |        |
|                                                                           |   | September 30, |      |   | December 31, |        |
| ASSETS                                                                         |   | 2010          |      |   | 2009         |        |
|                                                                           |   |          |      |   |         |        |
| Current assets:                                                                |   |          |      |   |         |        |
| Cash and cash equivalents                                                      |   | $             | 78,158    |   |         |        | 48,142 |   |
|                                                                           |   |          |      |   |         |        |   |   |
| Receivables                                                                    |   |          | 171,994   |   |         |        | 147,859 |   |
| Less allowance for doubtful receivables                                        |   |          | 9,913     |   |         |        | 7,060 |   |
| Net receivables                                                                |   |          | 162,081   |   |         |        | 140,799 |   |
|                                                                           |   |          |      |   |         |        |   |   |
| Deferred income taxes                                                          |   |          | 17,522    |   |         |        | 17,618 |   |
| Prepaid expenses                                                               |   |          | 6,054     |   |         |        | 4,491 |   |
| Inventories                                                                    |   |          | 7,922     |   |         |        | 9,278 |   |
| Other current assets                                                           |   |          | 5,282     |   |         |        | 5,872 |   |
| Total current assets                                                           |   |          | 277,019   |   |         |        | 226,200 |   |
|                                                                           |   |          |      |   |         |        |   |   |
| Property and equipment in service, net of depreciation                         |   |          | 788,648   |   |         |        | 823,080 |   |
| Construction in progress                                                       |   |          | 40,692    |   |         |        | 26,161 |   |
| Net property and equipment                                                     |   |          | 829,340   |   |         |        | 849,241 |   |
|                                                                           |   |          |      |   |         |        |   |   |
| Cable certificates                                                             |   |          | 191,635   |   |         |        | 191,565 |   |
| Goodwill                                                                       |   |          | 73,452    |   |         |        | 73,452 |   |
| Wireless licenses                                                              |   |          | 25,967    |   |         |        | 25,967 |   |
| Other intangible assets, net of amortization                                   |   |          | 17,494    |   |         |        | 19,561 |   |
| Deferred loan and senior notes costs, net of amortization                      |   |          | 14,159    |   |         |        | 13,168 |   |
| Other assets                                                                   |   |          | 16,542    |   |         |        | 18,609 |   |
| Total other assets                                                             |   |          | 339,249   |   |         |        | 342,322 |   |
| Total assets                                                                   |   | $             | 1,445,608 |   |         |        | 1,417,763 |   |
|                                                                           |   |          |      |   |         |        |   |   |
| See accompanying condensed notes to interim consolidated financial statements. |   |
|                                                                           |   |          |      |   |         |        |   |   |
|                                                                           |   |          |      |   |         |        |   |   |
|                                                                           |   |          |      |   |         |        |   |   |
|                                                                           |   |          |      |   |         | (Continued) |   |

----

| GCI, INC. AND SUBSIDIARIES                                                           |
|--------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                          |
| (Unaudited)                                                                          |
| (Continued)                                                                          |
|                                                                                 |   |   |   |   |   |   |   |
| (Amounts in thousands)                                                               |   |   |   |   |   |   |   |
|                                                                                 |   | September 30, |   |   | December 31, |   |   |
| LIABILITIES AND STOCKHOLDER’S EQUITY                                           |   | 2010 |   |   | 2009  |   |   |
|                                                                                 |   |   |   |   |   |   |   |
| Current liabilities:                                                                 |   |   |   |   |   |   |   |
| Current maturities of obligations under long-term debt and  capital leases |   | $ | 10,379 |   |   |   | 9,892 |   |
| Accounts payable                                                                     |   |   | 35,068 |   |   |   | 30,697 |   |
| Deferred revenue                                                                     |   |   | 22,461 |   |   |   | 21,404 |   |
| Accrued payroll and payroll related obligations                                      |   |   | 22,140 |   |   |   | 21,874 |   |
| Accrued interest                                                                     |   |   | 16,914 |   |   |   | 14,821 |   |
| Accrued liabilities                                                                  |   |   | 12,522 |   |   |   | 15,037 |   |
| Subscriber deposits                                                                  |   |   | 1,205 |   |   |   | 1,549 |   |
| Total current liabilities                                                            |   |   | 120,689 |   |   |   | 115,274 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |
| Long-term debt, net                                                                  |   |   | 773,830 |   |   |   | 771,247 |   |
| Obligations under capital leases, excluding current maturities                       |   |   | 85,461 |   |   |   | 89,279 |   |
| Obligation under capital lease due to related party                                  |   |   | 1,883 |   |   |   | 1,876 |   |
| Deferred income taxes                                                                |   |   | 110,550 |   |   |   | 100,386 |   |
| Long-term deferred revenue                                                           |   |   | 50,410 |   |   |   | 52,342 |   |
| Other liabilities                                                                    |   |   | 23,269 |   |   |   | 21,676 |   |
| Total liabilities                                                                    |   |   | 1,166,092 |   |   |   | 1,152,080 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |
| Commitments and contingencies                                                        |   |   |   |   |   |   |   |   |   |
| Stockholder’s equity:                                                          |   |   |   |   |   |   |   |   |   |
| Class A common stock (no par). Authorized 10 shares;                                 |   |   |   |   |   |   |   |   |   |
| issued and outstanding 0.1 shares at September 30, 2010 and December 31, 2009        |   |   | 206,622 |   |   |   | 206,622 |   |
| Paid-in capital                                                                      |   |   | 53,158 |   |   |   | 49,165 |   |
| Retained earnings                                                                    |   |   | 19,736 |   |   |   | 9,896 |   |
| Total stockholders’ equity                                                     |   |   |           279,516 |   |   |   | 265,683 |   |   |
| Total liabilities and stockholder’s equity                                     |   | $ | 1,445,608 |   |   |   | 1,417,763 |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |
| See accompanying condensed notes to interim consolidated financial statements.       |

----

| CONSOLIDATED INCOME STATEMENTS                                                |   |
|-------------------------------------------------------------------------------|--------|
| (Unaudited)                                                                   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                          |   | Three Months Ended |   |   | Nine Months Ended |   |
|                                                                          |   | September 30, |   |   | September 30, |   |
| (Amounts in thousands)                                                        |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
| Revenues                                                                      |   | $ | 171,509 |   |   |   | 150,816 |   |   |   | 486,254 |   |   |   | 448,301 |   |
| Cost of goods sold (exclusive of depreciation and                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization shown separately below)                                          |   |   | 52,486 |   |   |   | 50,167 |   |   |   | 153,147 |   |   |   | 145,372 |   |
| Selling, general and administrative expenses                                  |   |   | 58,532 |   |   |   | 49,045 |   |   |   | 166,493 |   |   |   | 157,350 |   |
| Depreciation and amortization expense                                         |   |   | 30,288 |   |   |   | 30,874 |   |   |   | 92,234 |   |   |   | 92,778 |   |
|  Operating income                                                        |   |   | 30,203 |   |   |   | 20,730 |   |   |   | 74,380 |   |   |   | 52,801 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense (including amortization of deferred                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| loan fees)                                                                    |   |   | (17,760 | ) |   |   | (13,176 | ) |   |   | (53,169 | ) |   |   | (39,096 | ) |
| Interest income                                                               |   |   | 99 |   |   |   | 49 |   |   |   | 236 |   |   |   | 68 |   |
|  Other expense, net                                                      |   |   | (17,661 | ) |   |   | (13,127 | ) |   |   | (52,933 | ) |   |   | (39,028 | ) |
|    Income before income tax expense                            |   |   | 12,542 |   |   |   | 7,603 |   |   |   | 21,447 |   |   |   | 13,773 |   |
| Income tax expense                                                            |   |   | 4,959 |   |   |   | 3,267 |   |   |   | 10,260 |   |   |   | 6,519 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net income                                                  |   | $ | 7,583 |   |   |   | 4,336 |   |   |   | 11,187 |   |   |   | 7,254 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying condensed notes to interim consolidated financial statements |   |   |   |   |   |   |   |   |   |

----

| CONSOLIDATED STATEMENTS OF CASH FLOWS                                          |   |
|--------------------------------------------------------------------------------|--------|
| NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009                                  |   |
| (Unaudited)                                                                    |   |
|                                                                           |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |
| (Amounts in thousands)                                                         |   | 2010 |   |   | 2009 |   |
| Cash flows from operating activities:                                          |   |   |   |   |   |   |
| Net income                                                                     |   | $ | 11,187 |   |   |   | 7,254 |   |
| Adjustments to reconcile net income to net cash provided by                    |   |   |   |   |   |   |   |   |
| operating activities:                                                          |   |   |   |   |   |   |   |   |
| Depreciation and amortization expense                                          |   |   | 92,234 |   |   |   | 92,778 |   |
| Deferred income tax expense                                                    |   |   | 10,260 |   |   |   | 6,519 |   |
| Share-based compensation expense                                               |   |   | 4,696 |   |   |   | 1,897 |   |
| Other noncash income and expense items                                         |   |   | 5,712 |   |   |   | 6,850 |   |
| Change in operating assets and liabilities                                     |   |   | (11,933 | ) |   |   | (48,046 | ) |
| Net cash provided by operating activities                                      |   |   | 112,156 |   |   |   | 67,252 |   |
| Cash flows from investing activities:                                          |   |   |   |   |   |   |   |   |
| Purchases of property and equipment                                            |   |   | (68,813 | ) |   |   | (92,989 | ) |
| Purchase of businesses, net of cash received                                   |   |   | (5,545 | ) |   |   | (108 | ) |
| Purchase of marketable securities                                              |   |   | (202 | ) |   |   | (305 | ) |
| Proceeds from sale of marketable securities                                    |   |   | 178 |   |   |   | 613 |   |
| Purchases of other assets and intangible assets                                |   |   | (3,002 | ) |   |   | (2,513 | ) |
| Net cash used in investing activities                                          |   |   | (77,384 | ) |   |   | (95,302 | ) |
| Cash flows from financing activities:                                          |   |   |   |   |   |   |   |   |
| Repayment of debt and capital lease obligations                                |   |   | (7,315 | ) |   |   | (9,516 | ) |
| Issuance of long-term debt                                                     |   |   | 6,206 |   |   |   | - |   |
| Payment of debt issuance costs                                                 |   |   | (2,300 | ) |   |   | - |   |
| Distribution to General Communication, Inc.                                    |   |   | (1,347 | ) |   |   | (234 | ) |
| Borrowing on Senior Credit Facility                                            |   |   | - |   |   |   | 30,000 |   |
| Net cash provided by (used in) financing activities                            |   |   | (4,756 | ) |   |   | 20,250 |   |
| Net increase (decrease) in cash and cash equivalents                           |   |   | 30,016 |   |   |   | (7,800 | ) |
| Cash and cash equivalents at beginning of period                               |   |   | 48,142 |   |   |   | 29,693 |   |
| Cash and cash equivalents at end of period                                     |   | $ | 78,158 |   |   |   | 21,893 |   |
|                                                                           |   |   |   |   |   |   |   |   |
| See accompanying condensed notes to interim consolidated financial statements. |   |   |   |   |   |   |   |   |

----

|   | (a) | Business |
|--------|-----|----------|

| ·   | Origination and termination of traffic in Alaska for certain common carriers, |
|--------------------|-------------------------------------------------------------------------------|

| ·   | Cable television services throughout Alaska, |
|--------------------|----------------------------------------------|

| ·   | Competitive local access services throughout Alaska, |
|--------------------|------------------------------------------------------|

| ·   | Incumbent local access services in areas of rural Alaska, |
|--------------------|-----------------------------------------------------------|

| ·   | Long-distance telephone service, |
|--------------------|----------------------------------|

| ·   | Sale of postpaid and prepaid wireless telephone services and sale of wireless telephone handsets and accessories, |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | Data network services, |
|--------------------|------------------------|

| ·   | Internet access services, |
|--------------------|---------------------------|

| ·   | Wireless roaming for certain wireless carriers, |
|--------------------|-------------------------------------------------|

| ·   | Broadband services, including our SchoolAccess® offering to rural school districts, our ConnectMD® offering to rural hospitals and health clinics, and managed video conferencing, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Managed services to certain commercial customers, |
|--------------------|---------------------------------------------------|

| ·   | Sales and service of dedicated communications systems and related equipment, |
|--------------------|------------------------------------------------------------------------------|

| ·   | Lease, service arrangements and maintenance of capacity on our fiber optic cable systems used in the transmission of voice and data services within Alaska and between Alaska and the remaining United States and foreign countries, and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Distribution of white and yellow pages directories to residential and business customers in certain markets we serve and on-line directory products. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Principles of Consolidation |
|--------|-----|-----------------------------|

|   | The consolidated financial statements include the consolidated accounts of GCI, Inc. and its wholly-owned subsidiaries.   All significant intercompany transactions between non-regulated affiliates of our company are eliminated.   Intercompany transactions generated between regulated and non-regulated affiliates of the company are not eliminated in consolidation. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Regulatory Accounting and Regulation |
|--------|-----|--------------------------------------|

|   | We account for our regulated operations in accordance with the accounting principles promulgated for each of the regulated enterprises.  This accounting recognizes the economic effects of rate regulation by recording cost and a return on investment as such amounts are recovered through rates authorized by regulatory authorities.  Accordingly, plant and equipment is depreciated over lives approved by regulators and certain costs and obligations are deferred based upon approvals received from regulators to permit recovery of such amounts in future years.  Our cost studies and depreciation rates for our regulated operations are subject to periodic audits that could result in a change to recorded revenues. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (f) | Earnings per Common Share |
|--------|-----|---------------------------|

|   | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to estimates and assumptions include the allowance for doubtful receivables, unbilled revenues, accrual of the Universal Service Fund (“USF”) high cost area program support, share-based compensation, inventory reserves, reserve for future customer credits, valuation allowances for deferred income tax assets, depreciable and amortizable lives of assets, the carrying value of long-lived assets including goodwill, cable certificates and wireless licenses, purchase price allocations, deferred lease expense, asset retirement obligations, the accrual of Cost of Goods Sold, and the accrual of contingencies and litigation. Actual results could differ from those estimates. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | Income Taxes |
|--------|-----|--------------|

|   | GCI, Inc., as a wholly-owned subsidiary and member of the GCI controlled group of corporations, files its income tax returns as part of the consolidated group of corporations under GCI.  Accordingly, all discussions regarding income taxes reflect the consolidated group's activity.  Our income tax expense and deferred income tax assets and liabilities are presented herein using the separate-entity method. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                      |   | Three Months Ended |   |   | Nine Months Ended |   |
|---------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                      |   | September 30,      |   |   | September 30,     |   |
|                      |   | 2010               |   |   | 2009              |   |   | 2010 |   |   | 2009 |   |
| Surcharges reported gross |   | $                  | 1,272  |   |              |   | 1,241 |   |   |   | 4,023 |   |   |   | 3,224 |   |

|   | Reclassifications have been made to the 2009 financial statements to make them comparable with the 2010 presentation. |
|--------|-----------------------------------------------------------------------------------------------------------------------|

| (2) | Consolidated Statements of Cash Flows Supplemental Disclosures |
|-----|----------------------------------------------------------------|

|   | Changes in operating assets and liabilities consist of (amounts in thousands): |
|--------|--------------------------------------------------------------------------------|

| Nine month period ended September 30,                                  |   | 2010   |    |   | 2009   |   |
|------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Increase in accounts receivable                                        |   | $      | (23,482 | )      |   |   | (19,695 | ) |
| (Increase) decrease in prepaid expenses                                |   |   | (1,563  | )      |   |   | 1,288 |   |
| (Increase) decrease in inventories                                     |   |   | 1,343   |   |   |   | (960 | ) |
| (Increase) decrease in other current assets                            |   |   | 646     |   |   |   | (3,874 | ) |
| (Increase) decrease in other assets                                    |   |   | 2,193   |   |   |   | (11,251 | ) |
| Increase (decrease) in accounts payable                                |   |   | 5,430   |   |   |   | (2,261 | ) |
| Increase (decrease) in deferred revenues                               |   |   | 1,057   |   |   |   | (170 | ) |
| Increase (decrease) in accrued payroll and payroll related obligations |   |   | 96      |   |   |   | (2,471 | ) |
| Increase (decrease) in accrued liabilities                             |   |   | 3,030   |   |   |   | (840 | ) |
| Increase (decrease) in accrued interest                                |   |   | 2,093   |   |   |   | (7,251 | ) |
| Increase (decrease) in subscriber deposits                             |   |   | (344    | )      |   |   | 245 |   |
| Decrease in long-term deferred revenue                                 |   |   | (1,932  | )      |   |   | (1,562 | ) |

----

| Increase (decrease) in components of other long-term liabilities |   |   | (500    | ) |   |   | 756     |   |
|------------------------------------------------------------------|--------|--------|---------|---|--------|--------|---------|--------|
|                                                             |   | $      | (11,933 | ) |   |   | (48,046 | )      |

| Net cash paid or received:                |   | 2010 |   |   | 2009   |   |
|-------------------------------------------|--------|------|--------|--------|--------|--------|
| Interest paid, net of amounts capitalized |   | $    | 49,363 |   |   |   | 45,009 |   |
| Income tax refund received                |   | $    | 1,163  |   |   |   | 911 |   |
| Income tax paid                           |   | $    | -      |   |   |   | 9 |   |

|                                                            |   | 2010   |   |   | 2009   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Non-cash additions for purchases of property and equipment |   | $      | 3,547  |   |   |   | 3,977 |   |
| Asset retirement obligation additions to property and equipment |   | $      | 657    |   |   |   | 957 |   |
| Warranty receivable applied to capital lease obligation         |   | $      | -      |   |   |   | 465 |   |
|                                                            |   |   |   |   |   |   |   |   |

|                 |   | Three Months Ended |   |   | Nine Months Ended |   |
|----------------------|--------|--------------------|--------|--------|-------------------|--------|
|                 |   | September 30,      |   |   | September 30,     |   |
|                 |   | 2010               |   |   | 2009              |   |   | 2010 |   |   | 2009 |   |
| Amortization expense |   | $                  | 1,557  |   |              |   | 1,939 |   |   |   | 4,854 |   |   |   | 5,709 |   |

| Years Ending December 31, |   |   |   |
|---------------------------|--------|--------|--------|
| 2010                 |   | $      | 5,372  |   |
| 2011                 |   |   | 4,608  |   |
| 2012                 |   |   | 3,162  |   |
| 2013                 |   |   | 2,086  |   |
| 2014                 |   |   | 1,233  |   |

----

| (4) | Long-Term Debt |
|-----|----------------|

|   | 2019 Notes |
|--------|------------|

|   | On November 3, 2009, we privately placed $425.0 million of 8.625% Senior Notes due 2019 (“2019 Notes”). Simultaneously with the private placement, we entered into a registration rights agreement with the initial purchasers of the 2019 Notes that required us to cause a registration statement to become effective on or prior to June 1, 2010, and to complete an exchange offer on or before 30 days following the effective date of the registration statement.  In compliance with the agreement, the registration statement became effective June 1, 2010, and the exchange offer was completed on July 1, 2010. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Total Leverage Ratio (as defined) |   | Applicable Margin |   |
|-----------------------------------|--------|-------------------|--------|
| >3.75                          |   |              | 4.00   | % |
| >3.25 but <3.75             |   |              | 3.50   | % |
| >2.75 but <3.25             |   |              | 3.00   | % |
| <2.75                          |   |              | 2.50   | % |

| (5) | Financial Instruments |
|-----|-----------------------|

----

|                                                     |   | September 30,   |    |   | December 31, |   |
|----------------------------------------------------------|--------|-----------------|---------|--------|--------------|--------|
|                                                     |   | 2010            |    |   | 2009         |   |
|                                                     |   | Carrying Amount |    |   | Fair Value   |   |   | Carrying Amount |   |   | Fair Value |   |
| Current and long-term debt and capital lease obligations |   | $               | 871,553 |   |         |   | 905,875 |   |   |   | 872,294 |   |   |   | 866,820 |   |
| Other liabilities                                        |   |            | 72,383  |   |         |   | 71,607 |   |   |   | 72,770 |   |   |   | 71,623 |   |

|   | Current and long-term debt and capital lease obligations:  The fair value of our 2019 Notes, 2014 Notes, U.S. Department of Agriculture Rural Utilities Service ("RUS") debt, CoBank mortgage note payable, and capital leases are valued based on quoted market prices for the same or similar issues or on the current rates offered to us for the same remaining maturities. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Other Liabilities:  Deferred compensation liabilities are carried at fair value, which is the amount payable as of the balance sheet date. Asset retirement obligations are recorded at their fair value and, over time, the liability is accreted to its present value each period. Lease escalation liabilities are valued at the discounted amount of future cash flows using quoted market prices on current rates offered to us. Our non-employee share-based compensation awards are reported at their fair value at each reporting period. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                   |   | Fair Value Measurement at Reporting Date Using                 |   |
|----------------------------------------|--------|----------------------------------------------------------------|--------|
| September 30, 2010 Assets              |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Money market funds                     |   | $                                                              | 7      |   |   |   | - |   |   |   | - |   |
| U.S. government and agency obligations |   |                                                           | 944    |   |   |   | - |   |   |   | - |   |

----

| Deferred compensation plan assets (money market funds) |   |   | 1,567  |   |   |   | -      |   |   |   | -      |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Total assets at fair value                             |   | $      | 2,518  |   |   |   | -      |   |   |   | -      |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009 Assets                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Money market funds                                     |   | $      | 12     |   |   |   | -      |   |   |   | -      |   |
| U.S. government and agency obligations                 |   |   | 883    |   |   |   | -      |   |   |   | -      |   |
| Deferred compensation plan assets (money market funds) |   |   | 1,522  |   |   |   | -      |   |   |   | -      |   |
| Total assets at fair value                             |   | $      | 2,417  |   |   |   | -      |   |   |   | -      |   |

|   | The following is a summary of our share-based compensation expense for the nine months ended September 30, 2010 and 2009 (in thousands): |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                           |   | 2010   |   |   | 2009   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Employee share-based compensation expense                                      |   | $      | 3,982  |   |   |   | 4,533 |   |
| Expense reversal for performance based options and awards not expected to vest |   |   | -      |   |   |   | (2,134 | ) |
| Adjustment to fair value of liability classified awards                        |   |   | 714    |   |   |   | (502 | ) |
|   Total share-based compensation expense                             |   | $      | 4,696  |   |   |   | 1,897 |   |

----

|                                     |   |   |   |   |     |   | Weighted    |      |
|------------------------------------------|--------|--------|--------|--------|----------|--------|-------------|-----------|
|                                     |   |   |   |   | Weighted |   | Average     |      |
|                                     |   |   |   |   | Average  |   | Remaining   | Aggregate |
|                                     |   |   |   |   | Exercise |   | Contractual | Intrinsic |
|                                     |   | Shares |   |   | Price    |   | Term        | Value     |
| Outstanding options at December 31, 2009 |   |   | 1,627  |   |     | $      | 7.35        |      |   |   |
| Granted                                  |   |   | 203    |   |     | $      | 5.34        |      |   |   |
| Exercised                                |   |   | (41    | )      |     | $      | 5.01        |      |   |   |
| Forfeited and retired                    |   |   | (451   | )      |     | $      | 7.64        |      |   |   |
| Outstanding at September 30, 2010        |   |   | 1,338  |   |     | $      | 7.01        |      |  4.6  | $ 4,051 |
| Exercisable at September 30, 2010        |   |   | 951    |   |     | $      | 7.17        |      |  3.1  | $ 2,736 |

|                              |   |   |   |   | Weighted   |   |
|-----------------------------------|--------|--------|--------|--------|------------|--------|
|                              |   |   |   |   | Average    |   |
|                              |   |   |   |   | Grant Date |   |
| Nonvested Restricted Stock Awards |   | Shares |   |   | Fair Value |   |
| Nonvested at December 31, 2009    |   |   | 2,225  |   |       | $      | 5.69 |   |
| Granted                           |   |   | 211    |   |       | $      | 6.14 |   |
| Vested                            |   |   | (233   | )      |       | $      | 8.30 |   |
| Forfeited                         |   |   | (132   | )      |       | $      | 12.51 |   |
| Nonvested at September 30, 2010   |   |   | 2,071  |   |       | $      | 5.01 |   |

----

|                                      |   |   |   |   | Weighted |   |
|-------------------------------------------|--------|--------|--------|--------|----------|--------|
|                                      |   |   |   |   | Average  |   |
|                                      |   |   |   |   | Exercise |   |
|                                      |   | Shares |   |   | Price    |   |
| Outstanding at December 31, 2009          |   |   | 150    |   |     | $      | 6.50 |   |
| Options forfeited and retired             |   |   | (150   | )      |     | $      | 6.50 |   |
| Outstanding at September 30, 2010         |   |   | -      |   |     |   |   |   |
| Available for grant at September 30, 2010 |   |   | -      |   |     |   |   |   |

| (7) | Industry Segments Data |
|-----|------------------------|

|   | Corporate related expenses including engineering, information technology, accounting, legal and regulatory, human resources, and other general and administrative expenses for the three and nine months ended September 30, 2010 and 2009 are allocated to our segments using segment margin for the years ended December 31, 2009 and 2008, respectively.  Bad debt expense for the three and nine months ended September 30, 2010 and 2009 is allocated to our segments using a combination of specific identification and allocations based upon segment revenue for the three and nine months ended September 30, 2010 and 2009, respectively.  Corporate related expenses and bad debt expense are specifically identified for our Regulated Operations segment and therefore, are not included in the allocations. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | We evaluate performance and allocate resources based on earnings before depreciation and amortization expense, net interest expense, income taxes, share-based compensation expense, and non-cash contribution adjustment (“adjusted EBITDA”). Management believes that this measure is useful to investors and other users of our financial information in evaluating operating profitability as an analytical indicator of income generated to service debt and fund capital expenditures.  In addition, multiples of current or projected EBITDA are used to estimate current or prospective enterprise value.  The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in note 1 in the “Notes to Consolidated Financial Statements” included in Part II of our December 31, 2009 annual report on Form 10-K. Intersegment sales are recorded at cost plus an agreed upon intercompany profit. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We earn all revenues through sales of services and products within the United States. All of our long-lived assets are located within the United States of America, except approximately 82% of our undersea fiber optic cable systems which transit international waters and all of our satellite transponders. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Three months ended September 30, |   | Consumer |   |   | Network Access |   |   | Commercial |   |   | Managed Broadband |   |   | Regulated Operations |   |   | Total Reportable Segments |   |
|----------------------------------|--------|----------|--------|--------|----------------|--------|--------|------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|
| 2010                        |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Revenues:                        |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Intersegment                     |   | $        | -      |   |           |   | (1     | )          |   |   | 1,386             |   |   |                 | -      |   |                      |   | 44 |   |   |   | 1,429 |   |
| External                         |   |     | 88,713 |   |           |   | 28,204 |       |   |   | 35,449            |   |   |                 | 13,548 |   |                      |   | 5,595 |   |   |   | 171,509 |   |
| Total revenues                   |   | $        | 88,713 |   |           |   | 28,203 |       |   |   | 36,835            |   |   |                 | 13,548 |   |                      |   | 5,639 |   |   |   | 172,938 |   |
| Adjusted EBITDA                  |   | $        | 31,212 |   |           |   | 15,028 |       |   |   | 9,125             |   |   |                 | 5,826  |   |                      |   | 1,550 |   |   |   | 62,741 |   |
|                             |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| 2009                        |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Revenues:                        |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Intersegment                     |   | $        | -      |   |           |   | 76     |       |   |   | 1,371             |   |   |                 | -      |   |                      |   | 50 |   |   |   | 1,497 |   |
| External                         |   |     | 75,021 |   |           |   | 30,263 |       |   |   | 27,780            |   |   |                 | 11,715 |   |                      |   | 6,037 |   |   |   | 150,816 |   |
| Total revenues                   |   | $        | 75,021 |   |           |   | 30,339 |       |   |   | 29,151            |   |   |                 | 11,715 |   |                      |   | 6,087 |   |   |   | 152,313 |   |
| Adjusted EBITDA                  |   | $        | 23,234 |   |           |   | 14,084 |       |   |   | 6,154             |   |   |                 | 5,501  |   |                      |   | 1,299 |   |   |   | 50,272 |   |

| Nine months ended September 30, |   | Consumer |    |   | Network Access |   |   | Commercial |   |   | Managed Broadband |   |   | Regulated Operations |   |   | Total Reportable Segments |   |
|---------------------------------|--------|----------|---------|--------|----------------|--------|--------|------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|
| 2010                       |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Revenues:                       |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Intersegment                    |   | $        | -       |   |           |   | -      |       |   |   | 4,042             |   |   |                 | -      |   |                      |   | 132 |   |   |   | 4,174 |   |
| External                        |   |     | 256,230 |   |           |   | 81,499 |       |   |   | 95,243            |   |   |                 | 36,020 |   |                      |   | 17,262 |   |   |   | 486,254 |   |
| Total revenues                  |   | $        | 256,230 |   |           |   | 81,499 |       |   |   | 99,285            |   |   |                 | 36,020 |   |                      |   | 17,394 |   |   |   | 490,428 |   |
| Adjusted EBITDA                 |   | $        | 88,420  |   |           |   | 40,206 |       |   |   | 23,526            |   |   |                 | 13,888 |   |                      |   | 5,110 |   |   |   | 171,150 |   |
|                            |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| 2009                       |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Revenues:                       |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Intersegment                    |   | $        | -       |   |           |   | 459    |       |   |   | 4,309             |   |   |                 | -      |   |                      |   | 154 |   |   |   | 4,922 |   |
| External                        |   |     | 219,139 |   |           |   | 94,582 |       |   |   | 82,683            |   |   |                 | 33,323 |   |                      |   | 18,574 |   |   |   | 448,301 |   |
| Total revenues                  |   | $        | 219,139 |   |           |   | 95,041 |       |   |   | 86,992            |   |   |                 | 33,323 |   |                      |   | 18,728 |   |   |   | 453,223 |   |
| Adjusted EBITDA                 |   | $        | 64,304  |   |           |   | 46,674 |       |   |   | 17,047            |   |   |                 | 14,777 |   |                      |   | 5,154 |   |   |   | 147,956 |   |

----

|                                                   |   | Three Months Ended |    |   | Nine Months Ended |   |
|--------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                                   |   | September 30,      |    |   | September 30,     |   |
|                                                   |   | 2010               |    |   | 2009              |   |   | 2010 |   |   | 2009 |   |
| Reportable segment revenues                            |   | $                  | 172,938 |   |              |   | 152,313 |   |   |   | 490,428 |   |   |   | 453,223 |   |
| Less intersegment revenues eliminated in consolidation |   |               | 1,429   |   |              |   | 1,497 |   |   |   | 4,174 |   |   |   | 4,922 |   |
| Consolidated revenues                                  |   | $                  | 171,509 |   |              |   | 150,816 |   |   |   | 486,254 |   |   |   | 448,301 |   |

|                                          |   | Three Months Ended |    |   | Nine Months Ended |   |
|-----------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                                          |   | September 30,      |    |   | September 30,     |   |
|                                          |   | 2010               |    |   | 2009              |   |   | 2010 |   |   | 2009 |   |
| Reportable segment adjusted EBITDA            |   | $                  | 62,741  |   |              |   | 50,272 |   |   |   | 171,150 |   |   |   | 147,956 |   |
| Less depreciation and amortization expense    |   |               | (30,288 | )      |              |   | (30,874 | ) |   |   | (92,234 | ) |   |   | (92,778 | ) |
| (Less) plus share-based compensation expense  |   |               | (2,250  | )      |              |   | 1,332 |   |   |   | (4,696 | ) |   |   | (1,897 | ) |
| (Less) plus non-cash contribution adjustment  |   |               | -       |   |              |   | - |   |   |   | 160 |   |   |   | (480 | ) |
| Consolidated operating income                 |   |               | 30,203  |   |              |   | 20,730 |   |   |   | 74,380 |   |   |   | 52,801 |   |
| Less other expense, net                       |   |               | (17,661 | )      |              |   | (13,127 | ) |   |   | (52,933 | ) |   |   | (39,028 | ) |
| Consolidated income before income tax expense |   | $                  | 12,542  |   |              |   | 7,603 |   |   |   | 21,447 |   |   |   | 13,773 |   |

| (8) | Commitments and Contingencies |
|-----|-------------------------------|

| ·   | In August 2008, the Federal Communications Commission’s (“FCC”) Office of Inspector General ("OIG") initiated an investigation by requesting information regarding Alaska DigiTel LLC’s (“Alaska DigiTel”) compliance with program rules and requirements under the Lifeline Program. The request covers the period beginning January 1, 2004 through August 31, 2008 and relates to the amounts received for Lifeline service.  Alaska DigiTel was an Alaska based wireless communications company of which we acquired an 81.9% equity interest on January 2, 2007 and the remaining 18.1% equity interest on August 18, 2008 and was subsequently merged with one of our wholly owned subsidiaries in April 2009. Prior to August 18, 2008, our control over the operations of Alaska DigiTel was limited as required by the FCC upon its approval of our initial acquisition completed in January 2007. We have been and intend to continue fully complying with this request on behalf of Alaska DigiTel and the GCI companies as affiliates.  The OIG investigation is still pending, and we are presently unable to assess the ultimate resolution of this matter; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | In August 2010, a GCI-owned aircraft was involved in an accident resulting in five fatalities and injuries to the remaining four passengers on board.  We had aircraft and liability insurance coverage in effect at the time of the accident.  We cannot predict the likelihood or nature of any potential claims related to the accident. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (9) | Subsequent Event |
|-----|------------------|

----

----

|                  |                       | Reportable Segments |
|-----------------------|----------------------------|---------------------|
| Services and Products | Consumer                   | Network Access      | Commercial | Managed Broadband | Regulated Operations |
| Voice:                |                       |                |   |   |   |
|                  | Long-distance              | X                   | X | X |   | X |
|                  | Local Access               | X                   | X | X |   | X |
|                  | Directories                |                |   | X |   |   |
|                  |                       |                |   |   |   |   |
| Video                 | X                          |                | X |   |   |
|                  |                       |                |   |   |   |   |
| Data:                 |                       |                |   |   |   |
|                  | Internet                   | X                   | X | X | X | X |
|                  | Data Networks              |                | X | X | X |   |
|                  | Managed Services           |                |   | X | X |   |
|                  | Managed Broadband Services |                |   |   | X |   |
|                  |                       |                |   |   |   |   |
| Wireless              | X                          | X                   | X |   |   |

|                           |                                  |                         |           |               |          | Percentage        |          |       | Percentage |
|--------------------------------|---------------------------------------|------------------------------|----------------|--------------------|---------------|-------------------|---------------|------------|------------|
|                           |                                  |                         |           | Three Months Ended | Change1  | Nine Months Ended | Change1  |
|                           |                                  |                         |           | September 30,      | 2010     | September 30,     | 2010     |
|                           |                                  |                         |           | 2010          | 2009     | vs. 2009          | 2010     | 2009  | vs. 2009   |
| (Unaudited)                    |                                  |                         |           |               |          |              |
| Statements of Operations Data: |                                  |                         |           |               |          |              |
|                           | Revenues:                             |                         |           |               |          |              |
|                           |                                  | Consumer segment             | 52%            | 50%                | 18%           | 53%               | 49%           | 17%        |
|                           |                                  | Network Access segment       | 16%            | 20%                | (7%)          | 17%               | 21%           | (14%)      |
|                           |                                  | Commercial segment           | 21%            | 18%                | 28%           | 20%               | 19%           | 15%        |
|                           |                                  | Managed Broadband segment    | 8%             | 8%                 | 16%           | 7%                | 7%            | 8%         |
|                           |                                  | Regulated Operations segment | 3%             | 4%                 | (7%)          | 3%                | 4%            | (7%)       |
|                           |                                  |                         | Total revenues | 100%               | 100%          | 14%               | 100%          | 100%       | 8%         |
|                           | Selling, general and                  |                         |           |               |          |              |          |
|                           |                                  | administrative expenses      | 34%            | 33%                | 19%           | 34%               | 35%           | 6%         |
|                           | Depreciation and amortization         |                         |           |               |          |              |          |
|                           |                                  | expense                      | 18%            | 20%                | (2%)          | 19%               | 21%           | (1%)       |
|                           | Operating income                      | 18%                          | 14%            | 46%                | 15%           | 12%               | 41%           |
|                           | Other expense, net                    | 10%                          | 9%             | 35%                | 11%           | 9%                | 36%           |
|                           | Income before income tax expense      | 7%                           | 5%             | 65%                | 4%            | 3%                | 56%           |
|                           | Net income                            | 4%                           | 3%             | 75%                | 2%            | 2%                | 54%           |
|                           |                                  |                         |           |               |          |              |          |       |       |
| 1                         | Percentage change in underlying data. |                         |           |               |          |              |          |

----

|                           |   | Third Quarter of |   |   | Percentage |   |
|--------------------------------|--------|------------------|--------|--------|------------|--------|
|                           |   | 2010             |   |   | 2009       |   |   | Change |   |
| Voice                          |   | $                | 14,601 |   |       |   | 12,487 |   |   |   | 17 | % |
| Video                          |   |             | 29,720 |   |       |   | 27,612 |   |   |   | 8 | % |
| Data                           |   |             | 15,797 |   |       |   | 12,726 |   |   |   | 24 | % |
| Wireless                       |   |             | 28,595 |   |       |   | 22,196 |   |   |   | 29 | % |
| Total Consumer segment revenue |   | $                | 88,713 |   |       |   | 75,021 |   |   |   | 18 | % |

|                                      |   | Third Quarter of |   |   | Percentage |   |
|-------------------------------------------|--------|------------------|--------|--------|------------|--------|
|                                      |   | 2010             |   |   | 2009       |   |   | Change |   |
| Voice                                     |   | $                | 2,724  |   |       |   | 4,000 |   |   |   | (32 | %) |
| Video                                     |   |             | 12,662 |   |       |   | 11,921 |   |   |   | 6 | % |
| Data                                      |   |             | 972    |   |       |   | 1,127 |   |   |   | (14 | %) |
| Wireless                                  |   |             | 9,016  |   |       |   | 7,638 |   |   |   | 18 | % |
| Total Consumer segment Cost of Goods Sold |   | $                | 25,374 |   |       |   | 24,686 |   |   |   | 3 | % |

|                             |   | Third Quarter of |   |   | Percentage |   |
|----------------------------------|--------|------------------|--------|--------|------------|--------|
|                             |   | 2010             |   |   | 2009       |   |   | Change |   |
| Consumer segment adjusted EBITDA |   | $                | 31,212 |   |       |   | 23,234 |   |   |   | 34 | % |

|                                        |   | September 30, |   |   | Percentage |   |
|---------------------------------------------|--------|---------------|--------|--------|------------|--------|
|                                        |   | 2010          |   |   | 2009       |   |   | Change |   |
|  Voice:                                |   |          |   |   |       |   |   |   |   |
| Long-distance subscribers1             |   |          | 89,000 |   |       |   | 89,900 |   |   |   | (1 | %) |
| Long-distance minutes carried (in millions) |   |          | 25.6   |   |       |   | 28.0 |   |   |   | (8 | %) |

----

| Total local access lines in service2                                                                                                                                                                                                                                                                                                                                                |   |   | 84,700  |   |   |   | 82,700  |   |   |   | 2      | %      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
| Local access lines in service on GCI facilities2                                                                                                                                                                                                                                                                                                                                    |   |   | 77,100  |   |   |   | 72,700  |   |   |   | 6      | %      |
|  Video:                                                                                                                                                                                                                                                                                                                                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Basic subscribers3                                                                                                                                                                                                                                                                                                                                                                  |   |   | 130,500 |   |   |   | 129,600 |   |   |   | 1      | %      |
| Digital programming tier subscribers4                                                                                                                                                                                                                                                                                                                                               |   |   | 80,600  |   |   |   | 77,600  |   |   |   | 4      | %      |
| HD/DVR converter boxes5                                                                                                                                                                                                                                                                                                                                                             |   |   | 87,500  |   |   |   | 77,000  |   |   |   | 14     | %      |
| Homes passed                                                                                                                                                                                                                                                                                                                                                                             |   |   | 234,900 |   |   |   | 231,400 |   |   |   | 2      | %      |
| Average monthly gross revenue per subscriber6                                                                                                                                                                                                                                                                                                                                       |   | $      | 75.85   |   |   | $      | 70.95   |   |   |   | 7      | %      |
|  Data:                                                                                                                                                                                                                                                                                                                                                                              |   |   |    |   |   |   |    |   |   |   |   |   |
| Cable modem subscribers7                                                                                                                                                                                                                                                                                                                                                            |   |   | 104,400 |   |   |   | 97,900  |   |   |   | 7      | %      |
|  Wireless:                                                                                                                                                                                                                                                                                                                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Wireless lines in service8                                                                                                                                                                                                                                                                                                                                                          |   |   | 122,900 |   |   |   | 109,900 |   |   |   | 12     | %      |
| Average monthly gross revenue per subscriber9                                                                                                                                                                                                                                                                                                                                       |   | $      | 74.61   |   |   | $      | 64.17   |   |   |   | 16     | %      |
|                                                                                                                                                                                                                                                                                                                                                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| 1 A long-distance subscriber is defined as a customer account that is invoiced a monthly long-distance plan fee or has made a long-distance call during the month.                                                                                                                                                                                                                  |   |
| 2 A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network.                                                                                                                                                                                                                              |   |
| 3 A basic cable subscriber is defined as one basic tier of service delivered to an address or separate subunits thereof regardless of the number of outlets purchased.                                                                                                                                                                                                              |   |
| 4 A digital programming tier subscriber is defined as one digital programming tier of service delivered to an address or separate subunits thereof regardless of the number of outlets or digital programming tiers purchased. Digital programming tier subscribers are a subset of basic subscribers.                                                                              |   |
| 5 A high definition/digital video recorder (“HD/DVR”) converter box is defined as one box rented by a digital programming or basic tier subscriber. A digital programming or basic tier subscriber is not required to rent an HD/DVR converter box to receive service.                                                                                                  |   |
| 6 Quarter-to-date average monthly consumer video revenues divided by the average of consumer video basic subscribers at the beginning and end of each month in the period.                                                                                                                                                                                                          |   |
| 7 A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased. If one entity purchases multiple cable modem service access points, each access point is counted as a subscriber. Cable modem subscribers may also be video basic subscribers though basic cable service is not required to receive cable modem service. |   |
| 8 A wireless line in service is defined as a revenue generating wireless device.                                                                                                                                                                                                                                                                                                    |   |
| 9 Quarter-to-date average monthly consumer wireless revenues divided by the average of consumer wireless subscribers at the beginning and end of each month in the period.                                                                                                                                                                                                          |   |

| ·   | A 7% increase in programming services revenue to $23.6 million in 2010 primarily resulting from an increase in digital programming tier subscribers in 2010 and a rate increase on certain cable service offerings beginning in August 2009, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A 9% increase in equipment rental revenue to $5.9 million in 2010 primarily resulting from our customers’ increased use of our HD/DVR converter boxes. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | A $5.6 million increase in USAC support.  This increase includes a $4.4 million increase in USF high cost support and a $1.2 million increase in USF low income support.  We accrue estimated USF high cost support revenue quarterly and adjust our revenue as we obtain new information that changes the variables used to calculate our estimate. The increase in USF high cost support is primarily due to changes in the variables used to calculate our estimate, an increase in the number of wireless subscribers and $1.0 million for amended line count filings for which the revenue recognition criteria was met in the third quarter of 2010.  The increase in low income support is due to an increase in the number of wireless subscribers who qualify under this program; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.6 million increase in plan fee revenue due to an increase in the number of wireless subscribers. |
|--------------------|-------------------------------------------------------------------------------------------------------|

|                                 |   | Third Quarter of |   |   | Percentage |   |
|--------------------------------------|--------|------------------|--------|--------|------------|--------|
|                                 |   | 2010             |   |   | 2009       |   |   | Change |   |
| Voice                                |   | $                | 8,636  |   |       |   | 12,197 |   |   |   | (29 | %) |
| Data                                 |   |             | 14,208 |   |       |   | 14,876 |   |   |   | (4 | %) |
| Wireless                             |   |             | 5,360  |   |       |   | 3,190 |   |   |   | 68 | % |
| Total Network Access segment revenue |   | $                | 28,204 |   |       |   | 30,263 |   |   |   | (7 | %) |

----

|                                            |   | Third Quarter of |   |   | Percentage |   |
|-------------------------------------------------|--------|------------------|--------|--------|------------|--------|
|                                            |   | 2010             |   |   | 2009       |   |   | Change |   |
| Voice                                           |   | $                | 4,437  |   |       |   | 4,406 |   |   |   | 1 | % |
| Data                                            |   |             | 680    |   |       |   | 2,792 |   |   |   | (76 | %) |
| Wireless                                        |   |             | 430    |   |       |   | 338 |   |   |   | 27 | % |
| Total Network Access segment Cost of Goods Sold |   | $                | 5,547  |   |       |   | 7,536 |   |   |   | (26 | %) |

|                                   |   | Third Quarter of |   |   | Percentage |   |
|----------------------------------------|--------|------------------|--------|--------|------------|--------|
|                                   |   | 2010             |   |   | 2009       |   |   | Change |   |
| Network Access segment adjusted EBITDA |   | $                | 15,028 |   |       |   | 14,084 |   |   |   | 7 | % |

|                                                                                                                                                                             |   | September 30, |   |   | Percentage |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|------------|--------|
|                                                                                                                                                                             |   | 2010          |   |   | 2009       |   |   | Change |   |
|  Voice:                                                                                                                                                                     |   |          |   |   |       |   |   |   |   |
| Long-distance minutes carried (in millions)                                                                                                                                      |   |          | 205.4  |   |       |   | 224.6 |   |   |   | (9 | %) |
|  Data:                                                                                                                                                                      |   |          |   |   |       |   |   |   |   |   |   |   |
| Total Internet service provider access lines in service1                                                                                                                    |   |          | 1,700  |   |       |   | 1,700 |   |   |   | 0 | % |
|                                                                                                                                                                             |   |          |   |   |       |   |   |   |   |   |   |   |
| 1 An Internet service provider access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network. |   |

----

|                             |   | Third Quarter of |   |   | Percentage |   |
|----------------------------------|--------|------------------|--------|--------|------------|--------|
|                             |   | 2010             |   |   | 2009       |   |   | Change |   |
| Voice                            |   | $                | 8,025  |   |       |   | 7,688 |   |   |   | 4 | % |
| Video                            |   |             | 2,953  |   |       |   | 2,320 |   |   |   | 27 | % |
| Data                             |   |             | 22,211 |   |       |   | 15,801 |   |   |   | 41 | % |
| Wireless                         |   |             | 2,260  |   |       |   | 1,971 |   |   |   | 15 | % |
| Total Commercial segment revenue |   | $                | 35,449 |   |       |   | 27,780 |   |   |   | 28 | % |

|                                        |   | Third Quarter of |   |   | Percentage |   |
|---------------------------------------------|--------|------------------|--------|--------|------------|--------|
|                                        |   | 2010             |   |   | 2009       |   |   | Change |   |
| Voice                                       |   | $                | 3,486  |   |       |   | 4,926 |   |   |   | (29 | %) |
| Video                                       |   |             | 520    |   |       |   | 529 |   |   |   | (2 | %) |
| Data                                        |   |             | 11,752 |   |       |   | 7,164 |   |   |   | 64 | % |
| Wireless                                    |   |             | 973    |   |       |   | 691 |   |   |   | 41 | % |
| Total Commercial segment Cost of Goods Sold |   | $                | 16,731 |   |       |   | 13,310 |   |   |   | 26 | % |

----

|                               |   | Third Quarter of |   |   | Percentage |   |
|------------------------------------|--------|------------------|--------|--------|------------|--------|
|                               |   | 2010             |   |   | 2009       |   |   | Change |   |
| Commercial segment adjusted EBITDA |   | $                | 9,125  |   |       |   | 6,154 |   |   |   | 48 | % |

|                                                                                                                                                                                                                                              |   | September 30, |   |   | Percentage |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                              |   | 2010          |   |   | 2009       |   |   | Change |   |
|  Voice:                                                                                                                                                                                                                                      |   |          |   |   |       |   |   |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                   |   |          | 9,300  |   |       |   | 9,700 |   |   |   | (4 | %) |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                       |   |          | 29.8   |   |       |   | 30.6 |   |   |   | (3 | %) |
| Total local access lines in service2                                                                                                                                                                                                         |   |          | 48,100 |   |       |   | 47,300 |   |   |   | 2 | % |
| Local access lines in service on GCI facilities2                                                                                                                                                                                             |   |          | 20,900 |   |       |   | 19,000 |   |   |   | 10 | % |
|  Data:                                                                                                                                                                                                                                       |   |          |   |   |       |   |   |   |   |   |   |   |
| Cable modem subscribers3                                                                                                                                                                                                                     |   |          | 10,800 |   |       |   | 10,600 |   |   |   | 2 | % |
|  Wireless:                                                                                                                                                                                                                                   |   |          |   |   |       |   |   |   |   |   |   |   |
| Wireless lines in service4                                                                                                                                                                                                                   |   |          | 13,600 |   |       |   | 10,100 |   |   |   | 35 | % |
|                                                                                                                                                                                                                                              |   |          |   |   |       |   |   |   |   |   |   |   |
| 1 A long-distance subscriber is defined as a customer account that is invoiced a monthly long-distance plan fee or has made a long-distance call during the month.                                                                           |   |
| 2 A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network.                                                                                       |   |
| 3 A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased. If one entity purchases multiple cable modem service access points, each access point is counted as a subscriber. |   |
| 4 A wireless line in service is defined as a revenue generating wireless device.                                                                                                                                                             |   |

----

|                                                                                                                                                        |   | September 30, |   |   | Percentage |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|------------|--------|
|                                                                                                                                                        |   | 2010          |   |   | 2009       |   |   | Change |   |
|  Voice:                                                                                                                                                |   |          |   |   |       |   |   |   |   |
| Total local access lines in service on GCI facilities1                                                                                                 |   |          | 10,200 |   |       |   | 11,300 |   |   |   | (10 | %) |
|                                                                                                                                                        |   |          |   |   |       |   |   |   |   |   |   |   |
| 1 A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network. |   |

----

| ·   | A $3.4 million increase in share-based compensation expense primarily due to the absence of a $2.4 million reversal of expense in the third quarter of 2009.  The expense had been properly recognized in previous periods for certain performance-based stock options and restricted stock awards but in the third quarter of 2009 we determined they were not expected to vest, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $1.9 million in costs, including workers compensation expense, related to an accident involving our company-owned aircraft in August 2010, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.6 million increase in our company-wide success sharing bonus accrual, |
|--------------------|----------------------------------------------------------------------------|

| ·   | A $1.4 million increase in health care costs, and |
|--------------------|---------------------------------------------------|

| ·   | A $1.2 million increase in labor costs. |
|--------------------|-----------------------------------------|

----

|                           |   |   |    |   | Percentage |   |
|--------------------------------|--------|--------|---------|--------|------------|--------|
|                           |   | 2010   |    |   | 2009       |   |   | Change |   |
| Voice                          |   | $      | 43,711  |   |       |   | 39,390 |   |   |   | 11 | % |
| Video                          |   |   | 88,096  |   |       |   | 82,114 |   |   |   | 7 | % |
| Data                           |   |   | 44,531  |   |       |   | 36,654 |   |   |   | 21 | % |
| Wireless                       |   |   | 79,892  |   |       |   | 60,981 |   |   |   | 31 | % |
| Total Consumer segment revenue |   | $      | 256,230 |   |       |   | 219,139 |   |   |   | 17 | % |

|                                      |   |   |   |   | Percentage |   |
|-------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                      |   | 2010   |   |   | 2009       |   |   | Change |   |
| Voice                                     |   | $      | 9,227  |   |       |   | 11,492 |   |   |   | (20 | %) |
| Video                                     |   |   | 38,128 |   |       |   | 34,280 |   |   |   | 11 | % |
| Data                                      |   |   | 2,795  |   |       |   | 3,255 |   |   |   | (14 | %) |
| Wireless                                  |   |   | 27,049 |   |       |   | 23,073 |   |   |   | 17 | % |
| Total Consumer segment Cost of Goods Sold |   | $      | 77,199 |   |       |   | 72,100 |   |   |   | 7 | % |

|                             |   |   |   |   | Percentage |   |
|----------------------------------|--------|--------|--------|--------|------------|--------|
|                             |   | 2010   |   |   | 2009       |   |   | Change |   |
| Consumer segment adjusted EBITDA |   | $      | 88,420 |   |       |   | 64,304 |   |   |   | 38 | % |

|                                        |   | September 30, |   |   | Percentage |   |
|---------------------------------------------|--------|---------------|--------|--------|------------|--------|
|                                        |   | 2010          |   |   | 2009       |   |   | Change |   |
|  Voice:                                |   |          |   |   |       |   |   |   |   |
| Long-distance minutes carried (in millions) |   |          | 80.6   |   |       |   | 85.9 |   |   |   | (6 | %) |

----

|  Video:                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Average monthly gross revenue per subscriber1                                                                                                                           |   | $      | 74.80  |   |   | $      | 69.61  |   |   |   | 7      | %      |
|  Wireless:                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Average monthly gross revenue per subscriber2                                                                                                                           |   | $      | 70.51  |   |   | $      | 63.55  |   |   |   | 11     | %      |
|                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| 1 Year-to-date average monthly consumer video revenues divided by the average of consumer video basic subscribers at the beginning and end of each month in the period. |   |
| 2 Year-to-date average monthly consumer wireless revenues divided by the average of consumer wireless subscribers at the beginning and end of each month in the period. |   |

| ·   | A 7% increase in programming services revenue to $69.8 million in 2010 primarily resulting from an increase in digital programming tier subscribers in 2010 and a rate increase on certain cable service offerings beginning in August 2009, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An 8% increase in equipment rental revenue to $17.3 million in 2010 primarily resulting from our customers’ increased use of our HD/DVR converter boxes. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $15.9 million increase in USAC support. This increase includes a $11.6 million increase in USF high cost support and a $4.3 million increase in USF low income support. We accrue estimated USF high cost support revenue quarterly and adjust our revenue as we obtain new information that changes the variables used to calculate our estimate. The increase in USF high cost support is primarily due to changes in the variables used to calculate our estimate, an increase in the number of wireless subscribers and $1.0 million for amended line count filings for which the revenue recognition criteria was met in the third quarter of 2010.  The increase in USF low income support is due to an increase in the number of wireless subscribers who qualify under this program; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $3.8 million increase in plan fee revenue due to an increase in the number of wireless subscribers. |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | An absence of $1.7 million in support recorded in 2009 related to services provided during the year ended December 31, 2008.  The support was for a new local access area for which we received ETC status in May 2009.  Collectability was not reasonably assured until we were awarded ETC status, therefore we deferred revenue recognition until such status was confirmed, and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An absence of $810,000 recorded in 2009 related to services provided during the year ended December 31, 2008.  In March 2009, the FCC issued an order which provided uncapped support for all lines served by competitive ETCs for tribal lands in Alaska Native regions retroactive to August 2008.  This revenue was for the additional support for the period August to December 2008. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                 |   |   |   |   | Percentage |   |
|--------------------------------------|--------|--------|--------|--------|------------|--------|
|                                 |   | 2010   |   |   | 2009       |   |   | Change |   |
| Voice                                |   | $      | 22,471 |   |       |   | 39,975 |   |   |   | (44 | %) |
| Data                                 |   |   | 46,360 |   |       |   | 48,903 |   |   |   | (5 | %) |
| Wireless                             |   |   | 12,668 |   |       |   | 5,704 |   |   |   | 122 | % |
| Total Network Access segment revenue |   | $      | 81,499 |   |       |   | 94,582 |   |   |   | (14 | %) |

|                                            |   |   |   |   | Percentage |   |
|-------------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                            |   | 2010   |   |   | 2009       |   |   | Change |   |
| Voice                                           |   | $      | 11,137 |   |       |   | 12,947 |   |   |   | (14 | %) |
| Data                                            |   |   | 6,288  |   |       |   | 7,004 |   |   |   | (10 | %) |
| Wireless                                        |   |   | 1,029  |   |       |   | 825 |   |   |   | 25 | % |
| Total Network Access segment Cost of Goods Sold |   | $      | 18,454 |   |       |   | 20,776 |   |   |   | (11 | %) |

|                                   |   |   |   |   | Percentage |   |
|----------------------------------------|--------|--------|--------|--------|------------|--------|
|                                   |   | 2010   |   |   | 2009       |   |   | Change |   |
| Network Access segment adjusted EBITDA |   | $      | 40,206 |   |       |   | 46,674 |   |   |   | (14 | %) |

----

|                                        |   | September 30, |   |   | Percentage |   |
|---------------------------------------------|--------|---------------|--------|--------|------------|--------|
|                                        |   | 2010          |   |   | 2009       |   |   | Change |   |
|  Voice:                                |   |          |   |   |       |   |   |   |   |
| Long-distance minutes carried (in millions) |   |          | 600.3  |   |       |   | 640.6 |   |   |   | (6 | %) |

----

|                             |   |   |   |   | Percentage |   |
|----------------------------------|--------|--------|--------|--------|------------|--------|
|                             |   | 2010   |   |   | 2009       |   |   | Change |   |
| Voice                            |   | $      | 24,316 |   |       |   | 23,373 |   |   |   | 4 | % |
| Video                            |   |   | 7,909  |   |       |   | 6,591 |   |   |   | 20 | % |
| Data                             |   |   | 56,544 |   |       |   | 47,725 |   |   |   | 18 | % |
| Wireless                         |   |   | 6,474  |   |       |   | 4,994 |   |   |   | 30 | % |
| Total Commercial segment revenue |   | $      | 95,243 |   |       |   | 82,683 |   |   |   | 15 | % |

|                                        |   |   |   |   | Percentage |   |
|---------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                        |   | 2010   |   |   | 2009       |   |   | Change |   |
| Voice                                       |   | $      | 11,626 |   |       |   | 14,393 |   |   |   | (19 | %) |
| Video                                       |   |   | 1,550  |   |       |   | 1,532 |   |   |   | 1 | % |
| Data                                        |   |   | 28,276 |   |       |   | 21,425 |   |   |   | 32 | % |
| Wireless                                    |   |   | 2,747  |   |       |   | 2,292 |   |   |   | 20 | % |
| Total Commercial segment Cost of Goods Sold |   | $      | 44,199 |   |       |   | 39,642 |   |   |   | 11 | % |

|                               |   |   |   |   | Percentage |   |
|------------------------------------|--------|--------|--------|--------|------------|--------|
|                               |   | 2010   |   |   | 2009       |   |   | Change |   |
| Commercial segment adjusted EBITDA |   | $      | 23,526 |   |       |   | 17,047 |   |   |   | 38 | % |

|                                        |   | September 30, |   |   | Percentage |   |
|---------------------------------------------|--------|---------------|--------|--------|------------|--------|
|                                        |   | 2010          |   |   | 2009       |   |   | Change |   |
|  Voice:                                |   |          |   |   |       |   |   |   |   |
| Long-distance minutes carried (in millions) |   |          | 88.8   |   |       |   | 94.5 |   |   |   | (6 | %) |

----

| ·   | A $1.0 million favorable adjustment based upon refunds from several vendors.  In the course of business we estimate unbilled long-distance services Cost of Goods Sold based upon minutes of use processed through our network and established rates.  Such estimates are revised when subsequent billings are received, payments are made, billing matters are researched and resolved, tariffed billing periods lapse, or when disputed charges are resolved; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cost savings resulting from increased deployment of local access services lines on our own facilities during the last three months of 2009 and first nine months of 2010. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | A $3.2 million increase in labor costs, |
|--------------------|-----------------------------------------|

| ·   | A $3.0 million increase in health benefit costs, |
|--------------------|--------------------------------------------------|

| ·   | A $2.8 million increase in share-based compensation expense primarily due to the absence of a $2.4 million reversal of expense in 2009.  The expense had been properly recognized in previous periods for certain performance-based stock options and restricted stock awards but in the third quarter of 2009 we determined they were not expected to vest, and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $1.9 million in costs, including workers compensation expense, related to an accident involving our company-owned aircraft in August 2010. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $2.0 million decrease in sales expense, |
|--------------------|-------------------------------------------|

| ·   | The absence of $1.2 million in costs for the conversion of our customers’ wireless phones to our facilities in 2009, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | A $737,000 decrease in contract labor, and |
|--------------------|--------------------------------------------|

| ·   | The absence of a $500,000 contribution expense recognized upon the gift of an IRU to the University of Alaska that was recorded in 2009. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                 |   | 2010   |    |   | 2009   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Operating activities                                 |   | $      | 112,156 |   |   |   | 67,252 |   |
| Investing activities                                 |   |   | (77,384 | )      |   |   | (95,302 | ) |
| Financing activities                                 |   |   | (4,756  | )      |   |   | 20,250 |   |
| Net increase (decrease) in cash and cash equivalents |   | $      | 30,016  |   |   |   | (7,800 | ) |

----

----

----

----

----

| ·   | In August 2008, the FCC's OIG initiated an investigation by requesting information regarding Alaska DigiTel’s compliance with program rules and requirements under the Lifeline Program. The request covers the period beginning January 1, 2004 through August 31, 2008 and relates to the amounts received for Lifeline service.  Alaska DigiTel was an Alaska based wireless communications company of which we acquired an 81.9% equity interest on January 2, 2007 and the remaining 18.1% equity interest on August 18, 2008 and was subsequently merged with one of our wholly owned subsidiaries in April 2009. Prior to August 18, 2008, our control over the operations of Alaska DigiTel was limited as required by the FCC upon its approval of our initial acquisition completed in January 2007. We have been and intend to continue fully complying with this request on behalf of Alaska DigiTel and the GCI companies as affiliates.  The OIG investigation is still pending, and we are presently unable to assess the ultimate resolution of this matter; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In August 2010, a GCI-owned aircraft was involved in an accident resulting in five fatalities and injuries to the remaining four passengers on board.  We had aircraft and liability insurance coverage in effect at the time of the accident.  We cannot predict the likelihood or nature of any potential claims related to the accident. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit No.  | Description                                                                         |                                                                        |
|--------------|-------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|
| 31.1    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to            |                                                                        |
|         |                                                                                | Section 302 of the Sarbanes-Oxley Act of 2002 by our President and Director |   |
| 31.2    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to            |                                                                        |
|         |                                                                                | Section 302 of the Sarbanes-Oxley Act of 2002 by our Senior Vice President, |   |
|         |                                                                                | Chief Financial Officer, Secretary and Treasurer                            |   |
| 32.1    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to            |                                                                        |
|         |                                                                                | Section 906 of the Sarbanes-Oxley Act of 2002 by our President and Director |   |
| 32.2    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to            |                                                                        |
|         |                                                                                | Section 906 of the Sarbanes-Oxley Act of 2002 by our Senior Vice President, |   |
|         |                                                                                | Chief Financial Officer, Secretary and Treasurer                            |   |
| 10.177  | Description of Incentive Compensation Guidelines for Named Executive Officers #     |                                                                        |
|         |                                                                                |                                                                        |   |
|         |                                                                                |                                                                        |   |
| #            | Incorporated by reference to our Current Report on Form 8-K dated October 15, 2010. |                                                                        |
|         |                                                                                |                                                                        |   |
|         |                                                                                |                                                                        |   |   |   |   |   |   |   |   |   |

----

| Signature                   |   | Title                                        |   | Date                    |
|-----------------------------|--------|----------------------------------------------|--------|-------------------------|
|                        |   |                                         |   |                    |
|                        |   |                                         |   |                    |
|   /s/ G. Wilson Hughes |   | President and Director                       |   |   November 8, 2010 |
| G. Wilson Hughes            |   | (Principal Executive Officer)                |   |                    |
|                        |   |                                         |   |                    |
|   /s/ John M. Lowber   |   | Secretary, Treasurer and Director            |   |   November 8, 2010 |
| John M. Lowber              |   | (Principal Financial and Accounting Officer) |   |                    |

----