----

| [X] | No fee      required. |
|-----|-----------------------|

| [  ] | Fee computed      on table below per Exchange Act Rules 14a-6(I)(1) and  0-11. |
|----------------|--------------------------------------------------------------------------------|

|   | 1) | Title of each      class of securities to which transaction applies: __________________________ |
|--------|----|-------------------------------------------------------------------------------------------------|

|   | 2) | Aggregate      number of securities to which transaction applies: __________________________ |
|--------|----|----------------------------------------------------------------------------------------------|

|   | 3) | Per unit      price or other underlying value of transaction computed pursuant to      Exchange Act Rule 0-11 (set forth the amount on which the filing fees is      calculated and state how it wasdetermined): |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ____________________________________________________________________________ |
|--------|------------------------------------------------------------------------------|

|   | 4) | Proposed      maximum aggregate value of transaction: _________________________________ |
|--------|----|-----------------------------------------------------------------------------------------|

|   | [  ] | Check box if      any part of the fee if offset as provided by Exchange Act Rule 0-11(a)(2)      and identify the filing for which the offsetting fee was paid      previously.  Identify the previous filing by registration      statement number, or the Form or Schedule and the date of its      filing. |
|--------|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   |                                             |
|--------|--------|--------------------------------------------------|
|   |   |                                             |   |
|   |   |                                             |   |
|   |   | Ronald A.      Duncan                            |   |
|   |   | President and Chief Executive      Officer  |   |
|   |   |                                             |   |

----

| ·   | Electing      three directors, each for a three year term, as part of Class II of our      classified board of directors and electing one director to complete the      remaining two years in the three-year term in Class I of our      board. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Approving an      amendment to our Amended and Restated 1986 Stock Option Plan specifically      permitting a one-time offer of exchange of certain options, granted under      the plan to certain of the officers and employees of the Company and other      persons, for grants of certain stock awards under the  plan. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Transacting      such other business as may properly come before the annual meeting and any      adjournment or adjournments of it. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

|   |   |                           |
|--------|--------|--------------------------------|
|   |   |                           |   |
|   |   |                           |   |
|   |   | John M.      Lowber, Secretary |   |
|   |   |                           |   |
|   |   |                           |   |

----

|                                                                    |  Page |
|-------------------------------------------------------------------------|------------|
| ABOUT THE ANNUAL MEETING                                                | 1          |
| MATTERS TO BE VOTED UPON                                                | 12         |
| Director Elections                                                      | 12         |
| Plan Amendment                                                          | 14         |
| Other Business                                                          | 29         |
| GOVERNANCE OF COMPANY                                                   | 30         |
| Directors and Executive      Officers                                   | 30         |
| Board and Committee Meetings                                            | 35         |
| Director Independence                                                   | 41         |
| Compensation Committee Interlocks and      Insider Participation        | 42         |
| Compensation Committee      Report                                      | 42         |
| Director Compensation                                                   | 42         |
| Litigation and Regulatory Matters                                       | 44         |
| COMPENSATION DISCUSSION AND      ANALYSIS                               | 44         |
| Overview                                                                | 44         |
| Principles of the Compensation    Program                               | 45         |
| Process                                                                 | 45         |
| Elements of Compensation                                                | 48         |
| Performance Rewarded                                                    | 55         |
| Timing of Equity Awards                                                 | 56         |
| Tax and Accounting Treatment of Executive      Compensation             | 57         |
| EXECUTIVE COMPENSATION                                                  | 57         |
| Summary CompensationTable                                               | 57         |
| Grant of Plan-Based Awards Table                                        | 60         |
| Outstanding Equity Awards at Fiscal Year-End      Table                 | 60         |
| Option Exercises and Stock Vested      Table                            | 62         |
| Potential Payments upon Termination or      Change-in-Control           | 62         |
| NONQUALIFIED DEFERRED      COMPENSATION                                 | 63         |
| Deferred Compensation    Plan                                           | 63         |
| Deferred Compensation      Arrangements                                 | 63         |
| CODE OF BUSINESS CONDUCT AND      ETHICS                                | 66         |
| CERTAIN TRANSACTIONS                                                    | 66         |
| Transactions with Related Persons                                       | 66         |
| Review Procedure for Transactions with Related      Persons             | 68         |
| OWNERSHIP OF COMPANY                                                    | 70         |
| Principal Shareholders                                                  | 70         |
| Changes in Control                                                      | 73         |
| Securities Authorized for Issuance under      Equity Compensation Plans | 74         |
| Section 16(a) Beneficial Ownership Reporting      Compliance            | 74         |
| AUDIT COMMITTEE REPORT                                                  | 74         |
| RELATIONSHIP WITH INDEPENDENT REGISTERED PUBLIC      ACCOUNTING FIRM    | 75         |
| Overview                                                                | 75         |
| Pre-Approval Policies and      Procedures                               | 75         |
| Fees and Services                                                       | 76         |
| ANNUAL REPORT                                                           | 77         |
| SHAREHOLDER COMMUNICATIONS                                              | 77         |
| FUTURE SHAREHOLDER PROPOSALS AND      RECOMMENDATIONS                   | 78         |
| Proposals                                                               | 78         |
| Recommendations                                                         | 80         |

----

ABOUT

----

| ·   | Electing      three individuals as directors, each for a three-year term, as part of      Class II of our eight member classified board of directors and electing      one individual to complete the remaining two years of the three-year term      in Class I of our board, as identified in the Proxy Card and this Proxy      Statement. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Approving an      amendment ("Plan Amendment") to our Amended and Restated 1986 Stock Option      Plan ("Stock Option Plan") specifically permitting a one-time offer      of exchange of certain options, granted under the plan ("Prior Options")      to certain of the officers and employees of the Company and other persons      ("Prior Optionees"), for grants of certain stock awards under the plan      ("Exchange Awards"). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Transacting      such other business as may properly come before the meeting and any      adjournment or adjournments of it. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | For      the election of board-nominees asdirectors. |
|--------------------|------------------------------------------------------|

| ·   | For      approval of the PlanAmendment. |
|--------------------|-----------------------------------------|

| ·   | For or      against other matters that come before our Annual Meeting, as the      proxy holder deems advisable. |
|--------------------|------------------------------------------------------------------------------------------------------------------|

----

| ·   | For the      election of three nominees as in Class II of our board, the three nominees      receiving the most "For" votes (among votes properly cast in person or by      proxy) and in each case constituting a tally of at least a majority of the      votes entitled to be cast. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | For the      separate election of a nominee as director in Class I of our board, the      nominee receiving the most "For" votes (among votes properly cast in      person or by proxy) and constituting a tally of at least a majority of the      votes entitled to be cast. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | For each      other matter to come before the Annual Meeting, "For" votes (among votes      properly cast in person or by proxy) constituting a tally of at least a      majority of the votes entitled to becast. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Online – Go      to www.proxyvote.com. |
|--------------------|----------------------------------------------|

| ·   | Email – Send      message to sendmaterial@proxyvote.com. |
|--------------------|----------------------------------------------------------------|

| ·   | Telephone –      Call 1.800.579.1639. |
|--------------------|---------------------------------------------|

| ·   | Online–      Go to www.proxyvote.com      and follow the instructions.  You need to enter certain      information that is printed on your Internet Notice or Proxy      Card.  You can also use this website to elect to be notified in      the future by email that future proxy statements and annual reports are      available online instead of receiving paper copies of those materials by      mail. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | By      Telephone– Call toll-free 1.800.690.6903 within the United States      and follow the instructions.  You need to enter certain      information that is printed on your Internet Notice or Proxy Card in order      to vote by telephone. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | By      Mail– Complete, sign and date your Proxy Card and return it in the      envelope provided.   |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

MATTERS

Director

----

| ·   | Be between      and including 21 and 75 years of age (although, in the event a person      reaches the upper limit of that age while a director, that person's term      as director immediately terminates and the director is required by our      Bylaws to resign from the board). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Possess basic      skills and characteristics required as prerequisites for each member,      unless otherwise specified, on the board which must include, but are not      limited to, the following – |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Knowledge,      skills and experience in at least one of the primary industries in which      we operate. |
|---------------|-----------------------------------------------------------------------------------------------------------|

| o   | Ability to      read and understand fundamental financial statements, including our      balance sheet, income statement and cash flow statement, and have at least      familiarity with the underlying accounting rules and      practices. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Ability to      understand our key business and financialrisks. |
|---------------|-----------------------------------------------------------------|

| o   | Appreciation      of the relationship of our business to changing needs of      society. |
|---------------|------------------------------------------------------------------------------------------|

| o   | With respect      to at least one member of our board, skills, attributes, and financial      sophistication of an audit committee financial expert as the term is      defined in the charter. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | With respect      to at least a simple majority of the authorized members of our board, each      be an independent director as the term is defined in the Nasdaq Stock      Market ("Nasdaq") corporate governance listing standards (to which we are      subject) and incorporated into the charter, i.e., an individual other than      one of our executive officers or employees or any other      individual  having a relationship which in the opinion of our      board would interfere with the exercise of independent judgment in      carrying out the responsibilities of a director ("Independent      Director"). |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| o   | Other skills      and characteristics specifically identified and approved by the      committee. |
|---------------|---------------------------------------------------------------------------------------------------|

| ·   | Stephen M.      Brett – Class II |
|--------------------|----------------------------------------|

| ·   | Ronald A.      Duncan – Class II |
|--------------------|----------------------------------------|

| ·   | Stephen R.      Mooney – Class II |
|--------------------|-----------------------------------------|

| ·   | Mark W.      Kroloff – Class I |
|--------------------|--------------------------------------|

Plan

----

----

----

----

----

----

----

----

| Name                           | Prior      Options(#      Shares) | Exchange      Awards(#      Shares) | Exchange      Ratio(%) |
|--------------------------------|-----------------------------------|-------------------------------------|------------------------|
|  Ronald A.      Duncan1   |  - -      -                  |  - -      -                    |  - -      -       |
|  G. Wilson      Hughes    |  650,000                     |  230,000                       |  35               |
|  John M.      Lowber      |  650,000                     |  236,000                       |  36               |
|  William C.      Behnke   |  450,000                     |  172,000                       |  38               |
|  Gregory F.      Chapados |  480,000                     |  190,000                       |  40               |

----

----

----

----

| ·   | Motivate and      encourage Prior Optionees who are our employees to continue to build      shareholders value. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | Motivate and      encourage Prior Optionees who are some of our vendors to refocus on      providing quality goods and services to us in the  future. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Reduce the      total number of our outstanding options under, and use of shares of our      common stock allocated to, our Stock Option Plan since a substantially      smaller number of Exchange Awards are to be granted for the surrendered      Prior Options. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Recapture      retentive and incentive value from the compensation expense that we record      in our financial statements with respect to Prior  Options. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Members of      our board are excluded from participating in the Plan      Amendment.  All other employees holding Prior Options will      generally be eligible toparticipate. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Only options      granted through the Stock Option Plan during the Option Grant Period are      eligible Prior Options to participate in the Plan    Amendment. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | None of the      Exchange Awards will be vested on the date of exchange.  The      Exchange Awards will be scheduled to vest 50% on December 20, 2011 with      the balance on February 28, 2012. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Prior Options      surrendered in the exchange through the proposed Plan Amendment will be      cancelled, and shares subject to those cancelled options will be available      for future issuance under the terms of the Stock Option    Plan. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Instead of      granting Exchange Awards, a small cash payment will be issued in exchange      for surrendered Prior Options to avoid issuance of fractional      shares. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Motivate      Prior Optionees who are our officers and employees to continue to build      shareholder value and achieve future stock price growth by exchanging      Prior Options for Exchange Awards with new extended vesting periods and      which have a value that moves directly in line with our stock      price. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Reduce our      total number of outstanding options under the Stock Option Plan, since a      substantially smaller number of Exchange Awards will be granted for the      surrendered Prior Options. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Recapture      value from the compensation expense that we record with respect to certain      Prior Options. |
|--------------------|---------------------------------------------------------------------------------------------------------------|

----

Other

----

GOVERNANCE 

Directors

| Name                     | Age      | Position                                                                    |
|--------------------------|----------|----------------------------------------------------------------------------------|
| Stephen M.      Brett1   | 68       | Chairman,      Director                                                     |
| Ronald A.      Duncan1   | 56       | President,      Chief Executive Officer and Director                        |
| John M.      Lowber      | 59  | Senior Vice      President, Chief Financial Officer, Secretary, and    Treasurer |
| G. Wilson      Hughes    | 63  | Executive      Vice President and General Manager                                |
| William C.      Behnke   | 51  | Senior Vice      President – Strategic Initiatives                         |
| Natalie W.      Blaylock | 45       | Vice      President – General Manager, Network Access Services        |
| Gina R.      Borland     | 46  | Vice      President, Product Management – Voice and Messaging              |
| Martin E.      Cary      | 44  | Vice      President – General Manager, Managed Broadband Services          |
| Gregory F.      Chapados | 51  | Senior Vice      President – Federal Affairs and Business Development      |
| Richard P.      Dowling  | 65  | Senior Vice      President – Corporate Development                         |
| Paul E.      Landes      | 51  | Vice      President and General Manager, ConsumerServices                        |

----

| Terry J.      Nidiffer   | 58  | Vice      President, Product Management – Data and Entertainment        |
|--------------------------|----------|-------------------------------------------------------------------------------|
| Gregory W.      Pearce   | 46  | Vice      President and General Manager, Commercial Services                  |
| Dana L.      Tindall     | 47  | Senior Vice      President – Legal, Regulatory and Governmental Affairs |
| Richard D.      Westlund | 65  | Senior Vice      President, Network Access Services                           |
| Jerry A.      Edgerton1  | 67  | Director                                                                      |
| Scott M.      Fisher1    | 43  | Director                                                                      |
| William P.      Glasgow1 | 50  | Director                                                                      |
| Mark W.      Kroloff1    | 52       | Director                                                                 |
| Stephen R.      Mooney1  | 49  | Director                                                                      |
| James M.      Schneider1 | 56       | Director                                                                 |

| 1 | The present      classification of our board is as follows: (1) Class I – Mr. Edgerton,      whose present term expires at the time of our 2011 annual meeting, and Mr.      Kroloff, who was appointed to the board on February 9, 2009 and who stands      for election at the Annual Meeting to complete the present term ending at      the time of our 2011 annual meeting; (2) Class II – Messrs. Brett, Duncan      and Mooney whose present terms expire at the time of our present Annual      Meeting; and (3) Class III – Messrs. Fisher, Glasgow, and Schneider, whose      present terms expire at the time of our 2010 annual    meeting. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

----

----

Board

| ·   | Audit      Committee. |
|--------------------|-----------------------|

| ·   | Compensation      Committee. |
|--------------------|------------------------------|

| ·   | Executive      Committee. |
|--------------------|---------------------------|

| ·   | Finance      Committee. |
|--------------------|-------------------------|

| ·   | Nominating      and Corporate Governance Committee. |
|--------------------|-----------------------------------------------------|

| Name                    | Audit  | Compensation        | Executive | Finance1 | Nominating      &  Corporate Governance |
|-------------------------|--------|---------------------|-----------|----------|-------------------------------------------------------|
| Stephen M.      Brett   |   | Chair               | Chair     |     | Chair                                                 |
| Ronald A.      Duncan   |   |                | X         |     |                                                  |
| Jerry A.      Edgerton  |   | X                   |      |     | X                                                     |
| Scott M.      Fisher    |   | X                   |      | X        | X                                                     |
| William P.      Glasgow | X      | X                   | X         | X        | X                                                     |
| Mark W.      Kroloff    |   | X                   |      |     | X                                                     |
| Stephen R.      Mooney  | X      | X                   | X         |     | X                                                     |
| James M.      Schneider | Chair  | ­­      X |      |     | X                                                     |

----

| ·   | Understanding      of U.S. generally accepted accounting principles and financial      statements. |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | Ability to      assess the general application of such principles in connection with      accounting for estimates, accruals andreserves. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Experience in      preparing, auditing, analyzing or evaluating financial statements that      present a breadth and level of complexity of accounting issues that are      generally comparable to the breadth and complexity of issues that can      reasonably be expected to be raised by our financial statements, or      experience actively supervising one or more persons engaged in such      activities. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Understanding      of internal control over financialreporting. |
|--------------------|-----------------------------------------------------------------|

| ·   | Understanding      of audit committee functions. |
|--------------------|--------------------------------------------------|

| ·   | Education and      experience as a principal financial officer, principal accounting officer,      controller, public accountant or auditor or experience in one or more      positions that involved the performance of similar    functions. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Experience      actively supervising a principal financial officer, principal accounting      officer, controller, public accountant, auditor or person performing      similar functions. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Experience      overseeing or assessing the performance of companies or public accountants      with respect to the preparation, auditing or evaluation of financial      statements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other      relevant experience. |
|--------------------|---------------------------------|

| ·   | Principal      Accountant Selection, Qualification –      Is directly responsible for appointment, compensation, retention,      oversight, qualifications and independence of our External      Accountant. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Financial      Statements –      Assists in our board's oversight of integrity of the Company      financial statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | Financial      Reports, Internal Control –      Is directly responsible for oversight of the audit by our External      Accountant of our financial reports and reports on internal      control. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Annual      Reports –      Prepares reports required to be included in our annual proxy      statement.  See, "Audit Committee  Report." |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Complaints –      Receives and responds to certain complaints relating to internal      accounting controls, and auditing matters, confidential, anonymous      submissions by our employees regarding questionable accounting or auditing      matters, and certain alleged illegal acts or behavior-related conduct in      violation of our Ethics Code.  See, "Code of Business Conduct      and Ethics." |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Principal      Accountant Disagreements –      Resolves disagreements, if any, between our External Accountant and us      regarding financial reporting. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Non-Audit      Services –      Reviews and pre-approves any non-audit services offered to us by our      External Accountant ("Non-AuditServices"). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Attorney      Reports –      Addresses certain attorney reports, if any, relating to violation      of securities law or fiduciary duty by one of our officers, directors,      employees or agents. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Related      Party Transactions –      Reviews certain related party transactions as described elsewhere in this      Proxy Statement.  See, "Certain  Transactions." |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other –      Carries out other assignments as designated by our  board. |
|--------------------|-------------------------------------------------------------------------------|

| ·   | Review, on an      annual basis, plans and targets for executive officer and board member      compensation, if any – |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| o   | Review is      specifically to address expected performance and compensation of, and the      criteria on which compensation is based for, the chief executive officer      and such other of our executive officers as our board may designate for      this purpose. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Monitor the      effect of ongoing events on and the effectiveness of existing compensation      policies, goals, and plans – |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| o   | Events      specifically include but are not limited to the status of the premise that      all pay systems correlate with our compensation goals and      policies. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Report from      time to time, its findings to ourboard. |
|---------------|----------------------------------------------------------|

| ·   | Administer      our Stock Option Plan and approve grants of options and awards pursuant to      the plan. |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | Monitor      compensation-related publicity and public and private sector developments      on executive compensation. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Familiarize      itself with, and monitor the tax, accounting, corporate, and securities      law ramifications of, our compensation policies, including but not limited      to – |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Comprehending      a senior executive officer's total compensation  package. |
|---------------|------------------------------------------------------------------------------|

| o   | Comprehending      the package's total cost to us and its total value to the      recipient. |
|---------------|----------------------------------------------------------------------------------------------|

| o   | Paying close      attention to salary, bonuses, individual insurance and health benefits,      perquisites, historical loans made by us, special benefits to specific      executive officers, individual pensions, and other retirement      benefits. |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Establish the      overall cap on executive compensation and the measure of performance for      executive officers, either by predetermined measurement or by a subjective      evaluation. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Strive to      make our compensation plans simple, fair, and structured so as to maximize      shareholder value. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

----

| ·   | Nominations –      Identifies and recommends nominees for our board and its      committees. |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | Corporate      Governance – Reviews and recommends      to our board, or independently takes, action on various corporate      governance issues. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Complaints –      Receives and responds to certain complaints raised by our employees, and      not otherwise addressed by our Audit Committee, regarding alleged illegal      acts or behavior-related conduct by our board members in violation of our      Ethics Code. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Supervision –      Supervises our chief financial officer in the context of our Ethics      Code. |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | Other –      Carries out other assignments as designated by our  board. |
|--------------------|-------------------------------------------------------------------------------|

----

Director

----

Compensation

Compensation

Director 

----

| Name                          | FeesEarnedorPaid      inCash($) | StockAwards2($)  | OptionAwards($)  | Non-EquityIncentive      PlanCompensation($) | Change      inPensionValue      and NonqualifiedDeferredCompensationEarnings($) | All      OtherCompensation($)     | Total($)           |
|-------------------------------|---------------------------------|------------------|------------------|----------------------------------------------|--------------------------------------------------------------------------------------|-----------------------------------|--------------------|
|  Stephen M.      Brett   |    40,000        |  24,509     | - -      -       | - -      -                                   | - -      -                                                                           |  - -      -                  |   64,509 |
|  Jerry A.      Edgerton3 |  130,623                   |  88,844     |  - -      - |  - -      -                             |  - -      -                                                                     |  25,734                      |  245,201      |
|  Scott M.      Fisher    |    40,000        |  24,509     | - -      -       | - -      -                                   | - -      -                                                                           |      507 |   65,016 |
|  William P.      Glasgow |   50,000              |  24,509     | - -      -       | - -      -                                   | - -      -                                                                           |  1,523                       |   76,032 |
|  Mark W.      Kroloff4   |  - -      -                |  - -      - | - -      -       | - -      -                                   | - -      -                                                                           |  - -      -                  |  - -      -   |
|  Stephen R.      Mooney5 |  189,623                   |  88,844     | - -      -       | - -      -                                   | - -      -                                                                           |  25,734                      |  304,201      |
|  James M.      Schneider |   50,000              |  24,509     |  - -      - | - -      -                                   |  - -      -                                                                     |  - -      -                  |   74,509 |

| 1 | Compensation      to Mr. Duncan as a director is described elsewhere in this      report.  See, "Executive Compensation" and "Compensation      Discussion and Analysis." |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Except as      noted in the table and as further described below, each director received      a grant of awards of 3,330 shares of Company Class A common stock on June      1, 2008.  The value of the shares on the date of grant was $7.36      per share, i.e., the closing price of the stock on Nasdaq on that date and      as required in accordance with FAS123R. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Includes      $90,623 in board fees, $64,335 in Class A common stock and $25,734 in tax      reimbursement for prior years' service on our board during which Mr.      Edgerton's previous employer did not allow board compensation to accrue to      the benefit of an individual serving on the  board. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Mr. Kroloff      was appointed to the board in February 2009 and did not receive director      compensation for 2008. |
|---|-----------------------------------------------------------------------------------------------------------------------|

| 5 | Includes      $139,623 in board fees, $64,335 in Class A common stock and $25,734 in tax      reimbursement for prior years' service on our board during which Mr.      Mooney's previous employer did not allow board compensation to accrue to      the benefit of the individual serving on the  board. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

Litigation

COMPENSATION 

Overview

----

Principles

| ·   | Compensation      is related to performance and must cause alignment of interests of      executive officers with the long term interests of our      shareholders. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Compensation      targets must take into consideration competitive market conditions and      provide incentives for superior performance by the  Company. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Actual      compensation must take into consideration the Company's and the executive      officer's performance over the prior year and the long term, and the      Company's resources. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Compensation      is based upon both qualitative and quantitative  factors. |
|--------------------|-----------------------------------------------------------------------------|

| ·   | Compensation      must enable the Company to attract and retain management necessary to      cause the Company to succeed. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

Process

----

----

| ·   | Publicly held      companies in industries similar to ourCompany. |
|--------------------|-------------------------------------------------------------------|

| ·   | Companies      with which our Company competes for executive  talent. |
|--------------------|-----------------------------------------------------------------------|

| ·   | Our Company's      direct business competitors. |
|--------------------|-------------------------------------------------|

| ·   | Companies      that compete with our Company for investment  dollars. |
|--------------------|-----------------------------------------------------------------------|

| Alaska      Communications Systems Group, Inc.  | CT      Communications, Inc.        |
|-------------------------------------------------|-------------------------------------|
| FairPoint      Communications, Inc.             | Equinix,      Inc.                  |
| Iowa      Telecommunications Services, Inc.     | Golden      Telecom, Inc.           |
| Mediacom      Communications Corp.              | North      Pittsburgh Systems, Inc. |
| Northrim      BanCorp, Inc.                     | RCN      Corp                       |
| Cincinnati      Bell, Inc.                      | SureWest      Communications        |
| Commonwealth      Telephone Enterprises, Inc.   | Talk America      Holdings, Inc.    |
| Consolidated      Communications Holdings, Inc. | Time Warner      Telecom, Inc.      |
| Covad      Communications Group                 | XO Holdings,      Inc.              |
| Crown Media      Holdings, Inc.                 |                                |

----

Elements

| ·   | Base      Salary. |
|--------------------|-------------------|

| ·   | Incentive      Compensation Bonus Plan ("Incentive Compensation  Plan"). |
|--------------------|--------------------------------------------------------------------------|

| ·   | Stock Option      Plan. |
|--------------------|-------------------------|

| ·   | Perquisites. |
|--------------------|--------------|

----

| ·   | Retirement      and Welfare Benefits. |
|--------------------|---------------------------------------|

----

----

----

| ·   | Use of      Company Leased Aircraft – The Company permits employees, including      the Named Executive Officers, to use Company aircraft for personal travel      for themselves and their guests.  Such travel is limited to a      space available basis on flights that are otherwise      business-related.  When employees, including the Named Executive      Officers, use Company aircraft for such travel they are attributed with      taxable income in accordance with IRS regulations.  The Company      does not "gross up" or reimburse employees for taxes they owe on such      attributed income.  Messrs. Behnke, Duncan and Hughes have made      use of the aircraft for personal travel, the value of which is included in      the Summary Compensation Table.  See, "Executive      Compensation:  Summary Compensation  Table." |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Enhanced      Long Term Disability Benefit – The Company provides the Named      Executive Officers and other senior executive officers of the Company with      an enhanced long term disability benefit.  This benefit provides      a supplemental replacement income benefit of 60% of average monthly      compensation capped at $10,000 per month.  The normal      replacement income benefit applying to other of our employees is capped at      $5,000 per month. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Enhanced      Short Term Disability Benefit  – The Company provides the      Named Executive Officers and other senior executive officers of the      Company with an enhanced short term disability benefit.  This      benefit provides a supplemental replacement income benefit of 66 2/3%      of average monthly compensation, capped at $2,300 per week.  The      normal replacement income benefit applying to other of our employees is      capped at $1,150 per week. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Miscellaneous      – Aside from benefits offered to its employees generally, the      Company provided miscellaneous other benefits to its Named Executive      Officers including the following (see, "Executive      Compensation:  Summary Compensation Table – Components of 'All      Other Compensation'"): |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Success      Sharing – An incentive program offered to all of our employees that shares      15% of the excess earnings before interest, taxes, depreciation,      amortization and share based compensation expense over the highest      previous year ("Success Sharing"). |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| o   | Tax      Reimbursement – Provided to Mr. Duncan, as one of our directors, on      restricted stock awards granted to him under our Director Compensation      Plan during 2006 and provided to other employees and senior executive      officers, including the Named Executive Officers, from time to time, on      $100 longevity stock awards. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Board Fees –      Provided to Mr. Duncan as one of ourdirectors. |
|---------------|------------------------------------------------------------------------|

----

----

Performance

----

Timing

----

Tax

EXECUTIVE 

Summary

----

| Name      andPrincipal      Position                                                                                                                         | Year                     | Salary1($)                           | Bonus($)                                                                | StockAwards($)                                                                                                                                                          | Option      Awards($)       | Change in      Pension Value and Nonqualified Deferred Compensation Earnings($)                                                                                                      | All Other      Compensation($)      2                                 | Total($)                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|--------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------------------|
|  Ronald A.      Duncan3  President      and Chief  Executive      Officer                                                           |  200820072006  |  600,000585,208345,000     |  750,000100,000900,000                                        |  1,101,263   596,132     43,656                                                                                            |  237,258325,968308,713 |          -      - -        -      - -        -      - - |   75,143 90,800 96,324                            |  2,763,6641,698,1081,693,693                                            |
|  G. Wilson      Hughes  Executive      Vice  President      and  General      Manager                                     |  200820072006  |  462,5004462,5004461,4594  |  203,000  77,000  65,500                  |         -      - -       -      - -         100 |  659,545308,470230,219 |        7,556    10,516    21,471                                                                          |   24,806 21,801 31,833                            |  1,357,407   880,287   810,582                 |
|  John M.      Lowber  Senior      Vice President,  Chief      Financial Officer  and      Secretary/  Treasurer |  200820072006  |  325,000323,919296,888     |  203,000  76,000  65,500                  |        -      - -      -      - -      -      - -                        |  426,357284,915321,147 |           646         633        -      - -   |   24,268 22,500 30,524                            |     979,271   707,967   714,059 |
|  William C.      Behnke  Senior      Vice President –  Strategic      Initiatives                                             |  200820072006  |  250,000248,959225,000          |  202,000125,000  94,000                                  |        -      - -      -      - -      -      - -                        |  482,687272,323180,343 |          -      - -        -      - -        -      - - |   30,824 18,750      724 |     965,511   665,032   500,067 |
|  Gregory F.      Chapados  Senior      Vice President –  Federal      Affairs &  Business      Development      |  200820072006  |  240,000239,333121,621          |  204,000  53,000     -      - - |       -      - -     -      - -     -      - -                                          |  926,443519,871280,364 |          -      - -        -      - -        -      - - |   43,771 62,000 29,589                            |  1,414,214   874,204   431,574                 |

| 1 | For 2006      through 2008, salary includes deferred compensation of $225,000 and      $65,000 for Messrs. Hughes and Lowber,  respectively. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | In 2006, Mr.      Duncan received $107,119 in compensation relating to his service on our      board including $46,000 in board fees, $43,656 in stock awards, and      $17,463 in tax reimbursements on those stock awards.  In 2007,      Mr. Duncan received $84,422 in compensation relating to his service on our      board including $40,000 in board fees and $44,422 in stock      awards.  In 2008, Mr. Duncan received $64,509 in compensation      relating to his service on our board including $40,000 in board fees and      $24,509 in stock awards. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | For 2006      through 2008, includes $37,500 for Mr. Hughes representing the amount      vested during 2006 through 2008 pursuant to prepaid retention      agreements. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name      andPrincipal      Position | Year               | Stock      PurchasePlan1($)                                                              | BoardFees($)                                                                                                                   | Success      Sharing2($)                                                                                     | TaxReimbursementon      StockAwards3($)                                                                                                                      | Use of      Company LeasedAircraft4($)                                                                 | Miscell-aneous5($)                                                                                                             | Total($)                                      |
|--------------------------------------|--------------------|------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|
|  Ronald A.      Duncan     |  200820072006 |    23,000  22,500  22,000                        |    40,000  40,000  46,000                                                              |      -      - -    -      - -    -      - - |        -      - -      -      - -   17,463                                   |  12,14328,30010,861                                                                               |       -      - -     -      - -     -      - - |  75,14390,80096,324                 |
| G. Wilson      Hughes           | 200820072006  |   23,000  21,801  22,000                                   |      -      - -     -      - -     -      - -  |   1,268    -      - -     579                         |       -      - -      -      - -          27   |      538    -      - -    -      - -  |      -      - -     -      - -   9,227                        | 24,80621,80131,833                            |
| John M.      Lowber             | 200820072006  |   23,000  22,500  22,000                                   |      -      - -     -      - -     -      - -  |   1,268    -      - -    579                               |       -      - -      -      - -      -      - -                   |     -      - -    -      - -    -      - - |      -      - -     -      - -   7,945                        | 24,26822,50030,524                            |
| William C.      Behnke          | 200820072006       |   21,646  18,750      -      - -  |      -      - -     -      - -- -      -                                     |   1,268    -      - -    724                               |        -      - -       -      - -       -      - - |   7,910    -      - -    -      - -                  |      -      - -     -      - -     -      - -       | 30,82418,750     724 |
| Gregory F.      Chapados        | 200820072006       |   21,670  12,000     -      - -             |      -      - -     -      - -     -      - -       |   1,268    -      - -    422                               |        -      - -       -      - -       -      - - |     -      - -    -      - -    -      - - |   20,833  50,000  29,167                                                                         | 43,77162,00029,589                            |

| 1 | Amounts are      contributions by us matching each employee's      contribution.  Matching contributions by us under the Stock      Purchase Plan are available to each of our full time employees with over      one year of service.  During 2008, the match was based upon the      lesser of $23,000 ($22,500 for 2007 and $22,000 for 2006), 10% of the      employee's salary and the total of the employee's pre-tax and post-tax      contributions to the plan.  See, "Compensation Discussion and      Analysis:  Elements of Compensation – Retirement and Welfare      Benefits – Stock Purchase Plan." |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | The highest      year on which the Success Sharing was based was 2008.  See,      "Compensation Discussion and Analysis:  Elements of Compensation      – Perquisites." |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Mr. Duncan's      reimbursement relates to stock awards received for services on our      board.  Mr. Hughes' reimbursements relate to his receipt of      awards of $100 in our stock for longevity of service under a program open      to all of our employees. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Use of      Company aircraft is based upon standard industrial fare      levels. |
|---|----------------------------------------------------------------------------------|

| 5 | Includes, for      Mr. Hughes, an event (for 2006, valued at $9,227) hosted by him outside of      Alaska for a gathering of a group of Company executives to celebrate the      achievement of a specific corporate performance      target.  Includes, for Mr. Lowber, forgiveness (for 2006, valued      at $7,945) of interest on a loan.  Includes for Mr. Chapados      vesting of a $100,000 signing bonus received in 2006.  See,      "Certain Transactions:  Transactions with Related Persons" and      "Compensation Discussion and Analysis:  Elements of Compensation      – Perquisites." |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

Grant

| Name                           | Grant      Date                          | Estimated      Future PayoutsUnderEquity      Incentive Plan Awards | All      OtherStockAwards:Number      ofSharesof      Stockor      Units  | All      OtherOptionAwards:Number of      SecuritiesUnderlyingOptions  | Exerciseor      BasePrice      ofOptionAwards($/Sh) | Grant      DateFair Value of      Stock and Option Awards1($) |
|--------------------------------|------------------------------------------|---------------------------------------------------------------------|--------------------------------------------------------------------------------|-----------------------------------------------------------------------------|-----------------------------------------------------|---------------------------------------------------------------|
|                           |                                     | Threshold(#)                                                        | Target(#)                                                                      | Maximum(#)                                                                  |  (#)                                           |  (#)                                                     |   |   |   |
|  Ronald A.      Duncan    |  6/01/08                            |  - -      -                                                    |  - -      -                                                               |  - -      -                                                            |  3,3302                                        |  - -      -                                              |  - -      - |   24,509 |   |
|  G. Wilson      Hughes    |  1/09/08                            |    -      - -                                        |  - -      -                                                               |  - -      -                                                            |  - -      -                                    |  100,000                                                 |  7.95 |  438,680 |   |
|  John M.      Lowber      |      -      - - |    -      - -                                        |  - -      -                                                               |  - -      -                                                            |  - -      -                                    |  - -      -                                              |  - -      - |  - -      - |   |
|  William C.      Behnke   |  1/09/08                            |    -      - -                                        |  - -      -                                                               |  - -      -                                                            |  - -      -                                    |  100,000                                                 |  7.95 |  438,680 |   |
|  Gregory F.      Chapados |  1/09/08                            |    -      - -                                        |  - -      -                                                               |  - -      -                                                            |  - -      -                                    |  100,000                                                 |  7.95 |  438,680 |   |

| 1 | Determined as      the closing price of the stock on Nasdaq on the date of grant and as      required by FAS 123R. |
|---|--------------------------------------------------------------------------------------------------------------------|

| 2 | Mr. Duncan's      stock award was granted pursuant to the terms of our Director Compensation      Plan.  See, "Governance of Company:  Director      Compensation." |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Outstanding

----

| Name                                                                | Option      Awards1                                                                                                                            | Stock      Awards                                                                                                                                                                              |
|---------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number of      SecuritiesUnderlyingUnexercisedOptions(#)Exercisable | Number      ofSecuritiesUnderlyingUnexercisedOptions (#)      Unexercisable                                                                    | OptionExercisePrice($)                                                                                                                                                                         | OptionExpirationDate | Number of      Shares orUnits of      StockThat Have      NotVested      (#)  | Market      Valueof Shares      orUnits of      Stockthat      HaveNot      Vested($) | Equity      Incentive Plan Awards:  Number of Unearned Shares, Units or      Other Rights That Have Not Vested (#) | Equity      Incentive Plan Awards:  Market or Payout Value of Unearned      Shares, Units or Other Rights That Have Not Vested ($) |
|  Ronald A.      Duncan                                         |       -      - -150,000250,0003150,0004                                                                          |        -      - -      -      - -      -      - -      -      - - |     -      - -  6.50  8.403  7.254 |       -      - - 3/14/10 6/24/143 2/08/124 |  225,0002     -      - -     -      - -     -      - - |  1,820,2502       -      - -       -      - -       -      - - |          -      - -        -      - -        -      - -        -      - - |          -      - -        -      - -        -      - -        -      - - |
|  G. Wilson      Hughes                                    |      -      - -200,0004200,000  50,0006            - - -                           |       -      - -     -      - -     -      - -100,0006100,0007                                                 |     -      - -  7.25  6.5012.996  7.957 |       -      - - 2/08/12 3/14/10 6/25/176 1/09/187 |       -      - -     -      - -     -      - -     -      - -     -      - - |         -      - -       -      - -       -      - -       -      - -       -      - - |       50,0005       -      - -       -      - -       -      - -       -      - - |      437,5005        -      - -        -      - -        -      - -        -      - - |
|  John M.      Lowber                                           |  100,0003200,000  30,0008150,000                                                                                                |       -      - -     -      - -170,0008     -      - -                                                         |    8.403  7.2512.998  6.50 |   6/24/143 2/08/12 6/25/178 3/14/10 |       -      - -     -      - -     -      - -     -      - - |         -      - -       -      - -       -      - -       -      - - |         -      - -       -      - -       -      - -       -      - - |          -      - -        -      - -        -      - -        -      - - |
|  William C.      Behnke                                        |  208,3259     -      - -     -      - -                                                 |    41,6759100,00010100,00011                                                                                                                                                    |    7.25912.9910  7.9511 |    2/08/128  6/25/179  1/09/1811 |       -      - -     -      - -     -      - - |         -      - -       -      - -       -      - - |         -      - -       -      - -       -      - - |          -      - -        -      - -        -      - - |
|  Gregory F.      Chapados                                      |       -      - -  80,000  82,00012  30,000     -      - - |       -      - -120,000  68,00012        -      - -100,0007                                                    |     -      - -13.1113.1112  6.00  7.95 |       -      - - 6/01/16 6/01/1612 2/01/13 1/09/187 |       -      - -     -      - -     -      - -     -      - -     -      - - |         -      - -       -      - -       -      - -       -      - -       -      - - |      15,0005       -      - -       -      - -       -      - -       -      - - |      131,2505        -      - -        -      - -        -      - -        -      - - |

| 1   | Stock option      awards generally vest over five years and expire ten years from grant      date, except as noted in the footnotesbelow. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| 2   | Stock Award      vests 75,000 shares each on February 19 of 2009, 2010 and      2011. |
|---------------|---------------------------------------------------------------------------------------|

| 3   | Options vest      20% per year, and the first vesting date occurred on December 4,      2004. |
|---------------|-----------------------------------------------------------------------------------------------|

| 4   | All options      vested on February 8, 2007. |
|---------------|----------------------------------------------|

| 5   | Stock awards      fully vest on April 1, 2010 subject to our adjusted EBITDA reaching $210      million in 2009.  Awards will vest at 20% for $202 million and      ratably thereafter to 100% for $210million. |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6   | Options vest      33.3% on each of February 19, 2008, 2009 and  2011. |
|---------------|-----------------------------------------------------------------------|

| 7   | Options vest 50% on each      of December 31, 2010 and 2011,respectively. |
|---------------|--------------------------------------------------------------------------------|

| 8   | Options vest      15%, 20%, 20%, 20% and 25% on February 19 of 2008, 2009, 2010, 2011 and      2012, respectively. |
|---------------|--------------------------------------------------------------------------------------------------------------------|

| 9   | Options vest      16.7% each year from February 8, 2004 through February 8,      2009. |
|---------------|----------------------------------------------------------------------------------------|

----

| 10   | Options vest      33.3% on February 19 of 2009, 2010 and2011. |
|----------------|---------------------------------------------------------------|

| 11   | Options vest      25% on December 31, 2010 and 75% on December 31,  2011. |
|----------------|---------------------------------------------------------------------------|

| 12   | Options vest      27,000 shares on January 1, 2007 and 15,000, 40,000, 20,000, 20,000,      20,000 and 8,000 shares on December 31, 2007, 2008,      2009, 2010, 2011 and 2012, respectively, subject to adjustments based upon      performance. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Option

|                     | Option      Awards                                 | Stock      Awards                  |
|--------------------------|----------------------------------------------------|------------------------------------|
| Name                     | Number of      SharesAcquired on      Exercise (#) | Value      Realized on Exercise($) | Number of      SharesAcquired on      Vesting(#) | Value      RealizedOn      Vesting($) |
| Ronald A.      Duncan1   | - -      -- -      -                               |  - -      -- -      -         |    3,330175,000 |    24,3091470,250 |
| G. Wilson      Hughes    | - -      -                                         | - -      -                         | - -      - | - -      - |
| John M.      Lowber      | - -      -                                         | - -      -                         | - -      - | - -      - |
| William C.      Behnke   | 5,425                                              | 20,941                             | - -      - | - -      - |
| Gregory F.      Chapados | - -      -                                         | - -      -                         | - -      - | - -      - |

| 1 | Mr. Duncan's      stock awards relate to his service as one of our  directors. |
|---|--------------------------------------------------------------------------------|

Potential

----

NONQUALIFIED

Deferred

Deferred 

| Name                           | ExecutiveContributionsin Last      FY($) | RegistrantContributionin Last      FY($) | AggregateEarnings      (Loss)in Last      FY1($) | AggregateWithdrawals/Distributions($) | AggregateBalanceat Last      FY($)   |
|--------------------------------|------------------------------------------|------------------------------------------|--------------------------------------------------|---------------------------------------|--------------------------------------|
|  Ronald A.      Duncan    |  - -      -                         |  - -      -                         |  (128,918)                                  |  - -      -                      |  1,580,228                      |
|  G. Wilson      Hughes    |  125,000                            |  100,000                            |    (84,118)                       |  - -      -                      |  2,712,253                      |
|  John M.      Lowber2     |  65,000                             |    90,538                 |     88,812                   |  (400,000)                       |  1,087,384                      |
|  William C.      Behnke   |  - -      -                         |  - -      -                         |      (8,097)            |  - -      -                      |      99,248 |
|  Gregory F.      Chapados |  - -      -                         |  - -      -                         |  - -      -                                 |  - -      -                      |  - -      -                     |

----

| 1 | Includes      earnings of $7,556 for Mr. Hughes and $646 for Mr. Lowber that is reported      in the Summary Compensation Table. |
|---|----------------------------------------------------------------------------------------------------------------------------------|

| 2 | Includes      $90,538 in Company contributions, $13,894 in aggregate earnings and a year      end balance of $194,845 which vests 100% on December 31, 2010 pursuant to      a retention agreement. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

CODE

CERTAIN

Transactions 

----

----

Review

----

----

OWNERSHIP

Principal

| ·   | Each person      known by us to own beneficially 5% or more of the outstanding shares of      Class A common stock or Class B commonstock. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Each of our      directors. |
|--------------------|-----------------------------|

| ·   | Each of the      Named Executive Officers. |
|--------------------|--------------------------------------------|

| ·   | All of our      executive officers and directors as agroup. |
|--------------------|-------------------------------------------------------------|

|     Names      ofBeneficial      Owner1 |     Title      ofClass2 |  Amount      andNature      ofBeneficialOwnership(#)                                                   |      %of      Class |   % of Total      Shares Outstanding (Class      A & B)2 |   %      CombinedVotingPower(Class A      & B)2 |
|-------------------------------------------------------------|---------------------------------------------|-------------------------------------------------------------------------------------------------------------|----------------------------------------------|-----------------------------------------------------------------------------|---------------------------------------------------------------|
|  Stephen M.      Brett                                 |  Class      AClass      B              |        41,6503        -      - - |  *- -      -                            |  *                                                                     |  *                                                       |
|  Ronald A.      Duncan                                 |  Class      AClass      B              |   1,633,0083,4    459,9704                                                    |    3.314.4                    |  3.9                                                              |  7.6                                                |
|  Jerry A.      Edgerton                           |  Class      AClass      B              |       16,6503       -      - -             |  *- -      -                            |  *                                                                     |  *                                                       |
|  Scott M.      Fisher                                  |  Class      AClass      B              |     104,2623,5   437,6885                                                |  *13.7                                  |  1.0                                                                   |  5.5                                                     |
|  William P.      Glasgow                               |  Class      AClass      B              |       66,5943,6        -      - -     |  *- -      -                            |  *                                                                     |  *                                                       |
|  G. Wilson      Hughes                            |  Class      AClass      B              |     938,7107       2,6957                            |  1.9*                                   |  1.8                                                                   |  1.2                                                |
|  Mark W.      Kroloff8                                 |  Class      AClass      B              |       10,000        -      - -        |  *- -      -                            |  *                                                                     |  *                                                  |
|  John M.      Lowber                                   |  Class      AClass      B              |     627,6449       6,2569                            |  1.3*                                   |  1.2                                                                   |  *                                                  |
|  Stephen R.      Mooney                                |  Class      AClass      B              |       16,6503        -      - -       |  *- -      -                            |  *                                                                     |  *                                                       |

----

|  James M.      Schneider                                                                                             |  Class      AClass      B       |        38,0503         -      - - |  *- -      -               |  *         |  *         |
|---------------------------------------------------------------------------------------------------------------------------|--------------------------------------|-------------------------------------------------------------------------------------------------------------------|---------------------------------|-----------------|-----------------|
|  William C.      Behnke                                                                                              |  Class      AClass      B       |      296,89510        -      - -                 |  *- -      -               |  *         |  *    |
|  Gregory F.      Chapados                                                                                            |  Class      AClass      B       |      252,99711        -      - -                 |  *- -      -               |  *         |  *         |
|  Arctic Slope      Regional Corp.3900 C      Street, Suite 801Anchorage,      Alaska 99503                           |  Class      AClass      B  |  7,481,240       -      - -                                          |  15.0- -      -       |  14.1      |   9.2 |
|  Barclays      Global Investors45 Fremont      StreetSan      Francisco, CA 94105                                    |  Class      AClass      B       |   3,540,87912        -      - -                            |    7.1- -      - |   6.7 |   4.3 |
|  GCI Qualified      EmployeeStock      Purchase Plan2550 Denali      St., Ste. 1000Anchorage, AK      99503          |  Class      AClass      B       |   5,047,33013      68,87313                                               |  10.1  2.2       |   9.6 |   7.0 |
|  Gary      Magnessc/o Raymond      L. Sutton, Jr.303 East 17th      Ave., Ste 1100Denver, CO      80203-1264         |  Class      AClass      B  |   1,347,96112    433,92412                                                     |    2.713.6  |   3.4 |   7.0 |
|  John W.      Stanton andTheresa E.      Gillespie155 108th      Avenue., N.E.,Suite      450Bellevue, WA      98004 |  Class      AClass      B       |  2,503,3051,275,791                                                                                          |    5.039.9       |   7.1 |  18.7      |
|  Robert M.      Walp804 P Street,      Apt. 4Anchorage, AK      99501                                                |  Class      AClass      B       |     124,51714   202,35014                                                      |  * 6.3                |  *         |   2.6 |
|  All Directors      and Executive  Officers      As a Group  (21      Persons)                   |  Class      AClass      B  |  5,404,33315   991,33815                                                                 |  10.831.0                  |  11.4      |  18.1      |

| 1 | Beneficial      ownership is determined in accordance with Rule 13d-3 of the Exchange      Act.  Shares of our stock that a person has the right to acquire      within 60 days of the Record Date are deemed to be beneficially owned by      such person and are included in the computation of the ownership and      voting percentages only of such person.  Each person has sole      voting and investment power with respect to the shares indicated, except      as otherwise stated in the footnotes to the table.  Addresses      are provided only for persons other than management who own beneficially      more than 5% of the outstanding shares of Class A or B common      stock. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | "Title of      Class" includes our Class A common stock and Class B common      stock.  "Amount and Nature of Beneficial Ownership" and "% of      Class" are given for each class of stock.  "% of Total Shares      Outstanding" and "% Combined Voting Power" are given for the combination      of outstanding Class A common stock and Class B common stock, and the      voting power for Class B common stock (10 votes per share) is factored      into the calculation of that combined voting  power. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3 | Includes      3,330 shares of our Class A common stock granted to each of those persons      pursuant to the Director Compensation Plan for services performed during      2008. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Includes      147,391 shares of Class A common stock and 6,219 shares of Class B common      stock allocated to Mr. Duncan under the Stock Purchase Plan as of December      31, 2008.  Includes 400,000 shares of Class A common stock      subject to stock options granted under the Stock Option Plan to Mr. Duncan      which he has the right to acquire within 60 days of the Record Date by      exercise of the stock options.  Does not include 35,560 shares      of Class A common stock or 8,242 shares of Class B common stock held by      the Amanda Miller Trust, with respect to which Mr. Duncan has no voting or      investment power.  Ms. Miller is Mr. Duncan's daughter, and Mr.      Duncan disclaims beneficial ownership of the shares.   Does      not include 27,760 shares of Class A common stock or 27,020 shares of      Class B common stock held by Dani Bowman, Mr. Duncan's wife, of which Mr.      Duncan disclaims beneficial ownership.  Includes 150,000 shares      of Class A common stock which a company owned by Mr. Duncan has the right      to acquire within 60 days of the Record Date by the exercise of stock      options.  Includes 714,392 shares of Class A common stock and      453,751 shares of Class B common stock pledged as  security. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Includes      87,512 shares of Class A and 437,688 shares of Class B common stock owned      by Fisher Capital Partners, Ltd. of which Mr. Fisher is a      partner. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Does not      include 158 shares owned by a daughter of Mr. Glasgow.  Mr.      Glasgow disclaims any beneficial ownership of the shares held by his      daughter. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | Includes      500,000 shares of Class A common stock which Mr. Hughes has the right to      acquire within 60 days of the Record Date by the exercise of vested stock      options.  Includes 81,422 shares of Class A common stock and      2,695 shares of Class B common stock allocated to Mr. Hughes under the      Stock Purchase Plan, as of December 31, 2008.  Includes a grant      of restricted stock the vesting of which is contingent on 2009 adjusted      EBITDA, exceeding $202 million and ratably thereafter as previously      described.  See "Executive Compensation:  Outstanding      Equity Awards at Fiscal Year-End Table."  Includes 325,890      shares of Class A common stock pledged as security.  Excludes      217,300 shares held by the Company pursuant to Mr. Hughes' Deferred      Compensation Agreement. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | Mr. Kroloff      joined our board on February 9, 2009.  Includes 10,000 shares of      Class A common stock purchased by Mr. Kroloff.  Excludes shares      held by Arctic Slope Regional Corporation where Mr. Kroloff is the Chief      Operating Officer. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9 | Includes      520,000 shares which Mr. Lowber has the right to acquire within 60 days of      the Record Date by the exercise of vested stock      options.  Includes 28,321 shares of Class A common stock and      ­­­5,986 shares of Class B common stock allocated to Mr.      Lowber under the Stock Purchase Plan, as of December 31,    2008. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 | Includes      283,333 shares which Mr. Behnke has the right to acquire within 60 days of      the Record Date by the exercise of vested stock      options.  Includes 8,800 shares of Class A common stock      allocated to Mr Benhke under the Stock Purchase Plan, as of December 31,      2008. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11 | Includes      232,000 shares of Class A common stock which Mr. Chapados has the right to      acquire within 60 days of the Record Date by the exercise of vested stock      options.  Includes a grant of restricted stock the vesting of      which is contingent on 2009 adjusted EBITDA exceeding $202 million and      ratably thereafter as previously described.  See "Executive      Compensation:  Outstanding Equity Awards at Fiscal Year-End      Table."  Includes 5,997 shares of Class A common stock allocated      to Mr. Chapados under the Stock Purchase Plan, as of December 31,      2008. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12 | Balance as of      December 31, 2008. |
|----|---------------------------------------|

| 13 | Balance as of      March 31, 2009. |
|----|------------------------------------|

| 14 | Includes      16,098 shares of Class A common stock and 457 shares of Class B common      stock allocated to Mr. Walp under the Stock Purchase      Plan.  Includes 25,000 shares of Class A common stock which Mr.      Walp has the right to acquire within 60 days of the Record Date by the      exercise of vested stock options. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15 | Includes      3,115,091 shares of Class A common stock which such persons have the right      to acquire within 60 days of the Record Date through the exercise of      vested stock options.  Includes 549,549 shares of Class A common      stock and 25,601 shares of Class B common stock allocated to such persons      under the Stock Purchase Plan.  Does not include shares held by      Arctic Slope Regional Corporation where Mr. Kroloff is the Chief Operating      Officer. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Changes 

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Securities

| Plan      category                                                              | Number of      securitiesto be issued      upon exercise of outstanding options, warrants and rights | Weighted-averageexercise      price ofoutstanding      options,warrants and      rights($)  | Number of      securitiesremaining      available for future issuance under equity compensation plans (excluding      securities reflected in the second column) |
|---------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Equity      compensationplans      approved bysecurity      holders  |  7,205,186                                                                                      |  9.08                                                                                       |  917,855                                                                                                                                                    |
| Equity      compensationplans not      approved bysecurity      holders    |   150,000                                                                             | 6.50                                                                                             | -0-                                                                                                                                                              |
| Total:                                                                     | 7,355,186                                                                                            | 9.03                                                                                             | 917,855                                                                                                                                                          |

Section

AUDIT 

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RELATIONSHIP

Overview

Pre-Approval

| ·   | Full Audit      Committee –      The full Audit Committee can consider each Non-Audit    Service. |
|--------------------|---------------------------------------------------------------------------------------------------------|

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| ·   | Designee –      The Audit Committee can designate one of its members to approve a      Non-Audit Service, with that member reporting approvals to the full      committee. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pre-Approval      of Categories –      The Audit Committee can pre-approve categories of Non-Audit      Services.  Should this option be chosen, the categories must be      specific enough to ensure both of the following  – |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | The Audit      Committee knows exactly what it is approving and can determine the effect      of such approval on auditorindependence. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------|

| o   | Management      will not find it necessary to decide whether a specific service falls      within a category of pre-approved Non-Audit  Service. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

Fees 

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| Type of      Fees        | 2008                                                                                  |          2007                            |
|--------------------------|---------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
| Audit      Fees1         | $1,442,605                                                                            | $646,500                                                                              |
| Audit-Related      Fees2 |     17,500                                                        | 13,500                                                                                |
| Tax Fees3                |     45,695                                                        | 26,250                                                                                |
| All Other      Fees4     |               0 |               0 |
| Total                    | $1,505,800                                                                            | $686,250                                                                              |

| 1 | Consists of      fees for our annual financial statement audit, quarterly financial      statement reviews, reviews of other filings by us with the SEC, audit of      our internal control over financial reporting and for services that are      normally provided by an auditor in connection with statutory and      regulatory filings or engagements. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Consists of      fees for audit of the Stock Purchase Plan and review of the related annual      report on Form 11-K filed with theSEC. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Consists of      fees for review of our state and federal income tax returns and      consultation on various tax advice and tax planning    matters. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Consists of      fees for any services not included in the first three types of fees      identified in the table. |
|---|--------------------------------------------------------------------------------------------------------------------|

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

ANNUAL

SHAREHOLDER 

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FUTURE

Proposals

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Recommendations

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