UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

             [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal quarter ended March 31, 2002

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                          Commission File Number 0-556

                             SUREWEST COMMUNICATIONS

             (Exact name of registrant as specified in its charter)

           California                                     68-0365195
--------------------------------------            -----------------------
  (State or other jurisdiction                         (I.R.S. Employer
          of incorporation or organization)          Identification  No.)

200 Vernon Street, Roseville, California                   95678
----------------------------------------          ----------------------
  (Address of principal executive offices)                (Zip Code)

        Registrant's telephone number, including area code (916) 786-6141
                                                           --------------

           Securities registered pursuant to Section 12(g) of the Act:

                        Common Stock - Without Par Value
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                    Yes X No

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of April 30, 2002, 14,903,465 shares of the registrant's Common Stock were
outstanding.


<PAGE>



                             SUREWEST COMMUNICATIONS
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                (Amounts in thousands, except per share amounts)
<TABLE>

<CAPTION>
                                              Quarter Ended      Quarter Ended
                                              March 31, 2002     March 31, 2001
                                              --------------     --------------
<S>                                                    <C>               <C>
Operating revenues:
  Local service                                     $16,813            $18,073
  Network access service                             13,329             11,129
  Wireless service                                    5,418              4,702
  Directory advertising                               3,738              3,548
  Nonregulated sales and service                      1,298              1,705
  Other                                               3,368              3,107
                                                    -------            -------
    Total operating revenues                         43,964             42,264

Operating expenses:
  Cost of services and products                      14,091             13,269
  Customer operations and selling                     8,401              7,741
  General and administrative                          5,896              5,556
  Depreciation and amortization                      10,447              9,642
                                                    -------            -------
    Total operating expenses                         38,835             36,208
                                                    -------            -------
Income from operations                                5,129              6,056

Other income (expense)
  Interest income                                       203              2,575
  Interest expense                                     (362)              (261)
  Gain on sale of alarm monitoring assets             4,436                  -
  Other, net                                            (26)               (40)
                                                    -------            -------
    Total other income, net                           4,251              2,274
                                                    -------            -------
Income before income taxes                            9,380              8,330

Income taxes                                          3,771              3,344
                                                    -------            -------

Net income                                          $ 5,609            $ 4,986
                                                    =======            =======

Basic and diluted earnings per share (1)          $   .37            $   .32
                                                    =======            =======

Cash dividends per share (2)                      $   .25            $   .25
                                                    =======            =======
Shares of common stock used to calculate
  earning per share                                  15,072             15,470
                                                    =======            =======
</TABLE>

(1)  Shares used in the computation of basic earnings per share are based on the
     weighted average number of common shares  outstanding,  excluding  unvested
     restricted  common  shares.  Shares  used  in the  computation  of  diluted
     earnings per share are based on the weighted  average  number of common and
     other potentially dilutive securities outstanding in each period.

(2)  Cash  dividends per share are based on the actual  dividends per share,  as
     declared by the Company's Board of Directors.



                             See accompanying notes.


<PAGE>


<TABLE>


                             SUREWEST COMMUNICATIONS
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                             (Amounts in thousands)

<CAPTION>

                                                    March 31, 2002     December 31, 2001
                                                    -------------      -----------------
<S>                                                  <C>                   <C>

ASSETS
  Current assets:
    Cash and cash equivalents                             $ 47,489               $54,520
    Short-term investments                                     737                 1,723
    Accounts receivable, net                                21,607                20,282
    Refundable income tax                                        -                 2,619
    Inventories                                              3,327                 3,324
    Deferred income tax asset                                  640                   640
    Deferred directory costs                                 3,091                 3,260
    Prepaid expenses and other current assets                1,968                 1,726
                                                          --------              --------
      Total current assets                                  78,859                88,094

  Property, plant and equipment, net                       308,304               308,073

  Investments and other assets:
    Wireless licenses, net                                  13,566                13,566
    Goodwill                                                 2,171                 2,171
    Deferred charges and other assets                          385                   439
                                                          --------              --------
                                                            16,122                16,176
                                                          --------              --------
                                                          $403,285              $412,343
                                                          ========              ========
LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Current portion of long-term debt                     $  2,143              $  2,143
    Accounts payable and accrued liabilities                 6,788                11,093
    Estimated shareable earnings obligations                16,410                16,597
    Advance billings and deferred revenues                   9,626                 8,144
    Accrued income tax                                         164                     -
    Accrued pension cost                                     7,358                 6,551
    Accrued compensation                                     4,753                 4,218
                                                          --------              --------
      Total current liabilities                             47,242                48,746

  Long-term debt                                            41,606                42,142

  Deferred income tax                                       12,387                11,206

Other liabilities and deferred revenues                      8,475                 8,456

  Shareholders' equity:
    Common Stock, without par value;
      100,000 shares authorized, 14,912 and
      15,110 shares issued and
      outstanding at March 31, 2002 and
      December 31, 2001, respectively                      167,209               172,083
    Deferred stock-based compensation                         (232)                 (303)
    Retained earnings                                      126,598               130,013
                                                          --------              --------
      Total shareholders' equity                           293,575               301,793
                                                          --------              --------
                                                          $403,285              $412,343
                                                          ========              ========

                             See accompanying notes.
</TABLE>

<PAGE>



                             SUREWEST COMMUNICATIONS
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                   (Unaudited)
                             (Amounts in thousands)


<TABLE>
<CAPTION>
                                                   Three Months        Three Months
                                                      Ended               Ended
                                                  March 31, 2002      March 31, 2001
                                                  --------------      --------------
<S>                                                     <C>                 <C>
Net cash provided by (used in)                          $ 12,673            $(71,912)
 operating activities

Cash flows from investing activities:
  Capital expenditures for property, plant
    and equipment                                        (10,806)            (16,796)
  Purchases of held-to-maturity investments                 (737)                  -
  Maturities of held-to-maturity investments               1,723               7,435
  Proceeds from sale of alarm monitoring
    assets                                                 4,495                   -
  Changes in deferred charges and other
    assets                                                    54                  18
                                                         -------             -------
  Net cash used in investing activities                   (5,271)             (9,343)

Cash flows from financing activities:
  Principal payments of long-term debt                      (536)               (536)
  Dividends paid                                          (3,760)             (3,876)
  Repurchase of common stock                             (10,566)             (3,934)
  Proceeds from exercise of stock options                    429                   -
                                                         -------             -------
  Net cash used in financing activities                  (14,433)             (8,346)

                                                         -------             -------
Decrease in cash and cash equivalents                     (7,031)            (89,601)

Cash and cash equivalents at beginning of
  period                                                  54,520             169,955
                                                         -------             -------
Cash and cash equivalents at end of
  period                                                 $47,489             $80,354
                                                         =======             =======


</TABLE>




















                             See accompanying notes.

<PAGE>



                             SUREWEST COMMUNICATIONS
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                             (Amounts in thousands)

1.   SUMMARY OF  SIGNIFICANT  ACCOUNTING  POLICIES  The  condensed  consolidated
     financial  statements of SureWest  Communications (the "Company") have been
     prepared  pursuant  to the  rules and  regulations  of the  Securities  and
     Exchange Commission (the "SEC") and, in the opinion of management,  include
     all adjustments (consisting only of normal recurring adjustments) necessary
     to present  fairly the  results  for the  interim  periods  shown.  Certain
     information and footnote  disclosures normally included in annual financial
     statements  prepared in accordance  with  accounting  principles  generally
     accepted in the United  States have been  condensed or omitted  pursuant to
     such SEC rules and  regulations  and accounting  principles  applicable for
     interim periods. Management believes that the disclosures made are adequate
     to  make  the  information   presented  not  misleading.   These  condensed
     consolidated  financial  statements  should be read in conjunction with the
     consolidated  financial  statements  and  notes  thereto  included  in  the
     Company's 2001 Annual Report on Form 10-K.

     The Company is a holding company with subsidiaries that provide  integrated
     communications  services.  The Company's  wholly-owned  principal operating
     subsidiary is Roseville Telephone Company ("Roseville Telephone"). SureWest
     Directories,  Roseville Long Distance Company  ("Roseville Long Distance"),
     SureWest Internet, SureWest Broadband, QuikNet, Inc. ("QuikNet"),  SureWest
     Wireless and Roseville  Alternative Company  ("Roseville  Alternative") are
     each wholly-owned  subsidiaries of the Company.  SureWest Wireless provides
     wireless personal  communication services ("PCS"). The Company expects that
     the sources of its  revenues  and its cost  structure  may be  different in
     future periods as a result of its entry into new communications markets.

     On January 25, 2002,  the Company sold  substantially  all of the assets of
     its  alarm  monitoring  division,  which  was a  component  of the  Telecom
     segment, for approximately  $5,150,  subject to certain future adjustments,
     which are not expected to be material. This sale resulted in a pre-tax gain
     of $4,436.  As of March 31, 2002 the Company had received  cash proceeds of
     $4,995,  of which $500 was  received  during  the  fourth  quarter of 2001,
     related  to the  sale  of  the  alarm  monitoring  division  assets,  which
     consisted  primarily of customer  contracts and equipment,  which had a net
     book  value  of  approximately  $355  as of the  date  of the  sale.  Total
     operating revenues  attributable to the Company's alarm monitoring division
     during  the  quarters  ended  March  31,  2002 and 2001 were $279 and $586,
     respectively.

     Certain amounts in the first quarter 2001 condensed  consolidated financial
     statements have been  reclassified to conform with the  presentation of the
     first quarter 2002 condensed consolidated financial statements.

2.   BUSINESS SEGMENTS

     The Company has two  reportable  business  segments:  Telecom and PCS.  The
     Telecom segment primarily provides local,  network access and long distance
     services, directory advertising services, Internet services and the sale of
     non-regulated  products and services  principally to customers  residing in
     Roseville  Telephone's  service  area.  The PCS segment  provides  personal
     communications  services and the sale of related communications  equipment.
     The Company  evaluates the performance of these business  segments based on
     income (loss) from operations.

     These segments are strategic  business units that offer different  products
     and services.  The  accounting  policies of these  segments are the same as
     those described in Note 1 - Summary of Significant Accounting Policies. The
     Company accounts for intersegment  sales and transfers at prevailing market
     rates.  Intersegment  sales  and  transfers  between  the  Telecom  and PCS
     segments are not significant. The Company's business segment information is
     as follows:
<TABLE>
<CAPTION>

         Three months ended
           March 31, 2002                      Telecom           PCS        Consolidated
                                              ---------       ---------     ------------
<S>                                           <C>                 <C>               <C>
         Operating revenues                    $ 38,546         $ 5,418         $ 43,964
         Depreciation and amortization            6,853           3,594           10,447
         Income (loss) from operations           12,186          (7,057)           5,129
         Assets                                 311,246          92,039          403,285

         Three months ended
           March 31, 2001                      Telecom           PCS        Consolidated
                                              ---------       ---------     ------------
         Operating revenues                    $ 37,562         $ 4,702         $ 42,264
         Depreciation and amortization            7,083           2,559            9,642
         Income (loss) from operations           11,406          (5,350)           6,056
         Assets                                 350,304          82,395          432,699

</TABLE>

3.   RECENT ACCOUNTING PRONOUNCEMENTS

     The Company adopted SFAS No. 142 "Goodwill and Other Intangible Assets," on
     January 1, 2002.  The Company  believes its wireless PCS and LMDS  licenses
     have indefinite lives because such licenses can be renewed  indefinitely at
     little  cost.  Accordingly,  the Company  has  applied the  nonamortization
     provision of SFAS No. 142 to the  Company's  wireless PCS and LMDS licenses
     effective  January 1, 2002,  which resulted in an increase in the Company's
     consolidated  net income of $68 ($0.01 per share) for the first  quarter of
     2002. The Company's  operating results for the three months ended March 31,
     2001 included $113 of amortization related to the wireless PCS licenses. In
     the absence of such amortization, the Company's adjusted net income for the
     three months ended March 31, 2001 would have been $5,057 ($0.33 per share).
     Beginning in the first quarter of 2002, the Company's wireless PCS and LMDS
     licenses are carried at the lower of cost or fair value (the application of
     this  provision  of SFAS No. 142 had no effect on the  Company's  condensed
     consolidated  financial  statements  as of and for the three  months  ended
     March 31, 2002).  The Company will test goodwill for  impairment  using the
     two-step process described in SFAS No. 142. The first step is to screen for
     potential  impairment,  while the second  step  measures  the amount of the
     impairment,  if any. The Company does not presently believe that a material
     impairment charge will result from the transitional  impairment test, which
     the Company will complete during the second quarter of 2002.

     In August 2001, the Financial  Accounting  Standards  Board ("FASB") issued
     SFAS No. 143,  "Accounting for Asset Retirement  Obligations." SFAS No. 143
     requires  that  the  fair  value of a  liability  for an  asset  retirement
     obligation  be  recognized  in the  period  in  which it is  incurred  if a
     reasonable  estimate  of fair  value  can be  made.  The  associated  asset
     retirement  costs are  capitalized  as part of the  carrying  amount of the
     long-lived  asset. The Company is required to adopt SFAS No. 143 on January
     1, 2003,  and it does not believe the  adoption of SFAS No. 143 will have a
     material effect on its consolidated financial statements.

     On January 1, 2002, the Company  adopted SFAS No. 144,  "Accounting for the
     Impairment or Disposal of Long-Lived  Assets,"  which  supersedes  SFAS No.
     121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
     Assets to Be  Disposed  Of," and  provides  a single  accounting  model for
     long-lived  assets to be disposed  of. The adoption of SFAS No. 144 did not
     have a material effect on the Company's consolidated financial statements.

     On  January  1, 2002,  the  Company  adopted  the  provision  of the FASB's
     Emerging Issues Task Force ("EITF") Issue 00-25,  "Vendor Income  Statement
     Characterization of Consideration from a Vendor to a Retailer" dealing with
     consideration from a vendor to a reseller under cooperative advertising and
     other  arrangements.  This  provision  of  EITF  Issue  00-25  states  that
     consideration  from a vendor to a  resel1er  of the  vendor's  products  or
     services is presumed to be a reduction of the selling price of the vendor's
     products  or  services,  unless  the vendor (i)  receives  an  identifiable
     benefit in return for the  consideration  and (ii) can reasonably  estimate
     the fair value of the benefit received. If the amount of consideration paid
     by the vendor exceeds the estimated fair value of the benefit received, the
     excess  amount is to be recorded by the vendor as a reduction  of revenues.
     The  adoption of this new  guidance  did not have a material  effect on the
     Company's  condensed  consolidated  financial  statements as of and for the
     three months ended March 31, 2002.

4.   SHAREABLE EARNINGS OBLIGATIONS

     Beginning  in January  2002,  Roseville  Telephone  began paying a consumer
     dividend for intrastate overearnings relating to the years 1998 and 1999. A
     portion of the consumer's  intrastate  service  charges will be returned in
     the form of a surcredit  over 12 months or until a  threshold  of $4,600 is
     met. For the quarter ended March 31, 2002  approximately  $788 was returned
     to consumers.

     As of March 31, 2002, the Company's  consolidated  balance sheet  reflected
     aggregate   liabilities  of  $16,410  relating  to  Roseville   Telephone's
     estimated  interstate and intrastate  shareable earnings  obligations.  The
     calculations  supporting  these  liabilities are very complex and involve a
     variety of estimates prior to the ultimate  settlement of such obligations.
     In  addition,   Roseville   Telephone's   interstate   shareable   earnings
     obligations lapse over time if Roseville Telephone's  interexchange carrier
     and other customers do not claim the amounts ascribed to them. Accordingly,
     it is  reasonably  possible  that  management's  estimates of the Company's
     liabilities for interstate and intrastate  shareable  earnings  obligations
     could change in the near term, and the amounts involved could be material.


<PAGE>




                            SUREWEST COMMUNICATIONS

PART I

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

Certain  information  included in the Company's  quarterly  report on Form 10-Q,
including  that  which  relates  to the  impact on future  revenue  sources  and
potential sharing obligations of pending and future regulatory orders, continued
expansion of the telecommunications  network and expected changes in the sources
of the Company's revenue and its cost structure  resulting from the its entrance
into new  communications  markets,  are forward looking  statements and are made
pursuant to the safe harbor  provisions of the Securities  Litigation Reform Act
of 1995.  Such  forward  looking  statements  are  subject to a number of risks,
assumptions and  uncertainties  that could cause the Company's actual results to
differ from those projected in such forward looking statements.

Important factors that could cause actual results to differ from those set forth
in the forward looking statements  include,  but are not limited to: advances in
telecommunications  technology,  changes  in the  telecommunications  regulatory
environment,  changes in competition  in markets in which the Company  operates,
the  availability  of future  financing,  changes in the demand for services and
products,  new product and service  development and  introductions,  pending and
future  litigation  and  unanticipated  changes in the  growth of the  Company's
emerging businesses,  including the PCS, Internet and Competitive Local Exchange
Carrier operating entities.

Results of Operations

General

SureWest  Communications  (the "Company") is a holding company with subsidiaries
operating in the  Telecommunications  ("Telecom")  and  Personal  Communications
Services ("PCS") segments.

The  Telecom  segment is aligned  with  specific  subsidiaries  of the  Company.
Roseville Telephone Company ("Roseville  Telephone"),  a wholly-owned subsidiary
of the Company,  provides  local and toll  telephone  services,  network  access
services,  billing and collection services,  directory  advertising services and
certain nonregulated services.  SureWest Directories,  a wholly-owned subsidiary
of the  Company,  publishes  and  distributes  Roseville  Telephone's  directory
including the sale of yellow pages  advertising.  SureWest  Directories  is also
engaged in the business of producing, publishing and distributing directories in
other Northern California  communities outside of Roseville  Telephone's service
area. The Company's  wholly-owned  subsidiary,  Roseville Long Distance  Company
("Roseville  Long  Distance"),  is engaged  in the  provision  of long  distance
services. The Company's wholly-owned subsidiary, SureWest Internet is engaged in
the  provision  of high speed  Internet  services.  The  Company's  wholly-owned
subsidiary QuikNet, Inc. is engaged in the provision of custom data services.

The PCS  segment  consists of the  Company's  wholly-owned  subsidiary  SureWest
Wireless, which provides wireless PCS.

The Company  expects that the sources of its revenues and its cost structure may
be different in future periods as a result of its entry into new  communications
markets.

Telecom Revenue Overview

The Telecom  segment  derives its revenue from services  subject to  regulation,
long distance services,  directory advertising  services,  Internet services and
the sale of non-regulated products and services.

Revenues from services subject to regulation  constituted  approximately  69% of
the Company's total operating revenues for the quarters ended March 31, 2002 and
2001, respectively. Revenues subject to regulation, which include local service,
network  access  service,  and toll  service  revenues  generated  by  Roseville
Telephone, are derived from various sources,  including billings to business and
residential  subscribers  for basic  exchange  services,  extended  area service
charges,  surcharges  mandated by the  California  Public  Utilities  Commission
("P.U.C."),   billings  to  Pacific  Bell,  a  wholly-owned  subsidiary  of  SBC
Communications  Inc., long distance  carriers,  competitive access providers and
subscribers for network access services, interstate settlement revenues from the
National Exchange Carrier  Association,  and support payments from the Universal
Service Fund and a California High Cost Fund.

Total  revenues  from  telephone  services are affected by rates  authorized  by
various regulatory agencies.  Intrastate service rates are subject to regulation
by the P.U.C. With respect to toll calls initiated by customers of interexchange
carriers,  interexchange  carriers are assessed  access charges based on tariffs
filed by Roseville Telephone. Interstate access rates and resulting earnings are
subject to regulation by the Federal Communications Commission ("F.C.C.").  With
respect to  interstate  services,  Roseville  Telephone has filed its own tariff
with the F.C.C.  for all elements of access  services except carrier common line
charges,  for  which  Roseville  Telephone  concurs  with  tariffs  filed by the
National Exchange Carrier Association.

The FCC monitors Roseville  Telephone's  interstate  earnings through the use of
annual cost separation  studies prepared by Roseville  Telephone,  which utilize
estimated cost information and projected demand usage. The FCC establishes rules
that carriers must follow in the preparation of the annual  studies.  On January
23,  2001,  the FCC issued a Memorandum  Opinion and Order to another  telephone
company in which it clarified how Internet  traffic,  which the FCC had prior to
that date  characterized  as largely  interstate  in nature,  should be treated.
Additionally, under current FCC rules governing rate making, Roseville Telephone
is required to establish  interstate  rates based on projected  demand usage for
its various  services and  determine  the actual  earnings from these rates once
actual volumes and costs are known.

During the year ended 2001, Internet traffic and DSL service grew substantially,
far exceeding Roseville  Telephone's estimates which resulted in actual earnings
exceeding the levels allowed by the FCC.  Based on preliminary  cost studies the
Company  recognized  liabilities  relating to  Roseville  Telephone's  estimated
interstate  shareable earnings obligations of $163 thousand and $1.8 million for
the quarters ended March 31, 2002 and 2001, respectively,  through reductions of
revenues.

Prior to  January 1, 2002,  Roseville  Telephone  billed  Pacific  Bell  various
charges  for  certain  local  service and  network  access  service  revenues in
accordance  with certain  agreements as described  below. Of the Company's total
revenues  for the  quarters  ended  March 31,  2002 and 2001,  less than 10% was
recorded under these agreements in each period. In 1999,  Pacific Bell expressed
interest in withdrawing  from the designated  carrier plan ("DCP") for Roseville
Telephone's  toll  traffic  and to  enter  into a  new,  permanent  compensation
arrangement  for  extended  area  service  ("EAS").  The DCP was a  compensation
arrangement  between Roseville  Telephone and Pacific Bell for certain intralata
toll services. Pacific Bell also paid Roseville Telephone $11.5 million per year
for EAS pursuant to a Settlement  Transition  Agreement.  In November  2000, the
P.U.C. authorized Pacific Bell to terminate its annual EAS payments to Roseville
Telephone effective November 30, 2000. The P.U.C. authorized replacement funding
on an interim basis using the current  reserve in the California High Cost Fund,
and  denied  permanent  replacement  funding.  The P.U.C.  also  opened an Order
Instituting  Investigation  for the purpose of determining  whether  recovery of
all,  none, or a portion of the $11.5 million annual  payments  should come from
Roseville Telephone's ratepayers or other regulatory recovery mechanisms.  These
proceedings  began in 2001 and will be conducted  through 2003.  The P.U.C.  has
made no indication as to what, if any,  changes will be forthcoming  relating to
EAS revenues.  The results of these  proceedings and their potential  effects on
Roseville  Telephone  cannot  yet be  determined.  In  addition,  since  the DCP
arrangement with Pacific Bell expired in December 2001,  Roseville Telephone now
bills and keeps its  customers  toll  traffic.  The  termination  of the DCP and
transition to a bill and keep  arrangement did not have a material impact on the
Company's  consolidated  financial  position  as of March 31, 2002 or results of
operations for the three months then ended.

In 1996, the P.U.C.  issued a decision in connection with Roseville  Telephone's
general rate proceeding, which authorized Roseville Telephone to implement a New
Regulatory Framework ("NRF") for services furnished within Roseville Telephone's
service  area in order to  accommodate  market and  regulatory  movement  toward
competition and greater pricing flexibility.  Under the NRF, Roseville Telephone
is subject to ongoing monitoring and reporting requirements, including a sharing
mechanism  whereby  Roseville  Telephone  is  required  to share  earnings  with
customers  through a reduction of revenues if its earned  annual  rate-of-return
exceeds that authorized by the P.U.C.

In accordance with the  requirements  of its general rate case order,  Roseville
Telephone  filed an application  for review of its NRF in 1999.  This proceeding
considered  modifications to the NRF structure,  including  potential changes to
the  current  monitoring  and  reporting  requirements,   the  earnings  sharing
mechanism  and related  matters.  In  addition,  the P.U.C.  Office of Ratepayer
Advocates  ("ORA")  undertook  a  verification  audit of  Roseville  Telephone's
non-regulated and affiliated  transactions pursuant to the general rate case and
other  P.U.C.  orders.  In June 2001,  the P.U.C.  adopted its  decision in this
matter (the "Decision").  The Decision did not suspend the sharing mechanism and
the P.U.C. ruled that Roseville Telephone must change the allocation method used
to  allocate  costs  for  services  provided  by  Roseville   Telephone  to  its
affiliates,  the  treatment of certain  directory  revenues and the treatment of
internal-use software costs. Additionally,  in accordance with the provisions of
the Decision,  the Company  recorded  liabilities  and reductions of revenues of
$438 thousand relating to estimated  shareable earnings during the quarter ended
March 31, 2002 (none in the first quarter of 2001).

Beginning in January 2002,  Roseville Telephone began paying a consumer dividend
for  intrastate  overearnings  relating to the years 1998 and 1999. A portion of
the  consumer's  intrastate  service  charges  will be returned in the form of a
surcredit  over 12 months or until a threshold  of $4.6  million is met. For the
quarter  ended March 31, 2002  approximately  $788 thousand has been returned to
consumers.

As of March  31,  2002,  the  Company's  consolidated  balance  sheet  reflected
aggregate  liabilities  of  $16.4  million  relating  to  Roseville  Telephone's
estimated  interstate  and  intrastate  shareable  earnings   obligations.   The
calculations supporting these liabilities are very complex and involve a variety
of estimates prior to the ultimate settlement of such obligations.  In addition,
Roseville Telephone's  interstate shareable earnings obligations lapse over time
if Roseville Telephone's  interexchange carrier and other customers do not claim
the amounts  ascribed  to them.  Accordingly,  it is  reasonably  possible  that
management's   estimates  of  the  Company's   liabilities  for  interstate  and
intrastate  shareable earning obligations could change in the near term, and the
amounts involved could be material.


<PAGE>




PCS Revenue Overview

The PCS segment  derives  its revenue  from the  provision  of wireless  digital
personnel   communication   services  and  the  sale  of  handsets  and  related
communications  equipment.  Revenues include  wireless voice services,  sales of
handsets and related accessories,  long distance, telephone insurance and custom
calling features.  Wireless services are provided on a month-to-month  basis and
are generally billed in advance.

Quarters Ended March 31, 2002 and 2001

Operating Revenues:

Revenues subject to regulation, which include local and network access services,
increased  $940  thousand,  or 3%, in the first  quarter of 2002 compared to the
same  period  in 2001.  This  increase  was due to the  combined  effects  of 1)
increased  network access  revenues due to the expanded  demand for DSL services
and dedicated access and increased minutes of use volumes 2) increases in custom
calling and other enhanced network services, 3) access line growth of 1%, and 4)
a reduction in the Company's  provision for its estimated  interstate  shareable
earnings  obligations.  This  increase in revenues was  partially  offset by the
Company's provision for its intrastate shareable earnings obligations.

Wireless service revenues increased $716 thousand,  or 15%, in the first quarter
2002, compared to the same period in 2001, as a result of continued additions to
the customer base.

Directory  advertising  revenues  increased $190  thousand,  or 5%, in the first
quarter  of  2002,  compared  to the  same  period  in  2001,  due to  increased
advertising sales and the introduction of an additional directory in March 2001.
Revenues from non-regulated  sales and services  decreased by $407 thousand,  or
24%, in the first  quarter of 2002,  compared  to the same  period in 2001,  due
primarily to the effects of lower sales of telecommunications  equipment and the
sale of the Company's alarm monitoring division in the first quarter of 2002.

Other operating revenues  primarily consist of Internet services,  long distance
services,  billing and  collection  services and other  miscellaneous  services.
Other operating revenues increased $261 thousand, or 8%, in the first quarter of
2002,  compared to the same period in 2001,  due primarily to an increase in the
market  penetration  of  long  distance  services,  continued  additions  to the
Internet customer base, the acquisition of QuikNet in the third quarter of 2001.

Operating Expenses:

Total operating  expenses  increased $2.6 million,  or 7%, for the quarter ended
March 31,  2002  compared  to the same  period  in 2001.  Cost of  services  and
products  increased  $822 thousand,  or 6%, due primarily to increased  costs in
transport,  tower rents, and roaming charges related to the continuing expansion
of the coverage area and increased  demand for SureWest  Wireless  services.  In
addition,  there were increases in transport costs associated with long distance
services, and modem and transport costs related to Internet services.

Customer operations and selling expense increased $660 thousand,  or 9%, for the
quarter ended March 31, 2002, compared to the same period in 2001. The increases
were due primarily to customer service, subscriber billing and advertising costs
associated with the continued growth of wireless and Internet services and costs
related to the production of the Roseville Telephone Directory.

General and  Administrative  expenses  increased $340  thousand,  or 6%, for the
quarter ended March 31, 2002, compared to the same period in 2001, due primarily
to fulfillment of strategic planning and growth objectives.

Depreciation  and  amortization  increased  $805  thousand,  or 8%, in the first
quarter of 2002,  compared to the same period in 2001,  as a result of increases
in PCS property, plant and equipment, and amortization of network software. This
increase  was  partially  offset by a decrease in  amortization  relating to the
Company's  wireless  licenses  due to the  adoption of SFAS No. 142 as described
below.

Other Income, Net:

Other income,  net, increased $2.0 million,  or 87%, for the quarter ended March
31, 2002, compared to the same period in 2001. This increase is due primarily to
an increase of $4.4  million  attributable  to the sale of the  Company's  alarm
monitoring  division  offset by a $2.4 million  decrease in interest income as a
result of lower average invested balances in 2002.

Income Taxes:

Income taxes for the quarter ended March 31, 2002,  increased $427 thousand,  or
13%, compared to the same period in 2001, due primarily to an increase in income
subject  to  tax.  The  effective  federal  and  state  income  tax  rates  were
approximately  40.2% and 40.1% for the  quarters  ended March 31, 2002 and 2001,
respectively.

Liquidity and Capital Resources

As reflected in the Condensed  Consolidated  Statements of Cash Flows,  net cash
provided by operating  activities  was $12.7 million for the quarter ended March
31,  2002.  Net cash used in  operating  activities  was $71.9  million  for the
quarter ended March 31, 2001. The increase in cash from operating activities for
the quarter ended March 31, 2002,  compared to the same period in 2001,  was due
primarily to a $90 million  payment of income tax in 2001 related to the sale of
the Company's  cellular  partnership  interest in 2000. During the quarter ended
March 31, 2002,  the Company used cash flows from  operations  and existing cash
and cash equivalents to fund 1) capital expenditures of $10.8 million pertaining
to ongoing plant  construction  projects,  2) common stock  repurchases of $10.6
million,  3)  dividends  of $3.8  million,  and 4)  principal  payments  of $536
thousand to retire long-term debt.

The Company's most  significant use of funds for the balance of 2002 is expected
to be for 1) remaining  budgeted  capital  expenditures of  approximately  $43.4
million, 2) remaining scheduled payments of long-term debt of $1.6 million,  and
3) net  operating  expenditures  of up to  $2.7  million  relating  to  SureWest
Wireless.

In February  2000,  the Board of Directors  authorized the repurchase of up to 1
million shares of Company common stock. Additionally, the Company implemented an
odd lot  repurchase  program  during 2001. The shares are purchased from time to
time in the open market or through privately negotiated  transactions subject to
overall financial and market conditions.  Through March 31, 2002,  approximately
952 thousand shares of common stock have been repurchased through both programs.
The Company has  authorization  from the Board of  Directors  to  repurchase  an
additional 65 thousand outstanding shares.

In March 2000,  the Company  entered into a business loan  agreement with a bank
for a $30  million  line of credit  with a term of three  years.  There  were no
amounts outstanding under this line at March 31, 2002.

In 2000, the Company entered into a 3-year  non-exclusive  agreement with Global
Crossing Ltd. ("Global  Crossing"),  a long distance service  provider,  for the
right to provide  long  distance  service to the  Company's  customers  at fixed
prices during the term of the  agreement.  For the year 2002,  the Company has a
minimum  aggregate long distance service usage commitment of approximately  $1.6
million. On January 28, 2002, Global Crossing filed for protection under Chapter
11 of the U.S. Bankruptcy Code. The Company is presently unable to determine the
impact,  if any,  that  Global  Crossing's  bankruptcy  filing  will have on the
Company's long distance operations.  However, the Company believes that it could
procure long distance network transport  services from other  telecommunications
providers. In the event the Company must procure network transport services from
another  telecommunications  provider, rates for such service may be higher than
those offered by Global Crossing.  However, the Company believes that the impact
on its results of operations  resulting  from any potential  change in transport
rates would not be material.

On January 25,  2002,  the Company sold  substantially  all of the assets of its
alarm monitoring  division,  which was a component of the Telecom  segment,  for
approximately $5.2 million, subject to certain future adjustments, which are not
expected to be material.  This sale  resulted in a pre-tax gain of $4.4 million.
As of March 31, 2002 the Company had received cash proceeds of $5.0 million,  of
which $500 thousand was received  during the fourth quarter of 2001,  related to
the sale of the alarm monitoring  division assets,  which consisted primarily of
customer  contracts and equipment,  which had a book value of approximately $355
thousand as of the date of the sale.  Total operating  revenues  attributable to
the Company's alarm monitoring division during the quarters ended March 31, 2002
and 2001 were $279 thousand and $586 thousand, respectively.

The Company had cash, cash  equivalents and short-term  investments at March 31,
2002,  in excess of $48.2  million.  In  addition,  the  Company  has  borrowing
capacity under the aforementioned business loan agreement,  and believes,  given
its  financial  position  and  debt-to-equity   position,   it  has  substantial
additional  short and long-term  borrowing  capacity.  Accordingly,  the Company
believes that its working capital  position,  operating cash flows and borrowing
capacity are more than sufficient to satisfy its liquidity requirements in 2002.
The Company may consider other sources of external financing for the purposes of
funding future capital expenditures and potential investments.

Critical Accounting Policies and Estimates

Below is a summary of the Company's critical accounting policies and estimates:

o    Total revenues from telephone  services are affected by rates authorized by
     various  regulatory  agencies.   The  FCC  monitors  Roseville  Telephone's
     interstate  earnings  through  the use of annual  cost  separation  studies
     prepared by Roseville  Telephone,  which utilize estimated cost information
     and projected  demand usage.  The FCC establishes  rules that carriers must
     follow in the  preparation of the annual studies.  In addition,  under NRF,
     Roseville   Telephone  is  subject  to  ongoing  monitoring  and  reporting
     requirements by the PUC,  including a sharing  mechanism  whereby Roseville
     Telephone  may be required to share  earnings with  customers  based on its
     earned annual rate-of return.  The calculations  supporting the liabilities
     associated with the Company's estimated shareable earnings  obligations are
     very  complex  and  involve a variety of  estimates  prior to the  ultimate
     settlement of such obligations. Accordingly, it is reasonably possible that
     management's   estimates  of  Roseville   Telephone's   shareable  earnings
     obligations  could change in the near term, and the amounts  involved could
     be material.

o    The  Company  recognizes  revenue  when  (i)  persuasive   evidence  of  an
     arrangement  between the Company and the customer exists,  (ii) delivery of
     the product to the customer  has  occurred or service has been  provided to
     the customer, (iii) the price to the customer is fixed and determinable and
     (iv) collectibility of the sales price is reasonably assured.

o    Property,  plant and equipment and intangible  assets are recorded at cost.
     Additions and substantial  improvements  are  capitalized.  Retirements and
     other  reductions  of regulated  telephone  plant and equipment are charged
     against  accumulated  depreciation  with  no gain  or  loss  recognized  in
     accordance with the composite group remaining life methodology utilized for
     telephone  plant  assets.   When  property   applicable  to   non-telephone
     operations  is  sold  or  retired,   the  asset  and  related   accumulated
     depreciation  are removed from the accounts and the associated gain or loss
     is  recognized.  Property,  plant and equipment and  intangible  assets are
     depreciated  or  amortized  using  the  straight-line   method  over  their
     estimated economic lives,  certain of which were  significantly  revised in
     the  fourth  quarter  of  2000.  In  assessing  the  recoverability  of the
     Company's  intangible  assets,  which  consist  of  wireless  licenses  and
     goodwill, the Company must make assumptions regarding estimated future cash
     flows and other  factors  to  determine  the fair  value of the  respective
     assets.  If these  estimates  and  assumptions  change in the  future,  the
     Company  may be  required  to record  impairment  charges  relating  to its
     intangible  assets. See further discussion below concerning the adoption of
     SFAS Nos. 142 and 144 during the first quarter of 2002.

o    The Company  accounts for income taxes using the  liability  method.  Under
     this method,  deferred tax assets and liabilities  are determined  based on
     differences  between the  financial  reporting  and tax basis of assets and
     liabilities  and are measured using the enacted tax rates and laws that are
     expected to be in effect when the differences are expected to reverse.  The
     Company does not have a valuation allowance on its deferred tax asset as of
     March 31,  2002  because it  believes  it is more likely than not that such
     deferred tax asset will be realized.  Should the Company  determine that it
     would not be able to realize all or part of its  deferred  tax asset in the
     future,  an adjustment to the deferred tax asset would be charged to income
     in the period in which the determination was made.

o    The Company maintains allowances for doubtful accounts for estimated losses
     resulting  from the  potential  inability of its customers to make required
     payments.  If the financial  condition of the Company's  customers  were to
     deteriorate,  resulting in an impairment of their ability to make payments,
     additional allowances may be required.

o    The Company has pension and  postretirement  benefit costs and obligations.
     The  Company's   pension  and   postretirement   benefit   obligations  are
     actuarially  determined  based on  estimates of discount  rates,  long-term
     rates of return on plan assets and increases in future compensation levels.
     Changes in these estimates and other factors could significantly impact the
     Company's pension and postretirement benefit costs and obligations.

Other Financial Information

Recent accounting pronouncements

The Company  adopted  SFAS No. 142  "Goodwill  and Other  Intangible  Assets" on
January 1, 2002.  The Company  believes its wireless PCS and LMDS  licenses have
indefinite  lives  because such licenses can be renewed  indefinitely  at little
cost. Accordingly, the Company has applied the nonamortization provision of SFAS
No. 142 to the  Company's  wireless PCS and LMDS licenses  effective  January 1,
2002, which resulted in an increase in the Company's  consolidated net income of
$68 ($0.01 per share) for the first  quarter of 2002.  The  Company's  operating
results for the three  months  ended March 31, 2001  included  $113  thousand of
amortization  related  to the  wireless  PCS  licenses.  In the  absence of such
amortization, the Company's adjusted net income for the three months ended March
31, 2001 would have been $5.1 million ($0.33 per share).  Beginning in the first
quarter of 2002, the Company's wireless PCS and LMDS licenses are carried at the
lower of cost or fair value (the  application  of this provision of SFAS No. 142
had no effect on this Company's condensed  consolidated  financial statements as
of and for the  three  months  ended  March 31,  2002).  The  Company  will test
goodwill for impairment  using the two-step  process  described in SFAS No. 142.
The first  step is to screen for  potential  impairment,  while the second  step
measures the amount of the  impairment,  if any. The Company does not  presently
believe  that a material  impairment  charge will  result from the  transitional
impairment  test,  which the Company will complete  during the second quarter of
2002.

In August 2001, the Financial  Accounting  Standards  Board ("FASB") issued SFAS
No. 143,  "Accounting for Asset Retirement  Obligations."  SFAS No. 143 requires
that the fair  value  of a  liability  for an  asset  retirement  obligation  be
recognized  in the period in which it is  incurred if a  reasonable  estimate of
fair value can be made. The associated asset retirement costs are capitalized as
part of the carrying amount of the long-lived  asset. The Company is required to
adopt SFAS No. 143 on January 1, 2003,  and it does not believe the  adoption of
SFAS  No.  143  will  have  a  material  effect  on its  consolidated  financial
statements.

On January 1, 2002,  the  Company  adopted  SFAS No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets,"  which  supersedes  SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," and provides a single accounting model for long-lived assets to
be disposed of. The  adoption of SFAS No. 144 did not have a material  effect on
the Company's consolidated financial statements.

On January 1, 2002,  the Company  adopted the  provision of the FASB'S  Emerging
Issues   Task   Force   ("EITF")   Issue   00-25,   "Vendor   Income   Statement
Characterization  of  Consideration  from a Vendor to a Retailer"  dealing  with
consideration  from a vendor to a reseller  under  cooperative  advertising  and
other arrangements. This provision of EITF Issue 00-25 states that consideration
from a vendor to a resel1er of the vendor's  products or services is presumed to
be a reduction of the selling price of the vendor's products or services, unless
the vendor (i) receives an identifiable  benefit in return for the consideration
and (ii) can reasonably estimate the fair value of the benefit received.  If the
amount of  consideration  paid by the vendor exceeds the estimated fair value of
the  benefit  received,  the excess  amount is to be recorded by the vendor as a
reduction of revenues. The adoption of this new guidance did not have a material
effect on the Company's condensed  consolidated  financial  statements as of and
for the three months ended March 31, 2002.







<PAGE>



PART II

Item 1.  Regulatory and Legal Proceedings.
         ---------------------------------

Except for the  proceedings  described  below and in Part I, the  Company is not
aware of any material  pending legal  proceedings,  other than ordinary  routine
litigation incidental to its business, to which it is a party or to which any of
its property is subject.

Roseville  Telephone is subject to  regulation by the F.C.C.  and P.U.C.  In the
past,  there  have been  various  proceedings  before  these  agencies  to which
Roseville Telephone has been a party.

In 1996, Congress passed the  Telecommunications  Act of 1996 (the "Act"), which
significantly   changed  the  regulatory   environment  for   telecommunications
companies.  Beginning  in 1996,  the F.C.C.  conducted  proceedings  and adopted
orders implementing the Act's provisions to open local exchange service markets,
such as the market of Roseville Telephone, to competition. These proceedings and
orders  address  interconnection,  access  charges and universal  service.  With
respect to local competition, the F.C.C. rules outline pricing methodologies for
the  states  to  follow  when  setting  rates for  incumbent  carriers  (such as
Roseville  Telephone)  to charge  competitors  for resale,  interconnection  and
unbundled network elements.

In January 2001,  the United States Supreme Court granted a petition for writ of
certiorari  to review  certain  aspects  of the  implementation  of the Act.  In
particular, the United States Supreme Court will consider whether the Act:

1)   precludes the F.C.C. from requiring incumbent local exchange carriers, such
     as Roseville  Telephone,  from using a pricing  methodology  in determining
     what  new  entrants  must  pay  that is  based  upon a  hypothetical,  most
     efficient  network  configuration,  rather  than  the  incumbent  carrier's
     historical cost;

2)   requires the "historical costs" of the incumbent carrier (such as Roseville
     Telephone) to be taken into account in setting the rates that the incumbent
     can charge the new entrants for access to network elements; and

3)   prohibits  regulators  from  requiring that  incumbents  (such as Roseville
     Telephone)  combine  previously  uncombined  network  elements when the new
     entrant requests the combination and offers to pay for the extra work.

Given the Act's relatively  recent  enactment,  the ongoing actions taken by the
F.C.C. to promulgate rules and regulations on interconnection access charges and
universal service reform, and the various on-going legal challenges  considering
the validity of these F.C.C.  orders,  it is not yet possible to determine fully
the impact of the Act and related F.C.C.  regulations  on Roseville  Telephone's
operations.

The Company's  financial  condition and results of operations have been and will
be  affected  by recent and  future  proceedings  before  the P.U.C.  and F.C.C.
Pending before the F.C.C. and P.U.C. are proceedings which are considering:

     o    Additional rules governing the opening of markets to competition

     o    The goals and definition of universal  telephone service in a changing
          environment,  including  examination of subsidy support mechanisms for
          subscribers of different carriers  (including the incumbent  carriers)
          and in various geographic areas.

     o    Rules that will provide non-discriminatory access by competing service
          providers to the network capabilities of local exchange carriers

The  eventual  impact  on the  Company  of the  effect  of all  the  proceedings
described above cannot presently be determined.


<PAGE>



Item 6. Exhibits and Reports on Form 8-K.
        ---------------------------------

a) See Index to Exhibits.

b) Reports on Form 8-K:

   The Company filed a report on Form 8-K on January 28, 2002  announcing  the
   completion of the sale of its alarm monitoring division.



<PAGE>


                             SUREWEST COMMUNICATIONS
                                INDEX TO EXHIBITS
                                  (Item 6 (a))

<TABLE>
<CAPTION>
                                                                                Method
Exhibit No.                         Description                                of Filing          Page
<S>                                    <C>                                       <C>               <C>
 3(a)          Articles of Incorporation of Registrant, together with          Incorporated by        -
               Certificate of Amendment of Articles of Incorporation dated        reference
               January 25, 1996 and Certificate of Amendment of Articles
               of Incorporation dated June 21, 1996 (Filed as Exhibit 3(a)
               to Form 10-Q Quarterly Report for the quarter ended
               September 30, 1996)

 3(b)          Certificate of Amendment of Articles of Incorporation dated     Incorporated by        -
               May 18, 2001 (Filed as Exhibit 3(b) to Form 10-Q Quarterly         reference
               Report for the quarter ended June 30, 2001)

 3(c)          Bylaws of Registrant (Filed as Exhibit 3(b)to Form 10-K         Incorporated by        -
               Annual Report of the Registrant for the year ended December        reference
               31, 2000)

 4(a)          Shareholder Rights Plan(Filed as Exhibit 2.1 to Form 8-A        Incorporated by        -
               Registration Statement under the Securities Act of 1934)           reference

10(a)          Credit Agreement of Roseville Telephone Company with Bank       Incorporated by        -
               of America National Trust and Savings Association, dated           reference
               March 27, 1992, with respect to $25,000,000 term loan
               (Filed as Exhibit 10(a) to Form 10-Q Quarterly Report of
               Registrant for the quarter ended March 31, 1992)

10(b)          Note Purchase Agreement for Series A Senior Notes in the        Incorporated by        -
               aggregate amount of $40,000,000 dated December 9, 1998             reference
               (Filed as Exhibit 10(b) to Form 10-K Annual Report of
               Registrant for the year ended December 31, 1998)

10(c)          Operating Agreement of West Coast PCS LLC  (Filed as            Incorporated by        -
               Exhibit 10(c) to Form 10-K Annual Report of Registrant for         reference
                 the year ended December 31, 1997)
</TABLE>


<PAGE>

                             SUREWEST COMMUNICATIONS
                                INDEX TO EXHIBITS
                                  (Item 6 (a))

<TABLE>
<CAPTION>
                                                                                Method
Exhibit No.                        Description                                  of Filing          Page
<S>                     <C>                                                       <C>                <C>

10(d)          1999 Restricted Stock Bonus Plan (Filed as Exhibit 10(d) to     Incorporated by        -
               Form 10-K Annual Report of Registrant for the year ended           reference
               December 31, 1998)

10(e)          2000 Equity Incentive Plan (Filed as                             Incorporated          -
               Exhibit 10 (e) to form 10-K Annual Report of Registrant for      by reference
               the year ended December 31, 1999)

10(f)          Business Loan Agreement of Registrant with Bank of America,     Incorporated by        -
               dated March 15, 2000, as amended by Amendment No. 1 dated          reference
               as of April 10, 2000 (Filed as Exhibit 10 (f) to Form 10-Q
               Quarterly Report of Registrant for the  quarter ended March
               31, 2000)

10 (g)         Letter agreement dated January 16, 2001                         Incorporated by        -
               between Registrant and Brian H. Strom (Filed as Exhibit 10         reference
               (g) to Form 10-K Annual Report of Registrant for the  year
               ended December 31, 2000)

10 (h)         Letter agreement dated January 16, 2001                         Incorporated by        -
               between Registrant and Michael D. Campbell (Filed as               reference
               Exhibit 10 (h) to Form 10-K Annual Report of Registrant for
               the year ended December 31, 2000)

10 (i)         Letter agreement dated January 16, 2001                         Incorporated by        -
               between Registrant and Jay B. Kinder (Filed as Exhibit 10          reference
               (i) to Form 10-K Annual Report of Registrant for the year
               ended December 31, 2000)

10 (j)         Letter agreement dated January 16, 2001                         Filed Herewith         19
               between Registrant and Fred Arcuri
</TABLE>


<PAGE>


                             SUREWEST COMMUNICATIONS
                                INDEX TO EXHIBITS
                                  (Item 6 (a))

<TABLE>
<CAPTION>
                                                                                Method
Exhibit No.                        Description                                  of Filing            Page
<S>                       <C>                                                    <C>                  <C>
   10 (k)         Letter agreement dated January 16, 2001                       Filed Herewith         26
                  between Registrant and David Marsh

</TABLE>



<PAGE>





                                   signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                             SUREWEST COMMUNICATIONS
                                  (Registrant)


Date: May 2, 2002         By:          /s/BRIAN H. STROM
                                        ----------------------------------------
                                         Brian H. Strom,
                                         President and Chief
                                         Executive Officer



Date: May 2, 2002        By:          /s/MICHAEL D. CAMPBELL
                                        ----------------------------------------
                                         Michael D. Campbell,
                                         Executive Vice President
                                         and Chief Financial Officer


<PAGE>




                                   signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                             SUREWEST COMMUNICATIONS
                                  (Registrant)


Date:   May 2, 2002      By:         ___________________________
                                         Brian H. Strom,
                                         President and Chief
                                         Executive Officer



Date:   May 2, 2002     By:          ___________________________
                                         Michael D. Campbell,
                                         Executive Vice President
                                         and Chief Financial Officer


<PAGE>



                                 Exhibit 10 (j)

                        Roseville Communications Company
                                  P.O. Box 969
                           Roseville, California 95678



                                January 16, 2001



Fred A. Arcuri
Vice President - Emerging Businesses
Roseville Telephone Company
P.O. Box 969
Roseville, California 95678

Dear Fred:

     Roseville  Communications Company (the "Company") considers it essential to
the best interests of the Company and its  shareholders  to foster the continued
employment of key management personnel in a period of uncertainty  regarding the
Company's  future  in  light  of the  consolidation  in  the  telecommunications
industry.  In this  connection,  the  Board of  Directors  of the  Company  (the
"Board")  recognizes that the possibility of a change in control exists and that
such possibility,  and the uncertainty and questions which it necessarily raises
among  management,  may result in the  departure or  distraction  of  management
personnel  to the  detriment  of the  Company  and its  shareholders  when their
undivided  attention and commitment to the best interests of the Company and its
shareholders are particularly important.

     Accordingly,  the Board has  determined  that  appropriate  steps should be
taken to reinforce  and encourage  the  continued  attention  and  dedication of
members of the Company's  management,  including you, to their  assigned  duties
without distraction in the face of potentially disturbing  circumstances arising
from the possibility of a change in control of the Company.

     In order to  induce  you to  remain in the  employ  of the  Company  and in
consideration  of your  agreement  set forth in  Section 2 hereof,  the  Company
agrees that you shall  receive the benefits  set forth in this letter  agreement
("Agreement")  in the  event of a  "change  in  control  of the  Company"  and a
"constructive  termination"  (each as  defined  in  Section 2 hereof)  under the
circumstances described below.



<PAGE>



     1. Term of Agreement.  This Agreement shall commence on the date hereof and
shall  continue in effect through  December 31, 2001;  provided,  however,  that
commencing  on January 1, 2001 and each January 1  thereafter,  the term of this
Agreement shall  automatically  be extended for one additional year unless,  not
later than by November 30 of the  preceding  year,  the Company shall have given
notice that it does not wish to extend this Agreement;  provided,  further, that
following a change in control of the Company (as  hereinafter  defined) the term
of this Agreement shall automatically  extend to the date which is two (2) years
following such change in control.

     2. Change in Control and  Constructive  Termination.  No benefits  shall be
payable  hereunder  unless  there  shall  have been a change in  control  of the
Company and  thereafter a  constructive  termination,  as set forth  below.  For
purposes of this Agreement, a "change in control of the Company" shall be deemed
to have  occurred if (A) any "person" (as such term is used in Section 13(d) and
14(d) of the  Exchange  Act),  other than a trustee or other  fiduciary  holding
securities  under an employee  benefit  plan of the  Company,  is or becomes the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or indirectly, of securities of the Company representing Twenty percent (20%) or
more of the  combined  voting power of the  Company's  then  outstanding  voting
securities;  (B) there is a merger or  consolidation of the Company in which the
Company does not survive as an independent  public company;  or (C) the business
or businesses of the Company for which your services are  principally  performed
are disposed of by the Company pursuant to a partial or complete  liquidation of
the Company,  a sale of assets (including stock of a subsidiary) of the Company,
or otherwise. For purposes of this Agreement,  "constructive  termination" shall
mean a change in control  of the  company,  as well as,  and as a direct  result
thereof,  (i) a decrease in the total amount of your base salary below its level
in effect on the date hereof or as the same may be increased  from time to time,
or a decrease in the bonus  percentage to which you are  entitled,  without your
consent, provided,  however, nothing herein shall be construed to guarantee your
bonus  award  if  performance  is  below  target,  or  (ii) a  reduction  in the
importance  of  your  job  responsibilities   without  your  consent,  with  the
determination of whether a reduction in job responsibility has taken place to be
in your discretion or, (iii) your geographical  relocation without your consent.
Absent written consent,  after a change in control of the Company,  no action or
inaction by you within ninety (90) days  following the  occurrence of the events
described in (i), (ii) or (iii) hereof shall be deemed consent to such events.

     3. Compensation  Following Change of Control and Constructive  Termination.
Subject to the terms and  conditions  of this  Agreement,  following a change in
control of the Company and  constructive  termination,  as defined in Section 2,
the  Company  shall pay you a lump sum  payment,  within ten (10) days after the
constructive termination, in the amount equal to the sum of:

          (A) The sum of your then  effective  annual  base  salary  through the
     termination date and any accrued vacation pay, plus

          (B) two times the sum of (I) your full  annual base salary on the date
     of the constructive termination, plus (II) the greater of your target bonus
     or the most recent annual bonus paid to you.



<PAGE>



In addition, the Company shall continue to provide to you and your family at the
Company's  expense,  for twenty-four (24) months following the change in control
and the constructive termination, the life insurance,  medical, dental and other
benefits  provided  to you and your  family  immediately  prior to the change in
control and  constructive  termination.  The  Company  also shall pay to you all
legal fees and  expenses  incurred  by you in  seeking to obtain or enforce  any
right or  benefit  provided  by this  Agreement.  You shall not be  required  to
mitigate  the amount of any payment  provided  for in this  Section 3 by seeking
other  employment or  otherwise,  nor shall the amount of any payment or benefit
provided for in this Section 3 be reduced by any  compensation  earned by you as
the result of employment by another employer or by retirement benefits after the
date of termination, or otherwise.

     4. Certain Additional Payments by the Company.

          (i) Anything in this Agreement to the contrary notwithstanding, in the
     event it shall  be  determined  that any  payment  or  distribution  by the
     Company to or for your benefit  (whether paid or payable or  distributed or
     distributable  pursuant to the terms of this  Agreement or  otherwise,  but
     determined  without regard to any additional  payments  required under this
     Section 4) (a  "Payment")  would be  subject  to the excise tax  imposed by
     Section 4999 of the Internal  Revenue Code of 1986, as amended (the "Code")
     or any corresponding provisions of state or local tax laws, or any interest
     or  penalties  are  incurred  by you with  respect to such excise tax (such
     excise tax, together with any such interest and penalties,  are hereinafter
     collectively  referred to as the "Excise Tax"),  then you shall be entitled
     to receive an additional  payment (a "Gross-Up  Payment") in an amount such
     that after your payment of all taxes  (including  any interest or penalties
     imposed with respect to such taxes),  including,  without  limitation,  any
     income taxes (and any interest and penalties  imposed with respect thereto)
     and Excise Tax imposed upon the Gross-Up  Payment,  you retain an amount of
     the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.



<PAGE>



          (ii) Subject to the provisions of Section 4(iii),  all  determinations
     required  to be made under this  Section 4,  including  whether  and when a
     Gross-Up  Payment is required and the amount of such  Gross-Up  Payment and
     the assumptions to be utilized in arriving at such determination,  shall be
     made by Ernst & Young LLP or such other certified public accounting firm as
     may be  designated  by you (the  "Accounting  Firm"),  which shall  provide
     detailed  supporting  calculations  both to the  Company  and you within 15
     business  days of the  receipt  of  notice  from you that  there has been a
     Payment,  or such earlier time as is requested by the Company. In the event
     that the  Accounting  Firm is serving  as  accountant  or  auditor  for the
     individual,  entity or group  effecting  the change of  control,  you shall
     appoint  another  nationally   recognized   accounting  firm  to  make  the
     determinations  required  hereunder  (which  accounting  firm shall then be
     referred to as the Accounting Firm hereunder). All fees and expenses of the
     Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
     as  determined  pursuant to this Section 4, shall be paid by the Company to
     you within five days of the receipt of the Accounting Firm's determination.
     Any  determination by the Accounting Firm shall be binding upon the Company
     and you. As a result of the  uncertainty in the application of Section 4999
     of the Code at the time of the initial determination by the Accounting Firm
     hereunder,  it is possible that Gross-Up  Payments which will not have been
     made by the Company should have been made ("Underpayment"), consistent with
     the  calculations  required  to be made  hereunder.  In the event  that the
     Company exhausts its remedies pursuant to Section 4(iii) and you thereafter
     are required to make a payment of any Excise Tax, the Accounting Firm shall
     determine  the amount of the  Underpayment  that has  occurred and any such
     Underpayment shall be promptly paid by the Company to or for your benefit.

          (iii) You shall  notify  the  Company  in  writing of any claim by the
     Internal Revenue Service that, if successful,  would require the payment by
     the Company of the Gross-Up Payment.  Such  notification  shall be given as
     soon as  practicable  but no later  than ten  business  days  after you are
     informed  in  writing of such claim and shall  apprise  the  Company of the
     nature of such claim and the date on which such  claim is  requested  to be
     paid.  You shall not pay such claim prior to the  expiration  of the 30-day
     period  following the date on which you give such notice to the Company (or
     such  shorter  period  ending on the date that any  payment  of taxes  with
     respect to such claim is due). If the Company notifies you in writing prior
     to the expiration of such period that it desires to contest such claim, you
     shall:

               (A) give the Company any information  reasonably requested by the
          Company relating to such claim,

               (B) take such action in connection  with contesting such claim as
          the Company  shall  reasonably  request in writing  from time to time,
          including,  without  limitation,  accepting legal  representation with
          respect  to such  claim  by an  attorney  reasonably  selected  by the
          Company,

               (C) cooperate with the Company in good faith in order effectively
          to contest such claim, and



<PAGE>



               (D) permit the Company to participate in any proceedings relating
          to such claim; provided,  however, that the Company shall bear and pay
          directly all costs and  expenses  (including  additional  interest and
          penalties)   incurred  in  connection  with  such  contest  and  shall
          indemnify and hold you harmless, on an after-tax basis, for any Excise
          Tax or income tax  (including  interest  and  penalties  with  respect
          thereto)  imposed as a result of such  representation  and  payment of
          costs and expenses.  Without limitation on the foregoing provisions of
          this Section 4(iii),  the Company shall control all proceedings  taken
          in connection with such contest and, at its sole option, may pursue or
          forego any and all administrative appeals,  proceedings,  hearings and
          conferences  with the  taxing  authority  in respect of such claim and
          may, at its sole option,  either direct you to pay the tax claimed and
          sue for a refund or contest the claim in any permissible  manner,  and
          you agree to  prosecute  such  contest to a  determination  before any
          administrative tribunal, in a court of initial jurisdiction and in one
          or more appellate  courts,  as the Company shall determine;  provided,
          however, that if the Company directs you to pay such claim and sue for
          a refund, the Company shall advance the amount of such payment to you,
          on an  interest-free  basis and shall indemnify and hold you harmless,
          on an after-tax  basis,  from any Excise Tax or income tax  (including
          interest or penalties  with respect  thereto)  imposed with respect to
          such  advance or with  respect to any imputed  income with  respect to
          such advance;  and further  provided that any extension of the statute
          of limitations relating to payment of taxes for your taxable year with
          respect to which such contested amount is claimed to be due is limited
          solely to such contested amount. Furthermore, the Company's control of
          the  contest  shall be  limited  to  issues  with  respect  to which a
          Gross-Up Payment would be payable  hereunder and you shall be entitled
          to settle or contest,  as the case may be, any other  issue  raised by
          the Internal Revenue Service or any other taxing authority.

     (iv) If, after your receipt of an amount  advanced by the Company  pursuant
to Section  4(iii),  you become  entitled to receive any refund with  respect to
such claim, you shall (subject to the Company's  complying with the requirements
of  Section  4(iii))  promptly  pay to the  Company  the  amount of such  refund
(together  with any interest  paid or credited  thereon  after taxes  applicable
thereto).  If, after your receipt of an amount advanced by the Company  pursuant
to Section 4(iii), a determination is made that you shall not be entitled to any
refund with respect to such claim and the Company does not notify you in writing
of its intent to contest  such denial of refund  prior to the  expiration  of 30
days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such  advance  shall  offset,  to the
extent thereof, the amount of Gross-Up Payment required to be paid.

     5. Successors; Binding Agreement.

     (i) The Company will require any successor (whether direct or indirect,  by
merger,  consolidation or otherwise) to all or substantially all of the business
and/or  assets of the  Company to  expressly  agree to perform  this  Agreement.
Failure of the  Company to obtain such  assumption  and  agreement  prior to the
effectiveness  of any such  succession  shall be a breach of this  Agreement and
shall entitle you to compensation from the Company in the same amount and on the
same terms as you would be entitled  hereunder  following a change in control of
the  Company  and  constructive   termination,   except  that  for  purposes  of
implementing  the  foregoing,  the date on which  any  such  succession  becomes
effective  shall be  deemed  the  date on  which  you  become  entitled  to such
compensation from the Company.  As used in this Agreement,  "Company" shall mean
the Company as  hereinbefore  defined and any  successor to its business  and/or
assets as  aforesaid  which  assumes  and agrees to perform  this  Agreement  by
operation of law, or otherwise.

     (ii) This  Agreement  shall inure to the benefit of and be  enforceable  by
your executors,  administrators,  successors, heirs, distributees,  devisees and
legatees.  If you  should  die while any  amount  would  still be payable to you
hereunder  if you had  continued to live,  all such  amounts,  unless  otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee,  legatee or other  designee or, if there is no such  designee,  to
your estate.



<PAGE>




                                       24

     6.  Notice.  For  purposes  of  this  Agreement,   notices  and  all  other
communications  provided for in this Agreement  shall be in writing and shall be
deemed  to have been  duly  given  when  delivered  or  mailed by United  States
registered mail,  return receipt  requested,  postage prepaid,  addressed to the
respective  addresses  set forth on the first page of this  Agreement,  provided
that all notices to the Company  shall be directed to the attention of the Board
with a copy to the Secretary of the Company,  or to such other address as either
party may have furnished to the other in writing in accordance herewith,  except
that notice of a change of address shall be effective only upon receipt.

     7. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by you and such  officer  as may be  specifically  designated  by the
Board.  No waiver by either  party hereto at any time of any breach by the other
party  hereto  of, or  compliance  with,  any  condition  or  provision  of this
Agreement  to be  performed  by such  other  party  shall be  deemed a waiver of
similar or  dissimilar  provisions  or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied,  with  respect to the  subject  matter  hereof have been made by either
party  which  are not  expressly  set  forth in this  Agreement.  The  validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California.

     8. Validity.  The invalidity or  unenforceability  of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

     9.  Counterparts.  This Agreement may be executed in several  counterparts,
each of which shall be deemed to be an original but all of which  together  will
constitute one and the same instrument.

     10.  Supercedes  Prior  Agreements.  The  Company  and you agree  that this
Agreement supercedes all prior agreements,  whether written or oral, relating to
the subject matter of this Agreement  including,  without limitation,  any prior
letter  agreements  relating  to payments in the event of a change in control of
the Company,  or any  provisions of any letters of offer of employment  with the
Company."



<PAGE>




     If this  letter sets forth our  agreement  on the  subject  matter  hereof,
kindly  sign and return to the Company the  enclosed  copy of this letter  which
will then constitute our agreement on this subject.

                                   Sincerely yours,

                                   ROSEVILLE COMMUNICATIONS COMPANY


                                   By
                                     ------------------------------------------
                                            Thomas E. Doyle
                                            Chairman

AGREED TO this _____ day

of ________________, 2001.

-------------------------------
Fred A. Arcuri



<PAGE>




                                 Exhibit 10 (k)

                        Roseville Communications Company
                                  P.O. Box 969
                           Roseville, California 95678



                                January 16, 2001



David Marsh
Vice President & CIO
Roseville Communications Company
P.O. Box 969
Roseville, California 95678

Dear David:

     Roseville  Communications Company (the "Company") considers it essential to
the best interests of the Company and its  shareholders  to foster the continued
employment of key management personnel in a period of uncertainty  regarding the
Company's  future  in  light  of the  consolidation  in  the  telecommunications
industry.  In this  connection,  the  Board of  Directors  of the  Company  (the
"Board")  recognizes that the possibility of a change in control exists and that
such possibility,  and the uncertainty and questions which it necessarily raises
among  management,  may result in the  departure or  distraction  of  management
personnel  to the  detriment  of the  Company  and its  shareholders  when their
undivided  attention and commitment to the best interests of the Company and its
shareholders are particularly important.

     Accordingly,  the Board has  determined  that  appropriate  steps should be
taken to reinforce  and encourage  the  continued  attention  and  dedication of
members of the Company's  management,  including you, to their  assigned  duties
without distraction in the face of potentially disturbing  circumstances arising
from the possibility of a change in control of the Company.

     In order to  induce  you to  remain in the  employ  of the  Company  and in
consideration  of your  agreement  set forth in  Section 2 hereof,  the  Company
agrees that you shall  receive the benefits  set forth in this letter  agreement
("Agreement")  in the  event of a  "change  in  control  of the  Company"  and a
"constructive  termination"  (each as  defined  in  Section 2 hereof)  under the
circumstances described below.



<PAGE>



     1. Term of Agreement.  This Agreement shall commence on the date hereof and
shall  continue in effect through  December 31, 2001;  provided,  however,  that
commencing  on January 1, 2001 and each January 1  thereafter,  the term of this
Agreement shall  automatically  be extended for one additional year unless,  not
later than by November 30 of the  preceding  year,  the Company shall have given
notice that it does not wish to extend this Agreement;  provided,  further, that
following a change in control of the Company (as  hereinafter  defined) the term
of this Agreement shall automatically  extend to the date which is two (2) years
following such change in control.

     2. Change in Control and  Constructive  Termination.  No benefits  shall be
payable  hereunder  unless  there  shall  have been a change in  control  of the
Company and  thereafter a  constructive  termination,  as set forth  below.  For
purposes of this Agreement, a "change in control of the Company" shall be deemed
to have  occurred if (A) any "person" (as such term is used in Section 13(d) and
14(d) of the  Exchange  Act),  other than a trustee or other  fiduciary  holding
securities  under an employee  benefit  plan of the  Company,  is or becomes the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or indirectly, of securities of the Company representing Twenty percent (20%) or
more of the  combined  voting power of the  Company's  then  outstanding  voting
securities;  (B) there is a merger or  consolidation of the Company in which the
Company does not survive as an independent  public company;  or (C) the business
or businesses of the Company for which your services are  principally  performed
are disposed of by the Company pursuant to a partial or complete  liquidation of
the Company,  a sale of assets (including stock of a subsidiary) of the Company,
or otherwise. For purposes of this Agreement,  "constructive  termination" shall
mean a change in control  of the  company,  as well as,  and as a direct  result
thereof,  (i) a decrease in the total amount of your base salary below its level
in effect on the date hereof or as the same may be increased  from time to time,
or a decrease in the bonus  percentage to which you are  entitled,  without your
consent, provided,  however, nothing herein shall be construed to guarantee your
bonus  award  if  performance  is  below  target,  or  (ii) a  reduction  in the
importance  of  your  job  responsibilities   without  your  consent,  with  the
determination of whether a reduction in job responsibility has taken place to be
in your discretion or, (iii) your geographical  relocation without your consent.
Absent written consent,  after a change in control of the Company,  no action or
inaction by you within ninety (90) days  following the  occurrence of the events
described in (i), (ii) or (iii) hereof shall be deemed consent to such events.

     3. Compensation  Following Change of Control and Constructive  Termination.
Subject to the terms and  conditions  of this  Agreement,  following a change in
control of the Company and  constructive  termination,  as defined in Section 2,
the  Company  shall pay you a lump sum  payment,  within ten (10) days after the
constructive termination, in the amount equal to the sum of:

          (A) The sum of your then  effective  annual  base  salary  through the
     termination date and any accrued vacation pay, plus

          (B) two times the sum of (I) your full  annual base salary on the date
     of the constructive termination, plus (II) the greater of your target bonus
     or the most recent annual bonus paid to you.



<PAGE>



In addition, the Company shall continue to provide to you and your family at the
Company's  expense,  for twenty-four (24) months following the change in control
and the constructive termination, the life insurance,  medical, dental and other
benefits  provided  to you and your  family  immediately  prior to the change in
control and  constructive  termination.  The  Company  also shall pay to you all
legal fees and  expenses  incurred  by you in  seeking to obtain or enforce  any
right or  benefit  provided  by this  Agreement.  You shall not be  required  to
mitigate  the amount of any payment  provided  for in this  Section 3 by seeking
other  employment or  otherwise,  nor shall the amount of any payment or benefit
provided for in this Section 3 be reduced by any  compensation  earned by you as
the result of employment by another employer or by retirement benefits after the
date of termination, or otherwise.

     4. Certain Additional Payments by the Company.

          (i) Anything in this Agreement to the contrary notwithstanding, in the
     event it shall  be  determined  that any  payment  or  distribution  by the
     Company to or for your benefit  (whether paid or payable or  distributed or
     distributable  pursuant to the terms of this  Agreement or  otherwise,  but
     determined  without regard to any additional  payments  required under this
     Section 4) (a  "Payment")  would be  subject  to the excise tax  imposed by
     Section 4999 of the Internal  Revenue Code of 1986, as amended (the "Code")
     or any corresponding provisions of state or local tax laws, or any interest
     or  penalties  are  incurred  by you with  respect to such excise tax (such
     excise tax, together with any such interest and penalties,  are hereinafter
     collectively  referred to as the "Excise Tax"),  then you shall be entitled
     to receive an additional  payment (a "Gross-Up  Payment") in an amount such
     that after your payment of all taxes  (including  any interest or penalties
     imposed with respect to such taxes),  including,  without  limitation,  any
     income taxes (and any interest and penalties  imposed with respect thereto)
     and Excise Tax imposed upon the Gross-Up  Payment,  you retain an amount of
     the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.



<PAGE>



          (ii) Subject to the provisions of Section 4(iii),  all  determinations
     required  to be made under this  Section 4,  including  whether  and when a
     Gross-Up  Payment is required and the amount of such  Gross-Up  Payment and
     the assumptions to be utilized in arriving at such determination,  shall be
     made by Ernst & Young LLP or such other certified public accounting firm as
     may be  designated  by you (the  "Accounting  Firm"),  which shall  provide
     detailed  supporting  calculations  both to the  Company  and you within 15
     business  days of the  receipt  of  notice  from you that  there has been a
     Payment,  or such earlier time as is requested by the Company. In the event
     that the  Accounting  Firm is serving  as  accountant  or  auditor  for the
     individual,  entity or group  effecting  the change of  control,  you shall
     appoint  another  nationally   recognized   accounting  firm  to  make  the
     determinations  required  hereunder  (which  accounting  firm shall then be
     referred to as the Accounting Firm hereunder). All fees and expenses of the
     Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
     as  determined  pursuant to this Section 4, shall be paid by the Company to
     you within five days of the receipt of the Accounting Firm's determination.
     Any  determination by the Accounting Firm shall be binding upon the Company
     and you. As a result of the  uncertainty in the application of Section 4999
     of the Code at the time of the initial determination by the Accounting Firm
     hereunder,  it is possible that Gross-Up  Payments which will not have been
     made by the Company should have been made ("Underpayment"), consistent with
     the  calculations  required  to be made  hereunder.  In the event  that the
     Company exhausts its remedies pursuant to Section 4(iii) and you thereafter
     are required to make a payment of any Excise Tax, the Accounting Firm shall
     determine  the amount of the  Underpayment  that has  occurred and any such
     Underpayment shall be promptly paid by the Company to or for your benefit.

          (iii) You shall  notify  the  Company  in  writing of any claim by the
     Internal Revenue Service that, if successful,  would require the payment by
     the Company of the Gross-Up Payment.  Such  notification  shall be given as
     soon as  practicable  but no later  than ten  business  days  after you are
     informed  in  writing of such claim and shall  apprise  the  Company of the
     nature of such claim and the date on which such  claim is  requested  to be
     paid.  You shall not pay such claim prior to the  expiration  of the 30-day
     period  following the date on which you give such notice to the Company (or
     such  shorter  period  ending on the date that any  payment  of taxes  with
     respect to such claim is due). If the Company notifies you in writing prior
     to the expiration of such period that it desires to contest such claim, you
     shall:

               (A) give the Company any information  reasonably requested by the
          Company relating to such claim,

               (B) take such action in connection  with contesting such claim as
          the Company  shall  reasonably  request in writing  from time to time,
          including,  without  limitation,  accepting legal  representation with
          respect  to such  claim  by an  attorney  reasonably  selected  by the
          Company,

               (C) cooperate with the Company in good faith in order effectively
          to contest such claim, and



<PAGE>



               (D) permit the Company to participate in any proceedings relating
          to such claim; provided,  however, that the Company shall bear and pay
          directly all costs and  expenses  (including  additional  interest and
          penalties)   incurred  in  connection  with  such  contest  and  shall
          indemnify and hold you harmless, on an after-tax basis, for any Excise
          Tax or income tax  (including  interest  and  penalties  with  respect
          thereto)  imposed as a result of such  representation  and  payment of
          costs and expenses.  Without limitation on the foregoing provisions of
          this Section 4(iii),  the Company shall control all proceedings  taken
          in connection with such contest and, at its sole option, may pursue or
          forego any and all administrative appeals,  proceedings,  hearings and
          conferences  with the  taxing  authority  in respect of such claim and
          may, at its sole option,  either direct you to pay the tax claimed and
          sue for a refund or contest the claim in any permissible  manner,  and
          you agree to  prosecute  such  contest to a  determination  before any
          administrative tribunal, in a court of initial jurisdiction and in one
          or more appellate  courts,  as the Company shall determine;  provided,
          however, that if the Company directs you to pay such claim and sue for
          a refund, the Company shall advance the amount of such payment to you,
          on an  interest-free  basis and shall indemnify and hold you harmless,
          on an after-tax  basis,  from any Excise Tax or income tax  (including
          interest or penalties  with respect  thereto)  imposed with respect to
          such  advance or with  respect to any imputed  income with  respect to
          such advance;  and further  provided that any extension of the statute
          of limitations relating to payment of taxes for your taxable year with
          respect to which such contested amount is claimed to be due is limited
          solely to such contested amount. Furthermore, the Company's control of
          the  contest  shall be  limited  to  issues  with  respect  to which a
          Gross-Up Payment would be payable  hereunder and you shall be entitled
          to settle or contest,  as the case may be, any other  issue  raised by
          the Internal Revenue Service or any other taxing authority.

               (iv) If, after your receipt of an amount  advanced by the Company
          pursuant to Section 4(iii),  you become entitled to receive any refund
          with  respect  to such  claim,  you shall  (subject  to the  Company's
          complying with the requirements of Section 4(iii)) promptly pay to the
          Company the amount of such refund  (together with any interest paid or
          credited  thereon  after taxes  applicable  thereto).  If,  after your
          receipt  of an amount  advanced  by the  Company  pursuant  to Section
          4(iii),  a determination is made that you shall not be entitled to any
          refund with  respect to such claim and the Company does not notify you
          in writing of its intent to contest such denial of refund prior to the
          expiration  of 30 days after  such  determination,  then such  advance
          shall be  forgiven  and shall  not be  required  to be repaid  and the
          amount of such advance shall offset, to the extent thereof, the amount
          of Gross-Up Payment required to be paid.

     5. Successors; Binding Agreement.

          (i)  The  Company  will  require  any  successor  (whether  direct  or
     indirect,  by merger,  consolidation  or otherwise) to all or substantially
     all of the  business  and/or  assets of the Company to  expressly  agree to
     perform this  Agreement.  Failure of the Company to obtain such  assumption
     and agreement prior to the  effectiveness of any such succession shall be a
     breach of this  Agreement  and shall entitle you to  compensation  from the
     Company in the same  amount and on the same terms as you would be  entitled
     hereunder  following a change in control of the  Company  and  constructive
     termination,  except that for purposes of implementing  the foregoing,  the
     date on which any such  succession  becomes  effective  shall be deemed the
     date on which you become entitled to such compensation from the Company. As
     used in this  Agreement,  "Company"  shall mean the Company as hereinbefore
     defined and any successor to its business  and/or assets as aforesaid which
     assumes  and agrees to perform  this  Agreement  by  operation  of law,  or
     otherwise.

          (ii) This  Agreement  shall inure to the benefit of and be enforceable
     by  your  executors,   administrators,   successors,  heirs,  distributees,
     devisees  and  legatees.  If you should die while any amount would still be
     payable to you  hereunder if you had  continued to live,  all such amounts,
     unless  otherwise  provided  herein,  shall be paid in accordance  with the
     terms of this  Agreement to your devisee,  legatee or other designee or, if
     there is no such designee, to your estate.



<PAGE>





     6.  Notice.  For  purposes  of  this  Agreement,   notices  and  all  other
communications  provided for in this Agreement  shall be in writing and shall be
deemed  to have been  duly  given  when  delivered  or  mailed by United  States
registered mail,  return receipt  requested,  postage prepaid,  addressed to the
respective  addresses  set forth on the first page of this  Agreement,  provided
that all notices to the Company  shall be directed to the attention of the Board
with a copy to the Secretary of the Company,  or to such other address as either
party may have furnished to the other in writing in accordance herewith,  except
that notice of a change of address shall be effective only upon receipt.

     7. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by you and such  officer  as may be  specifically  designated  by the
Board.  No waiver by either  party hereto at any time of any breach by the other
party  hereto  of, or  compliance  with,  any  condition  or  provision  of this
Agreement  to be  performed  by such  other  party  shall be  deemed a waiver of
similar or  dissimilar  provisions  or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied,  with  respect to the  subject  matter  hereof have been made by either
party  which  are not  expressly  set  forth in this  Agreement.  The  validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California.

     8. Validity.  The invalidity or  unenforceability  of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

     9.  Counterparts.  This Agreement may be executed in several  counterparts,
each of which shall be deemed to be an original but all of which  together  will
constitute one and the same instrument.

     10.  Supercedes  Prior  Agreements.  The  Company  and you agree  that this
Agreement supercedes all prior agreements,  whether written or oral, relating to
the subject matter of this Agreement  including,  without limitation,  any prior
letter  agreements  relating  to payments in the event of a change in control of
the Company,  or any  provisions of any letters of offer of employment  with the
Company."



<PAGE>



If this letter sets forth our  agreement on the subject  matter  hereof,  kindly
sign and return to the Company the enclosed  copy of this letter which will then
constitute our agreement on this subject.

                                 Sincerely yours,

                                 ROSEVILLE COMMUNICATIONS COMPANY


                                 By
                                   -------------------------------------------
                                          Thomas E. Doyle
                                          Chairman

AGREED TO this _____ day

of ________________, 2001.

-------------------------------
David Marsh