----

----

|            |                                                                                               |
|-----------------|----------------------------------------------------------------------------------------------------|
| (Mark      One) |
|            |                                                                                               |
| x               | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934  |
|            |                                                                                               |
|            | For      the quarterly period ended June 30, 2009                                                  |
|            |                                                                                               |
|            | Or                                                                                                 |
|            |                                                                                               |
| o               | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|            |                                                                                               |
|            | For      the transition periodfrom  to                                                   |

|                                                  |   |                                      |
|-------------------------------------------------------|--------|-------------------------------------------|
| Delaware                                              |   | 52-2126395                                |
| (State      or other jurisdiction of incorporation or |   | (I.R.S.      Employer Identification No.) |
| organization)                                         |   |                                      |
|                                                  |   |                                      |
| 505      Third Avenue East, Oneonta, Alabama          |   | 35121                                     |
| (Address      of Principal Executive Offices)         |   | (Zip      Code)                           |

|       |      |
|------------|-----------|
| Yes      x | No      o |

|       |      |
|------------|-----------|
| Yes      o | No      o |

|                           |                     |                         |                             |
|--------------------------------|--------------------------|------------------------------|----------------------------------|
| Large      accelerated filer o | Accelerated      filer x | Non-accelerated      filer o | Smaller      reporting company o |

----

|       |      |
|------------|-----------|
| Yes      o | No      x |

|                                                  |   |                               |
|-------------------------------------------------------|--------|------------------------------------|
| Class                                                 |   | Outstanding      at August 7, 2009 |
| Class      A Common Stock ($0.01 par value per share) |   | 12,676,733                         |
| Class      B Common Stock ($0.01 par value per share) |   | 544,671                            |

----

|                              |                                                                                                             |   |
|-----------------------------------|------------------------------------------------------------------------------------------------------------------|--------|
|                              |                                                                                                             | Page   |
|                              |                                                                                                             |   |
| PART      I FINANCIAL INFORMATION |                                                                                                             |
| Item      1.                      | Financial      Statements                                                                                        | 2      |
|                              | Consolidated      Balance Sheets as of December 31, 2008 and June 30, 2009                                       | 2      |
|                              | Consolidated      Statements of Operations for the Three Months and Six Months Ended June      30, 2008 and 2009 | 3      |
|                              | Consolidated      Statements of Cash Flows for the Six Months Ended June 30, 2008 and      2009                  | 4      |
|                              | Notes      to Consolidated Financial Statements                                                                  | 5      |
| Item      2.                      | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations            | 15     |
| Item      3.                      | Quantitative      and Qualitative Disclosures about Market Risk                                                  | 24     |
| Item      4.                      | Controls      and Procedures                                                                                     | 24     |
|                              |                                                                                                             |   |
| PART      II OTHER INFORMATION    |                                                                                                             |
| Item      4.                      | Submission      of Matters to a Vote of Security Holders                                                         | 25     |
| Item      6.                      | Exhibits                                                                                                         | 25     |

----

----

|                             |
|----------------------------------|
| OTELCO      INC.                 |
| CONSOLIDATED      BALANCE SHEETS |

|                                                                                                                  |   | December      31, |        |   | June      30, |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------------|-------------|--------|---------------|--------|
|                                                                                                                  |   | 2008              |        |   | 2009          |   |
|                                                                                                                  |   |              |        |   | (unaudited)   |   |
| Assets                                                                                                                |   |              |        |   |          |   |
| Current      assets                                                                                                   |   |              |        |   |          |   |
| Cash      and cash equivalents                                                                                        |   | $                 | 13,542,255  |   |          | $      | 18,852,408 |   |
| Accounts      receivable:                                                                                             |   |              |        |   |          |   |   |   |
| Due      from subscribers, net of allowance for doubtful accounts of $318,446 and      $363,926, respectively         |   |              | 5,207,731   |   |          |   | 5,134,257 |   |
| Unbilled      receivables                                                                                             |   |              | 2,567,730   |   |          |   | 2,517,620 |   |
| Other                                                                                                                 |   |              | 4,348,044   |   |          |   | 4,234,922 |   |
| Materials      and supplies                                                                                           |   |              | 2,305,755   |   |          |   | 2,066,179 |   |
| Prepaid      expenses                                                                                                 |   |              | 1,141,908   |   |          |   | 907,719 |   |
| Income      tax receivable                                                                                            |   |              | 181,644     |   |          |   | 181,644 |   |
| Deferred      income taxes                                                                                            |   |              | 827,686     |   |          |   | 827,686 |   |
| Total      Current Assets                                                                                             |   |              | 30,122,753  |   |          |   | 34,722,435 |   |
|                                                                                                                  |   |              |        |   |          |   |   |   |
| Property      and equipment, net                                                                                      |   |              | 75,407,062  |   |          |   | 71,043,061 |   |
| Goodwill                                                                                                              |   |              | 189,334,837 |   |          |   | 189,164,662 |   |
| Intangible      assets, net                                                                                           |   |              | 44,390,644  |   |          |   | 38,971,522 |   |
| Investments                                                                                                           |   |              | 2,015,583   |   |          |   | 2,002,828 |   |
| Deferred      financing costs                                                                                         |   |              | 8,315,921   |   |          |   | 7,639,968 |   |
| Deferred      income taxes                                                                                            |   |              | 5,897,382   |   |          |   | 5,897,382 |   |
| Interest      rate swaps                                                                                              |   |              | —     |   |          |   | 264,267 |   |
| Interest      rate cap                                                                                                |   |              | 7,765       |   |          |   | — |   |
| Deferred      charges                                                                                                 |   |              | 49,540      |   |          |   | 26,345 |   |
| Total      Assets                                                                                                     |   | $                 | 355,541,487 |   |          | $      | 349,732,470 |   |
|                                                                                                                  |   |              |        |   |          |   |   |   |
| Liabilities      and Stockholders’ Equity                                                                       |   |              |        |   |          |   |   |   |
| Current      liabilities                                                                                              |   |              |        |   |          |   |   |   |
| Accounts      payable                                                                                                 |   | $                 | 2,312,920   |   |          | $      | 1,915,090 |   |
| Accrued      expenses                                                                                                 |   |              | 6,632,287   |   |          |   | 6,511,552 |   |
| Advance      billings and payments                                                                                    |   |              | 2,024,123   |   |          |   | 1,998,610 |   |
| Customer      deposits                                                                                                |   |              | 180,582     |   |          |   | 192,103 |   |
| Total      Current Liabilities                                                                                        |   |              | 11,149,912  |   |          |   | 10,617,355 |   |
| Deferred      income taxes                                                                                            |   |              | 45,962,402  |   |          |   | 45,962,402 |   |
| Advance      billings and payments                                                                                    |   |              | 739,736     |   |          |   | 719,044 |   |
| Other      liabilities                                                                                                |   |              | 188,346     |   |          |   | 146,822 |   |
| Long-term      notes payable                                                                                          |   |              | 278,799,513 |   |          |   | 278,759,595 |   |
| Total      Liabilities                                                                                                |   |              | 336,839,909 |   |          |   | 336,205,218 |   |
|                                                                                                                  |   |              |        |   |          |   |   |   |
| Derivative      liability                                                                                             |   |              | 238,054     |   |          |   | 163,592 |   |
| Class      B common convertible to senior subordinated notes                                                          |   |              | 4,085,033   |   |          |   | 4,085,033 |   |
|                                                                                                                  |   |              |        |   |          |   |   |   |
| Stockholders’      Equity                                                                                       |   |              |        |   |          |   |   |   |
|                                                                                                                  |   |              |        |   |          |   |   |   |
| Class      A Common Stock, $.01 par value-authorized 20,000,000 shares; issued and      outstanding 12,676,733 shares |   |              | 126,767     |   |          |   | 126,767 |   |
|                                                                                                                  |   |              |        |   |          |   |   |   |
| Class      B Common Stock, $.01 par value-authorized 800,000 shares; issued and      outstanding 544,671 shares       |   |              | 5,447       |   |          |   | 5,447 |   |
| Additional      paid in capital                                                                                       |   |              | 19,277,959  |   |          |   | 14,809,411 |   |
| Retained      deficit                                                                                                 |   |              | (3,870,923  | )      |          |   | (5,194,256 | ) |
| Accumulated      other comprehensive loss                                                                             |   |              | (1,160,759  | )      |          |   | (468,742 | ) |
| Total      stockholders’ equity                                                                                 |   |              | 14,378,491  |   |          |   | 9,278,627 |   |
| Total      liabilities and stockholders’ equity                                                                 |   | $                 | 355,541,487 |   |          | $      | 349,732,470 |   |

----

| OTELCO      INC.                           |
|--------------------------------------------|
|                                       |
| CONSOLIDATED      STATEMENTS OF OPERATIONS |
| (unaudited)                                |

|                                                    |   | Three      months endedJune      30, |       |   | Six      months endedJune      30, |   |
|---------------------------------------------------------|--------|--------------------------------------|------------|--------|------------------------------------|--------|
|                                                    |   | 2008                                 |       |   | 2009                               |   |   | 2008 |   |   | 2009 |   |
| Revenues                                                |   |                                 |       |   |                               |   |   |   |   |   |   |   |
| Local      services                                     |   | $                                    | 6,711,884  |   |                               | $      | 12,063,419 |   |   | $ | 13,438,075 |   |   | $ | 23,918,400 |   |
| Network      access services                            |   |                                 | 6,105,129  |   |                               |   | 8,265,063 |   |   |   | 12,542,783 |   |   |   | 16,359,196 |   |
| Cable      television services                          |   |                                 | 566,270    |   |                               |   | 612,363 |   |   |   | 1,112,432 |   |   |   | 1,219,050 |   |
| Internet      services                                  |   |                                 | 3,030,393  |   |                               |   | 3,500,149 |   |   |   | 6,031,859 |   |   |   | 7,041,826 |   |
| Transport      services                                 |   |                                 | 1,255,054  |   |                               |   | 1,355,677 |   |   |   | 2,403,002 |   |   |   | 2,758,376 |   |
| Total      revenues                                     |   |                                 | 17,668,730 |   |                               |   | 25,796,671 |   |   |   | 35,528,151 |   |   |   | 51,296,848 |   |
| Operating      expenses                                 |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of services                                   |   |                                 | 6,745,612  |   |                               |   | 10,133,256 |   |   |   | 13,397,723 |   |   |   | 20,799,712 |   |
| Selling,      general and administrative expenses       |   |                                 | 2,527,425  |   |                               |   | 3,342,855 |   |   |   | 5,221,408 |   |   |   | 6,919,529 |   |
| Depreciation      and amortization                      |   |                                 | 3,389,765  |   |                               |   | 6,604,748 |   |   |   | 6,763,013 |   |   |   | 13,396,586 |   |
| Total      operating expenses                           |   |                                 | 12,662,802 |   |                               |   | 20,080,859 |   |   |   | 25,382,144 |   |   |   | 41,115,827 |   |
|                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Income      from operations                             |   |                                 | 5,005,928  |   |                               |   | 5,715,812 |   |   |   | 10,146,007 |   |   |   | 10,181,021 |   |
|                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Other      income (expense)                             |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                   |   |                                 | (4,773,240 | )      |                               |   | (6,446,902 | ) |   |   | (9,456,080 | ) |   |   | (13,045,855 | ) |
| Change      in fair value of derivatives                |   |                                 | 166,850    |   |                               |   | 1,289,832 |   |   |   | (74,055 | ) |   |   | 338,729 |   |
| Other      income                                       |   |                                 | 64,045     |   |                               |   | 12,510 |   |   |   | 430,625 |   |   |   | 238,371 |   |
| Total      other expenses                               |   |                                 | (4,542,345 | )      |                               |   | (5,144,560 | ) |   |   | (9,099,510 | ) |   |   | (12,468,755 | ) |
|                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) before income tax                    |   |                                 | 463,583    |   |                               |   | 571,252 |   |   |   | 1,046,497 |   |   |   | (2,287,734 | ) |
| Income      tax (expense) benefit                       |   |                                 | (57,448    | )      |                               |   | (60,552 | ) |   |   | (232,322 | ) |   |   | 964,401 |   |
|                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss) available to common stockholders |   | $                                    | 406,135    |   |                               | $      | 510,700 |   |   | $ | 814,175 |   |   | $ | (1,323,333 | ) |
|                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding:               |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                   |   |                                 | 12,676,733 |   |                               |   | 12,676,733 |   |   |   | 12,676,733 |   |   |   | 12,676,733 |   |
| Diluted                                                 |   |                                 | 13,221,404 |   |                               |   | 13,221,404 |   |   |   | 13,221,404 |   |   |   | 13,221,404 |   |
| Basic      net income (loss) per share                  |   | $                                    | 0.03       |   |                               | $      | 0.04 |   |   | $ | 0.06 |   |   | $ | (0.10 | ) |
| Diluted      net income (loss) per share                |   | $                                    | 0.02       |   |                               | $      | 0.03 |   |   | $ | 0.05 |   |   | $ | (0.11 | ) |
|                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      declared per share                       |   | $                                    | 0.18       |   |                               | $      | 0.18 |   |   | $ | 0.35 |   |   | $ | 0.35 |   |

----

| OTELCO      INC.                           |
|--------------------------------------------|
|                                       |
| CONSOLIDATED      STATEMENTS OF CASH FLOWS |
| (unaudited)                                |

|                                                                                   |   | Six      months endedJune      30, |       |
|----------------------------------------------------------------------------------------|--------|------------------------------------|------------|
|                                                                                   |   | 2008                               |       |   | 2009 |   |
| Cash      flows from operating activities:                                             |   |                               |       |   |   |   |
| Net      income (loss)                                                                 |   | $                                  | 814,175    |   |   | $ | (1,323,333 | ) |
| Adjustments      to reconcile net income to cash flows from operating      activities: |   |                               |       |   |   |   |   |   |
| Depreciation                                                                           |   |                               | 5,527,814  |   |   |   | 7,176,803 |   |
| Amortization                                                                           |   |                               | 1,235,199  |   |   |   | 6,219,783 |   |
| Interest      rate caplet                                                              |   |                               | 470,022    |   |   |   | 699,783 |   |
| Amortization      of debt premium                                                      |   |                               | (35,553    | ) |   |   | (39,918 | ) |
| Amortization      of loan costs                                                        |   |                               | 745,655    |   |   |   | 675,953 |   |
| Change      in fair value of derivatives                                               |   |                               | 74,055     |   |   |   | (338,729 | ) |
| Provision      for uncollectible revenue                                               |   |                               | 129,453    |   |   |   | 149,765 |   |
| Changes      in assets and liabilities; net of assets and liabilities      acquired:   |   |                               |       |   |   |   |   |   |
| Accounts      receivables                                                              |   |                               | (165,066   | ) |   |   | 86,941 |   |
| Material      and supplies                                                             |   |                               | (284,036   | ) |   |   | 239,576 |   |
| Prepaid      expenses and other assets                                                 |   |                               | 426,802    |   |   |   | 234,189 |   |
| Income      tax receivable                                                             |   |                               | 255,106    |   |   |   | — |   |
| Accounts      payable and accrued liabilities                                          |   |                               | (392,464   | ) |   |   | (518,565 | ) |
| Advance      billings and payments                                                     |   |                               | (108,542   | ) |   |   | (46,205 | ) |
| Other      liabilities                                                                 |   |                               | (5,894     | ) |   |   | (30,003 | ) |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Net      cash from operating activities                                                |   |                               | 8,686,726  |   |   |   | 13,186,040 |   |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Cash      flows from investing activities:                                             |   |                               |       |   |   |   |   |   |
| Acquisition      and construction of property and equipment                            |   |                               | (3,947,447 | ) |   |   | (3,577,514 | ) |
| Deferred      charges                                                                  |   |                               | (232,100   | ) |   |   | — |   |
| Adjustment      to the purchase of the CR Companies                                    |   |                               | —    |   |   |   | 170,175 |   |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Net      cash used in investing activities                                             |   |                               | (4,179,547 | ) |   |   | (3,407,339 | ) |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Cash      flows from financing activities:                                             |   |                               |       |   |   |   |   |   |
| Cash      dividends paid                                                               |   |                               | (4,468,548 | ) |   |   | (4,468,548 | ) |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Net      cash used in financing activities                                             |   |                               | (4,468,548 | ) |   |   | (4,468,548 | ) |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Net      increase in cash and cash equivalents                                         |   |                               | 38,631     |   |   |   | 5,310,153 |   |
| Cash      and cash equivalents, beginning of period                                    |   |                               | 12,810,497 |   |   |   | 13,542,255 |   |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Cash      and cash equivalents, end of period                                          |   | $                                  | 12,849,128 |   |   | $ | 18,852,408 |   |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Supplemental      disclosures of cash flow information:                                |   |                               |       |   |   |   |   |   |
| Interest      paid                                                                     |   | $                                  | 8,569,514  |   |   | $ | 12,018,858 |   |
|                                                                                   |   |                               |       |   |   |   |   |   |
| Income      taxes received                                                             |   | $                                  | (146,606   | ) |   | $ | (15,342 | ) |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.     | Organization      and Basis of Financial Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Basis      of Presentation and Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      consolidated financial statements include the accounts of Otelco Inc. (the      “Company”) and its subsidiaries, all of which are wholly owned. These      include: Otelco Telecommunications LLC (“OTC”); Otelco Telephone LLC      (“OTP”); Hopper Holding Company, Inc. (“HHC”) and its wholly owned      subsidiary, Hopper Telecommunications Company, Inc. (“HTC”); Brindlee      Holdings LLC (“BH”) and its wholly owned subsidiary Brindlee Mountain      Telephone Company, Inc. (“BMTC”); Page & Kiser Communications, Inc.      (“PKC”) and its wholly owned subsidiary Blountsville Telephone Company,      Inc. (“BTC”); Mid-Missouri Holding Corporation (“MMH”) and its wholly      owned subsidiary Mid-Missouri Telephone Company (“MMT”) and its wholly      owned subsidiary Imagination, Inc.; Mid-Maine Communications, Inc. (“MMeT”      or “Mid-Maine”) and its wholly owned subsidiaries Mid-Maine Telecom, Inc.      (“MMTI”) and Mid-Maine TelPlus (“MMTP”); Granby Holdings, Inc. (“GH”) and      its wholly owned subsidiary The Granby Telephone & Telegraph Co. of      Massachusetts (“GTT”); War Holdings, Inc. (“WH”) and its wholly owned      subsidiary War Acquisition Corporation (“WT”); and Pine Tree Holdings,      Inc. (“PTH”) and its wholly owned subsidiaries The Pine Tree Telephone and      Telegraph Company (“PTT”), Saco River Telegraph and Telephone Company      (“SRT”), CRC Communications of Maine, Inc. (“PTN”), and Communications      Design Acquisition Corporation (“CDAC”). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | GH,      WH and PTH (collectively, the “CR Companies”) were acquired on October 31,      2008 from Country Road Communications LLC (“CRC”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      accompanying consolidated financial statements include the accounts of the      Company and all of the aforesaid subsidiaries after elimination of all      material intercompany balances and transactions. The unaudited operating      results for the three months and six months ended June 30, 2009 are not      necessarily indicative of the results that may be expected for the year      ending December 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      consolidated financial statements and notes included in this Form 10-Q      should be read in conjunction with the consolidated financial statements      and notes thereto included in the Company’s annual report on Form 10-K for      the year ended December 31, 2008. The interim consolidated financial      information herein is unaudited. The information reflects all adjustments      (which include only normal recurring adjustments), which are, in the      opinion of management, necessary for a fair presentation of the financial      position and results of operations for the periods included in the      report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Certain      prior year amounts have been reclassified to conform with the current year      presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Cash      and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Cash      equivalents are stated at cost plus accrued interest, which approximates      fair value. Cash equivalents are high-quality, short-term money market      instruments and highly liquid debt instruments with an original maturity      of three months or less when purchased. The cash equivalents are readily      convertible to known amounts of cash and are so near maturity that they      present insignificant risk of changes in value because of changes in      interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Recently      Adopted Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In      December 2007, the Financial Accounting Standards Board (“FASB”) issued      Statement of Financial Accounting Standards (“SFAS”) No. 141R, Business Combinations,      or SFAS 141R. SFAS 141R replaces SFAS No. 141 and establishes principles      and requirements for how the acquirer of a business recognizes and      measures in its financial statements the identifiable assets acquired, the      liabilities assumed, and any non-controlling interest in the acquiree. The      statement also provides guidance for recognizing and measuring the      goodwill acquired in the business combination and determines what      information to disclose to enable users of the financial statements to      evaluate the nature and financial effects of the business combination.      SFAS 141R is effective for financial statements issued for fiscal years      beginning after December 31, 2008. Accordingly, any business combinations      the Company engaged in prior to January 1, 2009 are recorded and disclosed      following generally accepted accounting principles as in effect on      December 31, 2008. The adoption of SFAS 141R will have an impact on the      consolidated financial statements but the nature and magnitude of the      specific effects will depend on the nature, terms, and size of      acquisitions the Company consummates after the effective    date.                                                                                                                                                                                                                                                                                                                                                                                                         |

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|   | Effective      January 1, 2008, the Company adopted SFAS No. 157, Fair Value      Measurements, or SFAS 157. In February 2008, the FASB issued a      staff position (FSP 157-2) that delayed the effective date of SFAS 157 for      all non-financial assets and liabilities except those recognized or      disclosed at least annually, until periods beginning after December 15,      2008. SFAS 157 defines fair value, establishes a framework for measuring      fair value and expands disclosure about fair value measurements. Valuation      techniques used to measure fair value under SFAS 157 must maximize the use      of observable inputs. The standard describes a fair value hierarchy      utilizing three levels of input. The first two levels are considered      observable and the third, unobservable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|   | Level      1 –                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Quoted      prices in active markets for identical assets or    liabilities. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|   | Level      2 –                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Inputs      other than Level 1 that are directly or indirectly observable, such as      quoted prices for similar assets or liabilities or quoted prices in      markets which are not active. The inputs are generally observable or can      be corroborated in observable markets. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|   | Level      3 –                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Unobservable      inputs where there is little or no market activity to support      valuation. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|   | The      adoption of SFAS 157 did not have a material impact on our consolidated      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | In      March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative      Instruments and Hedging Activities– an amendment of FASB      Statement No.133, or SFAS 161. SFAS      161 expands quarterly disclosure requirements in SFAS No. 133, Accounting for Derivative Instruments and      Hedging Activities, or SFAS 133, about an entity’s derivative      instruments and hedging activities. SFAS 161 is effective for fiscal years      beginning after November 15, 2008. The adoption of SFAS 161 did not have a      material impact on our consolidated financial  statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Recent      Accounting Prouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | In      April 2009, the FASB issued FSP 107-1 and APB 28-1, Interim Disclosures about Fair      Value of Financial Instruments, which requires disclosures about      fair value of financial instruments for interim reporting periods. This      guidance is effective for interim reporting periods ending after June 15,      2009. The adoption of FSP 107-1 and APB 28-1 did not have a material      impact on our consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | In      April 2009, the FASB issued FSP 157-4, Determining Fair Value When      the Volume and Level of Activity for the Asset or Liability Have      Significantly Decreased and Identifying Transactions That Are Not      Orderly, which provides guidance for estimating fair value when the      volume and level of activity for the asset or liability have significantly      decreased. This guidance is effective for interim reporting periods ending      after June 15, 2009. The adoption of FSP 157-4 did not have a material      impact on our consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | In      April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation      of Other-Than-Temporary Impairments, which amends the      other-than-temporary impairment guidance for debt securities to make the      guidance more operational and to improve the presentation and disclosure      of other-than-temporary impairments on debt and equity securities in the      financial statements. This guidance is effective for interim reporting      periods ending after June 15, 2009. The adoption of FSP FAS 115-2 and FAS      124-2 did not have a material impact on our consolidated financial      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | In      April 2009, the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired      and Liabilities Assumed in a Business Combination That Arise from      Contingencies, or FSP 141(R)-1, to amend SFAS 141 (revised 2007),      Business      Combinations. FSP 141(R)-1 addresses the initial recognition,      measurement and subsequent accounting for assets and liabilities arising      from contingencies in a business combination, and requires that such      assets acquired or liabilities assumed be initially recognized at fair      value at the acquisition date if fair value can be determined during the      measurement period. If the acquisition-date fair value cannot be      determined, the asset acquired or liability assumed arising from a      contingency is recognized only if certain criteria are met. FSP 141(R)-1      also requires that a systematic and rational basis for subsequently      measuring and accounting for the assets or liabilities be developed      depending on their nature. This guidance is effective for assets or      liabilities arising from contingencies in business combinations for which      the acquisition date is on or after the beginning of the first annual      reporting period beginning on or after December 15, 2008. The adoption of      FSP 141(R)-1 did not have a material impact on our consolidated financial      statements. |
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|   | In      May 2009, the FASB issued SFAS No. 165, Subsequent Events, or      SFAS 165. SFAS 165 establishes general standards for accounting for and      disclosure of events that occur after the balance sheet date but before      financial statements are available to be issued (“subsequent events”).      More specifically, SFAS 165 sets forth the period after the balance sheet      date during which management of a reporting entity should evaluate events      or transactions that may occur for potential recognition in the financial      statements, identifies the circumstances under which an entity should      recognize events or transactions occurring after the balance sheet date in      its financial statements and the disclosures that should be made about      events or transactions that occur after the balance sheet date. SFAS 165      provides largely the same guidance on subsequent events which previously      existed only in auditing literature. The guidance is effective for interim      reporting periods ending after June 15, 2009. The adoption of SFAS 165 did      not have a material impact on our consolidated financial      statements.                                                                                                                                                                                                                |

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|   | In      June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards      Codification and Hierarchy of Generally Accepted Accounting Principles, a      replacement of FASB Statement No. 162, or SFAS 168. SFAS 168      establishes the FASB Standards Accounting Codification (“Codification”) as      the source of authoritative U.S. generally accepted accounting principles      (“GAAP”) recognized by the FASB to be applied to nongovernmental entities      and rules and interpretive releases of the SEC as authoritative GAAP for      SEC registrants. The Codification will supersede all the existing non-SEC      accounting and reporting standards upon its effective date and      subsequently, the FASB will not issue new standards in the form of      Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts.      SFAS 168 also replaces FASB Statement No. 162, The Hierarchy of Generally      Accepted Accounting Principles, given that once in effect, the      Codification will carry the same level of authority. The guidance is      effective for financial statements issued for interim reporting periods      ending after September 15, 2009. The implementation of this standard will      not have a material impact on our consolidated financial position and      results of operations.                                                            |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 2.     | Commitments      and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | From      time to time, we may be involved in various claims, legal actions and      regulatory proceedings incidental to and in the ordinary course of      business, including administrative hearings of the Alabama, Maine,      Missouri, Massachusetts, New Hampshire, and West Virginia Public Service      Commissions relating primarily to rate making. Currently, none of the      legal proceedings are expected to have a material adverse effect on our      business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.     | Derivative      and Hedge Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | An      interest rate cap was purchased on December 21, 2004, coincident with the      closing of our initial public offering and the recapitalization of our      senior notes payable. The interest rate cap was purchased to mitigate the      risk of rising interest rates to limit or cap the rate at 3% for the three      month LIBOR index plus the applicable margin on $80 million in senior debt      for five years. On July 5, 2007, the Company repaid $55,353,032 in debt,      reducing its senior debt below the level of the rate cap. The cap was      considered an effective hedge for the remaining senior debt as all      critical terms of the interest rate cap are identical to the underlying      debt it hedges. The balance of the cap at that time was considered as an      investment and adjustments were made to accumulated other comprehensive      income to reflect this change. On October 31, 2008, the Company      implemented its second amended and restated credit agreement, increasing      senior debt to $173.5 million in conjunction with the acquisition of the      CR Companies. The full $80 million rate cap is accounted for as an      effective hedge from that date forward. Changes      in the fair value of the effective portion of the interest rate      cap are not included in earnings but are reported as a component      of accumulated other comprehensive income. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      second amended and restated credit agreement requires that the Company      acquire interest rate protection for at least half of the $173.5 million      senior debt through at least October 31, 2010. In addition to the existing      rate cap hedge, the Company has completed two interest rate swaps with      approved counterparties. The first swap has a notional amount of $90      million with the Company paying a fixed rate of 1.85% and the counterparty      paying a variable rate based upon the three month LIBOR interest rate. It      is effective from February 9, 2009 through February 8, 2012. The second      swap has a notional amount of $60 million with the Company paying a fixed      rate of 2.0475% and the counterparty paying a variable rate based upon the      three month LIBOR interest rate. It is effective from February 9, 2010      through February 8, 2012.  From an accounting perspective, the      documentation for both swaps does not meet the technical requirements      of SFAS 133 to allow the swaps to be considered highly effective      as hedging instruments and therefore the swaps do not qualify for hedge      accounting. The change in the fair value of the swaps is charged or      credited to income as a change in fair value of derivatives. Over the life      of the swaps, the cumulative change in value will be  zero.                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      cost of the effective portion of the interest rate cap is expensed as      interest over the effective life of the hedge in accordance with the      quarterly value of the caplets as determined at the date of inception. The      expense related to the ineffective portion of the interest rate cap in      2008 is reflected in the change in fair value of derivative. For the three      months ended June 30, 2008 and 2009, the cost of the effective portion of      the interest rate cap was $239,790 and $355,701 respectively. For the six      months ended June 30, 2008 and 2009, the cost of the effective portion of      the interest rate cap was $470,022 and $699,783    respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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| 4.     | Income      (Loss) per Common Share and Potential Common Share                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Basic      income per common share is computed by dividing net income (loss) by the      weighted-average number of shares outstanding for the period. Diluted      income (loss) per common share reflects the potential dilution that could      occur if the Class B common stock were exercised into Income Deposit      Securities (“IDS”) units. Class B common stock is convertible on a      one-for-one basis into IDS units, each of which includes a Class A common      share. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | A      reconciliation of the common shares for the Company’s basic and diluted      income (loss) per common share calculation is as  follows:                                                                                                                                                                                                                                                                                                                                                   |

|   |                                                                    |   | Three      months endedJune      30, |       |   | Six      months endedJune      30, |   |
|--------|-------------------------------------------------------------------------|--------|--------------------------------------|------------|--------|------------------------------------|--------|
|   |                                                                    |   | 2008                                 |       |   | 2009                               |   |   | 2008 |   |   | 2009 |   |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Weighted      average common shares-basic                               |   |                                 | 12,676,733 |   |                               |   | 12,676,733 |   |   |   | 12,676,733 |   |   |   | 12,676,733 |   |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Effect      of dilutive securities                                      |   |                                 | 544,671    |   |                               |   | 544,671 |   |   |   | 544,671 |   |   |   | 544,671 |   |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Weighted-average      common shares and potential common shares-diluted |   |                                 | 13,221,404 |   |                               |   | 13,221,404 |   |   |   | 13,221,404 |   |   |   | 13,221,404 |   |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Net      income (loss) available to common stockholders                 |   | $                                    | 406,135    |   |                               | $      | 510,700 |   |   | $ | 814,175 |   |   | $ | (1,323,333 | ) |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Net      income (loss) per basic share                                  |   | $                                    | 0.03       |   |                               | $      | 0.04 |   |   | $ | 0.06 |   |   | $ | (0.10 | ) |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Net      income (loss) available to common stockholders                 |   | $                                    | 406,135    |   |                               | $      | 510,700 |   |   | $ | 814,175 |   |   | $ | (1,323,333 | ) |
|   | Less:      Change in fair value of B share derivative                   |   |                                 | (80,670    | )      |                               |   | (62,882 | ) |   |   | (96,238 | ) |   |   | (74,462 | ) |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Net      income (loss) available for diluted shares                     |   | $                                    | 325,465    |   |                               | $      | 447,818 |   |   | $ | 717,937 |   |   | $ | (1,397,795 | ) |
|   |                                                                    |   |                                 |       |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|   | Net      income (loss) per diluted share                                |   | $                                    | 0.02       |   |                               | $      | 0.03 |   |   | $ | 0.05 |   |   | $ | (0.11 | ) |

| 5.     | Fair      Value Measurements                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                              |
|   | In      accordance with SFAS 157, the following table represents the Company’s      fair value hierarchy for its financial assets and liabilities as of June      30, 2009: |

|   |                               |   | June      30, 2009 |       |
|--------|------------------------------------|--------|--------------------|------------|
|   |                               |   | Fair      Value    |       |   | Level      1(1) |   |   | Level      2(2) |   |   | Level      3(3) |   |
|   | Assets                             |   |               |       |   |   |   |   |   |   |   |   |   |
|   | Cash      and cash equivalents     |   | $                  | 18,852,408 |   |   | $ | 18,852,408 |   |   | $ | — |   |   | $ | — |   |
|   | Interest      rate swaps           |   |               | 264,267    |   |   |   | — |   |   |   | 264,267 |   |   |   | — |   |
|   | Interest      rate cap             |   |               | —    |   |   |   | — |   |   |   | — |   |   |   | — |   |
|   | Co-operative      patronage shares |   |               | 1,540,930  |   |   |   | — |   |   |   | — |   |   |   | 1,540,930 |   |
|   | Total      assets                  |   | $                  | 20,657,605 |   |   | $ | 18,852,408 |   |   | $ | 264,267 |   |   | $ | 1,540,930 |   |
|   | Liabilities                        |   |               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Class      B derivative liability  |   | $                  | 163,592    |   |   |   | — |   |   |   | — |   |   |   | 163,592 |   |
|   | Total      liabilities             |   | $                  | 163,592    |   |   | $ | — |   |   | $ | — |   |   | $ | 163,592 |   |

|   | (1) | Quoted      prices in active markets for identical assets. |
|--------|-----|------------------------------------------------------------|
|   | (2) | Significant      other observable inputs.                  |
|   | (3) | Significant      unobservableinputs.                       |

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|   | The      Company retains its cash and cash equivalents in short-term interest      bearing instruments whose value is observable on a daily basis. Its      interest rate cap is valued at the end of each quarter by market experts      in that business based on similar transactions in the same financial      market on the day of valuation. Patronage shares have been issued      primarily by one of our lenders which operates as a co-operative. The      Company does not pay for these shares but receives them as a non-cash      dividend. The market for these shares is limited to the issuing      organization and subject to uncertainty of future redemption for cash.      These shares are valued at approximately 55% of their originally issued      value. While the issuer and the Company expect these shares to be worth      their issued value, the current valuation recognizes some uncertainty of      their future redemption value. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      interest rate swaps are valued at the end of the quarter by market experts      in that business based on similar transactions and rates in an active      financial market.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      interest rate cap matures on December 31, 2009. The interest rate cap is      valued by market experts at the end of each quarter. It had a zero value      at June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      Class B derivative is valued at the end of each quarter utilizing current      observable factors and a market based model developed by a company whose      business includes the provision of valuation expertise. Annually, the      Company evaluates the probability of its Class B shares converting to IDS      units in advance of their unrestricted December 2009 conversion date. This      estimate, as well as current market conditions, impacts the quarterly      valuation of the B share derivative liability. This liability is      extinguished once the Class B shares can be converted into IDS units. This      conversion can occur without any financial test after  2009.                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 6.     | Acquisitions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | On      October 31, 2008, the Company acquired 100% of the outstanding common      stock of the CR Companies from CRC. GH owns 100% of its operating      subsidiary GTT. WH owns 100% of operating subsidiary WT. PTH owns 100% of      its operating subsidiaries, PTT, SRT, PTN, and CDAC. These operating      subsidiaries provide telecommunications solutions, including voice, data      and Internet services, to residential and business customers in portions      of Massachusetts, Maine and West Virginia and extend the Company’s      presence in the New England market. The acquisition added over 24,000      retail access line equivalents to the Company’s presence in Maine; almost      5,000 retail access line equivalents in Massachusetts and West Virginia,      and a growing wholesale business in New England.                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      acquisition agreement relating to the CR Companies provided for cash      consideration of $101,329,000 subject to adjustment as provided in the      acquisition agreement, plus transaction costs. The purchase price was      $108,832,865, including transaction costs. The excess of the purchase      price over the market value of assets and liabilities is reflected as      goodwill of $54,594,227. The goodwill related to the acquisition is not      deductible for tax purposes. The aggregate consideration paid for the      acquisition was asfollows:                                                                                                                                                                                                                                                                                                                                                                                       |

|   | Cash                                      |   | $      | (20,167     | )      |   |
|--------|-------------------------------------------|--------|--------|-------------|--------|--------|
|   | Additional      senior debt notes payable |   |   | 108,853,032 |   |   |
|   | Purchase      price                       |   | $      | 108,832,865 |   |   |

|   | The      allocation of the net purchase price for the CR Companies acquisition was      as follows: |
|--------|-----------------------------------------------------------------------------------------------------|

|   |                                 |   | October      31, 2008 |        |   |
|--------|--------------------------------------|--------|-----------------------|-------------|--------|
|   | Cash                                 |   | $                     | 247,285     |   |   |
|   | Other      current assets            |   |                  | 4,602,298   |   |   |
|   | Property      and equipment          |   |                  | 24,034,772  |   |   |
|   | Intangible      assets               |   |                  | 37,800,000  |   |   |
|   | Goodwill                             |   |                  | 54,594,227  |   |   |
|   | Other      assets                    |   |                  | 6,142,596   |   |   |
|   | Current      liabilities             |   |                  | (2,948,933  | )      |   |
|   | Deferred      income tax liabilities |   |                  | (15,614,962 | )      |   |
|   | Other      liabilities               |   |                  | (24,368     | )      |   |
|   | Purchase      price                  |   | $                     | 108,832,865 |   |   |

|   | Property      and equipment at the time of acquisition had a fair value of $24.0 million      and remaining lives of five to 40 years which is consistent with current      policy. The intangible assets at the time of acquisition included      regulated and unregulated customer based assets at fair value of $17      million which had remaining lives of six to nine years and a      non-competition agreement fair valued at $1.2 million which had a      remaining life of one year. Unregulated contract based assets had a fair      value of $19.6 million at the time of acquisition and remaining lives of      seven years. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Prior      to the closing of the acquisition, the Company entered into a second      amended and restated credit agreement, dated as of October 20, 2008, to      amend and restate the amended and restated credit agreement, dated as of      July 3, 2006, as amended on July 13, 2007, by and among the Company and      the other credit parties to the agreement and General Electric Capital      Corporation, as a lender and agent for the lenders, and other lenders from      time to time party thereto. The credit facilities under the amended and      restated credit agreement are comprised of:               |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | ●                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Term      loans of $173.5 million due October 31, 2013, consisting of an original      term loan of $64.6 million, and an additional term loan of $108.9 million,      used to finance the acquisition and related transaction costs and to      provide working capital for the Company and its subsidiaries and for other      corporate purposes; and |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|   | ●                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | A      revolving loan commitment of up to $15 million. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      term loan facility was fully drawn concurrent with closing. Interest rates      applicable to the term loan and any revolving loans were an index rate      plus 3.00% or LIBOR plus 4.00%. In addition, there are fees associated      with undrawn revolver balances and certain annual fees.                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      acquisition was accounted for using the purchase method of accounting and      accordingly, the accompanying financial statements include the financial      position and results of operations from the date of      acquisition.                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      following unaudited pro forma information presents the combined results of      operations of the Company as though the acquisition of the CR Companies      had occurred at the beginning of the preceding year. The results include      certain adjustments, including increased interest expense on notes payable      and increased amortization expense related to intangible assets. The pro      forma financial information does not necessarily reflect the results of      operations had the acquisition been completed at the beginning of the      period or those which may be obtained in the  future. |

|   |                            |   | Three      Months EndedJune      30, 2008 |       |           | Six      Months EndedJune      30, 2008 |   |       |
|--------|---------------------------------|--------|-------------------------------------------|------------|--------------------------------------------------------|-----------------------------------------|--------|------------|
|   |                            |   | (unaudited)                               |       |                                                   | (unaudited)                             |   |       |
|   | Revenues                        |   | $                                         | 25,783,981 |                                                   |                                    | $      | 51,480,651 |   |   |
|   | Income      from operations     |   |                                      | 4,282,162  |                                                   |                                    |   | 8,582,473  |   |   |
|   | Net      loss                   |   |                                      | (1,350,793 | )                                                      |                                    |   | (2,538,410 | ) |   |
|   | Basic      net loss per share   |   | $                                         | (0.11      | )                                                      |                                    | $      | (0.20      | ) |   |
|   | Diluted      net loss per share |   | $                                         | (0.11      | )                                                      |                                    | $      | (0.20      | ) |   |

| 7.     | Subsidiary      Guarantees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The      Company has no independent assets or operations separate from its      operating subsidiaries. The guarantees of its senior subordinated notes by      12 of its 14 operating subsidiaries are full and unconditional, joint and      several. The operating subsidiaries have no independent long-term notes      payable. There are no significant restrictions on the ability of the      Company to obtain funds from its operating subsidiaries by dividend or      loan. The condensed consolidated financial information is provided for the      guarantor entities. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The      following tables present condensed consolidating balance sheets as of      December 31, 2008 and June 30, 2009, condensed consolidating statements of      operations for the three months ended June 30, 2008 and 2009, condensed      consolidating statements of operations for the six months ended June 30,      2008 and 2009 and condensed consolidating statements of cash flows      for the six months ended June 30, 2008 and2009.                                                                                                                           |

----

|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
|--------------------------------------------------------------|--------|--------|-------------|--------|-----------------------|--------|-------------|---------------------------|--------|--------|--------------|--------|--------|--------------|--------------|
|                                                         |   | Parent |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |         |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
| ASSETS                                                       |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
| Current      assets                                          |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
| Cash      and cash equivalents                               |   | $      | —     |   |                  | $      | 13,521,138  |                      |   | $      | 21,117       |   |   | $            | —      |   |   | $ | 13,542,255 |   |
| Accounts      receivable, net                                |   |   | —     |   |                  |   | 10,869,233  |                      |   |   | 1,254,272    |   |   |         | —      |   |   |   | 12,123,505 |   |
| Materials      and supplies                                  |   |   | —     |   |                  |   | 1,029,214   |                      |   |   | 1,276,541    |   |   |         | —      |   |   |   | 2,305,755 |   |
| Prepaid      and other current assets                        |   |   | 66,560      |   |                  |   | 994,500     |                      |   |   | 80,848       |   |   |         | —      |   |   |   | 1,141,908 |   |
| Income      tax receivables                                  |   |   | 181,644     |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 181,644 |   |
| Deferred      income taxes                                   |   |   | 827,686     |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 827,686 |   |
| Investment      in subsidiaries                              |   |   | 99,481,692  |   |                  |   | —     |                      |   |   | —      |   |   |         | (99,481,692  | ) |   |   | — |   |
| Intercompany      receivable                                 |   |   | 155,535,369 |   |                  |   | —     |                      |   |   | —      |   |   |         | (155,535,369 | ) |   |   | — |   |
| Total      current assets                                    |   |   | 256,092,951 |   |                  |   | 26,414,085  |                      |   |   | 2,632,778    |   |   |         | (255,017,061 | ) |   |   | 30,122,753 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Property      and equipment, net                             |   |   | —     |   |                  |   | 62,507,141  |                      |   |   | 12,899,921   |   |   |         | —      |   |   |   | 75,407,062 |   |
| Goodwill                                                     |   |   | —     |   |                  |   | 191,271,477 |                      |   |   | (1,936,640   | )      |   |         | —      |   |   |   | 189,334,837 |   |
| Intangibles      assets, net                                 |   |   | —     |   |                  |   | 41,286,088  |                      |   |   | 3,104,556    |   |   |         | —      |   |   |   | 44,390,644 |   |
| Investments                                                  |   |   | 1,000       |   |                  |   | 1,686,908   |                      |   |   | 327,675      |   |   |         | —      |   |   |   | 2,015,583 |   |
| Deferred      income taxes                                   |   |   | 5,897,382   |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 5,897,382 |   |
| Other      long-term assets                                  |   |   | 8,879,424   |   |                  |   | (506,198    | )                         |   |   | —      |   |   |         | —      |   |   |   | 8,373,226 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Total      assets                                            |   | $      | 270,870,757 |   |                  | $      | 322,659,501 |                      |   | $      | 17,028,290   |   |   | $            | (255,017,061 | ) |   | $ | 355,541,487 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY              |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Current      liabilities                                     |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Accounts      payable and accrued expenses                   |   | $      | 3,316,323   |   |                  | $      | 4,543,542   |                      |   | $      | 1,085,342    |   |   | $            | —      |   |   | $ | 8,945,207 |   |
| Intercompany      payables                                   |   |   | —     |   |                  |   | 146,585,645 |                      |   |   | 8,949,724    |   |   |         | (155,535,369 | ) |   |   | — |   |
| Other      current liabilities                               |   |   | —     |   |                  |   | 2,129,257   |                      |   |   | 75,448       |   |   |         | —      |   |   |   | 2,204,705 |   |
| Total      current liabilities                               |   |   | 3,316,323   |   |                  |   | 153,258,444 |                      |   |   | 10,110,514   |   |   |         | (155,535,369 | ) |   |   | 11,149,912 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Deferred      income taxes                                   |   |   | 10,316,819  |   |                  |   | 31,595,332  |                      |   |   | 4,050,251    |   |   |         | —      |   |   |   | 45,962,402 |   |
| Other      liabilities                                       |   |   | —     |   |                  |   | 928,082     |                      |   |   | —      |   |   |         | —      |   |   |   | 928,082 |   |
| Long-term      notes payable                                 |   |   | 238,536,037 |   |                  |   | 40,263,476  |                      |   |   | —      |   |   |         | —      |   |   |   | 278,799,513 |   |
| Derivative      liability                                    |   |   | 238,054     |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 238,054 |   |
| Class      B common convertible to senior subordinated notes |   |   | 4,085,033   |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 4,085,033 |   |
| Stockholders’      equity                              |   |   | 14,378,491  |   |                  |   | 96,614,167  |                      |   |   | 2,867,525    |   |   |         | (99,481,692  | ) |   |   | 14,378,491 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Total      liabilities and stockholders’ equity        |   | $      | 270,870,757 |   |                  | $      | 322,659,501 |                      |   | $      | 17,028,290   |   |   | $            | (255,017,061 | ) |   | $ | 355,541,487 |   |

----

|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
|--------------------------------------------------------------|--------|--------|-------------|--------|-----------------------|--------|-------------|---------------------------|--------|--------|--------------|--------|--------|--------------|--------------|
|                                                         |   | Parent |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |         |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
| ASSETS                                                       |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
| Current      assets                                          |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |
| Cash      and cash equivalents                               |   | $      | —     |   |                  | $      | 18,813,369  |                      |   | $      | 39,039       |   |   | $            | —      |   |   | $ | 18,852,408 |   |
| Accounts      receivable, net                                |   |   | —     |   |                  |   | 10,696,620  |                      |   |   | 1,190,179    |   |   |         | —      |   |   |   | 11,886,799 |   |
| Materials      and supplies                                  |   |   | —     |   |                  |   | 965,381     |                      |   |   | 1,100,798    |   |   |         | —      |   |   |   | 2,066,179 |   |
| Prepaid      and other current assets                        |   |   | 82,031      |   |                  |   | 775,381     |                      |   |   | 50,307       |   |   |         | —      |   |   |   | 907,719 |   |
| Income      tax receivables                                  |   |   | 181,644     |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 181,644 |   |
| Deferred      income taxes                                   |   |   | 827,686     |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 827,686 |   |
| Investment      in subsidiaries                              |   |   | 109,279,001 |   |                  |   | —     |                      |   |   | —      |   |   |         | (109,279,001 | ) |   |   | — |   |
| Intercompany      receivable                                 |   |   | 138,988,554 |   |                  |   | —     |                      |   |   | —      |   |   |         | (138,988,554 | ) |   |   | — |   |
| Total      current assets                                    |   |   | 249,358,916 |   |                  |   | 31,250,751  |                      |   |   | 2,380,323    |   |   |         | (248,267,555 | ) |   |   | 34,722,435 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Property      and equipment, net                             |   |   | —     |   |                  |   | 59,158,662  |                      |   |   | 11,884,399   |   |   |         | —      |   |   |   | 71,043,061 |   |
| Goodwill                                                     |   |   | —     |   |                  |   | 191,101,302 |                      |   |   | (1,936,640   | )      |   |         | —      |   |   |   | 189,164,662 |   |
| Intangibles      assets, net                                 |   |   | —     |   |                  |   | 35,991,148  |                      |   |   | 2,980,374    |   |   |         | —      |   |   |   | 38,971,522 |   |
| Investments                                                  |   |   | 1,000       |   |                  |   | 1,674,153   |                      |   |   | 327,675      |   |   |         | —      |   |   |   | 2,002,828 |   |
| Deferred      Income taxes                                   |   |   | 5,897,382   |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 5,897,382 |   |
| Other      long-term assets                                  |   |   | 8,195,706   |   |                  |   | (265,126    | )                         |   |   | —      |   |   |         | —      |   |   |   | 7,930,580 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Total      assets                                            |   | $      | 263,453,004 |   |                  | $      | 318,910,890 |                      |   | $      | 15,636,131   |   |   | $            | (248,267,555 | ) |   | $ | 349,732,470 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY              |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Current      liabilities                                     |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Accounts      payable and accrued expenses                   |   | $      | 1,377,081   |   |                  | $      | 5,751,870   |                      |   | $      | 1,297,691    |   |   | $            | —      |   |   | $ | 8,426,642 |   |
| Intercompany      payables                                   |   |   | —     |   |                  |   | 133,265,189 |                      |   |   | 5,723,365    |   |   |         | (138,988,554 | ) |   |   | — |   |
| Other      current liabilities                               |   |   | —     |   |                  |   | 2,112,977   |                      |   |   | 77,736       |   |   |         | —      |   |   |   | 2,190,713 |   |
| Total      current liabilities                               |   |   | 1,377,081   |   |                  |   | 141,130,036 |                      |   |   | 7,098,792    |   |   |         | (138,988,554 | ) |   |   | 10,617,355 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Deferred      income taxes                                   |   |   | 10,316,819  |   |                  |   | 31,595,332  |                      |   |   | 4,050,251    |   |   |         | —      |   |   |   | 45,962,402 |   |
| Other      liabilities                                       |   |   | (264,267    | )      |                  |   | 1,130,133   |                      |   |   | —      |   |   |         | —      |   |   |   | 865,866 |   |
| Long-term      notes payable                                 |   |   | 238,496,119 |   |                  |   | 40,263,476  |                      |   |   | —      |   |   |         | —      |   |   |   | 278,759,595 |   |
| Derivative      liability                                    |   |   | 163,592     |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 163,592 |   |
| Class      B common convertible to senior subordinated notes |   |   | 4,085,033   |   |                  |   | —     |                      |   |   | —      |   |   |         | —      |   |   |   | 4,085,033 |   |
| Stockholders’      equity                              |   |   | 9,278,627   |   |                  |   | 104,791,913 |                      |   |   | 4,487,088    |   |   |         | (109,279,001 | ) |   |   | 9,278,627 |   |
|                                                         |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |         |   |   |   |   |   |
| Total      liabilities and stockholders’ equity        |   | $      | 263,453,004 |   |                  | $      | 318,910,890 |                      |   | $      | 15,636,131   |   |   | $            | (248,267,555 | ) |   | $ | 349,732,470 |   |

|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |
|-----------------------------------------------|--------|--------|------------|--------|-----------------------|--------|-------------|---------------------------|--------|--------|--------------|--------|--------|--------------|------------|
|                                          |   | Parent |       |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |       |
|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |
| Revenue                                       |   | $      | 650,579    |   |                  | $      | 16,203,007  |                      |   | $      | 2,968,216    |   |   | $            | (2,153,072 | ) |   | $ | 17,668,730 |   |
| Operating      expenses                       |   |   | (650,579   | )      |                  |   | (11,640,351 | )                         |   |   | (2,524,944   | )      |   |         | 2,153,072  |   |   |   | (12,662,802 | ) |
| Income      from operations                   |   |   | —    |   |                  |   | 4,562,656   |                      |   |   | 443,272      |   |   |         | —    |   |   |   | 5,005,928 |   |
| Other      income (expense)                   |   |   | (4,417,403 | )      |                  |   | (125,100    | )                         |   |   | 158          |   |   |         | —    |   |   |   | (4,542,345 | ) |
| Earnings      from subsidiaries               |   |   | 4,880,986  |   |                  |   | —     |                      |   |   | —      |   |   |         | (4,880,986 | ) |   |   | — |   |
| Income      before income tax                 |   |   | 463,583    |   |                  |   | 4,437,556   |                      |   |   | 443,430      |   |   |         | (4,880,986 | ) |   |   | 463,583 |   |
| Income      tax expense                       |   |   | (57,448    | )      |                  |   | —     |                      |   |   | —      |   |   |         | —    |   |   |   | (57,448 | ) |
|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Net      income (loss) to common stockholders |   | $      | 406,135    |   |                  | $      | 4,437,556   |                      |   | $      | 443,430      |   |   | $            | (4,880,986 | ) |   | $ | 406,135 |   |

----

|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |
|-----------------------------------------------|--------|--------|------------|--------|-----------------------|--------|-------------|---------------------------|--------|--------|--------------|--------|--------|--------------|------------|
|                                          |   | Parent |       |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |       |
|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |
| Revenue                                       |   | $      | 700,138    |   |                  | $      | 24,908,849  |                      |   | $      | 2,897,581    |   |   | $            | (2,709,897 | ) |   | $ | 25,796,671 |   |
| Operating      expenses                       |   |   | (700,138   | )      |                  |   | (20,055,598 | )                         |   |   | (2,035,020   | )      |   |         | 2,709,897  |   |   |   | (20,080,859 | ) |
| Income      from operations                   |   |   | —    |   |                  |   | 4,853,251   |                      |   |   | 862,561      |   |   |         | —    |   |   |   | 5,715,812 |   |
| Other      income (expense)                   |   |   | (5,052,138 | )      |                  |   | (92,411     | )                         |   |   | (11          | )      |   |         | —    |   |   |   | (5,144,560 | ) |
| Earnings      from subsidiaries               |   |   | 5,623,390  |   |                  |   | —     |                      |   |   | —      |   |   |         | (5,623,390 | ) |   |   | — |   |
| Income      (loss) before income tax          |   |   | 571,252    |   |                  |   | 4,760,840   |                      |   |   | 862,550      |   |   |         | (5,623,390 | ) |   |   | 571,252 |   |
| Income      tax expense                       |   |   | (60,552    | )      |                  |   | —     |                      |   |   | —      |   |   |         | —    |   |   |   | (60,552 | ) |
|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Net      income (loss) to common stockholders |   | $      | 510,700    |   |                  | $      | 4,760,840   |                      |   | $      | 862,550      |   |   | $            | (5,623,390 | ) |   | $ | 510,700 |   |

|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |
|-----------------------------------------------|--------|--------|------------|--------|-----------------------|--------|-------------|---------------------------|--------|--------|--------------|--------|--------|--------------|------------|
|                                          |   | Parent |       |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |       |
|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |
| Revenue                                       |   | $      | 1,459,768  |   |                  | $      | 32,390,939  |                      |   | $      | 6,126,420    |   |   | $            | (4,448,976 | ) |   | $ | 35,528,151 |   |
| Operating      expenses                       |   |   | (1,459,768 | )      |                  |   | (23,409,655 | )                         |   |   | (4,961,697   | )      |   |         | 4,448,976  |   |   |   | (25,382,144 | ) |
| Income      from operations                   |   |   | —    |   |                  |   | 8,981,284   |                      |   |   | 1,164,723    |   |   |         | —    |   |   |   | 10,146,007 |   |
| Other      income (expense)                   |   |   | (8,864,889 | )      |                  |   | (234,703    | )                         |   |   | 82           |   |   |         | —    |   |   |   | (9,099,510 | ) |
| Earnings      from subsidiaries               |   |   | 9,911,386  |   |                  |   | —     |                      |   |   | —      |   |   |         | (9,911,386 | ) |   |   | — |   |
| Income      before income tax                 |   |   | 1,046,497  |   |                  |   | 8,746,581   |                      |   |   | 1,164,805    |   |   |         | (9,911,386 | ) |   |   | 1,046,497 |   |
| Income      tax expense                       |   |   | (232,322   | )      |                  |   | —     |                      |   |   | —      |   |   |         | —    |   |   |   | (232,322 | ) |
|                                          |   |   |       |   |                  |   |        |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Net      income (loss) to common stockholders |   | $      | 814,175    |   |                  | $      | 8,746,581   |                      |   | $      | 1,164,805    |   |   | $            | (9,911,386 | ) |   | $ | 814,175 |   |

|                                          |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |
|-----------------------------------------------|--------|--------|-------------|--------|-----------------------|--------|-------------|---------------------------|--------|--------|--------------|--------|--------|--------------|------------|
|                                          |   | Parent |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |       |
|                                          |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |
| Revenue                                       |   | $      | 1,534,430   |   |                  | $      | 49,426,210  |                      |   | $      | 5,842,340    |   |   | $            | (5,506,132 | ) |   | $ | 51,296,848 |   |
| Operating      expenses                       |   |   | (1,534,430  | )      |                  |   | (40,863,271 | )                         |   |   | (4,224,258   | )      |   |         | 5,506,132  |   |   |   | (41,115,827 | ) |
| Income      from operations                   |   |   | —     |   |                  |   | 8,562,939   |                      |   |   | 1,618,082    |   |   |         | —    |   |   |   | 10,181,021 |   |
| Other      income (expense)                   |   |   | (12,255,217 | )      |                  |   | (215,019    | )                         |   |   | 1,481        |   |   |         | —    |   |   |   | (12,468,755 | ) |
| Earnings      from subsidiaries               |   |   | 9,967,483   |   |                  |   | —     |                      |   |   | —      |   |   |         | (9,967,483 | ) |   |   | — |   |
| Income      (loss) before income tax          |   |   | (2,287,734  | )      |                  |   | 8,347,920   |                      |   |   | 1,619,563    |   |   |         | (9,967,483 | ) |   |   | (2,287,734 | ) |
| Income      tax (expense) benefit             |   |   | 964,401     |   |                  |   | —     |                      |   |   | —      |   |   |         | —    |   |   |   | 964,401 |   |
|                                          |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Net      income (loss) to common stockholders |   | $      | (1,323,333  | )      |                  | $      | 8,347,920   |                      |   | $      | 1,619,563    |   |   | $            | (9,967,483 | ) |   | $ | (1,323,333 | ) |

----

|                                                                                        |   |   |        |   |                  |   |       |                      |   |   |         |   |   |         |       |
|---------------------------------------------------------------------------------------------|--------|--------|-------------|--------|-----------------------|--------|------------|---------------------------|--------|--------|--------------|--------|--------|--------------|------------|
|                                                                                        |   | Parent |        |   | GuarantorSubsidiaries |   |       | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |       |
|                                                                                        |   |   |        |   |                  |   |       |                      |   |   |         |   |   |         |       |
| Cash      flows from operating activities:                                                  |   |   |        |   |                  |   |       |                      |   |   |         |   |   |         |       |
| Net      income (loss)                                                                      |   | $      | 814,175     |   |                  | $      | 8,746,581  |                      |   | $      | 1,164,805    |   |   | $            | (9,911,386 | ) |   | $ | 814,175 |   |
| Adjustment      to reconcile net income (loss) to cash flows from operating      activities |   |   | 1,254,179   |   |                  |   | 4,853,928  |                      |   |   | 2,038,538    |   |   |         | —    |   |   |   | 8,146,645 |   |
| Changes      in assets and liabilities, net of assets and liabilities      acquired         |   |   | 12,487,674  |   |                  |   | (9,839,317 | )                         |   |   | (2,922,451   | )      |   |         | —    |   |   |   | (274,094 | ) |
| Net      cash provided by operating activities                                              |   |   | 14,556,028  |   |                  |   | 3,761,192  |                      |   |   | 280,892      |   |   |         | (9,911,386 | ) |   |   | 8,686,726 |   |
| Cash      flows from investing activities                                                   |   |   | (176,093    | )      |                  |   | (3,676,540 | )                         |   |   | (326,914     | )      |   |         | —    |   |   |   | (4,179,547 | ) |
| Cash      flows from financing activities                                                   |   |   | (14,379,935 | )      |                  |   | 1          |                      |   |   | —      |   |   |         | 9,911,386  |   |   |   | (4,468,548 | ) |
| Net      increase (decrease) in cash and cash equivalents                                   |   |   | —     |   |                  |   | 84,653     |                      |   |   | (46,022      | )      |   |         | —    |   |   |   | 38,631 |   |
|                                                                                        |   |   |        |   |                  |   |       |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Cash      and cash equivalents, beginning of period                                         |   |   | —     |   |                  |   | 12,707,674 |                      |   |   | 102,823      |   |   |         | —    |   |   |   | 12,810,497 |   |
|                                                                                        |   |   |        |   |                  |   |       |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Cash      and cash equivalents, end of period                                               |   | $      | —     |   |                  | $      | 12,792,327 |                      |   | $      | 56,801       |   |   | $            | —    |   |   | $ | 12,849,128 |   |

|                                                                                        |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |
|---------------------------------------------------------------------------------------------|--------|--------|-------------|--------|-----------------------|--------|-------------|---------------------------|--------|--------|--------------|--------|--------|--------------|------------|
|                                                                                        |   | Parent |        |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | Consolidated |       |
|                                                                                        |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |
| Cash      flows from operating activities:                                                  |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |
| Net      income (loss)                                                                      |   | $      | (1,323,333  | )      |                  | $      | 8,347,920   |                      |   | $      | 1,619,563    |   |   | $            | (9,967,483 | ) |   | $ | (1,323,333 | ) |
| Adjustment      to reconcile net income (loss) to cash flows from operating      activities |   |   | 997,089     |   |                  |   | 11,895,013  |                      |   |   | 1,651,338    |   |   |         | —    |   |   |   | 14,543,440 |   |
| Changes      in assets and liabilities, net of assets and liabilities      acquired         |   |   | 14,762,275  |   |                  |   | (12,017,282 | )                         |   |   | (2,779,060   | )      |   |         | —    |   |   |   | (34,067 | ) |
| Net      cash provided by operating activities                                              |   |   | 14,436,031  |   |                  |   | 8,225,651   |                      |   |   | 491,841      |   |   |         | (9,967,483 | ) |   |   | 13,186,040 |   |
| Cash      flows from investing activities                                                   |   |   | —     |   |                  |   | (2,933,420  | )                         |   |   | (473,919     | )      |   |         | —    |   |   |   | (3,407,339 | ) |
| Cash      flows from financing activities                                                   |   |   | (14,436,031 | )      |                  |   | —     |                      |   |   | —      |   |   |         | 9,967,483  |   |   |   | (4,468,548 | ) |
| Net      increase in cash and cash equivalents                                              |   |   | —     |   |                  |   | 5,292,231   |                      |   |   | 17,922       |   |   |         | —    |   |   |   | 5,310,153 |   |
|                                                                                        |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Cash      and cash equivalents, beginning of period                                         |   |   | —     |   |                  |   | 13,521,138  |                      |   |   | 21,117       |   |   |         | —    |   |   |   | 13,542,255 |   |
|                                                                                        |   |   |        |   |                  |   |        |                      |   |   |         |   |   |         |       |   |   |   |   |   |
| Cash      and cash equivalents, end of period                                               |   | $      | —     |   |                  | $      | 18,813,369  |                      |   | $      | 39,039       |   |   | $            | —    |   |   | $ | 18,852,408 |   |

| 8.     | Revenue      Concentrations                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Revenues      for interstate access services are based on reimbursement of costs and an      allowed rate of return. Revenues of this nature are received from the      National Exchange Carrier Association in the form of monthly settlements.      Such revenues amounted to 13.6% and 10.3% of the Company’s total revenues      from continuing operations for the six months ended June 30, 2008 and      2009, respectively.                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The      Company acquired a multi-year contract with a large multiple system      operator for the provision of wholesale network connections to its      customers in Maine and New Hampshire. Associated with closing the      acquisition of the CR Companies, various terms of the agreement were      amended, including extending the contract through 2012. The customer      represented approximately 12.0% of the consolidated revenue for the six      months ended June 30, 2009. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 9.     | Subsequent      Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Management      performed an evaluation of the Company activity through August 7, 2009,      and has concluded that there are no significant subsequent events      requiring disclosure through the date these financial statements were      issued.                                                                                                                                                                                                                                        |

----

|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | Local services. We      receive revenues from providing local exchange telecommunications services      in our ten rural territories, from the wholesale network services in New      England, and on a competitive basis throughout Maine. These revenues      include monthly subscription charges for basic service, calling beyond the      local territory on a fixed price and on a per minute basis, local private      line services and enhanced calling features, such as voicemail, caller      identification, call waiting and call forwarding. We also provide billing      and collections services for other carriers under contract and receive      revenues from directory advertising. A growing portion of our rural      subscribers take bundled service plans which include multiple services,      including unlimited domestic calling, for a flat monthly    fee.                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | ● | Network access      services. We receive revenues from charges established to      compensate us for the origination, transport and termination of calls of      long distance and other interexchange carriers. These include subscriber      line charges imposed on end users and switched and special access charges      paid by carriers. Switched access charges for long distance services      within Alabama, Massachusetts, Maine, Missouri and West Virginia are based      on rates approved by the Alabama Public Service Commission, the      Massachusetts Department of Telecommunications and Cable, the Maine Public      Utilities Commission (“MPUC”), the Missouri Public Service Commission and      the West Virginia Public Service Commission, respectively, where      appropriate. Switched and special access charges for interstate and      international services are based on rates approved by the Federal      Communications Commission. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | ● | Cable television      services. We offer basic, digital, high-definition, digital video      recording and pay per view cable television services to a portion of our      telephone service territory in both Alabama and Missouri, including      Internet Protocol television (“IPTV”) in Alabama.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | ● | Internet services. We      receive revenues from monthly recurring charges for dial-up and digital      high-speed Internet access.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | ● | Transport services. We      receive monthly recurring revenues for the rental of fiber to transport      data and other telecommunications services in  Maine.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

----

|                                   |   |                         |    |   |                  |   |    |                 |   |   |    |   |
|----------------------------------------|--------|------------------------------|---------|--------|-----------------------|--------|---------|----------------------|--------|--------|---------|--------|
|                                   |   | Year      Ended December 31, |    |   | March      31,2009(2) |   |    | June      30,2009(2) |   |
| Key      Operating Statistics          |   | 2007                         |    |   | 2008(2)               |   |
| RLEC      access lines:                |   |                         |    |   |                  |   |    |                 |   |   |    |   |
| Voice      lines                       |   |                         | 36,687  |   |                  |   | 51,530  |                 |   |   | 50,807  |   |   |   | 50,078 |   |
| Data      lines                        |   |                         | 12,160  |   |                  |   | 18,709  |                 |   |   | 19,365  |   |   |   | 19,596 |   |
| RLEC      access line equivalents(1)   |   |                         | 48,847  |   |                  |   | 70,239  |                 |   |   | 70,172  |   |   |   | 69,674 |   |
|                                   |   |                         |    |   |                  |   |    |                 |   |   |    |   |   |   |   |   |
| CLEC      access lines:                |   |                         |    |   |                  |   |    |                 |   |   |    |   |   |   |   |   |
| Voice      lines                       |   |                         | 16,973  |   |                  |   | 26,558  |                 |   |   | 26,744  |   |   |   | 27,110 |   |
| Data      lines                        |   |                         | 2,571   |   |                  |   | 3,246   |                 |   |   | 3,228   |   |   |   | 3,298 |   |
| CLEC      access line equivalents(1)   |   |                         | 19,544  |   |                  |   | 29,804  |                 |   |   | 29,972  |   |   |   | 30,408 |   |
|                                   |   |                         |    |   |                  |   |    |                 |   |   |    |   |   |   |   |   |
| Otelco      access line equivalents(1) |   |                         | 68,391  |   |                  |   | 100,043 |                 |   |   | 100,144 |   |   |   | 100,082 |   |
|                                   |   |                         |    |   |                  |   |    |                 |   |   |    |   |   |   |   |   |
| Wholesale      network connections     |   |                         | — |   |                  |   | 98,187  |                 |   |   | 113,855 |   |   |   | 122,471 |   |
| Cable      television customers        |   |                         | 4,169   |   |                  |   | 4,082   |                 |   |   | 4,132   |   |   |   | 4,114 |   |
| Dial-up      Internet customers        |   |                         | 15,249  |   |                  |   | 11,864  |                 |   |   | 10,885  |   |   |   | 10,165 |   |

| (1)    | We      define access line equivalents as voice access lines and data access lines      (including cable modems, digital subscriber lines, and dedicated data      access trunks). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                               |
| (2)    | We      acquired the CR Companies effective October 31,  2008.                                                                                                                     |

----

|                    |   |                                 |   |   |                               |   |   |   |   |   |   |   |
|-------------------------|--------|--------------------------------------|--------|--------|------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                    |   | Three      Months EndedJune      30, |   |   | Six      Months EndedJune      30, |   |
|                    |   | 2008                                 |   |   | 2009                               |   |   | 2008   |   |   | 2009   |   |
| Revenues                |   |                                 |   |   |                               |   |   |   |   |   |   |   |
| Local      services     |   |                                 | 38.0   | %      |                               |   | 46.8   | %      |   |   | 37.8   | %      |   |   | 46.6 | % |
|                    |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Network      access     |   |                                 | 34.5   |   |                               |   | 31.9   |   |   |   | 35.3   |   |   |   | 31.9 |   |
|                    |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Cable      television   |   |                                 | 3.2    |   |                               |   | 2.4    |   |   |   | 3.1    |   |   |   | 2.4 |   |
|                    |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Internet                |   |                                 | 17.2   |   |                               |   | 13.6   |   |   |   | 17.0   |   |   |   | 13.7 |   |
|                    |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Transport      services |   |                                 | 7.1    |   |                               |   | 5.3    |   |   |   | 6.8    |   |   |   | 5.4 |   |
|                    |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Total      revenues     |   |                                 | 100.0  | %      |                               |   | 100.0  | %      |   |   | 100.0  | %      |   |   | 100.0 | % |

----

| Operating      expenses                                 |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------|
| Cost      of services and products                      |   |   | 38.2   | %      |   |   | 39.3   | %      |   |   | 37.7   | %       |   |   | 40.6   | %  |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Selling,      general and administrative expenses       |   |   | 14.3   |   |   |   | 13.0   |   |   |   | 14.7   |    |   |   | 13.5   |    |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Depreciation      and amortization                      |   |   | 19.2   |   |   |   | 25.6   |   |   |   | 19.0   |    |   |   | 26.1   |    |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Total      operating expenses                           |   |   | 71.7   |   |   |   | 77.9   |   |   |   | 71.4   |    |   |   | 80.2   |    |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Income      from operations                             |   |   | 28.3   |   |   |   | 22.1   |   |   |   | 28.6   |    |   |   | 19.8   |    |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Other      income (expense)                             |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Interest      expense                                   |   |   | (27.0  | )      |   |   | (25.0  | )      |   |   | (26.6  | )       |   |   | (25.4  | )       |
| Change      in fair value of derivatives                |   |   | 0.9    |   |   |   | 5.0    |   |   |   | (0.2   | )       |   |   | 0.6    |    |
| Other      income                                       |   |   | 0.4    |   |   |   | 0.1    |   |   |   | 1.2    |    |   |   | 0.5    |    |
| Total      other expense                                |   |   | (25.7  | )      |   |   | (19.9  | )      |   |   | (25.6  | )       |   |   | (24.3  | )       |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Income      before income taxes                         |   |   | 2.6    |   |   |   | 2.2    |   |   |   | 3.0    |    |   |   | (4.5   | )       |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Income      tax benefit (expense)                       |   |   | (0.3   | )      |   |   | (0.2   | )      |   |   | (0.7   | )       |   |   | 1.9    |    |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |    |   |   |   |    |
| Net      income (loss) available to common stockholders |   |   | 2.3    | %      |   |   | 2.0    | %      |   |   | 2.3    | %  |   |   | (2.6   | )%      |

|                           |   |                                 |   |   |   |   |   |   |   |   |    |   |
|--------------------------------|--------|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                           |   | Three      Months EndedJune      30, |   |   | Change |   |
|                           |   | 2008                                 |   |   | 2009   |   |   | Amount |   |   | Percent |   |
|                           |   | (dollars      in thousands)          |   |
| Local      services            |   | $                                    | 6,712  |   |   | $      | 12,064 |   |   | $      | 5,352   |   |   |   | 79.7 | % |
| Network      access services   |   |                                 | 6,105  |   |   |   | 8,265  |   |   |   | 2,160   |   |   |   | 35.4 |   |
| Cable      television services |   |                                 | 566    |   |   |   | 612    |   |   |   | 46      |   |   |   | 8.1 |   |
| Internet      services         |   |                                 | 3,031  |   |   |   | 3,500  |   |   |   | 469     |   |   |   | 15.5 |   |
| Transport      services        |   |                                 | 1,255  |   |   |   | 1,356  |   |   |   | 101     |   |   |   | 8.0 |   |
| Total                          |   | $                                    | 17,669 |   |   | $      | 25,797 |   |   | $      | 8,128   |   |   |   | 46.0 |   |

----

|                           |   |                               |   |   |   |   |   |   |   |   |    |   |
|--------------------------------|--------|------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                           |   | Six      Months EndedJune      30, |   |   | Change |   |
|                           |   | 2008                               |   |   | 2009   |   |   | Amount |   |   | Percent |   |
|                           |   | (dollars      in thousands)        |   |
| Local      services            |   | $                                  | 13,438 |   |   | $      | 23,919 |   |   | $      | 10,481  |   |   |   | 78.0 | % |
| Network      access services   |   |                               | 12,543 |   |   |   | 16,359 |   |   |   | 3,816   |   |   |   | 30.4 |   |
| Cable      television services |   |                               | 1,112  |   |   |   | 1,219  |   |   |   | 107     |   |   |   | 9.6 |   |
| Internet      services         |   |                               | 6,032  |   |   |   | 7,042  |   |   |   | 1,010   |   |   |   | 16.7 |   |
| Transport      services        |   |                               | 2,403  |   |   |   | 2,758  |   |   |   | 355     |   |   |   | 14.8 |   |
| Total                          |   | $                                  | 35,528 |   |   | $      | 51,297 |   |   | $      | 15,769  |   |   |   | 44.4 |   |

----

|                                              |   |                                 |   |   |   |   |   |   |   |   |    |   |
|---------------------------------------------------|--------|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                                              |   | Three      Months EndedJune      30, |   |   | Change |   |
|                                              |   | 2008                                 |   |   | 2009   |   |   | Amount |   |   | Percent |   |
|                                              |   | (dollars      in thousands)          |   |
| Cost      of services                             |   | $                                    | 6,746  |   |   | $      | 10,133 |   |   | $      | 3,387   |   |   |   | 50.2 | % |
| Selling,      general and administrative expenses |   |                                 | 2,527  |   |   |   | 3,343  |   |   |   | 816     |   |   |   | 32.3 |   |
| Depreciation      and amortization                |   |                                 | 3,390  |   |   |   | 6,605  |   |   |   | 3,215   |   |   |   | 94.8 |   |
| Total                                             |   | $                                    | 12,663 |   |   | $      | 20,081 |   |   | $      | 7,418   |   |   |   | 58.6 |   |

|                                              |   |                               |   |   |   |   |   |   |   |   |    |   |
|---------------------------------------------------|--------|------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                                              |   | Six      Months EndedJune      30, |   |   | Change |   |
|                                              |   | 2008                               |   |   | 2009   |   |   | Amount |   |   | Percent |   |
|                                              |   | (dollars      in thousands)        |   |
| Cost      of services                             |   | $                                  | 13,398 |   |   | $      | 20,800 |   |   | $      | 7,402   |   |   |   | 55.2 | % |
| Selling,      general and administrative expenses |   |                               | 5,221  |   |   |   | 6,919  |   |   |   | 1,698   |   |   |   | 32.5 |   |
| Depreciation      and amortization                |   |                               | 6,763  |   |   |   | 13,397 |   |   |   | 6,634   |   |   |   | 98.1 |   |
| Total                                             |   | $                                  | 25,382 |   |   | $      | 41,116 |   |   | $      | 15,734  |   |   |   | 62.0 |   |

----

|                                     |   |                                 |   |   |   |   |   |   |   |   |    |   |
|------------------------------------------|--------|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                                     |   | Three      Months EndedJune      30, |   |   | Change |   |
|                                     |   | 2008                                 |   |   | 2009   |   |   | Amount |   |   | Percent |   |
|                                     |   | (dollars      in thousands)          |   |
| Interest      expense                    |   | $                                    | (4,773 | )      |   | $      | (6,447 | )      |   | $      | 1,674   |   |   |   | 35.1 | % |
| Change      in fair value of derivatives |   |                                 | 167    |   |   |   | 1,290  |   |   |   | 1,123   |   |   |   | NM |   |
| Other      income                        |   |                                 | 64     |   |   |   | 12     |   |   |   | (52     | )      |   |   | (81.3 | ) |
| Income      tax expense                  |   |                                 | (57    | )      |   |   | (60    | )      |   |   | 3       |   |   |   | 5.3 |   |

|                                     |   |                               |   |   |   |   |    |   |   |   |    |   |
|------------------------------------------|--------|------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                     |   | Six      Months EndedJune      30, |   |   | Change |   |
|                                     |   | 2008                               |   |   | 2009   |   |    | Amount |   |   | Percent |   |
|                                     |   | (dollars      in thousands)        |   |
| Interest      expense                    |   | $                                  | (9,456 | )      |   | $      | (13,046 | )      |   | $      | 3,590   |   |   |   | 38.0 | % |
| Change      in fair value of derivatives |   |                               | (74    | )      |   |   | 339     |   |   |   | 413     |   |   |   | NM |   |
| Other      income                        |   |                               | 430    |   |   |   | 238     |   |   |   | (192    | )      |   |   | (44.7 | ) |
| Income      tax (expense) benefit        |   |                               | (232   | )      |   |   | 964     |   |   |   | 1,196   |   |   |   | 515.5 |   |

----

----

|   |                 |                                                                                                                                                                                                                                                                                  |
|--------|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Level      1 – | Quoted      prices in active markets for identical assets or    liabilities.                                                                                                                                                                                                          |
|   |                 |                                                                                                                                                                                                                                                                                  |
|   | Level      2 – | Inputs      other than Level 1 that are directly or indirectly observable, such as      quoted prices for similar assets or liabilities or quoted prices in      markets which are not active. The inputs are generally observable or can      be corroborated in observable markets. |
|   |                 |                                                                                                                                                                                                                                                                                  |
|   | Level      3 – | Unobservable      inputs where there is little or no market activity to support      valuation.                                                                                                                                                                                       |

----

----

|               |   |           |       |                |   |   |   |
|--------------------|--------|----------------|------------|---------------------|--------|--------|--------|
|               |   | Votes      For |       | Votes      Withheld |   |
| John      P. Kunz  |   |           | 11,853,887 |                |   | 35,987 |   |
| Andrew      Meyers |   |           | 11,841,629 |                |   | 48,245 |   |

|                                                                                   |   |           |   |               |   |    |   |                 |   |
|----------------------------------------------------------------------------------------|--------|----------------|--------|--------------------|--------|---------|--------|----------------------|--------|
|                                                                                   |   | Votes      For |   | Votes      Against |   | Abstain |   | Broker      Non-Vote |   |
| Ratification      of appointment of independent registered public accounting      firm |   | 12,048,555     |   | 63,086             |   | 47,151  |   | 0                    |   |

----

|                     |             |                           |
|--------------------------|------------------|--------------------------------|
| Date:      March 8, 2010 | OTELCO      INC. |
|                     |             |                           |
|                     | By:              | /s/      Curtis L. Garner, Jr. |   |
|                     |             | Curtis      L. Garner, Jr.     |
|                     |             | Chief      Financial Officer   |

----

|       |   |                                                                                                                                                              |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNo. |   | Description                                                                                                                                                       |
|       |   |                                                                                                                                                              |
| 31.1       |   | Certificate      pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange      Act of 1934 of the Chief Executive Officer                          |
|       |   |                                                                                                                                                              |
| 31.2       |   | Certificate      pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange      Act of 1934 of the Chief Financial Officer                          |
|       |   |                                                                                                                                                              |
| 32.1       |   | Certificate      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002, of the Chief Executive    Officer |
|       |   |                                                                                                                                                              |
| 32.2       |   | Certificate      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002, of the Chief Financial    Officer |