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

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

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

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

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

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

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

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

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

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

----

| ·   | Correct the      Company's consolidated financial statements under Part I, Item I contained      in this Form 10-Q/A for an error in depreciation expense due to failure to      make a change to the estimated useful life of certain assets that were      expected to be decommissioned at or near the end of 2008.  The      error increased depreciation expense $4.5 million, decreased minority      interest expense $1.0 million and decreased income tax expense $1.3      million for the three months ended March 31, 2008.  The error      also decreased property and equipment in service $4.5 million, decreased      minority interest $1.0 million and decreased deferred income tax liability      $1.3 million as of March 31, 2008.  Note 1(i) to the      consolidated financial statements has been updated to describe the error      correction, and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Correct the      Company’s disclosure under Part I, Item 4(b) to include the Company’s      evaluation of this error on its internal control over financial      reporting. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                           |                                                      |                                                                                            |   |   | Page  No. |
|----------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------------------------------------------------------------|--------|--------|-----------|
|                                                           |                                                      |                                                                                            |   |   |      |
| Cautionary      Statement Regarding Forward-Looking Statements | 3                                                         |
|                                                           |                                                      |                                                                                            |   |   |      |
| Part      I.  FINANCIAL INFORMATION                  |                                                      |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           | Item      I.                                              | Financial      Statements                                                                       |   |   |      |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           |                                                      | Consolidated      Balance Sheets as of March 31, 2008 (as restated,    unaudited)               |   |   |      |
|                                                           |                                                      |   and      December 31, 2007                                                          |   |   | 4         |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           |                                                      | Consolidated      Income Statement for the three months ended                                   |   |   |      |
|                                                           |                                                      |   March      31, 2008 (as restated, unaudited) and 2007 (as restated,      unaudited) |   |   | 6         |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           |                                                      | Consolidated      Statements of Cash Flows for the three months                                 |   |   |      |
|                                                           |                                                      |   ended      March 31, 2008 (unaudited) and 2007 (as restated,    unaudited)          |   |   | 7         |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           |                                                      | Notes to      Interim Consolidated Financial Statements (unaudited)                             |   |   | 8         |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           | Item      2.                                              | Management’s      Discussion and Analysis of Financial Condition                          |   |   |      |
|                                                           |                                                      |   and      Results of Operations                                                      |   |   | 22        |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           | Item      3.                                              | Quantitative      and Qualitative Disclosures About Market Risk                                 |   |   | 40        |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           | Item      4.                                              | Controls and      Procedures                                                                    |   |   | 41        |
|                                                           |                                                      |                                                                                            |   |   |      |
| Part      II.  OTHER INFORMATION                     |                                                      |                                                                                            |   |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           | Item      1.                                              | Legal      Proceedings                                                                          |   |   | 43        |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           | Item      6.                                              | Exhibits                                                                                        |   |   | 43        |
|                                                           |                                                      |                                                                                            |   |   |      |
|                                                           | Other items      are omitted, as they are not applicable. |                                                                                            |   |
|                                                           |                                                      |                                                                                            |   |   |      |
| SIGNATURES                                                     |                                                      |                                                                                            | 44     |

----

----

| (Amounts in      thousands)                                                 |   | (as restated,      unaudited) |      |   |              |   |
|-----------------------------------------------------------------------------|--------|-------------------------------|-----------|--------|-------------------|--------|
|                                                                        |   | March      31,                |      |   | December      31, |   |
| ASSETS                                                                      |   | 2008                          |      |   | 2007              |   |
|                                                                        |   |                          |      |   |              |   |
|        Current assets:                                                 |   |                          |      |   |              |   |
|         Cash and cash equivalents                                 |   | $                             | 17,165    |   |              |   | 13,074 |   |
|                                                                        |   |                          |      |   |              |   |   |   |
|  Receivables                                                           |   |                          | 92,154    |   |              |   | 97,913 |   |
|  Less      allowance for doubtful receivables                          |   |                          | 1,551     |   |              |   | 1,657 |   |
|          Net receivables                                          |   |                          | 90,603    |   |              |   | 96,256 |   |
|                                                                        |   |                          |      |   |              |   |   |   |
|         Deferred income taxes                                     |   |                          | 21,870    |   |              |   | 5,734 |   |
|         Prepaid expenses                                          |   |                          | 6,563     |   |              |   | 5,356 |   |
|         Inventories                                               |   |                          | 3,814     |   |              |   | 2,541 |   |
|         Other current assets                                      |   |                          | 679       |   |              |   | 717 |   |
|  Total      current assets                                             |   |                          | 140,694   |   |              |   | 123,678 |   |
|                                                                        |   |                          |      |   |              |   |   |   |
|         Property and equipment in service, net of depreciation    |   |                          | 515,214   |   |              |   | 504,273 |   |
|         Construction in progress                                  |   |                          | 84,950    |   |              |   | 69,409 |   |
|          Net property and equipment                          |   |                          | 600,164   |   |              |   | 573,682 |   |
|                                                                        |   |                          |      |   |              |   |   |   |
| Cable      certificates                                                     |   |                          | 191,565   |   |              |   | 191,565 |   |
| Goodwill                                                                    |   |                          | 42,181    |   |              |   | 42,181 |   |
| Wireless      certificates                                                  |   |                          | 25,757    |   |              |   | 25,757 |   |
| Other      intangible assets, net of amortization                           |   |                          | 11,873    |   |              |   | 11,769 |   |
|         Deferred loan and senior notes costs, net of amortization |   |                          | 5,985     |   |              |   | 6,202 |   |
| Other      assets                                                           |   |                          | 9,508     |   |              |   | 9,399 |   |
|  Total      other assets                                               |   |                          | 286,869   |   |              |   | 286,873 |   |
|  Total      assets                                                     |   | $                             | 1,027,727 |   |              |   | 984,233 |   |

----

| (Amounts in      thousands)                                                                                                              |   | (as restated,      unaudited) |      |   |              |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-----------|--------|-------------------|--------|
|                                                                                                                                     |   | March      31,                |      |   | December      31, |   |
| LIABILITIES,      MINORITY INTEREST, AND STOCKHOLDER'S EQUITY                                                                            |   | 2008                          |      |   | 2007              |   |
|                                                                                                                                     |   |                          |      |   |              |   |
| Current      liabilities:                                                                                                                |   |                          |      |   |              |   |
| Current      maturities of obligations under long-term debt and capital      leases                                                      |   | $                             | 2,382     |   |              |   | 2,375 |   |
| Accounts      payable                                                                                                                    |   |                          | 41,847    |   |              |   | 35,747 |   |
| Deferred      revenue                                                                                                                    |   |                          | 17,385    |   |              |   | 16,600 |   |
| Accrued      payroll and payroll related obligations                                                                                     |   |                          | 15,263    |   |              |   | 16,329 |   |
| Accrued      liabilities                                                                                                                 |   |                          | 8,326     |   |              |   | 7,536 |   |
| Accrued      interest                                                                                                                    |   |                          | 3,076     |   |              |   | 8,927 |   |
| Subscriber      deposits                                                                                                                 |   |                          | 956       |   |              |   | 877 |   |
| Total current      liabilities                                                                                                           |   |                          | 89,235    |   |              |   | 88,391 |   |
|                                                                                                                                     |   |                          |      |   |              |   |   |   |
| Long-term      debt                                                                                                                      |   |                          | 555,667   |   |              |   | 536,115 |   |
| Obligations      under capital leases, excluding current maturities                                                                      |   |                          | 2,306     |   |              |   | 2,290 |   |
| Obligation      under capital lease due to related party, excluding current      maturity                                                |   |                          | 441       |   |              |   | 469 |   |
| Deferred      income taxes                                                                                                               |   |                          | 101,865   |   |              |   | 84,295 |   |
| Other      liabilities                                                                                                                   |   |                          | 17,175    |   |              |   | 13,241 |   |
| Total      liabilities                                                                                                                   |   |                          | 766,689   |   |              |   | 724,801 |   |
|                                                                                                                                     |   |                          |      |   |              |   |   |   |
| Minority      interest                                                                                                                   |   |                          | 5,502     |   |              |   | 6,478 |   |
|                                                                                                                                     |   |                          |      |   |              |   |   |   |
| Commitments      and contingencies                                                                                                       |   |                          |      |   |              |   |   |   |
| Stockholder's      equity:                                                                                                               |   |                          |      |   |              |   |   |   |
| Class A      common stock (no par). Authorized 10 shares; issued and outstanding 0.1      shares at March 31, 2008 and December 31, 2007 |   |                          | 206,622   |   |              |   | 206,622 |   |
| Paid-in      capital                                                                                                                     |   |                          | 39,996    |   |              |   | 37,804 |   |
| Retained      earnings                                                                                                                   |   |                          | 8,918     |   |              |   | 8,528 |   |
| Total      stockholder’s equity                                                                                                    |   |                          | 255,536   |   |              |   | 252,954 |   |
| Total      liabilities, minority interest, and stockholder’s equity                                                                |   | $                             | 1,027,727 |   |              |   | 984,233 |   |

|   | See      accompanying notes to interim consolidated financial      statements. |
|--------|--------------------------------------------------------------------------------|

----

|                                                                                             |   | Three Months      Ended |    |
|--------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                             |   | March      31,          |    |
|   (Amounts in      thousands)                                                          |   | (as restated)      2008 |    |   | (as restated)      2007 |   |
| Revenues                                                                                         |   | $                       | 134,674 |   |   |   | 125,031 |   |
|                                                                                             |   |                    |    |   |   |   |   |   |
| Cost of goods      sold (exclusive of depreciation and amortization shown separately      below) |   |                    | 51,311  |   |   |   | 47,990 |   |
| Selling,      general and administrative expenses                                                |   |                    | 46,406  |   |   |   | 43,605 |   |
| Depreciation      and amortization expense                                                       |   |                    | 27,243  |   |   |   | 20,866 |   |
| Operating      income                                                                            |   |                    | 9,714   |   |   |   | 12,570 |   |
|                                                                                             |   |                    |    |   |   |   |   |   |
| Other income      (expense):                                                                     |   |                    |    |   |   |   |   |   |
| Interest      expense                                                                            |   |                    | (8,685  | ) |   |   | (8,318 | ) |
| Loan and      senior note fees                                                                   |   |                    | (223    | ) |   |   | (180 | ) |
| Interest      income                                                                             |   |                    | 81      |   |   |   | 184 |   |
| Minority      interest                                                                           |   |                    | 976     |   |   |   | 13 |   |
| Other      expense, net                                                                          |   |                    | (7,851  | ) |   |   | (8,301 | ) |
|                                                                                             |   |                    |    |   |   |   |   |   |
| Income before      income tax expense                                                            |   |                    | 1,863   |   |   |   | 4,269 |   |
|                                                                                             |   |                    |    |   |   |   |   |   |
| Income tax      expense                                                                          |   |                    | 1,427   |   |   |   | 1,963 |   |
|                                                                                             |   |                    |    |   |   |   |   |   |
| Net      income                                                                                  |   | $                       | 436     |   |   |   | 2,306 |   |

----

| (Amounts in      thousands)                                                                                                            |   | (as      restated)2008 |    | (as      restated)2007 |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|------------------------|--------|
| Cash flows      from operating activities:                                                                                             |   |                   |    |                   |   |   |
| Net      income                                                                                                                        |   | $                      | 436     |                   |   |   | 2,306 |   |
| Adjustments      to reconcile net income to net cash provided  by operating      activities (net of effects of acquisition): |   |                   |    |                   |   |   |   |   |
| Depreciation      and amortization expense                                                                                             |   |                   | 27,243  |                   |   |   | 20,866 |   |
| Deferred      income tax expense                                                                                                       |   |                   | 1,427   |                   |   |   | 1,963 |   |
| Share-based      compensation expense                                                                                                  |   |                   | 1,260   |                   |   |   | 985 |   |
| Other noncash      income and expense items                                                                                            |   |                   | 472     |                   |   |   | 1,153 |   |
| Change in      operating assets and liabilities, net of acquisition                                                                    |   |                   | 4,686   |                   |   |   | (5,424 | )  |
| Net cash      provided by operating activities                                                                                         |   |                   | 35,524  |                   |   |   | 21,849 |   |
|                                                                                                                                   |   |                   |    |                   |   |   |   |   |
| Cash flows      from investing activities:                                                                                             |   |                   |    |                   |   |   |   |   |
| Purchases of      property and equipment                                                                                               |   |                   | (49,647 | )                      |   |   | (30,454 | ) |
| Purchases of      other assets and intangible assets                                                                                   |   |                   | (1,183  | )                      |   |   | (396 | ) |
| Purchase of      business                                                                                                              |   |                   | ---     |                   |   |   | (19,530 | ) |
| Other                                                                                                                                  |   |                   | ---     |                   |   |   | 25 |   |
| Net cash used      in investing activities                                                                                             |   |                   | (50,830 | )                      |   |   | (50,355 | ) |
|                                                                                                                                   |   |                   |    |                   |   |   |   |   |
| Cash flows      from financing activities:                                                                                             |   |                   |    |                   |   |   |   |   |
| Borrowing on      Senior Credit Facility                                                                                               |   |                   | 20,000  |                   |   |   | --- |   |
| Repayment of      debt and capital lease obligations                                                                                   |   |                   | (567    | )                      |   |   | (25,577 | ) |
| Net      contribution from (distribution to) General Communication,      Inc.                                                          |   |                   | (30     | )                      |   |   | 6,170 |   |
| Other                                                                                                                                  |   |                   | (6      | )                      |   |   | --- |   |
| Net cash      provided by (used in) financing activities                                                                               |   |                   | 19,397  |                   |   |   | (19,407 | ) |
| Net increase      (decrease) in cash and cash equivalents                                                                              |   |                   | 4,091   |                   |   |   | (47,913 | ) |
| Cash and cash      equivalents at beginning of period                                                                                  |   |                   | 13,074  |                   |   |   | 57,647 |   |
|                                                                                                                                   |   |                   |    |                   |   |   |   |   |
| Cash and cash      equivalents at end of period                                                                                        |   | $                      | 17,165  |                   |   |   | 9,734 |   |

----

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

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

| ·   | Cable      television services throughoutAlaska, |
|--------------------|--------------------------------------------------|

| ·   | Competitive      local access services in Anchorage, Fairbanks, Juneau, Wasilla, Eagle      River, Kodiak, Palmer, Kenai, Soldotna, Chugiak, Sitka, Valdez, Ketchikan      and Homer, Alaska as of March 31, 2008 with on-going expansion into      additional Alaska communities, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Long-distance      telephone service between Alaska and the remaining United States and      foreign countries, |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Resale and      sale of postpaid and sale of prepaid wireless telephone services and sale      of wireless telephone handsets andaccessories, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

| ·   | Managed      services to certain commercialcustomers, |
|--------------------|-------------------------------------------------------|

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

| ·   | Lease, sales      and maintenance of capacity on our fiber optic cable systems used in the      transmission of interstate and intrastate data, switched message      long-distance and Internet services within Alaska and between Alaska and      the remaining United States and foreign countries,  and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

----

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

| Balance at      December 31, 2006                                    |   | $      | 3,408  |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|
| Liability      incurred                                              |   |   | 86     |   |
| Accretion      expense for the three months endedMarch 31,      2007 |   |   | 35     |   |
| Liability      settled                                               |   |   | (2     | )      |
| Balance at      March 31, 2007                                       |   | $      | 3,527  |   |
|                                                                 |   |   |   |   |
| Balance at      December 31, 2007                                    |   | $      | 4,173  |   |
| Accretion      expense for the three months endedMarch 31,      2008 |   |   | 26     |   |
| Balance at      March 31, 2008                                       |   | $      | 4,199  |   |

----

|   | (h) | Change      in Accounting Policy |
|--------|-----|----------------------------------|

|         (i) | Restatement,      Immaterial Error Correction and      Reclassification |
|-----------------------|------------------------------------------------------------------------------|

| ·   | We increased      depreciation expense $4.5 million to correct depreciation expense for a      failure to change the estimated useful life of certain assets that were      expected to be decommissioned at or near the end of 2008.  The      assets should have been depreciated over the remaining period they were      expected to be used; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      minority interest expense $1.0 million to record the minority interest      portion of the correction described above,and; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      income tax expense $1.3 million to record the income tax effect of the      corrections described above. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

|                                                                                      |   | March 31,      2008     |      |
|-------------------------------------------------------------------------------------------|--------|-------------------------|-----------|
| Consolidated      Condensed Balance Sheet                                                 |   | As previously reported1 |      |   | Adjustments |   |   | As      restated |   |
| Assets                                                                                    |   |                    |      |   |   |   |   |   |   |
| Total current      assets                                                                 |   | $                       | 140,694   |   |   |   | --- |   |   |   | 140,694 |   |
|                                                                                      |   |                    |      |   |   |   |   |   |   |   |   |   |
| Property and      equipment in service, net of depreciation                               |   |                    | 519,675   |   |   |   | (4,461 | ) |   |   | 515,214 |   |
| Construction      in progress                                                             |   |                    | 84,950    |   |   |   | --- |   |   |   | 84,950 |   |
| Net property      and equipment                                                           |   |                    | 604,625   |   |   |   | (4,461 | ) |   |   | 600,164 |   |
|                                                                                      |   |                    |      |   |   |   |   |   |   |   |   |   |
| Total other      assets                                                                   |   |                    | 286,869   |   |   |   | --- |   |   |   | 286,869 |   |
| Total      assets                                                                         |   | $                       | 1,032,188 |   |   |   | (4,461 | ) |   |   | 1,027,727 |   |
|                                                                                      |   |                    |      |   |   |   |   |   |   |   |   |   |
| Liabilities,      Minority Interest, and Stockholder's Equity                             |   |                    |      |   |   |   |   |   |   |   |   |   |
| Total current      liabilities                                                            |   |                    | 89,235    |   |   |   | --- |   |   |   | 89,235 |   |
|                                                                                      |   |                    |      |   |   |   |   |   |   |   |   |   |
| Long-term      debt                                                                       |   |                    | 555,667   |   |   |   | --- |   |   |   | 555,667 |   |
| Obligations      under capital leases, excluding current maturities                       |   |                    | 2,306     |   |   |   | --- |   |   |   | 2,306 |   |
| Obligation      under capital lease due to related party, excluding current      maturity |   |                    | 441       |   |   |   | --- |   |   |   | 441 |   |
| Deferred      income taxes                                                                |   |                    | 103,207   |   |   |   | (1,342 | ) |   |   | 101,865 |   |

----

| Other      liabilities                                                    |   |   | 17,175    |   |   |   | ---    |   |   |   | 17,175    |   |
|---------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
| Total      liabilities                                                    |   |   | 768,031   |   |   |   | (1,342 | )      |   |   | 766,689   |   |
|                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| Minority      interest                                                    |   |   | 6,528     |   |   |   | (1,026 | )      |   |   | 5,502     |   |
|                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| Stockholder's      equity:                                                |   |   |      |   |   |   |   |   |   |   |      |   |
| Class A      common stock (no par)                                        |   |   | 206,622   |   |   |   | ---    |   |   |   | 206,622   |   |
| Paid-in      capital                                                      |   |   | 39,996    |   |   |   | ---    |   |   |   | 39,996    |   |
| Retained      earnings                                                    |   |   | 11,011    |   |   |   | (2,093 | )      |   |   | 8,918     |   |
| Total      stockholder’s equity                                     |   |   | 257,629   |   |   |   | (2,093 | )      |   |   | 255,536   |   |
| Total      liabilities, minority interest, and stockholder's equity       |   |   | 1,032,188 |   |   |   | (4,461 | )      |   |   | 1,027,727 |   |
|                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| 1      As reported on Form 10-Q for the quarter ended March 31,      2008 |   |

|                                                                                             |   | Three months      ended March 31, 2008 |    |
|--------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                             |   | As previously reported1                |    |   | Adjustments |   |   | As      restated |   |
| Revenues                                                                                         |   | $                                      | 134,674 |   |   |   | --- |   |   |   | 134,674 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Cost of goods      sold (exclusive of depreciation and amortization shown separately      below) |   |                                   | 51,311  |   |   |   | --- |   |   |   | 51,311 |   |
| Selling,      general and administrative expenses                                                |   |                                   | 46,406  |   |   |   | --- |   |   |   | 46,406 |   |
| Depreciation      and amortization expense                                                       |   |                                   | 22,782  |   |   |   | 4,461 |   |   |   | 27,243 |   |
| Operating      income                                                                            |   |                                   | 14,175  |   |   |   | (4,461 | ) |   |   | 9,714 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Other income      (expense):                                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                            |   |                                   | (8,685  | ) |   |   | --- |   |   |   | (8,685 | ) |
| Loan and      senior note fees                                                                   |   |                                   | (223    | ) |   |   | --- |   |   |   | (223 | ) |
| Interest      income                                                                             |   |                                   | 81      |   |   |   | --- |   |   |   | 81 |   |
| Minority      interest                                                                           |   |                                   | (50     | ) |   |   | 1,026 |   |   |   | 976 |   |
| Other      expense, net                                                                          |   |                                   | (8,877  | ) |   |   | 1,026 |   |   |   | (7,851 | ) |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Income before      income tax expense                                                            |   |                                   | 5,298   |   |   |   | (3,435 | ) |   |   | 1,863 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Income tax      expense                                                                          |   |                                   | 2,769   |   |   |   | (1,342 | ) |   |   | 1,427 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                  |   | $                                      | 2,529   |   |   |   | (2,093 | ) |   |   | 436 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Cash provided      by operating activities                                                       |   | $                                      | 35,524  |   |   |   | --- |   |   |   | 35,524 |   |
| Cash used in      investing activities                                                           |   |                                   | (50,830 | ) |   |   | --- |   |   |   | (50,830 | ) |
| Cash used in      financing activities                                                           |   |                                   | 19,397  |   |   |   | --- |   |   |   | 19,397 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |
| 1      As reported on Form 10-Q for the quarter ended March 31,      2008                        |   |

----

| ·   | We decreased      depreciation expense $872,000 to correct an error in calculating      depreciation in the initial year an asset is placed in      service.  We originally recorded our estimated depreciation      expense evenly throughout the year with periodic adjustments based upon      improved estimates or actual results.  In accordance with GAAP      we now initially record depreciation expense in the month an asset is      placed in service.  Depreciation was improperly allocated among      quarters, but the year-end total was correct.  Therefore the      restatement impacts the quarterly results but not the December 31, 2007      year-end results; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      interest expense $382,000 to correct an interest capitalization error on      certain assets.  Our capitalized interest policy was too      restrictive and resulted in no interest capitalization on certain      qualifying capital expenditures.  Our capitalized interest      policy now conforms to GAAP; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We increased      depreciation expense $322,000 due to the recognition of depreciation on      additional capitalized interest; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | We increased      revenue $319,000 to correct a configuration error in the automated      interface between our unified billing system and our general      ledger; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We increased      revenue $133,000 to correct revenue recognition for a majority      noncontrolling interest in a subsidiary that was recognizing a certain      type of revenue on a cash basis rather than an accrual    basis; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      share-based compensation expense $42,000 to correct expense recognition      timing for options that did not vest in equal increments over the vesting      period; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      depreciation expense $38,000 due to a revision of the Alaska DigiTel      purchase price allocation, and; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      income tax expense $688,000 to record the income tax effect of the      corrections described above. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                             |   | Three Months      Ended March 31, 2007 |    |
|--------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                             |   | As previously reported1                |    |   | Adjustments |   |   | Reclassification |   |   | As      restated |   |
| Revenues                                                                                         |   | $                                      | 124,579 |   |   |   | 452 |   |   |   | --- |   |   |   | 125,031 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods      sold (exclusive of depreciation and amortization shown separately      below) |   |                                   | 43,113  |   |   |   | --- |   |   |   | 4,877 |   |   |   | 47,990 |   |
| Selling,      general and administrative expenses                                                |   |                                   | 48,524  |   |   |   | (42 | ) |   |   | (4,877 | ) |   |   | 43,605 |   |
| Depreciation      and amortization expense                                                       |   |                                   | 21,454  |   |   |   | (588 | ) |   |   | --- |   |   |   | 20,866 |   |
| Operating      income                                                                            |   |                                   | 11,488  |   |   |   | 1,082 |   |   |   | --- |   |   |   | 12,570 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income      (expense):                                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                            |   |                                   | (8,700  | ) |   |   | 382 |   |   |   | --- |   |   |   | (8,318 | ) |
| Loan and      senior note fees                                                                   |   |                                   | (180    | ) |   |   | --- |   |   |   | --- |   |   |   | (180 | ) |
| Interest      income                                                                             |   |                                   | 184     |   |   |   | --- |   |   |   | --- |   |   |   | 184 |   |
| Minority      interest                                                                           |   |                                   | 13      |   |   |   | --- |   |   |   | --- |   |   |   | 13 |   |
| Other      expense, net                                                                          |   |                                   | (8,683  | ) |   |   | 382 |   |   |   | --- |   |   |   | (8,301 | ) |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before      income tax expense                                                            |   |                                   | 2,805   |   |   |   | 1,464 |   |   |   | --- |   |   |   | 4,269 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax      expense                                                                          |   |                                   | 1,275   |   |   |   | 688 |   |   |   | --- |   |   |   | 1,963 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                  |   | $                                      | 1,530   |   |   |   | 776 |   |   |   | --- |   |   |   | 2,306 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash provided      by operating activities                                                       |   | $                                      | 21,467  |   |   |   | 382 |   |   |   | --- |   |   |   | 21,849 |   |
| Cash used in      investing activities                                                           |   |                                   | (45,361 | ) |   |   | (382 | ) |   |   | --- |   |   |   | (45,743 | ) |
| Cash used in      financing activities                                                           |   |                                   | (24,019 | ) |   |   | --- |   |   |   | --- |   |   |   | (24,019 | ) |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1      As reported on Form 10-Q for the quarter ended March 31,      2007                        |   |

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

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

| Three month      period ended March 31,                          |   | 2008   |   |   | 2007(as      restated) |   |
|------------------------------------------------------------------|--------|--------|--------|--------|------------------------|--------|
| Decrease in      accounts receivable                             |   | $      | 9,466  |   |                   |   | 2,067 |   |
| Increase in      prepaid expenses                                |   |   | (1,008 | )      |                   |   | (975 | ) |
| Increase in      inventories                                     |   |   | (1,273 | )      |                   |   | (937 | ) |
| Decrease in      other current assets                            |   |   | 23     |   |                   |   | 699 |   |
| Increase in      accounts payable                                |   |   | 2,784  |   |                   |   | 124 |   |
| Increase      (decrease) in deferred revenues                    |   |   | 571    |   |                   |   | (880 | ) |
| Decrease in      accrued payroll and payroll related obligations |   |   | (1,170 | )      |                   |   | (706 | ) |
| Increase in      accrued liabilities                             |   |   | 756    |   |                   |   | 591 |   |
| Decrease in      accrued interest                                |   |   | (5,851 | )      |                   |   | (5,761 | ) |
| Increase in      subscriber deposits                             |   |   | 79     |   |                   |   | 38 |   |
| Increase in      components of other long-term liabilities       |   |   | 309    |   |                   |   | 316 |   |
|                                                             |   | $      | 4,686  |   |                   |   | (5,424 | ) |

----

|   | We paid no      income taxes and received no income tax refunds during the three months      ended March 31, 2008 and 2007. |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | During the      three months ended March 31, 2008 and 2007, we capitalized interest      expense of $870,000 and $590,000,respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | During the      three months ended March 31, 2008, we had $3.4 million in non-cash      additions to property and equipment due to unpaid purchases as of March      31, 2008.  During the three months ended March 31, 2007, we paid      $900,000 for property and equipment additions that had been accrued in      prior periods. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In February      2007, our President and Chief Executive Officer tendered 112,000 shares of      his GCI Class A common stock to us at $15.50 per share for a total value      of $1.7 million.  The stock tender was in lieu of a cash payment      on his note receivable with related party and a note receivable with      related party issued upon stock option exercise, both of which originated      in 2002. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Intangible      Assets |
|-----|------------------------|

|                      |   | Three Months      Ended |   |
|---------------------------|--------|-------------------------|--------|
|                      |   | March      31,          |   |
|                      |   | 2008                    |   | 2007 |   |
| Amortization      expense | $      | 915                     |   |   | 821 |   |

| Years Ending      December 31, |   |   |   |
|--------------------------------|--------|--------|--------|
| 2008                           |   | $      | 3,456  |   |
| 2009                           |   |   | 3,160  |   |
| 2010                           |   |   | 2,642  |   |
| 2011                           |   |   | 1,287  |   |
| 2012                           |   |   | 722    |   |

----

|                                       |   | Shares(in      thousands) |   |   | WeightedAverageExercise      Price |   |
|--------------------------------------------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding      at December 31, 2007      |   |                      | 6,751  |   |                               | $      | 9.37 |   |
|                                       |   |                      |   |   |                               |   |   |   |
| Options      granted                       |   |                      | 315    |   |                               | $      | 7.95 |   |
| Restricted      stock awards granted       |   |                      | 20     |   |                               | $      | 6.44 |   |
| Exercised                                  |   |                      | (2     | )      |                               | $      | 6.12 |   |
| Restricted      stock awards vested        |   |                      | (107   | )      |                               | $      | 11.77 |   |
| Forfeited                                  |   |                      | (72    | )      |                               | $      | 8.96 |   |
| Outstanding      at March 31, 2008         |   |                      | 6,905  |   |                               | $      | 9.26 |   |
|                                       |   |                      |   |   |                               |   |   |   |
| Available for      grant at March 31, 2008 |   |                      | 1,321  |   |                               |   |   |   |

|                                                          |   | Shares(in      thousands) |   |   | WeightedAverageExercise      Price |   |
|---------------------------------------------------------------|--------|---------------------------|--------|--------|------------------------------------|--------|
| Outstanding      at December 31, 2007 and March 31, 2008 |   |                      | 150    |   |                               | $      | 6.50 |   |
|                                                          |   |                      |   |   |                               |   |   |   |
| Available for      grant at March 31, 2008                    |   |                      | ---    |   |                               |   |   |   |

----

| (5) | Industry      Segments Data |
|-----|-----------------------------|

----

| Three months      ended March 31,                                                                                                                      |   | Consumer |   |   | Network      Access |   |   | Commercial |   |   | Managed      Broadband |   |   | Total      Reportable Segments |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|---------------------|--------|--------|------------|--------|--------|------------------------|--------|--------|--------------------------------|--------|
| 2008 (as      restated)                                                                                                                                |   |     |   |   |                |   |   |       |   |   |                   |   |   |                           |   |
| Revenues:                                                                                                                                              |   |     |   |   |                |   |   |       |   |   |                   |   |   |                           |   |
| Intersegment                                                                                                                                           |   | $        | ---    |   |                |   | 301    |       |   |   | 1,349                  |   |   |                           | ---    |   |   |   | 1,650 |   |
| External                                                                                                                                               |   |     | 61,383 |   |                |   | 39,174 |       |   |   | 26,591                 |   |   |                           | 7,526  |   |   |   | 134,674 |   |
| Total      revenues                                                                                                                                    |   | $        | 61,383 |   |                |   | 39,475 |       |   |   | 27,940                 |   |   |                           | 7,526  |   |   |   | 136,324 |   |
| Earnings from      external operations before depreciation, amortization, net interest      expense, income taxes and share-based compensation expense |   | $        | 12,254 |   |                |   | 20,137 |       |   |   | 4,325                  |   |   |                           | 2,477  |   |   |   | 39,193 |   |
|                                                                                                                                                   |   |     |   |   |                |   |   |       |   |   |                   |   |   |                           |   |   |   |   |   |   |
| 2007 (as      restated)                                                                                                                                |   |     |   |   |                |   |   |       |   |   |                   |   |   |                           |   |   |   |   |   |   |
| Revenues:                                                                                                                                              |   |     |   |   |                |   |   |       |   |   |                   |   |   |                           |   |   |   |   |   |   |
| Intersegment                                                                                                                                           |   | $        | ---    |   |                |   | 271    |       |   |   | 1,625                  |   |   |                           | ---    |   |   |   | 1,896 |   |
| External                                                                                                                                               |   |     | 53,603 |   |                |   | 40,327 |       |   |   | 24,181                 |   |   |                           | 6,920  |   |   |   | 125,031 |   |
| Total      revenues                                                                                                                                    |   | $        | 53,603 |   |                |   | 40,598 |       |   |   | 25,806                 |   |   |                           | 6,920  |   |   |   | 126,927 |   |
| Earnings from      external operations before depreciation, amortization, net interest      expense, income taxes and share-based compensation expense |   | $        | 9,958  |   |                |   | 19,765 |       |   |   | 3,079                  |   |   |                           | 1,632  |   |   |   | 34,434 |   |

|                                                        |   | Three Months      Ended |    |
|-------------------------------------------------------------|--------|-------------------------|---------|
|                                                        |   | March      31,          |    |
|                                                        |   | 2008                    |    |   | 2007 (as      restated) |   |
| Reportable      segment revenues                            |   | $                       | 136,324 |   |   |   | 126,927 |   |
| Less      intersegment revenues eliminated in consolidation |   |                    | 1,650   |   |   |   | 1,896 |   |
| Consolidated      revenues                                  |   | $                       | 134,674 |   |   |   | 125,031 |   |

----

|                                                                                                                                                                                      |   | Three Months      Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                                                                                      |   | March      31,          |   |
|                                                                                                                                                                                      |   | 2008 (as      restated) |   |   | 2007 (as      restated) |   |
| Reportable      segment earnings from external operations before depreciation and      amortization expense, net interest expense, income taxes and share-based      compensation expense |   | $                       | 39,193 |   |   |   | 34,434 |   |
| Less      depreciation and amortization expense                                                                                                                                           |   |                    | 27,243 |   |   |   | 20,866 |   |
| Less      share-based compensation expense                                                                                                                                                |   |                    | 1,260  |   |   |   | 985 |   |
| Less other      income                                                                                                                                                                    |   |                    | 976    |   |   |   | 13 |   |
| Consolidated      operating income                                                                                                                                                        |   |                    | 9,714  |   |   |   | 12,570 |   |
| Less other      expense, net                                                                                                                                                              |   |                    | 7,851  |   |   |   | 8,301 |   |
| Consolidated      income before income tax expense                                                                                                                                        |   | $                       | 1,863  |   |   |   | 4,269 |   |

| (6) | Commitments      and Contingencies |
|-----|------------------------------------|

----

| (7) | Subsequent      Events |
|-----|------------------------|

|   | In May 2008,      we executed a binding contract to provide AT&T, Inc. (“AT&T”) a      large amount of undersea fiber optic capacity between Alaska and the lower      48 states. Under the agreement AT&T will receive a large initial      increment of capacity on our two undersea fiber networks connecting Alaska      with Washington and Oregon. AT&T was also granted options to acquire      certain additional amounts of capacity in the future. We expect to receive      cash payments in excess of $35.0 million from AT&T in connection with      the turn-up of the initial capacity in 2008. Future payments for      additional capacity are not expected to exceed $10.0 million. In addition      AT&T will make payments to GCI associated with the operation and      maintenance of their portion of the undersea fiber networks. We anticipate      the transaction will be accounted for as lease with deferred revenue to be      recognized over the estimated life of theIRU. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Capital      Lease Amendment |
|--------|------------------------------|

|   | On April 8,      2008, we signed an amendment to a long-term capital lease agreement with      our President and CEO and his wife for property we occupy.  The      amended lease terminates on September 30, 2026.    We      will increase our existing capital lease asset and liability by $1.3      million in the second quarter of 2008 to record the extension of this      capital lease. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | A summary of      future minimum lease payments for this lease follows (amount in      thousands): |
|--------|----------------------------------------------------------------------------------------------------|

| Years ending      December 31:    |   |   |   |
|-----------------------------------|--------|--------|--------|
| 2008                              |   | $      | 194    |   |
| 2009                              |   |   | 258    |   |
| 2010                              |   |   | 258    |   |
| 2011                              |   |   | 261    |   |
| 2012                              |   |   | 270    |   |
| 2013 and      thereafter          |   |   | 4,691  |   |
| Total minimum      lease payments |   | $      | 5,932  |   |
|                              |   |   |   |   |

| Total      Leverage Ratio (as defined) |   | Applicable      Margin |   |
|----------------------------------------|--------|------------------------|--------|
| >3.75                               |   |                   | 4.25   | % |
| >3.25 but      <3.75             |   |                   | 3.75   | % |
| >2.75 but      <3.25             |   |                   | 3.25   | % |
| <2.75                               |   |                   | 2.75   | % |

----

| Years ending      December 31, |   |   |    |
|--------------------------------|--------|--------|---------|
| 2008                           |   | $      | 2,870   |   |
| 2009                           |   |   | 3,577   |   |
| 2010                           |   |   | 3,558   |   |
| 2011                           |   |   | 173,763 |   |
| 2012                           |   |   | 171,992 |   |
|                           |   | $      | 355,760 |   |

----

| ·   | We increased      depreciation expense $4.5 million to correct depreciation expense for a      failure to change the estimated useful life of certain assets that were      expected to be decommissioned at or near the end of 2008.  The      assets should have been depreciated over the remaining period they were      expected to be used; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      minority interest expense $1.0 million to record the minority interest      portion of the correction described above,and; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      income tax expense $1.3 million to record the income tax effect of the      corrections described above. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

|                                                        |   | March 31,      2008     |    |
|-------------------------------------------------------------|--------|-------------------------|---------|
| Consolidated      Condensed Balance Sheet                   |   | As previously reported1 |    |   | Adjustments |   |   | As      restated |   |
| Assets                                                      |   |                    |    |   |   |   |   |   |   |
| Total current      assets                                   |   | $                       | 140,694 |   |   |   | --- |   |   |   | 140,694 |   |
|                                                        |   |                    |    |   |   |   |   |   |   |   |   |   |
| Property and      equipment in service, net of depreciation |   |                    | 519,675 |   |   |   | (4,461 | ) |   |   | 515,214 |   |
| Construction      in progress                               |   |                    | 84,950  |   |   |   | --- |   |   |   | 84,950 |   |
| Net property      and equipment                             |   |                    | 604,625 |   |   |   | (4,461 | ) |   |   | 600,164 |   |

----

|                                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
|-------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
| Total other      assets                                                                   |   |   | 286,869   |   |   |   | ---    |   |   |   | 286,869   |   |
| Total      assets                                                                         |   | $      | 1,032,188 |   |   |   | (4,461 | )      |   |   | 1,027,727 |   |
|                                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| Liabilities,      Minority Interest, and Stockholder's Equity                             |   |   |      |   |   |   |   |   |   |   |      |   |
| Total current      liabilities                                                            |   |   | 89,235    |   |   |   | ---    |   |   |   | 89,235    |   |
|                                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| Long-term      debt                                                                       |   |   | 555,667   |   |   |   | ---    |   |   |   | 555,667   |   |
| Obligations      under capital leases, excluding current maturities                       |   |   | 2,306     |   |   |   | ---    |   |   |   | 2,306     |   |
| Obligation      under capital lease due to related party, excluding current      maturity |   |   | 441       |   |   |   | ---    |   |   |   | 441       |   |
| Deferred      income taxes                                                                |   |   | 103,207   |   |   |   | (1,342 | )      |   |   | 101,865   |   |
| Other      liabilities                                                                    |   |   | 17,175    |   |   |   | ---    |   |   |   | 17,175    |   |
| Total      liabilities                                                                    |   |   | 768,031   |   |   |   | (1,342 | )      |   |   | 766,689   |   |
|                                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| Minority      interest                                                                    |   |   | 6,528     |   |   |   | (1,026 | )      |   |   | 5,502     |   |
|                                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| Stockholder's      equity:                                                                |   |   |      |   |   |   |   |   |   |   |      |   |
| Class A      common stock (no par)                                                        |   |   | 206,622   |   |   |   | ---    |   |   |   | 206,622   |   |
| Paid-in      capital                                                                      |   |   | 39,996    |   |   |   | ---    |   |   |   | 39,996    |   |
| Retained      earnings                                                                    |   |   | 11,011    |   |   |   | (2,093 | )      |   |   | 8,918     |   |
| Total      stockholder’s equity                                                     |   |   | 257,629   |   |   |   | (2,093 | )      |   |   | 255,536   |   |
| Total      liabilities, minority interest, and stockholder's equity                       |   |   | 1,032,188 |   |   |   | (4,461 | )      |   |   | 1,027,727 |   |
|                                                                                      |   |   |      |   |   |   |   |   |   |   |      |   |
| 1      As reported on Form 10-Q for the quarter ended March 31,      2008                 |   |

|                                                                                             |   |  Three Months      Ended March 31, 2008 |    |
|--------------------------------------------------------------------------------------------------|--------|----------------------------------------------|---------|
|                                                                                             |   | As previously reported1                      |    |   | Adjustments |   |   | As      restated |   |
| Revenues                                                                                         |   | $                                            | 134,674 |   |   |   | --- |   |   |   | 134,674 |   |
|                                                                                             |   |                                         |    |   |   |   |   |   |   |   |   |   |
| Cost of goods      sold (exclusive of depreciation and amortization shown separately      below) |   |                                         | 51,311  |   |   |   | --- |   |   |   | 51,311 |   |
| Selling,      general and administrative expenses                                                |   |                                         | 46,406  |   |   |   | --- |   |   |   | 46,406 |   |
| Depreciation      and amortization expense                                                       |   |                                         | 22,782  |   |   |   | 4,461 |   |   |   | 27,243 |   |
| Operating      income                                                                            |   |                                         | 14,175  |   |   |   | (4,461 | ) |   |   | 9,714 |   |
|                                                                                             |   |                                         |    |   |   |   |   |   |   |   |   |   |
| Other income      (expense):                                                                     |   |                                         |    |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                            |   |                                         | (8,685  | ) |   |   | --- |   |   |   | (8,685 | ) |
| Loan and      senior note fees                                                                   |   |                                         | (223    | ) |   |   | --- |   |   |   | (223 | ) |
| Interest      income                                                                             |   |                                         | 81      |   |   |   | --- |   |   |   | 81 |   |
| Minority      interest                                                                           |   |                                         | (50     | ) |   |   | 1,026 |   |   |   | 976 |   |
| Other      expense, net                                                                          |   |                                         | (8,877  | ) |   |   | 1,026 |   |   |   | (7,851 | ) |
|                                                                                             |   |                                         |    |   |   |   |   |   |   |   |   |   |
| Income before      income tax expense                                                            |   |                                         | 5,298   |   |   |   | (3,435 | ) |   |   | 1,863 |   |
|                                                                                             |   |                                         |    |   |   |   |   |   |   |   |   |   |
| Income tax      expense                                                                          |   |                                         | 2,769   |   |   |   | (1,342 | ) |   |   | 1,427 |   |
|                                                                                             |   |                                         |    |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                  |   | $                                            | 2,529   |   |   |   | (2,093 | ) |   |   | 436 |   |
|                                                                                             |   |                                         |    |   |   |   |   |   |   |   |   |   |
| Cash provided      by operating activities                                                       |   | $                                            | 35,524  |   |   |   | --- |   |   |   | 35,524 |   |
| Cash used in      investing activities                                                           |   |                                         | (50,830 | ) |   |   | --- |   |   |   | (50,830 | ) |
| Cash used in      financing activities                                                           |   |                                         | 19,397  |   |   |   | --- |   |   |   | 19,397 |   |
|                                                                                             |   |                                         |    |   |   |   |   |   |   |   |   |   |
| 1      As reported on Form 10-Q for the quarter ended March 31,      2008                        |   |

----

| ·   | We decreased      depreciation expense $872,000 to correct an error in calculating      depreciation in the initial year an asset is placed in      service.  We originally recorded our estimated depreciation      expense evenly throughout the year with periodic adjustments based upon      improved estimates or actual results.  In accordance with GAAP      we now initially record depreciation expense in the month an asset is      placed in service.  Depreciation was improperly allocated among      quarters, but the year-end total was correct.  Therefore the      restatement impacts the quarterly results but not the December 31, 2007      year-end results; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      interest expense $382,000 to correct an interest capitalization error on      certain assets.  Our capitalized interest policy was too      restrictive and resulted in no interest capitalization on certain      qualifying capital expenditures.  Our capitalized interest      policy now conforms to GAAP; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We increased      depreciation expense $322,000 due to the recognition of depreciation on      additional capitalized interest; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | We increased      revenue $319,000 to correct a configuration error in the automated      interface between our unified billing system and our general      ledger; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We increased      revenue $133,000 to correct revenue recognition for a majority      noncontrolling interest in a subsidiary that was recognizing a certain      type of revenue on a cash basis rather than an accrual    basis; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      share-based compensation expense $42,000 to correct expense recognition      timing for options that did not vest in equal increments over the vesting      period; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      depreciation expense $38,000 due to a revision of the Alaska DigiTel      purchase price allocation, and; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | We decreased      income tax expense $688,000 to record the income tax effect of the      corrections described above. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                             |   | Three Months      Ended March 31, 2007 |    |
|--------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                             |   | As previously reported1                |    |   | Adjustments |   |   | Reclassification |   |   | As      restated |   |
| Revenues                                                                                         |   | $                                      | 124,579 |   |   |   | 452 |   |   |   | --- |   |   |   | 125,031 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods      sold (exclusive of depreciation and amortization shown separately      below) |   |                                   | 43,113  |   |   |   | --- |   |   |   | 4,877 |   |   |   | 47,990 |   |
| Selling,      general and administrative expenses                                                |   |                                   | 48,524  |   |   |   | (42 | ) |   |   | (4,877 | ) |   |   | 43,605 |   |
| Depreciation      and amortization expense                                                       |   |                                   | 21,454  |   |   |   | (588 | ) |   |   | --- |   |   |   | 20,866 |   |
| Operating      income                                                                            |   |                                   | 11,488  |   |   |   | 1,082 |   |   |   | --- |   |   |   | 12,570 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income      (expense):                                                                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                            |   |                                   | (8,700  | ) |   |   | 382 |   |   |   | --- |   |   |   | (8,318 | ) |
| Loan and      senior note fees                                                                   |   |                                   | (180    | ) |   |   | --- |   |   |   | --- |   |   |   | (180 | ) |
| Interest      income                                                                             |   |                                   | 184     |   |   |   | --- |   |   |   | --- |   |   |   | 184 |   |
| Minority      interest                                                                           |   |                                   | 13      |   |   |   | --- |   |   |   | --- |   |   |   | 13 |   |
| Other      expense, net                                                                          |   |                                   | (8,683  | ) |   |   | 382 |   |   |   | --- |   |   |   | (8,301 | ) |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before      income tax expense                                                            |   |                                   | 2,805   |   |   |   | 1,464 |   |   |   | --- |   |   |   | 4,269 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax      expense                                                                          |   |                                   | 1,275   |   |   |   | 688 |   |   |   | --- |   |   |   | 1,963 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                  |   | $                                      | 1,530   |   |   |   | 776 |   |   |   | --- |   |   |   | 2,306 |   |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash provided      by operating activities                                                       |   | $                                      | 21,467  |   |   |   | 382 |   |   |   | --- |   |   |   | 21,849 |   |
| Cash used in      investing activities                                                           |   |                                   | (45,361 | ) |   |   | (382 | ) |   |   | --- |   |   |   | (45,743 | ) |
| Cash used in      financing activities                                                           |   |                                   | (24,019 | ) |   |   | --- |   |   |   | --- |   |   |   | (24,019 | ) |
|                                                                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1      As reported on Form 10-Q for the quarter ended March 31,      2007                        |   |

----

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

----

----

----

----

|                                              |   |                    |   |   | Percentage    |   |
|---------------------------------------------------|--------|-------------------------|--------|--------|---------------|--------|
|                                              |   | Three      Months Ended |   |   | Change 1 |   |
|                                              |   | March      31,          |   |   | 2008          |   |
| (Unaudited)                                       |   | 2008                    |   |   | 2007          |   |   | vs.      2007 |   |
| Statements      of Operations Data:               |   |                    |   |   |          |   |   |   |   |
| Revenues:                                         |   |                    |   |   |          |   |   |   |   |
| Consumer      segment                             |   |                    | 45.6   | %      |          |   | 42.9 | % |   |   | 14.5 | % |
| Network      Access segment                       |   |                    | 29.1   | %      |          |   | 32.3 | % |   |   | (2.9 | %) |
| Commercial      segment                           |   |                    | 19.7   | %      |          |   | 19.3 | % |   |   | 10.0 | % |
| Managed      Broadband segment                    |   |                    | 5.6    | %      |          |   | 5.5 | % |   |   | 8.8 | % |
| Total      revenues                               |   |                    | 100.0  | %      |          |   | 100.0 | % |   |   | 7.7 | % |
| Selling,      general and administrative expenses |   |                    | 34.5   | %      |          |   | 34.9 | % |   |   | 6.4 | % |
| Depreciation      and amortization expense        |   |                    | 20.2   | %      |          |   | 16.7 | % |   |   | 30.6 | % |
| Operating      income                             |   |                    | 7.2    | %      |          |   | 10.1 | % |   |   | (22.7 | %) |
| Other      expense, net                           |   |                    | 5.8    | %      |          |   | 6.6 | % |   |   | (5.4 | %) |
| Income before      income tax expense             |   |                    | 1.4    | %      |          |   | 3.4 | % |   |   | (56.4 | %) |
| Net      income                                   |   |                    | 0.3    | %      |          |   | 1.8 | % |   |   | (81.1 | %) |

| 1  Percentage      change in underlying data. |   |   |   |
|---------------------------------------------------------|--------|--------|--------|

----

|                                |   | 2008   |   |   | 2007   |   |   | Percentage      Change |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|------------------------|--------|
| Voice                               |   | $      | 11,844 |   |   |   | 11,353 |                   |   |   | 4.3 | % |
| Video                               |   |   | 25,647 |   |   |   | 23,631 |                   |   |   | 8.5 | % |
| Data                                |   |   | 10,096 |   |   |   | 7,947  |                   |   |   | 27.0 | % |
| Wireless                            |   |   | 13,796 |   |   |   | 10,672 |                   |   |   | 29.3 | % |
| Total      Consumer segment revenue |   | $      | 61,383 |   |   |   | 53,603 |                   |   |   | 14.5 | % |

|                                           |   | 2008   |   |   | 2007   |   |   | Percentage      Change |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|------------------------|--------|
| Voice                                          |   | $      | 5,052  |   |   |   | 5,064  |                   |   |   | (0.2 | %) |
| Video                                          |   |   | 9,930  |   |   |   | 8,858  |                   |   |   | 12.1 | % |
| Data                                           |   |   | 1,826  |   |   |   | 1,269  |                   |   |   | 43.9 | % |
| Wireless                                       |   |   | 7,893  |   |   |   | 6,764  |                   |   |   | 16.7 | % |
| Total      Consumer segment Cost of Goods Sold |   | $      | 24,701 |   |   |   | 21,955 |                   |   |   | 12.5 | % |

|                          |   | 2008 |   |   | 2007   |   |   | Percentage      Change |   |
|-------------------------------|--------|------|--------|--------|--------|--------|--------|------------------------|--------|
| Consumer      segment EBITDAS |   | $    | 12,254 |   |   |   | 9,958  |                   |   |   | 23.1 | % |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | March      31, |    |   | Percentage |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2008           |    |   | 2007       |   |   | Change |   |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |    |   |       |   |   |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |           | 90,400  |   |       |   | 89,600 |   |   |   | 0.9 | % |
| Long-distance      minutes carried (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |           | 33.7    |   |       |   | 34.2 |   |   |   | (1.5 | %) |
| Total local access lines in service2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |           | 76,800  |   |       |   | 67,400 |   |   |   | 14.0 | % |
| Local access lines in service on GCI      facilities2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |           | 55,500  |   |       |   | 37,400 |   |   |   | 48.4 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |           |    |   |       |   |   |   |   |   |   |   |
| Video:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |    |   |       |   |   |   |   |   |   |   |
| Basic subscribers3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |           | 130,700 |   |       |   | 124,500 |   |   |   | 5.0 | % |
| Digital programming tier subscribers4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |           | 68,100  |   |       |   | 60,600 |   |   |   | 12.4 | % |
| HD/DVR converter boxes5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           | 55,400  |   |       |   | 34,600 |   |   |   | 60.1 | % |
| Homes      passed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |           | 225,700 |   |       |   | 220,100 |   |   |   | 2.5 | % |
| Average monthly gross revenue per      subscriber6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $              | 66.09   |   |       | $      | 63.38 |   |   |   | 5.4 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |           |    |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |           |    |   |       |   |   |   |   |   |   |   |
| Cable modem subscribers7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           | 90,900  |   |       |   | 81,300 |   |   |   | 11.8 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |           |    |   |       |   |   |   |   |   |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |           |    |   |       |   |   |   |   |   |   |   |
| Wireless lines in service8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |           | 73,000  |   |       |   | 60,000 |   |   |   | 21.7 | % |
| Average monthly gross revenue per      subscriber9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $              | 56.76   |   |       | $      | 53.59 |   |   |   | 5.9 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| 1 A      long-distance subscriber is defined as a customer account that is invoiced      a monthly long-distance plan fee or has made a long-distance call during      the month.2 A      local access line in service is defined as a revenue generating circuit or      channel connecting a customer to the public switched telephone      network.3 A      basic cable subscriber is defined as one basic tier of service delivered      to an address or separate subunits thereof regardless of the number of      outlets purchased.4 A      digital programming tier subscriber is defined as one digital programming      tier of service delivered to an address or separate subunits thereof      regardless of the number of outlets or digital programming tiers      purchased. Digital programming tier subscribers are a subset of basic      subscribers.5 A      high definition/digital video recorder ("HD/DVR") converter box is defined      as one box rented by a digital programming or basic tier subscriber. A      digital programming or basic tier subscriber is not required to rent an      HD/DVR converter box to receive service.6 Quarter-to-date      average monthly consumer video revenues divided by the average of consumer      video basic subscribers at the beginning and ending of the      period.7 A      cable modem subscriber is defined by the purchase of cable modem service      regardless of the level of service purchased. If one entity purchases      multiple cable modem service access points, each access point is counted      as a subscriber. Cable modem subscribers may also be video basic      subscribers though basic cable service is not required to receive cable      modem service.8 A      wireless line in service is defined as a revenue generating wireless      device.9 Quarter-to-date      average monthly consumer wireless revenues divided by the average of      consumer wireless subscribers at the beginning and ending of the      period. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |

----

|   | · | A 6.4%      increase in programming services revenue to $20.7 million primarily      resulting from an increase in basic and digital programming tier      subscribers, and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 19.2%      increase in equipment rental revenue to $4.6 million primarily resulting      from our customers’ increased use of digital distribution      technology. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                      |   | 2008   |   |   | 2007   |   |   | PercentageChange |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|------------------|--------|
| Voice                                     |   | $      | 21,942 |   |   |   | 24,437 |             |   |   | (10.2 | %) |
| Data                                      |   |   | 16,839 |   |   |   | 15,034 |             |   |   | 12.0 | % |
| Wireless                                  |   |   | 393    |   |   |   | 856    |             |   |   | (54.1 | %) |
| Total Network      Access segment revenue |   | $      | 39,174 |   |   |   | 40,327 |             |   |   | (2.9 | %) |

|                                                 |   | 2008   |   |   | 2007   |   |   | Percentage      Change |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|------------------------|--------|
| Voice                                                |   | $      | 7,308  |   |   |   | 7,592  |                   |   |   | (3.7 | %) |
| Data                                                 |   |   | 2,726  |   |   |   | 3,433  |                   |   |   | (20.6 | %) |
| Wireless                                             |   |   | 221    |   |   |   | 220    |                   |   |   | 0.5 | %  |
| Total Network      Access segment Cost of Goods Sold |   | $      | 10,255 |   |   |   | 11,245 |                   |   |   | 0.5 | %  |

|                                |   | 2008 |   |   | 2007   |   |   | Percentage      Change |   |
|-------------------------------------|--------|------|--------|--------|--------|--------|--------|------------------------|--------|
| Network      Access segment EBITDAS |   | $    | 20,137 |   |   |   | 19,765 |                   |   |   | 1.9 | % |

|                                                                                                                                                                                            |   |   |   |   | Percentage |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                                                                                                                                                                            |   | 2008   |   |   | 2007       |   |   | Change |   |
| Voice:                                                                                                                                                                                          |   |   |   |   |       |   |   |   |   |
| Long-distance      minutes carried (in millions)                                                                                                                                                |   |   | 314.6  |   |       |   | 315.8 |   |   |   | (0.4 | %) |
|                                                                                                                                                                                            |   |   |   |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                                           |   |   |   |   |       |   |   |   |   |   |   |   |
| Internet service provider access lines in      service1                                                                                                                                         |   |   | 2,600  |   |       |   | 3,100 |   |   |   | (16.1 | %) |
|                                                                                                                                                                                            |   |
| 1 An      Internet service provider access line in service is defined as a revenue      generating circuit or channel connecting a customer to the public switched      telephone network. |   |
|                                                                                                                                                                                            |   |

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|                                  |   | 2008   |   |   | 2007   |   |   | Percentage      Change |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|------------------------|--------|
| Voice                                 |   | $      | 7,214  |   |   |   | 7,857  |                   |   |   | (8.2 | %) |
| Video                                 |   |   | 1,820  |   |   |   | 1,766  |                   |   |   | 3.1 | % |
| Data                                  |   |   | 16,209 |   |   |   | 13,954 |                   |   |   | 16.2 | % |
| Wireless                              |   |   | 1,348  |   |   |   | 604    |                   |   |   | 123.2 | % |
| Total      Commercial segment revenue |   | $      | 26,591 |   |   |   | 24,181 |                   |   |   | 10.0 | % |

|                                             |   |   |   |   |   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                             |   | 2008   |   |   | 2007   |   |   | Percentage      Change |   |
| Voice                                            |   | $      | 4,929  |   |   |   | 4,920 |   |   |   | 0.2 | % |
| Video                                            |   |   | 388    |   |   |   | 402 |   |   |   | (3.5 | %) |
| Data                                             |   |   | 7,580  |   |   |   | 6,040 |   |   |   | 25.5 | % |
| Wireless                                         |   |   | 1,174  |   |   |   | 903 |   |   |   | 30.0 | % |
| Total      Commercial segment Cost of Goods Sold |   | $      | 14,071 |   |   |   | 12,265 |   |   |   | 14.7 | % |

|                            |   | 2008 |   |   | 2007   |   |   | Percentage      Change |   |
|---------------------------------|--------|------|--------|--------|--------|--------|--------|------------------------|--------|
| Commercial      segment EBITDAS |   | $    | 4,325  |   |   |   | 3,079  |                   |   |   | 40.5 | % |

|                                                        |   | March      31, |   |   | Percentage |   |
|-------------------------------------------------------------|--------|----------------|--------|--------|------------|--------|
|                                                        |   | 2008           |   |   | 2007       |   |   | Change |   |
| Voice:                                                      |   |           |   |   |       |   |   |   |   |
| Long-distance subscribers1                                  |   |           | 10,400 |   |       |   | 11,100 |   |   |   | (6.3 | %) |
| Long-distance      minutes carried (in millions)            |   |           | 32.8   |   |       |   | 32.9 |   |   |   | (0.3 | %) |
| Total local access lines in service2                        |   |           | 43,500 |   |       |   | 42,100 |   |   |   | 3.3 | % |
| Local access lines in service on GCI      facilities      2 |   |           | 13,400 |   |       |   | 9,100 |   |   |   | 47.3 | % |
|                                                        |   |           |   |   |       |   |   |   |   |   |   |   |
| Data:                                                       |   |           |   |   |       |   |   |   |   |   |   |   |
| Cable modem subscribers3                                    |   |           | 8,800  |   |       |   | 8,000 |   |   |   | 10.0 | % |
|                                                        |   |           |   |   |       |   |   |   |   |   |   |   |
| Wireless:                                                   |   |           |   |   |       |   |   |   |   |   |   |   |
| Wireless lines in service4                                  |   |           | 7,200  |   |       |   | 6,200 |   |   |   | 16.1 | % |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| 1 A      long-distance subscriber is defined as a customer account that is invoiced      a monthly long-distance plan fee or has made a long-distance call during      the month.2 A      local access line in service is defined as a revenue generating circuit or      channel connecting a customer to the public switched telephone      network.3 A      cable modem subscriber is defined by the purchase of cable modem service      regardless of the level of service purchased. If one entity purchases      multiple cable modem service access points, each access point is counted      as a subscriber.4 A      wireless line in service is defined as a revenue generating wireless      device. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |

|                              |   |   |   |   | Percentage |   |
|-----------------------------------|--------|--------|--------|--------|------------|--------|
|                              |   | 2008   |   |   | 2007       |   |   | Change |   |
| Managed      Broadband segment:   |   |   |   |   |       |   |   |   |   |
| SchoolAccess®      customers |   |   | 51     |   |       |   | 48 |   |   |   | 6.3 | % |
| Rural health      customers       |   |   | 33     |   |       |   | 22 |   |   |   | 57.1 | % |

----

----

|                                                    |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Line      extensions                                    |   | $      | 10,320 |   |   |   | 9,320 |   |
| Customer      premise equipment                         |   |   | 6,043  |   |   |   | 7,556 |   |
| Scalable      infrastructure                            |   |   | 1,209  |   |   |   | 1,268 |   |
| Support      capital                                    |   |   | 356    |   |   |   | 210 |   |
| Upgrade/rebuild                                         |   |   | 232    |   |   |   | 171 |   |
| Commercial                                              |   |   | 30     |   |   |   | 32 |   |
| Sub-total                                               |   |   | 18,190 |   |   |   | 18,557 |   |
| Remaining      reportable segments capital expenditures |   |   | 31,457 |   |   |   | 11,897 |   |
|                                                    |   | $      | 49,647 |   |   |   | 30,454 |   |

----

| Total      Leverage Ratio (as defined) |   | Applicable      Margin |   |
|----------------------------------------|--------|------------------------|--------|
| >3.75                               |   |                   | 4.25   | % |
| >3.25 but      <3.75             |   |                   | 3.75   | % |
| >2.75 but      <3.25             |   |                   | 3.25   | % |
| <2.75                               |   |                   | 2.75   | % |

| Years ending      December 31, |   |   |    |
|--------------------------------|--------|--------|---------|
| 2008                           |   | $      | 2,870   |   |
| 2009                           |   |   | 3,577   |   |
| 2010                           |   |   | 3,558   |   |
| 2011                           |   |   | 173,763 |   |
| 2012                           |   |   | 171,992 |   |
|                           |   | $      | 355,760 |   |

----

|                                               |   | Payments Due      by Period |      |
|----------------------------------------------------|--------|-----------------------------|-----------|
|                                               |   | Total                       |      |   | Less than 1      Year |   |   | 1 to      3Years |   |   | 4 to      5Years |   |   | More Than 5      Years |   |
|                                               |   | (Amounts in      thousands) |      |
| Long-term      debt                                |   | $                           | 676,389   |   |   |   | 3,006 |   |   |   | 7,221 |   |   |   | 345,857 |   |   |   | 320,305 |   |
| Interest on      long-term debt                    |   |                        | 257,884   |   |   |   | 46,490 |   |   |   | 96,968 |   |   |   | 79,626 |   |   |   | 34,800 |   |
| Capital lease      obligations, including interest |   |                        | 167,401   |   |   |   | 6,947 |   |   |   | 23,300 |   |   |   | 23,400 |   |   |   | 113,754 |   |
| Operating      lease commitments                   |   |                        | 55,429    |   |   |   | 10,979 |   |   |   | 15,535 |   |   |   | 10,600 |   |   |   | 18,315 |   |
| Purchase      obligations                          |   |                        | 74,828    |   |   |   | 60,028 |   |   |   | 14,800 |   |   |   | --- |   |   |   | --- |   |
| Other                                              |   |                        | 66,500    |   |   |   | 63,500 |   |   |   | 3,000 |   |   |   | --- |   |   |   | --- |   |
| Total      contractual obligations                 |   | $                           | 1,298,431 |   |   |   | 190,950 |   |   |   | 160,824 |   |   |   | 459,483 |   |   |   | 487,174 |   |

----

----

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|   | • | We plan to      expand our accounting policy documentation and implement policies and      procedures to periodically review our accounting policies to ensure      ongoing GAAP compliance. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | With regards      to our policies and procedures for the recording of depreciation expense      during interim reporting periods, we will revise our accounting policies      and implement procedures to ensure depreciation is recorded consistent      with GAAP for interim reportingperiods. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Exhibit      No. | Description                                                                                                                                                                                                          |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1             | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of      the Sarbanes-Oxley Act of 2002 by our President and    Director                                                    |
| 31.2             | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of      the Sarbanes-Oxley Act of 2002 by our Senior Vice President, Chief      Financial Officer, Secretary and Treasurer |
| 32.1             | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 by our President and    Director                                                    |
| 32.2             | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 by our Senior Vice President, Chief      Financial Officer, Secretary andTreasurer  |

----

| Signature                       |   | Title                                             |   | Date                          |
|---------------------------------|--------|---------------------------------------------------|--------|-------------------------------|
|                            |   |                                              |   |                          |
|                            |   |                                              |   |                          |
|  /s/      Ronald A. Duncan |   | President and      Director                       |   |        November 20, 2008 |
| Ronald A.      Duncan           |   | (Principal      Executive Officer)                |   |                          |
|                            |   |                                              |   |                          |
|  /s/ G.      Wilson Hughes |   | Vice      President and Director                  |   |        November 20, 2008 |
| G. Wilson      Hughes           |   |                                              |   |                          |
|                            |   |                                              |   |                          |
|  /s/      John M. Lowber   |   | Secretary,      Treasurer and Director            |   |        November 20, 2008 |
| John M.      Lowber             |   | (Principal      Financial and Accounting Officer) |   |                          |

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