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                                                                    EXHIBIT 99.1
 
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MCLEODUSA ACQUIRES QST COMMUNICATIONS OF PEORIA, IL
 
CEDAR RAPIDS, IA, JULY 27, 1998 - McLeodUSA Telecommunications Services, Inc., a
wholly-owned subsidiary of McLeodUSA Incorporated (Nasdaq/NMS:MCLD) announced
today that it has signed a definitive agreement to purchase QST Communications
Inc. of Peoria, Illinois. The cash and stock transaction requires regulatory
approval before closing.
 
QST Communications is a subsidiary of QST Enterprises Inc., which is a first-
tier subsidiary of CILCORP Inc. (NYSE: CER), an energy industry holding company
headquartered in Peoria. QST Communications provides high bandwidth fiber optic-
based communication services to business customers in the Peoria area. QST
Communications began constructing an intra-city fiber optic network in Peoria in
the spring of 1996 and now has approximately 112 route miles in the Peoria area
and will continue development on a 65 route mile extension connecting Peoria to
Springfield.
 
Steve Gray, President and Chief Operating Officer of McLeodUSA, stated, "This is
a strategic acquisition for us, adding route miles of advanced fiber optic
network in and between two key Illinois cities where we have market share and
had planned to build network soon."
 
The long-standing McLeodUSA three-part strategy includes building customer
share, constructing network, and migrating customers onto that network as a true
facilities-based provider. Gray: "The addition of more than 175 route miles, and
the opportunity to serve QST Communications' existing customers using our own
facilities, accelerates all three elements of our strategy. In addition, this
agreement is an extension of the McLeodUSA emphasis on creating strategic
alliances with energy/utility companies."
 
QST Enterprises President Mark Elliott stated, "By delivering exceptional
customer service and reliability to key customers through our SONET network, QST
Communications has been very successful in becoming a premier communications
provider in central Illinois. This agreement between QST and McLeodUSA will
result in central Illinois businesses having a wide array of telecommunications
services available through McLeodUSA, while still maintaining the level of
customer support and reliability consumers have come to expect from QST."
 
Gray added, "McLeodUSA has had a local presence in central Illinois for many
years, and we are committed to increasing our presence in the region. Peoria is
one of the thirty Midwestern cities identified in our October 1997 agreement
with AT&T to provide dedicated access service. And, Peoria is also one of our
initial 50 "MainStreet" cities targeted for network construction along the
business corridors of the City. This acquisition speeds our ability to
accomplish something we had already planned to do, and will allow us to begin
selling dial tone in Peoria soon after receiving regulatory clearance and
closing this deal."
 
McLeodUSA is a provider of integrated telecommunications services to businesses
and residential customers. The Company's telecommunications customers are
located in ten Midwestern and Rocky Mountain States. The combined firm is a 14-
state facilities-oriented telecommunications provider with 7 switches, and
nearly 314,000 local lines, 4,700 employees, and 5,100 route miles of fiber
optics network. In the next 12 months, the Company's publishing subsidiaries
will distribute nearly 15 million copies of competitive directories in 21
states, reaching a population of nearly 27 million.

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