1. 1 State of Industry Blair Levin Managing Director Stifel Nicolaus (202) 778 1595 blevin@stifel.com Rural Cellular Association September 22, 2006 St. Louis, Missouri All relevant disclosures and certifications appear on page 28 of this report.

2. 2 Overview Big Picture Trends Political/Regulatory Trends Specific Policy Issues Affecting Rural Wireless Carriers Blair Levin September 22, 2006

3. 3 Big Pictures Trends Wireless Migration Three Trends and Train Wreck – Restructuring through mergers and sales – Redefinition of Production through Bundles – Broadband Based Unbundling and Innovation – Rewriting Regulation Blair Levin September 22, 2006

4. 4 Wireless Migration Key investment decision of 1990’s What’s going up/What’s going down Demographics makes it more so Big Picture Trends Blair Levin September 22, 2006

5. 5 The Happy Story of Wireless Source: Stifel Nicolaus Regulatory Research and Federal Communications Commission

6. 6 Restructuring Through Mergers and Sales Restructuring of big companies to take advantage of economics of scale and scope in high-density, high-spend areas in an effort to be growth vehicles Sale of profitable assets that do not fit into growth opportunities in an effort to be cash- generating (dividend) vehicles Consolidation of adjacent market segments Big Picture Trends Blair Levin September 22, 2006

7. 7 Implications All small players have to figure out where they want to end up in the game of musical chairs In game of musical chairs, it is possible to lose Technology could make today’s good decisions problematic in the future Big Picture Trends Blair Levin September 22, 2006

8. 8 Redefinition of Product Through Bundles Bundling as a way to achieve economies of scope Bundling as a way to achieve sustainable competitive advantage Bundling as a way to hold back new competition from edge-based providers Big Picture Trends Blair Levin September 22, 2006

9. 9 Implications Bundling favors multi-product incumbent networks Bundling hurts CLECs, independent wireless, ISPs, edge-based competitors Bundling increases value of certain strategic, unique assets Big Picture Trends Blair Levin September 22, 2006

10. 10 Broadband Based Unbundling and Innovation Broadband restructuring networks as we knew them Broadband as the new Sections 251/252 Broadband as the driver of innovation cycles Big Picture Trends Blair Levin September 22, 2006

11. 11 Cable Multichannel Video IXC Network Voice Service Local Access ILEC Network ISP Modem Bank Narrowband Internet Internet Cloud Central Office Cable Headend The Market in 1994: One Network, One Offering One Service, Terminating in One Device Source: Stifel Nicolaus Regulatory Research

12. 12 Cable Local ILEC Wireless Voice Video Data Satellite Voice Video Data The Emerging Broadband Market Multiple Networks Delivering Multiple Services to Multiple Devices Source: Stifel Nicolaus Regulatory Research

13. 13 Implications Shifts value to equipment and software over network services Threatens existing pricing power for all incumbent networks – All time and distance charges at risk – All high margin charges at risk – Core access revenues not so much at risk until new, ubiquitous networks arrive Big Picture Trends Blair Levin September 22, 2006

14. 14 Rewriting Regulation Rethinking classification Rethinking universal service Rethinking inter-carrier classification Rethinking government fees Rethinking the level playing field Rethinking the thing no one wants to think about Big Picture Trends Blair Levin September 22, 2006

15. 15 What Are Competitors Up To? Big Wireless Cable Satellite Municipal broadband Wireless broadband technologies Edge applications Big Picture Trends Blair Levin September 22, 2006

16. 16 Political/Regulatory Trends Election prognostication General approach to telecom/tech issues Impact of industry restructuring on telecom politics Political/Regulatory Trends Blair Levin September 22, 2006

17. 17 Specific Issues Affecting Rural Cellular Carriers Mergers and Bell line sales Intercarrier compensation Universal service Spectrum Unfunded mandates Numbering Local calling areas Interconnection Special access Poll attachments Specific Policy Issues Blair Levin September 22, 2006

18. 18 Mergers and Bell Line Sales AT&T/BLS Bell line spin offs Political/Regulatory Trends Blair Levin September 22, 2006

19. 19 Intercarrier Compensation Missoula Plan Continuing payment dispute Phantom traffic Political/Regulatory Trends Blair Levin September 22, 2006

20. 20 Universal Service Contribution – Safe harbor – Numbers-based systems Distribution – ETC status – Payment basis – Reverse auctions Political/Regulatory Trends Blair Levin September 22, 2006

21. 21 Spectrum 700 MHz auction Cyren call Verzion M2Z Political/Regulatory Trends Blair Levin September 22, 2006

22. 22 Unfunded Mandates Emergency Alert System (EAS) E911 Hearing Aid Compatible Devices Political/Regulatory Trends Blair Levin September 22, 2006

23. 23 Numbering Access to local numbers T-Mobile petition Political/Regulatory Trends Blair Levin September 22, 2006

24. 24 Local Calling Areas Size of local calling areas State issue Political/Regulatory Trends Blair Levin September 22, 2006

25. 25 Interconnection Neutral tandem petition Cable industry effort Qwest Challenge Political/Regulatory Trends Blair Levin September 22, 2006

26. 26 Special Access Issue will grow, particularly as consolidation solidifies and prices rise Not likely to be subject to greater legislation Key business question: when will wireless offer alternative? Political/Regulatory Trends Blair Levin September 22, 2006

27. 27 Poll Attachment Key asset still No government action likely Political/Regulatory Trends Blair Levin September 22, 2006

28. 28 Important Disclosures and Certifications I, Blair Levin, certify that the views expressed in this research report accurately reflect my personal views about the subject securities or issuers; and I, Blair Levin, certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views contained in this research report. The information contained herein has been prepared from sources believed to be reliable but is not guaranteed by us and is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell any securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of Stifel, Nicolaus & Company, Inc. or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed within. Stifel, Nicolaus & Company, Inc. is a multi-disciplined financial services firm that regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as a placement agent in private transactions. Moreover, Stifel Nicolaus, its shareholders, directors, officers and/or employees, may from time to time have long or short positions in such securities or in options or other derivative instruments based thereon. These materials have been approved by Stifel Nicolaus Limited, authorized and regulated by the Financial Services Authority (UK), in connection with its distribution to intermediate customers and market counterparties in the European Economic Area. (Stifel Nicolaus Limited home office: London +44 20 7557 6030.) No investments or services mentioned are available in the European Economic Area to private customers or to anyone in Canada other than a Designated Institution. This investment research report is classified as objective for the purposes of the FSA requirements relating to Conflicts of Interest management. Additional information is available upon request. Please contact a Stifel Nicolaus entity in your jurisdiction. Additional information is available upon request © 2006 Stifel, Nicolaus & Company, Incorporated 100 Light Street Baltimore, Maryland 21202