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 Integra Telecom Endorses Concerns by Department of Defense Over Proposed CenturyLink - Qwest Merger

DOD files testimony in four of Integra’s service areas

Portland, Ore., Oct. 26, 2010 Integra Telecom endorses the Department of Defense (DOD) objections in four of Integra’s service states over the proposed merger between CenturyLink and Qwest, Integra’s chief executive officer announced today.

According to public record, the DOD and Federal Executive Agencies (FEA) have filed testimony with utility commissions in Arizona, Colorado, Utah, and Washington state regarding the merger.

“The Department of Defense is one of the largest users of telecom services in all four states and could be gravely affected if this merger is not handled with caution,” said Dudley Slater, CEO of Integra Telecom. “We are equally concerned over the proposed transaction and have been working with business and consumer advocates, as well as government agencies, to alert the FCC and state utility commissions to the substantial risks in the merger.”

The DOD filings demonstrate how profoundly the sale of Qwest to CenturyLink could affect telecom services at national security bases and installations throughout the west. The DOD has asked for the regulatory agencies in those states to impose conditions on the merger so that service quality does not deteriorate in the wake of the transaction. Following is information quoted directly from the filings:

Arizona
The Department of Defense and all other Federal Executive Agencies have a substantial presence in the State of Arizona. Several major military installations are located in Arizona, including Fort Huachuca, Davis-Monthan Air Force Base, Yuma Proving Ground and Luke Air Force Base. In addition, the Federal presence also exists in major facilities such as the Department of Veterans Affairs Medical Centers in Phoenix and Tucson, and Federal Buildings and Courthouses in Phoenix and Tucson. Moreover, in the affected service area there are numerous and widespread smallbusiness sized offices such as Armed Forces recruiters, Post Offices, Social Security offices, as well as offices housing Fish and Wildlife Service, National Parks, USDA Forest Service and Farm Service/Agricultural employees and agents. Federal employment (Civilian and Active Duty Military) in Arizona exceeds 60,000 persons.

Colorado
The Department of Defense and all other Federal Executive Agencies have a substantial presence in the State of Colorado. Numerous major installations of the Department of Defense are located in Colorado, including the U.S. Air Force Academy, Fort Carson, Buckley Air Force Base, Peterson Air Force Base and Schriever Air Force Base. In addition, Federal presence also exists at the many facilities of the Department of Veterans Affairs ("VA"), including the East Colorado Health Care System ("ECHCS") facilities in Denver, the VA Medical Center in Grand Junction, and V A outpatient clinics in Colorado Springs, Durango, Lakewood, Pueblo and other Colorado localities. The U.S. General Services Administration owns 89 Federal buildings totaling 6.8 million rental square feet ("RSF") and in addition leases more than four million RSF in 157 buildings in Colorado. Principal tenants include the Geological Survey, the Bureau of Reclamation, the National Oceanic and Atmospheric Administration, the Environmental Protection Agency and the Bureau of Land Management, in addition to scores of smallbusiness sized offices such as Armed Forces recruiters, Post Offices, Social Security offices, as well as offices housing Fish and Wildlife Service, USDA Forest Service and Farm Service/Agricultural employees and agents. Colorado is home to several major national parks: Great Sand Dunes National Park, Gunnison National Park, Mesa Verde National Park and Rocky DoDIFEA, Mountain National Park. Total Federal employment (Civilian and Active Duty Military) in the state is approximately 90,000 persons.

Washington State
The Department of Defense and all other Federal Executive Agencies have a substantial presence in the State of Washington. Several major military installations are located in Washington, including Joint Base Lewis-McChord (formerly Fort Lewis and McChord Air Force Base) and Fairchild Air Force Base, and naval facilities around the Puget Sound area. In addition, the Federal presence also exists as numerous and widespread major facilities such as the General Services Administration Northwest/Arctic Region Office, and the Department of Veterans Affairs medical and outreach facilities, and small-business sized offices such as Armed Forces recruiters, Post Offices, Social Security offices, as well as Fish and Wildlife Service, National Parks, USDA Forest Service and Farm Service/Agricultural agents. Federal employment (Civilian and Active Duty Military) in Washington State exceeds 100,000 persons.

Utah
The Department of Defense and all other Federal Executive Agencies have a substantial presence in the State of Utah. Total federal employment in Utah, both civilian and active military, is about 36,000 personnel. Major military facilities include Tooele Army Depot, Dugway Proving Ground, and Hill Air Force Base. In addition, Federal presence also exists at many facilities of the Department of Veterans Affairs, including a Regional Office in Salt Lake City, as well as clinics in Fountain Green, Roosevelt, St. George and other localities. The Forest Service's Intermountain regional headquarters is in Ogden. The U.S. General Services Administration owns 15 Federal buildings, totaling 1.9 million rental square feet and leases more than 1.4 million square feet in 83 buildings in Utah. Federal tenants include the Forest Service, the Bureau of Indian Affairs, the Bureau of Land Management, the Bureau of Reclamation, the Fish and Wildlife Service, the Department of Energy, and the Environmental Protection Agency, in addition to scores of smaller entities.

In each filing the DOD/FEA says, “This very substantial presence makes DoDIFEA one of the largest users of telecommunications service in the state. Moreover, the DoD/FEA interest goes beyond the locations directly affected by the transition. Where possible, DoD and FEA telecommunications services are procured under contract through competitive bidding. The effectiveness of the competitive procurement process is, of course, dependent upon there being a number of financially strong and technically capable entities that can submit bids.

If the proposed transfer is approved, it is important to DoD/FEA that CenturyLink’s competitors have the opportunity to access Federal installations on a fair and reasonable basis through CenturyLink facilities and that CenturyLink be able to render service to Federal locations even outside of its service territories. Moreover, CenturyLink itself must be a sophisticated competitive bidder capable of providing the full range of telecommunications services at reasonable costs to the Federal government.”

“After reading this information, it’s obvious why we are all aggressively trying to ensure that the FCC and state utilities move forward with the utmost caution,” added Slater of Integra Telecom.

To date, more than 50 businesses, government agencies and third party organizations have shown concern over the proposed CenturyLink Qwest merger including: Level 3 Communications, Sprint\Nextel, The Utah Rural Telecom Association (URTA), The Arizona Consumers Council and the Minnesota and Washington state PIRGS.

About Integra Telecom
Integra Telecom Inc. provides integrated communications services across 33 metropolitan areas in 11 Western states, including: Arizona, California, Colorado, Idaho, Minnesota, Montana, Nevada, North Dakota, Oregon, Utah and Washington. It owns and operates a best-in-class fiber-optic network comprised of more than 2,800 route miles in 11 metropolitan access networks including approximately 1,386 on-net buildings, a world class Internet and data network, and approximately 4,900-mile highspeed long-haul fiber network. The company has earned some of the highest customer loyalty and customer satisfaction ratings in the telecommunications industry. Primary equity investors in the company include Goldman, Sachs & Co., Tennenbaum Capital Partners, funds managed by Farallon Capital Partners and Warburg Pincus. Integra Telecom and Electric Lightwave are registered trademarks of Integra Telecom, Inc. For more information, visit: www.integratelecom.com.

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