The Federal Communications Commission, or FCC, estimates that in 2003, the telecommunications industry in the United States generated aggregate revenue of $291.0 billion. IDC Research Inc., or IDC, an independent industry research firm, estimates that in 2004 telecommunications services sales to business customers were $118.5 billion and telecommunications services spending by the small and medium-sized business segment was $47.0 billion.

The market for telecommunications services, particularly local telephone services, is dominated by the incumbent telecommunications companies. These carriers consist primarily of the former subsidiaries of AT&T Corp., known as the Regional Bell Operating Companies, or RBOCs: Verizon Communications Inc., SBC Communications Inc., Qwest and BellSouth Corporation. While each of the RBOCs owns substantially all of the local exchange network in its respective operating region, competitive communications services providers continue to gain market share. According to the FCC, as of June 30, 2004, competitive communications services providers served 32.0 million, or 17.8%, of end-user access lines in the United States, an increase of 19.0% over the prior year. While RBOCs provide a broad range of communications services, their primary focus has been on residential and large, national business customers. It is believed the RBOCs have historically neglected the small and medium-sized business segment because it is too fragmented and localized to leverage their scale.

The Company provides customized packages of voice services to fulfill all of its customers' voice communication needs. The Company offers local telephone services, including basic dial tone services and vertical features, such as call forwarding, call waiting and call transfer; advanced call management capabilities such as calling number identification, caller name identification, automatic call back and distinctive ringing; plus enhanced services such as voice mail and direct inward dialing. The Company’s services are provided via analog and digital service platforms. The Company offers a full range of intrastate, interstate and international long distance services and calling plans to customers who purchase its local service. The Company’s services include "1+" outbound calling, inbound toll free service and complementary services, such as dedicated long distance, operator and directory assistance and calling cards.

The Company’s data service offerings are designed to provide a full range of services to its customers. The Company offers high-speed data transmission services, such as dedicated and broadband Internet access, and also provide and support e-mail and web-hosting services. Its IDSL system, DSL provided over an ISDN line, allows the Company to reach customers beyond the typical threshold of a normal DSL system. The Company’s data services are offered at transmission speeds that range from 56Kbps to 1.54Mbps.

The Company provides industry leading telephone equipment systems, including complete business telephone systems and voice messaging systems. The Company also procures and installs voice and data cable, patch panels, routers and other network hardware. The Company offers customers multi-year maintenance agreements to maintain and upgrade their systems. Some of the Company’s key manufacturers include Mitel, Inter-Tel, NEC and Cisco.

The Company has constructed its network around owned switching and colocation equipment. The Company leases the connection between its colocations and switches from third party providers and purchase the "last mile" or "loop" connection from its colocations to its customer's premises.

The Company operates various management information, network provisioning, customer billing and other operating support systems to support the functions of network and traffic management, customer service and customer billing.

Total gross profit was $94.8 million for the year ended December 31, 2004, an increase of $14.5 million compared to total gross profit of $80.3 million for the year ended December 31, 2003.

Income before income taxes was $1.1 million for the year ended December 31, 2004, compared to loss of $ 17.2 million for the year ended December 31, 2003.

Net income was $1.1 million for the year ended December 31, 2004, compared to net loss of $17.2 million for the year ended December 31, 2003.