IDC forecasts that in 2007, communications services sales in the United States to business customers will be approximately $110.6 billion, with approximately eight million small- and medium-sized businesses, defined as businesses with less than 500 employees, expected to spend approximately $76.8 billion.

The market for communications services in the United States, particularly local voice, is dominated by the incumbent local exchange carriers, or ILECs. These carriers consist primarily of the RBOCs, which include AT&T, Qwest Communications and Verizon.

While the RBOCs remain the market leaders in their service territories, competitive communications providers continue to gain market share within the small- and medium-sized enterprise segment. According to data from the FCC, as of June 30, 2006, competitive communications providers served 29.8 million, or 17.3%, of end-user lines in the United States.

While RBOCs provide a broad range of communications services, it is believed they have neglected the small- and medium-sized enterprise segment due to an increased focus on the global enterprise business segment of the market, increased competitive pressures in the residential markets, continued integration of recent mergers and acquisitions and investment in \"triple-play\" product offerings. This has created an increased demand for alternatives in the small- and medium-sized enterprise communications market where cost-effective enhanced telephony and data services have become increasingly important.

- Dynamic Integrated Access services that use both IP and TDM technology, linking voice and data lines on the same high-speed connection, and a user-friendly web portal for self-management and administration. Launched in 2005, this is the base platform from which all the Company’s business bundles will be based upon and requires the purchase of, at minimum, a T-1 connection by the customer.

- Secure Internet with Managed Firewall that allows customers to securely access any portion of their network regardless of that network\'s geographic location. Customers can manage their networks using the Company’s broad array of distributed services for each of their network locations. In addition, end-users may use the Company’s remote access VPN software to access any portion of the enterprise network externally.

The Company offers a customary portfolio of voice services, including local and long distance service packages, standard and enhanced 800 toll-free services, and other voice options such as voice mail, calling card, wire care, call restrictions, directory listing options, hunting, conference calling and call forwarding.

While the Company has deemphasized the acquisition of residential customers, it offers end-user residential customers local and long distance voice, internet and optional services such as calling card and residential 800 toll-free services in selected markets.

In addition to retail services, the Company provides a wide range of wholesale voice and data services to local and long distance carriers, government agencies, wireless service providers, cable television companies and other carrier-class customers.

Cost of service was $315.8 million for the year ended December 31, 2006, a decrease of $46.3 million or 13% from the year ended December 31, 2005.

Selling, general and administrative expenses were $181.7 million for the year ended December 31, 2006, representing a decrease of $35.7 million, or 16%, from 2005.

Depreciation and amortization expenses were $60.1 million for the year ended December 31, 2006, a decrease of $152.8 million from the same period of 2005.

Gross interest expense was $13.4 million for the year ended December 31, 2006, a decrease of $52.7 million from $66.1 million during the year ended December 31, 2005.