It is estimated that as of December 31, 2000 the population of the territory in north central Alabama was approximately 69,500.

According to the U.S. Census Bureau, the average population growth from 1990 to 2000 in rural communities in Alabama and Missouri was 15.1% compared to the state of Alabama's population growth of 10.1% and national population growth of 13.1% for the same period.

Revenue derived from local services includes monthly recurring charges for access lines providing local dial tone and calling features, including caller identification, call waiting, call forwarding and voicemail. The Company provides local services on a retail basis to residential and business customers, in most cases for a fixed monthly charge that varies by the selected features.

Network access revenue relates primarily to services provided by the Company to long distance carriers (also referred to as interexchange carriers) in connection with their use of the Company’s facilities to originate and terminate interstate and intrastate long distance, or toll, telephone calls.

The Company generates intrastate access revenue when a long distance call involving one of the Company’s RLECs and a long distance carrier is originated and terminated within the same state. The interexchange carrier pays the Company an intrastate access payment for either terminating or originating the call. The Company records the details of the call through its carrier access billing system.

The Company generates interstate access revenue when a long distance call originates from an area served by one of the Company’s RLECs and terminates in a local calling area outside of that state, or vice versa. The Company bills interstate access charges in a manner similar to intrastate access charges. The Company’s interstate access charges are regulated by the FCC through its participation in tariffs filed by the National Exchange Carriers Association, or NECA.

Hopper, Blountsville and Mid-Missouri Telephone recover a portion of their costs through the USF HC, which is regulated by the FCC and administered by the Universal Service Administrative Company, a non-profit organization. USF HC revenue allows carriers that are designated as eligible telecommunications carriers, or ETCs, by a state public service commission and that serve low density, small towns and rural areas to provide telecommunications services reasonably comparable to services available in urban and suburban areas, at reasonably comparable prices.

The Company offers long distance telephone services to its local telephone customers. The majority of the Company’s long distance revenue is derived from reselling long distance services purchased from other long distance providers.

The Company provides cable television services over networks with 750 MHz of transmission capacity in the towns of Bunceton and Pilot Grove in Missouri, and in Blount and Etowah counties in Alabama. The Company’s cable television packages offer from 27 to 196 channels, depending upon the location in which the services are offered.

Operating expenses for 2003 increased 22.4% to $18.0 million from $14.7 million in 2002.

The cost of services increased 18.0% to $7.5 million in the year ended December 31, 2003 from $6.3 million in the year ended December 31, 2002.

Selling, general and administrative expenses increased 15.6% to $4.0 million in the year ended December 31, 2003 from $3.5 million in the year ended December 31, 2002 due primarily to the acquisition of Blountsville.

Interest expense in the year ended December 31, 2003 decreased 26.2% to $3.4 million from $4.6 million in the year ended December 31, 2002.