Our reportable segments are business units that offer different products and are each managed separately.

Consumer - We offer a full range of voice, video, data and wireless services to residential customers.

Network Access - We offer a full range of voice, data and wireless services to common carrier customers.

Commercial - We offer a full range of voice, video, data and wireless services to small businesses, local, national and global businesses, governmental entities and public and private educational institutions.

Managed Broadband - We offer data services to rural school districts, hospitals and health clinics through our SchoolAccess® and ConnectMD® initiatives and managed video conferencing.

Regulated Operations - We offer voice and data services to residential, business, and governmental customers in areas of rural Alaska.

Corporate related expenses including engineering, information technology, accounting, legal and regulatory, human resources, and other general and administrative expenses for the three and six months ended June 30, 2011 and 2010 are allocated to our segments using segment margin for the years ended December 31, 2010 and 2009, respectively. Bad debt expense for the three and six months ended June 30, 2011 and 2010 is allocated to our segments using a combination of specific identification and allocations based upon segment revenue for the three and six months ended June 30, 2011 and 2010, respectively. Corporate related expenses and bad debt expense are specifically identified for our Regulated Operations segment and therefore, are not included in the allocations.

We evaluate performance and allocate resources based on earnings before depreciation and amortization expense, net interest expense, income taxes, share-based compensation expense, accretion expense and non-cash contribution adjustment (“Adjusted EBITDA”). Management believes that this measure is useful to investors and other users of our financial information in evaluating operating profitability as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected EBITDA are used to estimate current or prospective enterprise value. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in note 1 in the “Notes to Consolidated Financial Statements” included in Part II of our December 31, 2010 annual report on Form 10-K. Intersegment sales are recorded at cost plus an agreed upon intercompany profit.

We earn all revenues through sales of services and products within the United States. All of our long-lived assets are located within the United States of America, except approximately 82% of our undersea fiber optic cable systems which transit international waters and all of our satellite transponders.

Summarized financial information for our reportable segments for the three and six months ended June 30, 2011 and 2010 follows (amounts in thousands):

Three months ended June 30,				Consumer	Network Access	Commercial	Managed Broadband	Regulated Operations	Total Reportable Segments
2011
Revenues:
	Intersegment		$	-	-	1,416	-	44	1,460
	External			88,554	25,151	34,216	14,639	5,529	168,089
		Total revenues	$	88,554	25,151	35,632	14,639	5,573	169,549
Adjusted EBITDA			$	28,258	12,344	7,401	5,709	1,221	54,933

2010
Revenues:
	Intersegment		$	-	(5)	1,326	-	48	1,369
	External			87,149	27,112	32,071	10,387	5,607	162,326
		Total revenues	$	87,149	27,107	33,397	10,387	5,655	163,695
Adjusted EBITDA			$	31,255	13,187	8,044	3,148	1,717	57,351

Six months ended June 30,				Consumer	Network Access	Commercial	Managed Broadband	Regulated Operations	Total Reportable Segments
2011
Revenues:
	Intersegment		$	-	-	2,825	-	113	2,938
	External			176,971	50,248	66,045	28,634	10,968	332,866
		Total revenues	$	176,971	50,248	68,870	28,634	11,081	335,804
Adjusted EBITDA			$	56,651	24,224	14,063	11,420	1,921	108,279

2010
Revenues:
	Intersegment		$	-	1	2,656	-	88	2,745
	External			167,517	53,295	59,794	22,472	11,667	314,745
		Total revenues	$	167,517	53,296	62,450	22,472	11,755	317,490
Adjusted EBITDA			$	57,207	25,178	14,401	8,063	3,560	108,409

A reconciliation of reportable segment revenues to consolidated revenues follows (amounts in thousands):

			Three Months Ended		Six Months Ended
			June 30,		June 30,
			2011	2010	2011	2010
Reportable segment revenues		$	169,549	163,695	335,804	317,490
Less intersegment revenues eliminated in consolidation			1,460	1,369	2,938	2,745
	Consolidated revenues	$	168,089	162,326	332,866	314,745

A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands):

			Three Months Ended		Six Months Ended
			June 30,		June 30,
			2011	2010	2011	2010
Reportable segment Adjusted EBITDA		$	54,933	57,351	108,279	108,409
Less depreciation and amortization expense			(30,632)	(30,820)	(62,352)	(61,946)
Less share-based compensation expense			(1,670)	(1,643)	(2,840)	(2,446)
Plus other expense			9	160	33	160
Less accretion expense			(194)	-	(266)	-
	Consolidated operating income		22,446	25,048	42,854	44,177
Less other expense, net			(26,410)	(17,653)	(43,882)	(35,272)
	Consolidated income (loss) before income tax (expense) benefit	$	(3,964)	7,395	(1,028)	8,905