Arizona Approves Integra's Acquisition of Eschelon

  
    
  
  
    
      (NASDAQ:ESCH): Eschelon Telecom, Inc., a provider of integrated 
      communications services to small and medium sized businesses in the 
      western United States, today announced that the Arizona Corporation 
      Commission has approved the acquisition of Eschelon Telecom, Inc. by 
      Integra Telecom Holdings, Inc.
    
    
      This approval marks the final regulatory approval necessary to complete 
      the transaction with Integra.
    
    
      Separately, Deutsche Bank and Morgan Stanley announced on July 11th 
      the launching of a $1.25 billion bank loan to finance the transaction. 
      The transaction is expected to close in the third quarter.
    
    
      About Eschelon Telecom, Inc.
    
    
      Eschelon Telecom, Inc. is a facilities-based competitive communications 
      services provider of voice and data services and business telephone 
      systems in 53 markets in the western United States. Headquartered in 
      Minneapolis, Minnesota, the company currently employs approximately 
      1,470 telecommunications/Internet professionals, serves over 65,000 
      business customers and has approximately 655,000 access lines in service 
      throughout its markets in Minnesota, Arizona, Utah, Washington, Oregon, 
      Colorado, Nevada, Montana and California. For more information, please 
      visit our web site at www.eschelon.com.
    
    
      About Integra Telecom, Inc.
    
    
      Integra Telecom, Inc. provides voice, data and Internet communications 
      to thousands of business and carrier customers in eight Western states, 
      including: Arizona, California, Idaho, Minnesota, North Dakota, Oregon, 
      Utah and Washington. The company owns and operates a best-in-class 
      fiber-optic network comprised of eight metropolitan access networks, a 
      nationally acclaimed tier one Internet and data network and a 4,700-mile 
      high-speed long haul network. The company enjoys some of the highest 
      customer loyalty and customer satisfaction ratings in the 
      telecommunications industry. Primary equity investors in the company 
      include Bank of America Capital Investors, Boston Ventures and Nautic 
      Equity Partners. Integra Telecom and Electric Lightwave are registered 
      trademarks of Integra Telecom Inc. For more information, visit www.integratelecom.com.
    
    
      Forward Looking Statements
    
    
      This announcement contains forward-looking statements within the meaning 
      of Section 27A of the Securities Act of 1933, as amended, and Section 
      21E of the Securities Exchange Act of 1934, as amended. The 
      forward-looking statements are based on Eschelon Telecom’s 
      current intent, belief and expectations. These statements are not 
      guarantees of future performance and are subject to certain risks and 
      uncertainties that are difficult to predict. Actual results may differ 
      materially from these forward-looking statements because of the company’s 
      history of losses, ability to maintain relationships with RBOCs, 
      substantial indebtedness, intense competition, dependence on key 
      management, changes in government regulations, and other risks that may 
      be described in the company’s filings with the 
      Securities and Exchange Commission. In particular, statements regarding 
      the consummation of the merger are subject to risks that the conditions 
      to the transaction will not be satisfied. In addition, our results of 
      operations, financial condition and cash flows also may be adversely 
      impacted by the recent announcement of the proposed transaction, which 
      may impact our ability to attract and retain customers, management and 
      employees. We have incurred and will continue to incur significant 
      advisory fees and other expenses relating to the transaction. Existing 
      and prospective investors are cautioned not to place undue reliance on 
      these forward-looking statements, which speak only as of today’s 
      date. Eschelon Telecom undertakes no obligation to update or revise the 
      information contained in this announcement, whether as a result of new 
      information, future events or circumstances or otherwise.