ACS and State of Alaska Reach Settlement.

Business Editors/High-Tech Writers

ANCHORAGE, Alaska--(BUSINESS WIRE)--Oct. 1, 2003

Alaska Communications Systems Group, Inc. ("ACS") (Nasdaq:ALSK) today announced that it has reached a voluntary settlement with the State of Alaska regarding the Comprehensive Telecommunications Service Agreement signed by both parties in December 2001. As part of the settlement, ACS will pay the State approximately $3.4 million and State will gain title to selected capital equipment, including satellite, teleconference and VoIP phones. The agreement targets Dec. 31, 2003 to complete the disentanglement and ensures that ACS is eligible to compete for all new State of Alaska telecommunications contracts.

"It was in the best interests of both parties to reach a quick settlement," commented Chuck Robinson, chairman and CEO of ACS. "This agreement helps ensure a smooth transition and provides ACS with an opportunity to bid on future State contracts."

"While we are disappointed that the partnership did not develop as envisioned, the State has worked closely with ACS since its founding and looks forward to a continued working relationship with the Company going forward," said Commissioner of Administration Mike Miller.

"ACS will concentrate our resources on offering all of our customers, both big and small, the best in telecommunications services and we are committed to remaining the premier integrated telecommunications company in Alaska," added Robinson. "Moving forward, we will focus capital spending on opportunities that offer the best return on our investment. We expect revenues from the SOA to remain relatively consistent at current levels through the fourth quarter and margins to improve on this business or any possible future contracts with the State."

About Alaska Communications Systems -- ACS is the leading integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. ACS currently serves approximately 318,000 access lines, 83,000 cellular customers, 44,000 long distance customers and 45,000 Internet customers throughout the State. More information can be found on the Company's website at http://www.alsk.com.

In addition to historical information, this release includes forward-looking statements, estimates and projections that are based on current expectations only, and are subject to a number of risks, uncertainties and assumptions, many of which are beyond the control of Alaska Communications. Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: rapid technological developments and changes in the telecommunications industries; ongoing deregulation in the telecommunications industry as a result of the Telecommunications Act of 1996 and other similar federal and state legislation and the federal and state rules and regulations enacted pursuant to that legislation; regulatory limitations on the Company's ability to change its pricing for communications services; the possible future unavailability of SFAS No. 71 to the Company's wireline subsidiaries; and possible changes in the demand for the Company's products and services. In addition to these factors, actual future performance, outcomes and results may differ materially because of other, more general, factors including (without limitation) changes in general industry and market conditions and growth rates; changes in interest rates or other general national, regional or local economic conditions; governmental and public policy changes; changes in accounting policies or practices adopted voluntarily or as required by accounting principles generally accepted in the United States of America; and the continued availability of financing in the amounts, at the terms and on the conditions necessary to support the Company's future business. These and other uncertainties related to the Company's business are described in greater detail in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2002. The information contained in this release is as of Oct. 1, 2003. The Company undertakes no obligation to update or revise any of this information whether as a result of new information, future events or developments, or otherwise.