McLeodUSA Introduces Advanced VoIP Communication Solutions for IP PBX Consumers.

CEDAR RAPIDS, Iowa -- McLeodUSA Incorporated, one of the nation's largest competitive providers of integrated voice and data communication services, announced today that it has introduced an advanced solution for business customers by providing voice and data services that includes direct VoIP (Voice over Internet Protocol) peering between a customer's IP PBX and the McLeodUSA network.

McLeodUSA IP PBX Trunking delivers integrated voice and data services to IP PBX systems over a single high-speed connection. With bandwidth capabilities ranging from 1.5 Mbps to 45.0 Mbps, businesses may enjoy increased calling capacity, reduced costs for local and long distance calls, and an industry-standard direct SIP (Session Initiation Protocol) interface that improves the efficiency of network connections between a customer's IP PBX and the secure McLeodUSA VoIP network. In addition, IP PBX Trunking customers will receive free site-to-site calling with the convenience of abbreviated dialing between all locations served by McLeodUSA advanced products. IP PBX trunking is designed to suit the needs of the most demanding voice and data applications for businesses with one or more locations.

McLeodUSA IP PBX Trunking includes

* Local Service: 6 to 50 voice calling paths with unlimited local calling and expanded local calling area over a single T1 circuit.

* High-Speed Internet Access: Up to 1.5 Mbps of bandwidth in the base configuration.

* Long Distance: Free site-to-site calling and choice of available long distance plans.

* Toll-Free Number: New number or porting of an existing toll-free number(s).

Business customers may combine IP PBX Trunking with McLeodUSA's IP VPN (Virtual Private Network) service to create secure private voice and data networking for enterprise customers with multiple business locations or remote teleworkers. When combined with Managed Firewall and Remote Access VPN services, customers will enjoy the benefits of a complete, managed solution that gives users the ability to access critical information on the corporate network securely from any location.

"We're focused on developing and delivering solutions that improve the productivity of our business customers. IP PBX Trunking is one more example of how we're using advanced technology to create service solutions that matter and remove the burden of managing advanced IT technology for our customers," said Chris MacFarland, McLeodUSA Chief Technology Officer.

MacFarland added, "McLeodUSA has bundled the essential voice and data services to meet the needs of businesses with next-generation IP PBXs into an affordable, packaged solution. The fact that we are keeping the calls VoIP between our customers' PBX and our network saves them money and allows our customers to utilize more advanced features like business continuity not generally available from a legacy TDM based service provider. This solution uses proven VoIP technology on McLeodUSA's SIP based MPLS (MultiProtocol Label Switching) IP network to bring customers the latest in flexibility and data speed regardless of bandwidth requirements."

"The convergence of these services should be well suited to businesses with 100 or more employees," stated Rick Buyens, Executive Vice President of Sales. "It's a great fit for businesses already using or considering the use of a next generation IP PBX. Any business contemplating a conversion from traditional to an IP-based telecommunications system would benefit from this McLeodUSA solution."

The web-based Control Panel serves as a portal for the customer to make instant changes to their selected features and call-handling ability. The benefits include

* Cost savings: No order changes for common changes to lines.

* Time savings: No waiting for feature change orders or changes to call handling.

* Simplicity: Multiple business locations may be managed from a single interface.

* Visibility: Online and downloadable detailed long distance calling reports.

"Perhaps the most important benefit to McLeodUSA IP PBX Trunking is that fact that all voice and data traffic travels on an IP network owned and managed by McLeodUSA," added MacFarland. "We have invested over $3 billion in our 17,000 route mile network covering 20 states. The fact that we own, monitor and manage this network, which has service reliability of 99.999%, assures our customers their sensitive communications remain secure."

For more information, phone [phone], or visit the Company's website at www.mcleodusa.com

About McLeodUSA

McLeodUSA provides facilities-based integrated voice and data services, including complete package VoIP, local/long distance voice services, Internet access, private networking and frame relay products offered in high value, cost-effective bundles to small and medium-sized businesses in more than 490 cities throughout the Central, Southwestern and Rocky Mountain states. McLeodUSA manages these advanced communications services over one of the largest competitive, fiber-dense networks in the nation and through customer-managed, web-based portals. For more information, visit the Company website at www.mcleodusa.com

Some of the statements in this press release include statements about our future expectations. Statements that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Exchange Act and Section 27A of the Securities Act. Such statements may include projections of financial and operational results and goals, including revenue, EBITDA, Adjusted EBITDA, profitability, savings and cash. In some cases, you can identify these so-called "forward-looking statements" by our use of words such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "project," "intend" or "potential" or the negative of those words and other comparable words. These forward-looking statements are subject to known as well as unknown risks and uncertainties that may cause actual results to differ materially from our expectations. Our expectations are based on various factors and assumptions and reflect only our predictions. Factors that could cause actual results to differ materially from the forward-looking statement include technological, regulatory, public policy or other developments in our industry, availability and adequacy of capital resources, our ability to implement a strategic transaction or a capital restructuring, current and future economic conditions, the existence of strategic alliances, our ability to generate cash, our ability to implement process and network improvements, our ability to attract and retain customers, our ability to migrate traffic to appropriate platforms and changes in the competitive climate in which we operate. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.