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Telephone and Data Systems, Inc.

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July 27, 2009 Forum Report:

Alternatives for TDS and US Cellular Investors

Addressing multiple investor interests

Reinforcing views about timing concerns

Inviting your guidance


See also subsequent

July 30, 2009 Forum Report:

Management Choice of Adversary Response to Shareholder Interests



Forum Report: TDS

Alternatives for TDS and US Cellular Investors

In the absence of any response to the Forum's July 17 letter to the board's audit committee, it must be assumed that management will not be responding voluntarily to the shareholder questions or other information requirements.

Addressing multiple investor interests

It should be understood that the Forum treats investor information requirements as a right that must be respected.  Access to information is an essential element of sound investor decision-making, and its support was one of the Forum's original purposes.[1]  The Forum will therefore be advocating these rights, as a critical foundation of its non-partisan support for your consideration of the issues that concern TDS shareholders.

Included among the issues for which the Forum will provide non-partisan support, of course, are both (a) the investor interests you want to address and (b) the means by which those interests may be resolved.  We have in the past provided simultaneous support for multiple alternatives,[2] and will do so again in this case as appropriate to accommodate the views of Forum participants.

Reinforcing views about timing concerns

For your consideration of valuation issues, and particularly the timing concerns addressed at the May 14th open meeting, leading telecom analyst Phil Cusick of Macquarie issued a report on Friday downgrading US Cellular (USM), the 81% owned subsidiary of TDS, based on his analysis of the regional wireless operation's declining prospects resulting from "a combination of increased competition from the low-end from the likes of Leap Wireless, Boost, and T-mobile, as well as a stale handset lineup that makes USM uncompetitive at the high end."  He also expects speculation about new antitrust policies to temporarily discourage AT&T or Verizon interest in an acquisition of USM.  The full report is made available to Forum participants with permission:

Inviting your guidance

Please tell me what interests you, what alternatives you consider relevant, and what information you need to make your decisions.  We will be developing plans during the next week for a new phase of the program, and your guidance will help the Forum serve the interests of all TDS and US Cellular shareholders.

GL July 27, 2009


Gary Lutin

Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335



[1] See April 29, 2001 New York Times: "Holding Executives Answerable to Owners."  (Note that this article was published in 2001, addressing the internet bubble, rather than in 2009.)

[2] For examples, see the October 12, 2004 Crowley Maritime Forum Report: Proceeding with Two Tactical Plans and January 7, 2005 Farmer Bros. Co. Forum Report: Value Enhancement Objectives for 2005.




This Forum program is open to all shareholders of Telephone and Data Systems, Inc. (NYSE: TDS), and its controlled subsidiary, United States Cellular Corporation (NYSE: USM), and to any fiduciaries or professionals concerned with their investment decisions. Participation is free of charge, according to the Forum's standard Conditions of Participation.

The purpose of the Forum is to provide shareholders with access to information and a free exchange of views relating to their consideration of issues described in the Forum Summary. As stated in the Conditions, all Forum participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. Forum polices are intended to support anonymous communication, and provide that participants will not be identified or quoted without their explicit permission.

The initiation of this program was supported by Southeastern Asset Management, Inc., which as manager of the Longleaf Partners Funds and other client funds is the largest TDS shareholder with common and special common stock aggregating more than 15% of the total of all classes outstanding. TDS has been invited to assume corporate responsibility for the costs of addressing issues of apparent significance to a broad range of its investors, according to the Forum's Conditions, and other participants may be invited to contribute support to the continuing program pending the company's acceptance of responsibility.

Inquiries and requests to be included in the Forum's distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.