The evaporation of a subsidy by the Federal Communications Commission has triggered the withdrawal of wireless service provider Cellular One from the state of Montana. Montana Public Service Commission Rate analyst Gary Duncan explained what happened.

"What they did was they phased down the support these companies were receiving and CellularOne was one of them," Duncan said. "They were getting a significant amount of money. The FCC had designated these carriers and were offering subsidies to provide service in areas that were probably uneconomic otherwise."

Duncan said the PSC recently received notice recently that CellularOne would be leaving Montana by the end of August. CellularOne is trying to work with AT&T to provide similar coverage at a similar price for customers, but those that fail to switch to a new provider soon will find themselves without service.

This is the third year of a five year easing off of federal subsidies for wireless providers.There are three other wireless companies that receive the same subsidy, but Duncan said none of them have signaled that they will be pulling out of Montana.

Below is the warning letter sent by CellularOne to its customers:

Dear Cellular One Customer,

For the last nine years, Cellular One has strived to do the very best it could for its Montana customers. While we take pride in the service we have provided you, our business is changing. Effective at the end of July, we will discontinue wireless operations in Montana and Wyoming.

What does this mean for you?

· In order to avoid an interruption in your wireless service, you need to find an alternative service provider and port your number to that service provider prior to July 31, 2014.

What is Cellular One is doing to make this transition easier for you?

We hope your experience with Cellular One has been positive, and we would like your final impression of Cellular One to be positive as well. For that reason, Cellular One has taken several steps to make this transition easier.

· Effective immediately, Cellular One will waive all early termination fees for customers that have satisfied their outstanding account balance in full.

· Cellular One has arranged with AT&T to provide an exclusive offer that will make switching to AT&T both easy and cost effective for you. You will receive a $100 bill credit on your AT&T bill when you move your phone number from Cellular One to AT&T and select a new AT&T plan; moreover, new activation fees will be waived

· Cellular One has arranged for all current Cellular One retail locations to become AT&T retail locations, so switching can be fast and convenient, and handled by the same friendly team members you work with today.

What Happens Next?

· You will receive a letter in the mail from AT&T within the next few weeks further detailing the AT&T offer to Cellular One customers. AT&T will offer several convenient ways for you to select a rate plan and activate service.

Please note, Cellular One’s Montana and Wyoming network will be turned off on July 31, 2014, and any customer who has not made alternative arrangements will lose service on that date. It is important that you make alternative arrangements before July 31, 2014 to avoid a disruption to your service.

We will be communicating frequently over the next couple of months in an effort that make sure all of our customers find an alternative service provider prior to July 31, 2014, to avoid loss of service. We have valued our relationship with you and will do our best to ensure a smooth transition of your service.

Thank you for being a loyal Cellular One customer. It has been a privilege to serve you!

Sincerely,

Jonathan D. Foxman

President and CEO

Frequently Asked Questions:

1) Why is Cellular One exiting the Montana market?

Cellular One has decided to exit the Montana market because its business model simply did not support the significant capital investment required to upgrade its Montana network to the 4G technology needed to remain competitive with the large national service providers, particularly in light of the elimination of support from the Universal Service Fund.

2) What is the last day that my Cellular One service will work?

July 31, 2014; it is important that all customers find an alternative service provider before July 31, 2014, because after that date the Cellular One service will no longer work.

3) Is AT&T buying Cellular One?

No; Cellular One has made an independent business decision to exit the Montana market. Cellular One actually requested AT&T to support its effort to provide Cellular One customers with a cost effective and convenient service option to avoid service interruption. As part of this arrangement, AT&T will compensate Cellular One based on the number of customers that choose to take advantage of the AT&T offer.

4) What is being offered by AT&T to Cellular One customers?

Cellular One has arranged with AT&T to provide an exclusive offer that will make switching to AT&T both easy and cost effective for you. You will receive a $100 bill credit on your AT&T bill when you move your phone number from Cellular One to AT&T and select a new AT&T plan; moreover, new activation fees will be waived. If you need a new phone or wish to avoid a new service commitment, AT&T has great options available.

5) When will Cellular One stop billing me?

You will be billed for your Cellular One service until the service is disconnected. You will be billed for service from Cellular One through your last bill date. If you disconnect in the middle of billing cycle, your final bill will reflect the partial month of service. If you do not find a new service provider prior to July 31, your service will be disconnected as of July 31, 2014 and you will receive a final bill reflecting service through that date.

6) Will my Cellular One bill be affected by my decision to switch my service to AT&T under this special offer?

No; regardless of what service provider you choose, your bill will reflect your service with Cellular One through your final date of service. Cellular One has no connection to any other service providers and will only bill for service provided by Cellular One.

7) Will I be responsible for paying my final bill with Cellular One if I move to AT&T (or another operator)?

Yes; you will be billed by Cellular One through your deactivation date, and you are responsible for all charges to your Cellular One account through the deactivation date.

8) If I have a contract with Cellular One, will I have to pay a penalty for disconnecting prior to my contract expiration date?

No; Cellular One is waiving all early termination fees after May 1, 2014 so you are free to select an alternative provider at your convenience.

9) Isn’t Cellular One responsible for providing me service through the end of my contract term?

Cellular One is required to provide a 30 day notice if the service agreement is being terminated. In an effort to give you time to find the best and most convenient alternative for your wireless needs, Cellular One is notifying customers 90 days prior to discontinuing service.

10) Will I be able to keep my phone if I switch to AT&T?

AT&T offers an extensive selection of the latest smart phone technology, so you could take advantage of this opportunity to select a new device. However, if you prefer to keep your current device, AT&T does offer some rate plans that allow customers to use compatible owned devices.

11) Will I be able to keep my Cellular One rate plan if I move to AT&T?

No; if you choose to switch to AT&T, you will need to select from the service offerings available from AT&T.

12) Will I be required to enter into a new contract with AT&T?

AT&T offers both contract and non-contract plans, so you are not necessarily required to enter into a contract with AT&T to take advantage of their offer. However, the terms of service will be established when you activate your service with AT&T. We encourage you to read the details of the AT&T offer, and to fully understand the service agreement prior to activating service with any wireless service provider.

13) Will I have an activation fee if I sign up for service with AT&T?

No; AT&T has agreed to waive activation fees for all Cellular One customers that sign up for service and bring their phone number to AT&T

14) When is the last day that I can take advantage of this offer from AT&T?

AT&T will honor this offer to Cellular One customers that bring their phone number to AT&T until September 1, 2014.

15) If I cannot take advantage of the AT&T offer, are there any other service providers in my area?

Yes - Please call or visit your nearest Cellular One retail location and we will help you find a new service provider that will best meet your needs.

16) Will all of the Cellular One retail locations be closed?

While Cellular One will be exiting the Montana market, its retail locations in Montana will remain open under the AT&T name; Cellular One has made arrangements for an AT&T Authorized Retailer to assume these locations and the Cellular One retail store employees. So, if you choose to take advantage of the AT&T offer, you can visit any former Cellular One location for assistance with activating your new service.

Additionally, because of its familiarity with Cellular One customers, we have authorized this Authorized Retailer to continue to process bill payments for Cellular One customers that wish to make payments at the retail location.