Exhibit 99.2



McLeodUSA


McLeodUSA Announces Sale of ICTC and Related Businesses for $271 Million

$225 Million of Proceeds Will Reduce Bank Term Loans

CEDAR RAPIDS, Iowa - July 17, 2002 - McLeodUSA Incorporated (Nasdaq: MCLD),
one of the nation's largest independent competitive local exchange
carriers, today announced that it has entered into a definitive agreement
to sell Illinois Consolidated Telecommunications Company ("ICTC"), its
central Illinois-based independent local exchange carrier ("ILEC"), as well
as certain related telecommunications businesses, to Homebase Acquisition
Corp. for $271 million.

As part of its comprehensive Recapitalization, which was completed on April
16, 2002, McLeodUSA agreed to sell ICTC with the first $225 million of net
proceeds designated to reduce the Term A and Term B loans under its May
2000 Credit Agreement as amended. Upon the completion of the sale of ICTC,
McLeodUSA's bank and other debt will be reduced from $960 million to $715
million, including the elimination of $20 million of mortgage bonds issued
by ICTC. The balance of the proceeds will be retained by the Company.

The transaction is subject to Hart-Scott-Rodino, Illinois Commerce
Commission and FCC approval and certain other customary closing conditions,
including completion of senior debt financing by Homebase. The parties
anticipate the closing to occur by the end of 2002.

Based in Mattoon, Illinois, ICTC is the fifth-largest ILEC in the state,
with more than 90,000 access lines and 4,000 DSL subscribers in central
Illinois markets including Charleston, Mattoon and Effingham. The related
telecommunications businesses that McLeodUSA is selling as part of the
transaction are all located in central Illinois and include Operator
Services, Public Services, Consolidated Market Response and Mobile
Services. As part of the transaction McLeodUSA and Homebase have entered
into operating agreements which establish ongoing strategic relationships
covering long distance services, operator services, and telemarketing and
fulfillment services. McLeodUSA and Homebase do not anticipate any overall
changes in the current workforce or any impact on ICTC's service to its
customers.

Homebase Acquisition Corp. is a newly formed company financed by Spectrum
Equity Investors, Providence Equity and Richard A. Lumpkin, Chairman,
President and CEO of ICTC. Mr. Lumpkin was the principal owner of ICTC
prior to its sale to McLeodUSA in 1997. J. P. Morgan Securities Inc. and
Salomon Smith Barney Inc. advised McLeodUSA on the transaction.

About McLeodUSA
McLeodUSA provides integrated communications services, including local
services, in 25 Midwest, Southwest, Northwest and Rocky Mountain states.
The Company is a facilities based telecommunications provider with, as of
June 30, 2002, 43 ATM switches, 55 voice switches, 507 collocations, 525
DSLAMs and 4,740 employees. Visit the Company's web site 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 include projections of financial and operational results and
goals, including revenue, EBITDA, profitability, savings and cash. 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, 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. These and other risks are described in more
detail in our most recent Annual Report on the form 10K and form 10K/A both
filed with the SEC. The Comp any undertakes no obligation to update
publicly any forward-looking statements, whether as a result of future
events, new information or otherwise.

Contact:
George Sard/Anna Cordasco
Citigate Sard Verbinnen
212/687-8080

Bruce Tiemann
319/790-7800