Exhibit 99.1

Press Release

McLeodUSA Completes Sale of ICTC and Related Businesses

CEDAR RAPIDS, Iowa--(BUSINESS WIRE)--Dec. 31, 2002--McLeodUSA Incorporated
(Nasdaq:MCLD - News), one of the nation's largest independent competitive
local exchange carriers, today announced that the Company has completed the
sale of Illinois Consolidated Telephone Company ("ICTC") and certain related
telecommunications businesses to Homebase Acquisition Corp. ("Homebase") for
$271.2 million. The sale was announced on July 17, 2002.

McLeodUSA has also entered into a series of operating agreements with Homebase
and ICTC pursuant to which the parties will continue to provide value-added
commercial services to each other in the future. These services include
wholesale long-distance, telemarketing and fulfillment, and
operator-assistance services, among others. 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.

This sale completes the asset sales committed as part of the Company's
recapitalization plan. The Company has also completed the sale of essentially
all other non-core assets, which were identified as part of the Company's
strategy to focus on its 25-state footprint, announced in 4Q01. Total funds of
approximately $1.1 billion received from all sale transactions are expected to
exceed the Company's plan by approximately $100 million and be accomplished
nine months ahead of schedule.

Pursuant to the terms of its comprehensive Recapitalization completed on April
16, 2002, $225 million of the net proceeds from this transaction have been
used to reduce the Term A and Term B loans under the Company's May 2000 Credit
Agreement as amended. Inclusive of the repayment of $20 million of ICTC
mortgage bonds, this transaction reduced McLeodUSA's bank and bond debt from
$960 million to $715 million. The balance of the proceeds from the transaction
after fees and expenses is being retained by the Company.

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
September 30, 2002, 38 ATM switches, 53 voice switches, 513 collocations, 482
DSLAMs and 4,480 employees. As of April 16, 2002, Forstmann Little & Co.
became a 58% shareholder in the Company. 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 closing of sales of businesses, 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, our ability to close on sales of businesses 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 Company undertakes no obligation to
update publicly any forward-looking statements, whether as a result of future
events, new information or otherwise.

Contact:

     McLeodUSA Incorporated, Cedar Rapids
     Investor Contact:
     Bryce E. Nemitz, 319/790-7800
     or
     Press Contact:
     Bruce A. Tiemann, 319/790-7800
     mcleodusa_ir@mcleodusa.com