[Letterhead]



                                October 20, 1997


Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602


Ladies and Gentlemen:

     We have acted as counsel to you in connection with the proposed offering 
by TDS Capital I, a Delaware statutory business trust (the "Trust"), of __% 
Trust Originated Preferred Securities ("Preferred Securities"), as described 
in the Registration Statement on Form S-3 (the "Registration Statement"), 
which is being filed by Telephone and Data Systems, Inc., an Iowa corporation 
(the "Company"), the Trust, TDS Capital II, and TDS Capital III with the 
Securities and Exchange Commission pursuant to the Securities Act of 1933, as 
amended.  The Registration Statement includes the Prospectus and the 
Prospectus Supplement (collectively, the "Prospectuses") relating to such 
offering.

     In rendering the opinion expressed below, we have examined the 
Prospectuses and such other documents as we have deemed relevant and 
necessary, including, without limitation, the Form of Declaration of Trust, 
the Form of Amended and Restated Declaration of Trust, the Form of Indenture, 
the Form of First Supplemental Indenture and the Form of Preferred Securities 
Guarantee Agreement attached as Exhibits to the Registration Statement.  Such 
opinion is conditioned, among other things, upon the accuracy and 
completeness of the facts, information and representations contained in the 
Prospectuses as of the date hereof and the continuing accuracy and 
completeness thereof as of the date of the issuance of the Preferred 
Securities.  We have assumed that the transactions contemplated by the 
Prospectuses and such other documents will occur as provided therein and that 
there will be no material change to the Prospectuses or any of such other 
documents between the date hereof and the date of the issuance of the 
Preferred Securities.

     Based upon and subject to the foregoing, we are of the opinion that the 
discussion set forth in the Prospectus Supplement under the caption "UNITED 
STATES




Telephone and Date Systems, Inc.
October 20, 1997
Page 2


FEDERAL INCOME TAXATION" is a fair and accurate summary of the matters 
addressed therein, based upon current law and the assumptions stated or 
referred to therein.

     We assume no obligation to update or supplement this letter to reflect 
any facts or circumstances which may hereafter come to our attention with 
respect to the opinion expressed above, including any changes in applicable 
law which may hereafter occur.

     We hereby consent to the filing of this letter as an Exhibit to the 
Registration Statement and to all references to our Firm included in or made 
a part of the Registration Statement.


                                        Very truly yours,

                                        /s/ Sidley & Austin
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