The Federal Communications Commission has recently adopted new regulations concerning the calculation of the Federal Universal Service Fund. Commencing with April 1, 2003 invoices, you will note a few changes to individual line items appearing on your invoice. The federal USF charge along with other regulatory fees imposed on Arch Wireless are currently passed along to you through the one line item “Universal Service Fund”, appearing on your invoice as a flat rate. On a go forward basis, this will be a line item based on a percentage of all telecommunication services and will appear on the invoice as “Federal Universal Service”. A new line item, “Regulatory Admin. Costs” will also appear, as a flat rate, to reflect the costs incurred by the Company to administer these charges, and fulfill reporting obligations, imposed on the Company by various government agencies and associated billing costs. Also, where applicable, State universal service and State-mandated infrastructure fund charges that are imposed on the Company will be passed on to you through the “State Universal Service” line item.

CHANGES TO YOUR INVOICE:

• “Universal Service Fund” is currently a flat fee at the unit level – this will change to “Federal Universal Service” and will be calculated on all telecommunication services at an estimated .9%.
• “Regulatory Admin. Costs” will be a flat rate of $.25 at the unit level.
• “State Universal Service” will be a percentage at the unit level where applicable.

Federal law requires Arch Wireless to make contributions to the Universal Service Fund, which was created to support telecommunications services to rural customers, schools and other entities that the FCC designates. The Universal Services Administration Commission determines the quarterly contribution factor, which then determines the amount telecom carriers, including Arch Wireless, must pay into the federal USF.

If you have any questions regarding these specific changes, feel free to call the Universal Service Fund Hot Line at (888) 207-2937.

We at Arch Wireless wish you the best in 2003, and thank you for your business and continued support.