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No. of Recommendations: 2
TO: All RCN Employees

FROM: David McCourt, Chairman & CEO

DATE: October 22, 2001

RE: The Results of Our Tender Offer


Last month I told you about the “tender offer” RCN was making to our bond holders -- a financial move I thought would help us dramatically lower our debt and reduce our costs. Last Friday at midnight was the formal conclusion of the offer and it has been a resounding success.

As a result of this offer, RCN was able to buy back $594 million of debt at a cost of only $161 million. It's a complex financial move, but the impact is pretty simple: imagine having $594 in credit card debt and paying it all off with $161. That's effectively what we did by taking advantage of an uncertain economy and a nervous bond market. This is the second successful tender offer we have done this year and it will greatly strengthen our ability to lower our costs by reducing the amount we pay each year in interest and principal payments.

Making a financial play like this work smoothly takes a lot of team work, and I am indebted to Tim Stoklosa, John Jones, Ricardo Venegas, Tapan Dandnaik, Ina Petito and the others in our finance and legal departments who worked extra hard to make sure the tender offer was processed flawlessly.

Because of their great work, the rest of us can continue to focus on our main goals:

· Bringing more customers onto our network
· Reducing churn by providing excellent customer service
· Keeping our costs down

This successful tender offer was considered by many to be an unconventional move. We saw a business opportunity before others did and took advantage of it. That is the way it has always been with RCN. We approached the residential telecommunications business in a way that is different than everyone else, and I remain confident about our strategy and the markets in which we have chosen to do business.
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