DENVER -- Qwest Communications International Inc. (NYSE: Q) and Touch America Holdings, Inc. (OTC: TCAHQ) today announced an agreement in principle that will maintain service quality and reliability for Qwest and Touch America customers during Touch America's bankruptcy proceeding. Under the proposed settlement agreement, which must still be approved by the bankruptcy court, services currently provided by Touch America to Qwest and by Qwest to Touch America will continue.

The settlement contains provisions to ensure Touch America or a third party will continue to provide all services currently provided to Qwest. To maintain service continuity, Qwest will purchase, and Touch America will continue to provide, voice and data transport services in the 14 states where Qwest provides local service. Qwest also has agreed to purchase certain fiber routes from Touch America, and Touch America will maintain all existing capacity service, which it currently provides to Qwest.

In addition, the settlement terms provide for the termination of all disputes and litigation between Touch America and Qwest, including commercial arbitration and proceedings before the Federal Communications Commission and in federal court. The settlement terms resolve, without any payment by Touch America, the issues arising from the March 24, 2003 Interim Opinion and Award issued in the arbitration of billing disputes, as well as the payment due from Qwest to Touch America in February 2004 for the purchase of Touch America's investment in TW Wireless.

Finally, the settlement terms provide for Debtor-in-Possession financing to Touch America from Qwest. This financing, provided at very competitive terms, would assure sufficient funding for Touch America to achieve the objectives of its Chapter 11 bankruptcy filing.

"We're pleased to have reached this settlement with Touch America," said Pat Engels, executive vice president for Qwest's product and pricing group. "Customers expect and deserve outstanding, dependable service. Under the agreement we've cooperatively reached with Touch America, customers will continue to experience reliable and excellent service. This is an excellent, strategic agreement that supports our Spirit of Service and is in the best interests of customers, our company and shareholders."

"This settlement agreement will ensure that we continue with the same quality of service for Qwest and its customers and for all our customers, and it will allow an orderly transition as Touch America winds down its business," said Bob Gannon, Touch America's Chairman and CEO.

Qwest Communications International Inc.

Touch America Holdings Inc.