Commitments, Contingencies, and Concentrations

12 Months Ended

Dec. 31, 2011

Commitments, Contingencies, and Concentrations [Abstract]

Commitments, Contingencies, and Concentrations

Note 13.   Commitments, Contingencies, and Concentrations

We are involved in certain contractual disputes in the ordinary course of business, but do not believe the resolution of any of these existing matters will have a material adverse effect on our financial position, results of operations or cash flows.

In August 2010, we were awarded a NTIA Broadband Technology Opportunities Program grant to extend our middle mile fiber-optic network across greater Minnesota connecting health care facilities, schools, libraries, higher education institutions and public offices with an advanced high-capacity broadband network. This project involves approximately $24,000,000 of capital expenditures of which $16,800,000 is funded by the NTIA grant. We began capitalizing costs associated with this project in 2010 and began receiving grant funds in June 2011. The table below provides an overview of the capital expenditures incurred on this project along with reimbursements pending or received from the program. We anticipate the completion of this project by August 2013.

(Dollars in thousands)
Capital Expenditures	Capital Expenditures	NTIA Reimbursements
Incurred as of December 31, 2011	Pending Reimbursement from NTIA	Received as of December 31, 2011
$12,664	$1,920	$6,945

We have built our equipment practice around the Cisco brand. We generated sales of approximately $49,000,000, $48,000,000, and $37,000,000 in the years ended 2011, 2010 and 2009, respectively. The loss of Cisco as our principal supplier could significantly impact this revenue stream. We consider our relationship with Cisco to be sound.

We have a collective bargaining agreement with the International Brotherhood of Electrical Workers Local 949, which involves approximately 20% of our employees. The current labor agreement expires in 2013.

Operating Lease Commitments

We own most of our major facilities, but do lease certain office space, land and equipment under principally non-cancelable operating leases.Rental expense was $1,853,000 in 2011, $1,654,000 in 2010 and $1,683,000 in 2009. At December 31, 2011, future minimum operating lease rental obligations for the next five years and thereafter are as follows: 2012 - $1,680,000;  2013- $1,377,000; 2014 - $1,306,000;  2015 - $1,261,000;  2016 - $587,000 and thereafter - $2,045,000.