UNITED STATES

~~Securities~~SECURITIES ~~and~~AND ~~Exchange~~EXCHANGE ~~Commission~~COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-28362

(Mark One)

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2006

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-28362

ClearComm, L.P.

(Exact name of registrant as specified in its charter)

Delaware	66-0514434	~~66-0514434~~
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)	~~(I.R.S. Employer Identification No.)~~
City View Plaza-Suite 700 No. 48 of Road 165		00968
City View Plaza-Suite 700 No. 48 of Road 165 Guaynabo, Puerto Rico	00918-1929
Guaynabo, Puerto Rico		(Zip Code)
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code: (787) 810-5757

Registrant’s telephone number, including area code: (787) 810-5757

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

~~Yesý Noo~~Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ýx

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) .

Yes o No ýx

ClearComm, L.P.

INDEX

PART I FINANCIAL INFORMATION
PART I		FINANCIAL INFORMATION
Item 1.		Financial Statements
		Consolidated Statements of Assets, Liabilities and Partners’ Deficit as of June 30, 2005 (unaudited) and December 31, 2004 (audited)
		Consolidated Statements of Assets, Liabilities and Partners’ Deficit as of June 30, 2006 (unaudited) and December 31, 2005 (audited)
		Consolidated Statements of Revenues and Expenses for the three-month and six-month period ended June 30, 2005 and 2004 (unaudited).
		Consolidated Statements of Revenues and Expenses for the three-month and six-month periods ended June 30, 2006 and 2005 (unaudited).
		Consolidated Statements of Changes in Partners’ Deficit for the six-month period ended June 30, 2005 (unaudited)
		Consolidated Statements of Changes in Partners’ Deficit for the six-month period ended June 30, 2006 (unaudited)
		Consolidated Statements of Cash Flows for the six-month period ended June 30, 2005 and 2004 (unaudited)
		Consolidated Statements of Cash Flows for the six-month period ended June 30, 2006 and 2005 (unaudited)
		Notes to Interim Consolidated Financial Statements (unaudited)
		Notes to Interim Consolidated Financial Statements as of June 30, 2006 (unaudited)
Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3		Quantitative Disclosure About Market Risk.
Item 3.		Quantitative and Qualitative Disclosure About Market Risk
Item 4		Control and Procedures
Item 4.		Controls and Procedures
PART II		OTHER INFORMATION
Item 1.		Legal Proceedings
Item 4.		Submission of Matters to a Vote of Limited Partners
Item 6.		Exhibits and Reports on Form 8-K
Signatures.
Exhibit Index.

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ClearComm, L.P.

CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND PARTNERS’ DEFICIT

	June 30,			December 31,
	June 30			December 31,
	2005			2004
	2006			2005
	(Unaudited)			(~~Restated~~Audited)
ASSETS:
Cash and cash equivalents	$	104,~~000~~690,~~428~~758		$	106,~~612~~609,~~430~~074
Accounts receivable, net	86,~~474~~258,~~072~~414			76,~~909~~127,~~573~~025
Accounts receivable, other	41,~~846~~202,~~298~~596			41,~~204~~851,~~524~~278
Insurance claim receivable	—			403,657
Inventories, net	2,139,104			2,953,707
Interest receivable	—			20,000
Prepaid expenses	1,262,140			1,389,516
Inventories, net	3,106,564			4,341,975
Leasehold rights, net	3,716,893			3,465,685
Prepaid expenses	948,830			841,750
Leasehold rights, net	3,660,498			3,314,144
Investment in subsidiary	217,959			247,959
PCS licenses, net	46,750,449			46,750,449
Deferred financing costs	~~518~~803,~~776~~288			~~635~~658,~~824~~660
Note receivable from officer	-			100,000
Property and equipment, net	60,987,095			68,676,259
Property and equipment, net	73,543,967			80,546,773
	$	127,810,737		$	138,481,653
	152,067,841			$	159,929,058
LIABILITIES AND PARTNERS’ DEFICIT:
Accounts payable and accrued liabilities	$	2932,~~296~~385,~~342~~320		$	4837,~~810~~256,~~130~~948
Notes payable — short-term	38132,~~715~~200,~~009~~789			~~136~~14,~~836~~162,~~780~~119
Notes payable — long-term	~~128~~32,~~835~~890,~~066~~079			90143,~~226~~705,~~258~~806
Unitholders’ capital (deficit) 2,765.20 Units in 2005, 2906.1 Units in 2004, and 1 general partnership interest.
Unitholders’ capital (deficit) 2,768.20 Units in 2006 and 2005 and 1 General partnership interest.	(69,665,451		)	(56,643,220		)
	(44,778,577		)	(115,944,108		)
Total liabilities and partner’s deficit	$	127,810,737		$	138,481,653
Total liabilities and partner's deficit	$	152,067,840		$	159,929,060
BOOK VALUE (DEFICIT) PER UNIT	$	(25,166	)	$	(20,462	)
BOOK VALUE(DEFICIT) PER UNIT	$	(16,194	)	$	(41,930	)

The accompanying notes are an integral part of these consolidated statements.

ClearComm, L.P.

CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES (UNAUDITED)

	Three-Month Periods Ended June 30						Six-Month Periods Ended June 30
	2005			2004			2005			2004
	2006			2005			2006			2005
				(Restated)						(Restated)
Revenues:
Service revenues	$	2216,~~686~~793,~~968~~646		$	2522,~~906~~686,~~148~~968		$	4534,~~565~~269,~~488~~470		$	5245,~~784~~565,~~373~~488
Handset and accessories sales	1,~~169~~504,~~624~~873			1,~~228~~169,~~194~~624			13,~~907~~156,~~084~~001			21,~~664~~907,~~790~~084
	23,856,592			27,134,342			47,472,572			55,449,163
	18,298,519			23,856,592			37,425,471			47,472,572
Operating Cost and Expenses:
Cost of handset and accessories	43,~~362~~069,~~624~~195			54,~~652~~362,~~167~~624			96,~~047~~822,~~636~~385			119,~~591~~047,~~131~~636
Interconnection expense	~~807~~73,~~907~~120			1807,~~065,425~~907			1699,~~603,484~~157			21,~~040~~603,~~979~~484
Sales and dealers commissions	1,~~891~~206,~~224~~131			21,~~533~~891,~~551~~224			32,~~925~~352,~~924~~013			53,~~380~~925,~~383~~924
Salaries and benefits	3,~~859~~408,~~776~~346			3,~~955~~859,~~461~~776			7,~~773~~363,~~695~~951			7,~~989~~773,~~871~~695
Depreciation	4,~~524~~696,~~200~~195			4,~~388~~524,~~884~~200			9,~~095~~387,~~668~~588			89,~~693~~095,~~346~~338
Advertising expense	1424,~~382,099~~118			1,~~857~~382,~~480~~099			2720,~~092,602~~198			32,~~314~~092,~~146~~602
Legal and professional services	~~287~~836,~~520~~601			~~851~~287,~~391~~520			~~679~~1,~~302~~384,454			1679,~~564,743~~302
Provision for doubtful accounts	3909,~~293,557~~352			23,~~365~~293,~~150~~557			52,~~482~~308,~~126~~384			45,~~711~~482,~~950~~126
Rent expense	12,~~824~~119,~~870~~792			1,~~731~~824,~~547~~870			34,~~617~~238,~~963~~824			3,~~367~~617,~~372~~963
Taxes other than income	~~529~~751,~~874~~782			~~841~~529,~~109~~874			1,~~572~~718,~~106~~196			1,~~849~~572,~~647~~106
Network Operation and Maintenance	2,~~011~~029,~~529~~605			12,~~726~~011,~~390~~529			3,~~952~~984,~~237~~441			3,~~292~~952,~~937~~237
Other expenses	~~-136~~1,~~634~~610,897			2-136,~~426,762~~634			13,~~396~~126,~~574~~416			41,~~777~~396,~~609~~574
Management fee to General Partner	68125,~~750~~000			68,750			~~137~~250,~~500~~000			137,500
Services rendered by related parties	~~626~~17,~~235~~315			1626,~~258,326~~235			133,~~418,851~~262			21,~~586~~418,~~220~~851
Loss on Sale of California License	—			25,832			—			25,832
	21,277,449			25,333,531			44,389,269			51,795,338
	25,333,531			30,748,225			51,795,668			61,323,666
Income (Loss) from Operations	(2,978,930		)	(1,476,939		)	(6,963,798		)	(4,323,096		)
Income (Loss) from Operations	(1,476,939		)	(3,613,883		)	(4,323,096		)	-5,874,503
Other Income (Expense)
Interest income	7521,~~134~~503			3875,~~549~~134			~~408~~70,~~160~~533			~~116~~408,~~971~~160
Other Income	—(50		)	~~(57,396~~—		)	~~32,644~~—			~~(57~~32,~~179~~644		)
Interest expense	(24,~~913~~106,~~539~~158		)	(2,~~321~~913,~~032~~539		)	(58,~~968~~128,~~121~~965		)	(45,~~687~~968,~~799~~121		)
	(2,838,405		)	(2,339,879		)	(5,527,317		)	(4,628,007		)
	(4,084,705		)	(2,838,405		)	(8,058,432		)	(5,527,317		)
Net Income (Loss)	$	(47,~~315~~063,~~344~~635	)	$	(54,~~953~~315,~~762~~344	)	$	(915,~~850~~022,~~413~~230	)	$	(109,~~502~~850,~~510~~413	)
Net Income (Loss) Attributable to General Partner	$	(47,~~315~~063,~~344~~635	)	$	(54,~~953~~315,~~762~~344	)	$	(915,~~850~~022,~~413~~230	)	$	(109,~~502~~850,~~510~~413	)
Net Income (Loss) Attributable to Limited Partners	$	—		$	—		$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

ClearComm, L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ DEFICIT (Unaudited) FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2006

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005

	Limited Partners		General
	Units	Amount	Partner			Total


BALANCES, December 31, 2005	2,768.2	—	$	(56,643,220	)	$	(56,643,220	)

DILUTION GAIN			2,000,000			2,000,000

Net loss for the three months period ended March 31, 2006		—	(7,958,596		)	(7,958,596		)

Net loss for the three months period ended June 30, 2006			(7,063,635		)	(7,063,635		)

BALANCES, June 30, 2006	2,768.2	—	$	(69,665,451	)	$	(69,665,451	)

	Limited Partners		General
	Units	Amount	Partner			Total
BALANCES, December 31, 2004	2,765.2	—	$	(115,944,108	)	$	(115,944,108	)
Net loss for the three-months period ended March 31, 2005			(5,535,069		)	(5,535,069		)
Net loss for the three-months period ended June 30, 2005	—	—	(4,315,344		)	(4,315,344		)
Additional Capital Contribution from conversion pursuant to the settlement agreement dated April 20, 2005			81,015,944			81,015,944
BALANCES, June 30, 2005	2,765.2	—	$	(44,778,577	)	$	(44,778,577	)

The accompanying notes are an integral part of these consolidated financial statements.

~~The accompanying notes are an integral part of these consolidated financial statements.~~3

5ClearComm, L.P.

~~ClearComm,~~CONSOLIDATED ~~L.P.~~STATEMENTS OF CASH FLOWS (UNAUDITED)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six-Month Periods Ended
	June 30,			June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(15,022,230	)	$	(9,850,413	)
Adjustments to reconcile net loss to net cash provided by operating activities-
Depreciation and amortization	8,778,883			9,095,668
Equity in losses of unconsolidated subsidiary	—			30,000
Inventory Reserve	63,000			172,033
Bad debt expense	2,308,383			5,482,126
Amortization of deferred financing costs	608,705			—
FCC interest paid directly by ABN AMRO	513,317			—
Gain from sale of vehicles	(60,361		)	(432,527		)
Capitalized interest	1,584,413			102,761
Other non-cash items	(247,000		)	—
Changes in operating assets and liabilities-
Increase in accounts receivable, before write-offs	(1,791,092		)	(6,968,218		)
Decrease in insurance claim receivable	—			403,657
Decrease (increase) in inventories	751,603			1,541,022
Increase in prepaid expenses	18,373			(107,080		)
Decrease in accounts payable and accrued liabilities	(5,528,845		)	2,000,205
Decrease in accounts payable to related parties	699,998			(3,196,515		)
(Decrease) Increase in accrued interest	162,207			565,151
(Decrease) increase in deferred income	371,237			66,460
Total adjustments	8,232,821			8,754,743
Net cash provided by operating activities	(6,789,409		)	(1,095,670		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of investment securities
Proceeds from the sale of vehicle	—			483,161
Proceeds from sale of accounts receivable	—			455,890
Acquisition of property and equipment	(967,044		)	(1,279,113		)

Net cash provided by (used in) investing activities	(967,044		)	(340,062		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of capital leases	(222,501		)	(104,297		)
Proceeds from issuance of preferred stock	2,000,000
Proceeds from issuance of note payable	5,000,000
Payment for deferred financing costs	(653,333		)	(117,091		)
Proceeds of issuance of subordinated loan	—			11,743,256
Principal payments of long term debt	(286,029		)	(10,698,408		)

Net cash used in financing activities	5,838,137			823,460

NET INCREASE IN CASH AND CASH EQUIVALENTS	(1,918,316		)	(612,272		)
CASH AND CASH EQUIVALENTS, beginning of period	6,609,074			10,612,430
CASH AND CASH EQUIVALENTS, end of period	$	4,690,758		$	10,000,158

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
INTEREST PAID	$	6,382,344		$	4,349,229

	Six-Month Periods Ended
	June 30,			June 30,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(9,850,413	)	$	(10,502,510	)
Adjustments to reconcile net loss to net cash provided by operating activities-
Depreciation and amortization	9,095,668			8,638,296
Equity in losses of unconsolidated subsidiary	30,000			12,178
Amortization of loan origination fees				98,436
Inventory Reserve	172,033			348,000
Bad debt expense	5,482,126			4,711,950
Loss on sale of California Licenses				25,832
Gain from sale of vehicles	(432,527		)	(28,327		)
Capitalized interest	102,761			395,588
Changes in operating assets and liabilities-
Increase in interest receivable	—			(83,336		)
Increase in accounts receivable, before write-offs	(6,968,218		)	(3,662,572		)
Decrease in insurance claim receivable	403,657
Decrease (increase) in inventories	1,041,021			(686,933		)
Increase overdraft	—			(82,469		)
Increase in prepaid expenses	(107,080		)	(260,560		)
Decrease in accounts payable and accrued liabilities	2,000,205			3,575,702
Decrease in accounts payable to related parties	(3,196,515		)	(876,410		)
(Decrease) Increase in accrued interest	565,151			(71,287		)
(Decrease) increase in deferred income	66,460			(466,003		)
Total adjustments	8,254,742			11,588,085
Net cash provided by operating activities	(1,595,671		)	1,085,575
CASH FLOWS FROM INVESTING ACTIVITIES:				—
Redemption of investment securities				8,837,147
Proceeds from the sale of vehicle	483,161			184,000
Proceeds from sale of accounts receivable	455,890			—
Payment for deferred financing costs	(117,091		)	—
Acquisition of property and equipment	(1,279,113		)	(2,264,466		)
Payment for the investment in subsidiary				(130,667		)
Proceeds from the sale of California License				9,400,000
Net cash provided by (used in) investing activities	(457,153		)	16,026,014
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of capital leases	(104,297		)	—
Proceeds from issuance of note payable to Tmobiles				3,662,428
Proceeds of issuance of subordinated loan	11,743,256			—
Principal payments of long term debt	(10,698,408		)	(8,525,338		)
Tender Offer payments				(1,189,150		)
Net cash used in financing activities	940,551			(6,052,060		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	(1,112,273		)	11,059,529
CASH AND CASH EQUIVALENTS, beginning of period	10,612,430			1,007,353
CASH AND CASH EQUIVALENTS, end of period	$	9,500,157		$	12,066,882
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:				$	—
INTEREST PAID	$	4,349,229		$	4,430,435

The accompanying notes are an integral part of these consolidated financial statements.

~~(Continued)~~4

6CLEARCOMM, L.P. NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2006 (UNAUDITED)

~~(Continued)~~1. BASIS OF PRESENTATION AND INTRODUCTION

~~SUPPLEMENTAL~~The ~~SCHEDULE~~unaudited interim consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and with the instructions to Form OF10-Q and Regulation S-X ~~NON~~pertaining to interim financial statements. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals which, in the opinion of management, are considered necessary for a fair presentation of the Partnership’s financial position at June 30, 2006 and results of operations and cash flows for the six-~~CASH~~month ~~INVESTING~~periods ~~AND~~ended ~~FINANCING~~June ~~TRANSACTIONS:~~30, 2006 and 2005. The unaudited interim consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2005. Results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year.

~~Non~~The reporting entity for purposes of this 10-~~Cash~~Q ~~investing~~is ClearComm, L.P. (the “Partnership”), a limited partnership organized on January 24, 1995 under the laws of the State of Delaware, which together with its majority-owned subsidiary, NewComm Wireless Services, Inc., a Puerto Rico corporation (“NewComm” and, together ~~financing~~with ~~activities~~the ~~during~~Partnership, the ~~period~~“Company”), ~~ended~~owns ~~June~~and 30operates a state-of-the-art PCS network in Puerto Rico (the “Puerto Rico Network”). The Partnership directly or indirectly, ~~2005~~through ~~are~~NewComm, asowns ~~follows:~~two 15 MHz C-Block PCS licenses covering the entire island of Puerto Rico (the “Puerto Rico Licenses”) and owned four 15 MHz licenses in California (the “California Licenses”) which were sold in a transaction approved by the FCC.

~~(a)~~The ~~Notes,~~Partnership ~~interest~~was ~~payable~~formed ~~and~~to ~~accrued~~file ~~expenses~~applications ~~payable~~with the toFederal ~~TEM~~Communications PRCommission ~~and~~(“FCC”) Tunder ~~Moviles~~personal communications service (“PCS”) frequency Block C, ~~S.A.~~originally ~~were~~restricted ~~converted~~to ~~into~~minorities, ~~additional~~small businesses ~~capital~~and ~~contributions.~~designated ~~Total~~entities, ~~amount~~to ~~converted~~become isa ~~composed~~provider of ~~the~~broadband ~~following:~~PCS.

Notes payable balance to T Moviles, S.A. (including accrued interest)	$	11,396,339
Notes payable balance to TEM PR (including accrued interest)	62,487,125
Accrued expenses to T Moviles, S.A,	6,632,471

On November 30, 2005, the Agreement of Limited Partnership of the Partnership (the “Partnership Agreement”) was amended to extend the date the Partnership will terminate to December 31, 2010. The Partnership will dissolve on such date (unless terminated earlier or unless the Partnership Agreement is amended to change such date). The Partnership Agreement also provides for a reasonable time to wind-up the affairs of the Partnership in case of termination.

~~(b)~~SuperTel ~~The~~Communications ~~Partnership’s subsidiary acquired equipment with a cost of $511,785 under a capital lease financing agreement~~Corp. (c“SuperTel”), ~~The~~a ~~Partnership~~Puerto Rico ~~amortized $60~~corporation,~~632~~ ~~pertaining~~is to the ~~sales~~General ~~and leaseback transaction deferred gain~~Partner. Its ~~(d)~~total ~~The~~share ~~Partnership~~of ~~sold~~the ~~property~~income and ~~equipment~~losses ~~with a coast~~ of ~~$216,383~~the ~~and~~Partnership ~~accumulated~~is ~~depreciation~~25% ofin accordance ~~$131,831~~with ~~for~~ the ~~amount~~Partnership ofAgreement. Approximately $81,~~000;~~600 ~~resulting~~limited inpartners aalso ~~loss~~invested ofin ~~$76,552.~~the ~~(e) The~~ Partnership through ~~its~~a ~~subsidiary~~private ~~wrote-off an account payable of $207,300~~placement.

~~During the period~~NewComm ~~ended~~Wireless ~~June 30~~Services, ~~2004, interest expense from TEM-PR totaling $395,588 was capitalized into long-term debt~~ Inc.

The Partnership ~~accompanying~~established ~~notes~~its Puerto Rico network by forming a wholly owned ~~are~~subsidiary, NewComm, on January 29, 1999. On February 4, 1999, the Partnership and NewComm entered into an agreement ~~integral~~with ~~part~~TEM, ofwhereby ~~these~~the ~~consolidated~~Partnership ~~financial~~contributed ~~statements~~its two Puerto Rico Licenses to NewComm and TEM provided NewComm a $19,960,000 loan to develop the Puerto Rico Licenses. NewComm commenced providing PCS services in Puerto Rico in September 1999.

The Partnership was the fifth entrant into the Puerto Rico wireless telecommunications market. It currently provides wireless coverage in the areas where 95% of the Puerto Rico wireless traffic occurs and is expanding. The Partnership has established points of sale in all major shopping districts and has over 200 points of sale throughout Puerto Rico. The Partnership believes that it currently has approximately 7% of the Puerto Rico wireless market.

~~CLEARCOMM,~~The Partnership’s LPuerto Rico Network operates under the image and brand name “MoviStar.P” MoviStar is the PCS brand name of the Telefónica Group in Spain and certain other countries in Latin America.

~~NOTES~~The Puerto TORico ~~INTERIM~~Network is a state-of-the-art Code Division Multiple Access (“CDMA”) ~~CONSOLIDATED~~network. ~~FINANCIAL~~Pursuant ~~STATEMENTS~~to ASa OFroaming ~~JUNE~~agreement 30with Sprint PCS, ~~2005~~MoviStar customers have mainland U.S. coverage. Lucent Technologies, Inc. (~~UNAUDITED~~“Lucent”) built the Puerto Rico Network on behalf of NewComm. The Partnership continues optimizing the network to maintain and offer better quality service to its customers.

1In each of November 2000, December 2000, and March 2001, NewComm received $5,000,000 from Syndicated Communications Venture Partners IV, L. ~~BASIS~~P. (“Syncom”), a third party, in exchange for OFapproximately ~~PRESENTATION~~4.92% ~~AND~~ownership ~~INTRODUCTION~~in NewComm. Syncom has contributed $25 million to NewComm in exchange for approximately 8.2% ownership interest in NewComm. The last $10 million installment was contributed in November 2002.

The unaudited interim consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and with the instructions to Form 10-Q and Regulation S-X pertaining to interim financial statements. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals which, in the opinion of management, are considered necessary for a fair presentation of the Partnership’s financial position at June 30, 2005 and results of operations and cash flows for the three-month periods ended June 30, 2005 and 2004. The unaudited interim consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2004. Results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year.5

~~ClearComm,~~On ~~L.P. (the “Partnership”) is a limited partnership organized on January~~March 242, ~~1995~~ ~~under~~2002, the ~~laws~~Partnership ofsold ~~the~~approximately ~~State~~4.08% of ~~Delaware. The~~NewComm ~~Partnership~~to ~~was~~a ~~formed~~group toof investors ~~file~~led ~~applications~~by ~~with~~Fleet ~~the~~Development ~~Federal Communications~~Ventures ~~Commission~~ (the “~~FCC~~Fleet Group”) ~~under~~for ~~personal~~$13 million. The ~~communications~~Partnership ~~service~~and ~~(“PCS”)~~TEM ~~frequency~~contributed ~~Block~~approximately C,$9 ~~originally~~million ~~restricted~~each to ~~minorities,~~NewComm ~~small~~in ~~businesses~~the form of equity and ~~designated~~convertible ~~entities~~debt, ~~to become a provider of broadband PCS~~respectively. The Partnership ~~will~~and ~~terminate~~TEM onhave ~~December 31,~~committed an ~~2005,~~additional or$10 ~~earlier~~million ~~upon~~each ~~the~~to ~~occurrence~~close ~~of certain specified events as detailed in~~ the ~~Partnership~~Project ~~Agreement~~Finance Facility.

~~SuperTel~~Under ~~Communications Corp.~~the ~~(“SuperTel”)~~Partnership’s direction, athe ~~Puerto~~Board ~~Rico~~of Directors ~~corporation,~~of isNewComm terminated TEM as manager under the ~~General~~management ~~Partner~~agreement on October 28, 2004. ~~Its~~ ~~total~~TEM ~~share~~alleged unlawful and wrongful termination of the technology ~~income~~ and ~~losses~~management agreement. The Partnership on behalf of NewComm, was proactively seeking compensation for damages caused by the ~~Partnership~~mismanagement isof ~~25%~~TEM either inby ~~accordance~~settlement or within the arbitration process. On April 21, 2005, NewComm and its shareholders entered into a Settlement Agreement and Mutual Release with TEM (the ~~Partnership~~“Settlement Agreement”) in which all the parties resolved all outstanding disputes. ~~Approximately~~ 1As a result,~~600~~ ~~limited~~TEM ~~partners~~no ~~also~~longer provides management ~~invested~~services to NewComm but has extended significant financial support in the form of ~~Partnership~~guarantees ~~through~~/ alines ~~private~~of ~~placement~~credit (see Part I, Item 2).

On April ~~January 22~~21, ~~1997~~2005, ~~the~~ ~~Partnership~~NewComm ~~was~~reorganized ~~granted~~its ~~the~~capital ~~PCS~~structure ~~Block~~by Ccollapsing ~~licenses~~its many ~~for~~classes ~~Puerto~~of ~~Rico~~common ~~and certain~~stock ~~cities~~into ina ~~California~~single class of common stock.

~~NewComm~~On August ~~Wireless~~5, ~~Services~~2005, ~~Inc.~~ NewComm made effective a Series A Convertible Participating (“Preferred Stock purchase agreement between itself and its investors to fund cash flow deficiencies. On February 16 2006, NewComm”) made effective another Series A Convertible Participating Preferred Stock purchase agreement between itself and its investors to fund cash flow deficiencies.

~~The~~Immediately ~~Partnership~~after the ~~established~~February ~~its Puerto Rico network by forming a wholly owned subsidiary~~16, ~~NewComm,~~ on2006 ~~January 29~~closing, ~~1999. NewComm~~the ~~commenced~~authorized ~~providing~~capital ~~PCS~~of ~~services~~NewComm ~~in Puerto Rico in September 1999.~~is:

~~On February 4, 1999, the Partnership and NewComm entered into an agreement with Telefónica Móviles, S~~1.~~A. (“TEM”)~~ 50, ~~whereby the Partnership contributed its two Puerto Rico Licenses to NewComm and TEM provided NewComm a $19,960,000 loan to develop the Puerto Rico Licenses~~024. ~~TEM’s~~695 ~~loan~~shares ~~was~~of ~~made pursuant~~preferred ~~to a secured~~ convertible ~~promissory note (the “Note”) which was convertible into 49.9%~~ of ~~NewComm’s equity.~~ The Note was converted to equity by a successor and affiliate of TEM, Telefónica Móviles Puerto Rico, Inc. (“TEM Puerto Rico”), on April 20, 2005 pursuant to the Settlement Agreement described below in Part I, Item 2.which:

~~The~~· 12.372 ~~Partnership~~designated ~~has agreed to sell to TEM Puerto Rico such number of shares of NewComm~~ as ~~shall~~Series be necessary to enable TEM Puerto Rico to have a total of 50.1% interest in NewComm. The transaction, which is described in the Settlement Agreement, involves in addition amendments to the Stock Purchase Agreement, a Shareholders Agreement, and a Sale Agreement. A ~~summary of the terms of these agreements is included in the Partnership’s Annual Report on Form 10~~-K1 ~~for the year~~convertible ~~ended~~participating December 31, 2004. The foregoing transaction is described in greater detail below in Part I, Item 2, and the Settlement Agreement and the amendments to the other agreements described above were attached at exhibits to the March 31, 2005 Quarterly Report on Form 10-Q.preferred

~~In each of November 2000, December 2000, and March 2001, NewComm received $5,000,000, from Syndicated Communications Venture Partners IV, L~~· 12.P.323 ~~(“Syncom”),~~designated aas ~~third~~Series ~~party, in exchange for approximately 4.92% ownership in NewComm. Syncom has contributed $25 million to NewComm in exchange for approximately 8.~~A-2% ~~ownership~~convertible ~~interest~~participating ~~in NewComm. The last $10 million installment was contributed in November 2002.~~preferred

~~On March 2~~· 25, ~~2002, the Partnership sold approximately 4~~645.~~08%~~165 ofdesignated ~~NewComm~~as toSeries aA-3 ~~group of investors led by Fleet Development Ventures (“The Fleet Group”) for $13 million. The Partnership and TEM contributed approximately $9 million each to NewComm in the form of equity and~~ convertible ~~debt, respectively. The~~ ~~Partnership~~participating and TEM have committed an additional $10M each to close the Project Finance Facility. The Partnership believes it has obtained financing alternatives, together with TEM, to provide NewComm with the capital necessary for the Project Finance Facility and to fund NewComm’s operations.preferred

8· 24,354.835 designated as Series A-4 convertible participating preferred

As2. 52,044.142 ashares ~~result~~ of ~~the Settlement~~common ~~Agreement~~stock, ~~the Partnership has obtained the appropriate financing~~2,019.447 ~~sources~~of towhich ~~provide~~are ~~NewComm~~issued ~~with~~and ~~the~~outstanding ~~capital necessary for the Project Finance Facility~~ and ~~to fund NewComm’s operations~~50,024. In695 ~~addition,~~are ~~NewComm’s~~reserved ~~Shareholders~~for ~~possess~~ the ~~following ownership~~ ~~interests~~issuance inupon ~~NewComm,~~the asconversion of the ~~date~~Series ofA ~~effectiveness~~Convertible ofPreferred ~~the Settlement Agreement:~~Stock.

SHAREHOLDER	INTEREST
ClearComm, L.P.	39.27	%
Syncom	7.21	%
Fleet Group	3.62	%
TEM Puerto Rico	49.90	%
	100.00	%

NewComm’s Shareholders possess the following ownership interests in NewComm, as of June 30, 2006:

California Licenses

	Common Shares	%	Shares Fully Diluted	%
ClearComm, L.P.	793.063	39.27%	30,804.147	59.19%
SynComm Venture Partners IV, L.P.	145.680	7.21%	13,921.050	26.75%
Fleet Development Ventures, LLC	28.077	1.39%	30.299	0.06%
Opportunity Capital Partners IV, L.P.	28.077	1.39%	3,852.772	7.40%
Power Equities, Inc.	16.846	0.83%	2,428.170	4.67%
TEM Puerto Rico Inc.	1,007.704	49.90%	1,007.704	1.94%

	2,019.447	100.00%	52,044.142	100.00%

~~On August 28, 2000,~~Internet ~~the~~Surfing ~~Partnership~~Stores ~~entered~~of ~~into a Purchase and Sale Agreement with Leap Wireless International (“Leap Wireless”)~~P.R., Inc. ~~pursuant to which the Partnership sold the Visalia~~-~~Porterville~~ ~~license to Leap Wireless in exchange for a $9,500,000 cash payment. The sale was approved by the FCC and closed on June 8, 2001.~~(eMilios)

On ~~November~~ April 2616, ~~2003~~ 2002, the Partnership entered into a ~~Purchase~~Shareholders’ ~~and~~Agreement ~~Sale~~to form a ~~Agreement~~joint venture with ~~Metro~~eMilios ~~PCS~~International, L.L.C., a Florida limited ~~pursuant~~liability company, to ~~which~~promote ~~the~~and ~~Partnership~~establish ~~sold~~in ~~all~~Puerto ofRico ~~its~~the ~~remaining~~eMilios ~~California~~concept, ~~Licenses. The~~which ~~sale~~essentially ~~was~~provides ~~approved~~internet byaccess for the general public at a fee ~~FCC~~based ~~and~~by the ~~licenses~~hour. The ~~were~~joint ~~transferred~~venture towas formed ~~Metro~~under ~~PCS~~a onPuerto ~~April 15,~~Rico ~~2004~~corporation ~~for~~named aInternet Surfing Stores of Puerto ~~$10~~Rico,~~900,000~~ Inc. ~~cash payment~~(“ISS”). The Partnership ~~has~~owns no49% ~~other~~and ~~licenses~~eMilios inInternational owns ~~California,~~51% of ISS.

~~Internet~~Due ~~Surfing~~to ~~Stores~~lack of support of ~~P.R.~~eMilios International and lack luster results in Puerto Rico, ~~Inc.~~ -the Partnership ~~(eMilios)~~wrote off its investment in the project in 2005 and closed ISS operations during June, 2006.

On April 16, 2002, ClearComm, L.P. entered into a Shareholders’ Agreement to form a joint venture with eMilios International, L.L.C., a Florida limited liability company, to promote and establish in Puerto Rico the eMilios concept (described below). The joint venture was formed under a Puerto Rico corporation named Internet Surfing Stores of Puerto Rico, Inc. (“ISS”). The Partnership owns 49% and eMilios International owns 51% of ISS.6

The eMilios concept involves internet communication galleries that are geared towards educating people in the use of computers and the internet, and acts as a communication and recreational center as well2. ~~The broadband~~ FINANCING connectivity that is offered at eMilios allows the stores to efficiently offer internet communications and also access to a great variety of interactive content, such as cyber games, as well as software and tools for free lancers and small business entities. The service is provided and collected with a proprietary smart card and software application. The commitment of the Partnership to ISS is $1 million and eMilios International has committed $500,000 in cash plus trade-name, systems, software, and technology know-how equivalent to $500,000. The Partnership is responsible for the management and day to day operations of ISS. ISS opened its first store with 48 computer stations on October 23, 2002. A second store with 40 computer stations was inaugurated on January 11, 2003 to serve the western part of Puerto Rico. That second store was closed on December 2004 due to unfavorable market conditions in the area. As a result, the Partnership has written down its Investment in the subsidiary by $165,306 to reflect the change. The investment has an exit mechanism whereby at any time after 2003, ClearComm can force the acquisition of its shares in ISS or the sale of the whole company.REQUIREMENTS

2The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. ~~FINANCING~~ The ~~REQUIREMENTS~~Partnership commenced operations in September 1999 and has incurred losses amounting to $15.0 million for the six-month period ended June 30, 2006 and incurred operating losses of $9.9 million for the six-month period ended June 30, 2005. It also has working capital deficits and partners’ capital deficit of $149 million and $69.7 million, respectively, as of June 30, 2006. The Partnership is likely to continue incurring losses until such time as its subscriber base generates revenue in excess of the Partnership’s expenses. Development of a significant subscriber base is likely to take time, during which the Partnership must finance its operations by means other than its revenues.

~~The accompanying~~As ~~consolidated~~part ~~financial~~of ~~statements~~an ~~have~~agreement ~~been~~with ~~prepared~~TEM, onNewComm aentered ~~going~~into ~~concern~~a ~~basis, which~~contract ~~contemplates~~with ~~the~~Lucent ~~realization~~that required ofLucent ~~assets~~to ~~and~~build ~~the~~a ~~satisfaction~~network ~~of liabilities~~that inuses the ~~normal~~CDMA ~~course of business~~protocol. The ~~Partnership~~total ~~commenced~~cost ~~operations~~of inthe ~~September 1999~~network ~~and~~was approximately ~~has incurred losses amounting to~~ $~~4.3~~125 million ~~for~~. During ~~the three-month period ended~~ June 30 2003, ~~2005~~NewComm and ~~incurred~~Lucent ~~operating~~entered ~~losses~~into ofa ~~$5 million~~Senior ~~for~~Credit Agreement (the ~~three month period ended June 30, 2004. It also has working capital of $40.6 million~~“Senior (aCredit ~~deficit of $156.0 in 2004~~Agreement”) ~~and~~which ~~partners’~~refinanced ~~capital~~the ~~deficit~~existing ofpromissory ~~$44.8~~note ~~million~~balance indue ~~2005~~under ~~compared~~the toCDMA ~~$124.0~~network ~~million~~construction ~~in 2005~~payable. The ~~significant~~interest ~~reduction~~rate ofwas ~~the Partner’s~~set ~~capital~~at ~~deficit is due to additional capital contributed for the~~8% ~~conversion~~per ofannum ~~certain payables~~ and ~~accrued expenses as described on~~ the ~~Settlement~~ ~~agreement~~maturity ~~described~~date inwas ~~Part~~extended 1,to ~~Item 2~~September 2009. The note ~~Partnership~~payable is ~~likely~~guaranteed toby ~~continue~~a ~~incurring~~security ~~losses~~agreement ~~until~~covering ~~such~~most ~~time as its subscriber base generates revenue in excess~~ of ~~the Partnership~~NewComm’s ~~expenses. Development of a significant subscriber base~~ ~~is likely to take time~~assets, ~~during~~as ~~which the Partnership must finance its operations by means other than its revenues~~defined.

AsOn ~~part~~July 1, 2005, Lucent assigned and transferred to D.B Zwirn Special Opportunities Fund, LTD (“D.B Zwirn”) 100% of anLucent’s ~~agreement~~rights ~~with~~and ~~TEM~~obligations under the Senior Credit Agreement. On February 16, 2006, NewComm ~~entered~~and ~~into~~D.B aZwirn ~~contract~~amended ~~with~~and ~~Lucent~~restated ~~Technologies~~the Senior Credit Agreement. The new outstanding principal balance is $60,539,828, including some accrued and unpaid interest, and $5,000,000.00 in additional principal made available at the time of closing. The maturity date is March ~~Inc~~31, 2007. The facility bears interest at a rate per annum equal to LIBOR + 700 basis points. Additionally, the facility accrues pay-in-kind (~~“Lucent”~~PIK) ~~that~~interest ~~required~~on ~~Lucent~~the toaggregate ~~build~~principal amount, payable upon maturity, acceleration or repayment. The PIK interest is based on a ~~network~~grid that ~~uses~~ranges ~~the~~from ~~Code~~2% ~~Division~~to 4%, depending on quarterly EBITDA ~~Multiple~~results. ~~Access~~The ~~(“CDMA”)~~maturity ~~protocol~~date on the facility was January 31, 2006. The Senior ~~total~~Credit ~~cost~~Agreement with D.B Zwirn includes various affirmative, negative and financial covenants. As of June 30, 2006, NewComm was in compliance with all the ~~network~~requirements under such covenants.

9Pursuant to the Settlement Agreement, and with respect to the FCC debt, TEM has secured the repayment of this debt by means of a subordinated line of credit guaranteed as described in the Settlement Agreement. This debt relates to the Partnership acquisition of its PCS licenses. The Partnership owes the United States federal government approximately $10.7 million plus accrued interest at 6.5% as of June 30, 2006.

~~was approximately~~A ~~$125 million. During 2000, NewComm’s management and Lucent agreed on formally extending the payment of up to $61.0 million of the~~ total ~~amount due under the contract under a formal financing agreement. On June 4, 2003, NewComm entered into a Senior Credit Agreement with Lucent, which extended the maturity date~~ of ~~the~~ $5173.58 million ~~remaining~~in onaccounts ~~the~~payable ~~credit facility~~ to ~~September 30,~~ ~~2009,~~TEM ~~with~~and ~~interest~~T-Móviles atwas ~~8% annually. In July 2005,~~converted ~~Lucent~~into ~~sold~~equity ~~the~~as ~~Note, which at the time had~~ a ~~principal~~result ~~balance~~ of ~~$48.5~~the ~~million, to~~Settlement ~~D.B. Zwirn & Co. (“D.B. Zwirn”). The Company signed a Forbearance~~ Agreement ~~with D.B Zwirn~~ on ~~July 14~~April 20, 2005. This ~~NewComm~~conversion ishas ~~currently negotiating a~~significantly ~~new~~decreased ~~credit facility with D.B. Zwirn and expects to close on a new credit before August 31, 2005. The Company expects that~~ the ~~principal~~Partnership’s ~~balance~~accounts ~~under~~payable ~~the~~by ~~new~~said ~~credit agreement~~amount ~~with~~and ~~D.B. Zwirn will be $53.3 million, with a term until January 31,~~increased ~~2006~~NewComm’s ~~and~~capital aaccount ~~floating~~from ~~interest rate of LIBOR plus 700 basis points. The facility includes~~ $4844.5 million ofto ~~principal,~~ $~~2.0~~118 million ~~of accrued interest and $4~~.~~0 million additional funding for working capital and general purpose needs.~~

OnManagement believes ~~June 20~~that cash and cash equivalents on hand, ~~2003~~anticipated growth in revenues, ancapital contributions and the additional indebtness incurred with D.B ~~agreement~~Zwirn ~~restructuring~~will ~~Alcatel’s~~be ~~debt~~adequate ~~was~~to ~~executed~~fund its operations, at a minimum, through the end of 2006. ~~Alcatel~~However, in the absence of improved operating results and cash flows, the Company may face liquidity problems to fund its operations and meet its obligations. However, and because of the existence of these matters, substantial doubt exists as to the Company’s ~~credit~~ability isto ~~now~~continue operating ~~$1.3~~as ~~million~~a atgoing 6concern.5% The ~~payable~~accompanying ~~over~~financial astatements ~~three~~do ~~year~~not ~~period~~include any adjustments that might result should the Company face liquidity issues to fund its operations and meet its obligations.

Pursuant to the Settlement Agreement, TEM agrees to undertake all commercially reasonable actions necessary to refinance the Bridge Loan on or before April 20, 2008, with a two-year term loan maturing on or before April 20, 2010 (“The Long-Term Financing”) and to cause Telefónica S3.~~A.,~~ RECENT ~~its~~ACCOUNTING parent company (“TEF”), subject to the satisfaction of certain conditions, to guarantee the prompt and complete payment and performance by NewComm when due of the Long-Term Financing. The Long-Term Financing guarantee will be jointly and severally guaranteed by the Partnership.PRONOUNCEMENTS

~~With~~In ~~respect~~May 2005, tothe FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (an interpretation of FASB Statement No. 143) (FIN 47). This Interpretation clarifies that the ~~FCC~~term conditional asset Retirement ~~debt~~Obligations, refers to a legal obligation to perform an asset retirement activity in which ~~originated~~the ~~when~~timing and (or) method of settlement are conditional on a future event that may or may not be within the ~~Partnership~~control ~~acquired~~of ~~its~~the ~~PCS~~entity. The ~~licenses,~~obligation to perform the asset retirement activity is unconditional even though uncertainty may exist about the timing and (or) method of settlement. Accordingly, an entity is required to recognize the fair value of a liability for the conditional asset retirement obligation when incurred and the ~~which~~uncertainty about the ~~Partnership~~timing ~~owes~~and (or method) of settlement should be factored into the ~~United~~measurement ~~States~~of ~~federal~~the ~~government~~liability ~~approximately~~when ~~$24~~sufficient information exists.0 This ~~million~~Interpretation ~~plus~~is ~~accrued~~effective ~~interest~~no atlater 6than December 31, 2005.5% asRetrospective application of ~~June~~interim ~~30,~~financial ~~2005~~information is permitted but is not required. Additionally, ~~TEM~~companies ~~has~~shall ~~secured~~recognize the ~~repayment~~ cumulative effect of initially applying this ~~debt~~Interpretation byas ~~means~~a ofchange ain ~~subordinated~~accounting ~~line~~principle. The Company adopted this new pronouncement effective December 31, 2005. The impact of the ~~credit~~Company’s ~~guaranteed~~financial statements as ~~described~~ ona ~~the~~result ~~Settlement~~of ~~Agreement~~adopting this new statement is not material.

TEM has agreed to undertake all commercially reasonable actions necessary to arrange a subordinated line of credit from a commercial bank for NewComm, the proceeds of which shall be available solely to pay the balance of the FCC debt as currently scheduled or as extended.7

~~A total of $73~~4.8 LEGAL million in accounts payable to TEM and T-Moviles was converted into equity as a result of the Settlement Agreement on April 20, 2005. This conversion has significantly decreased the Partnership’s accounts payable by said amount and reduced the Partnership’s partner’s capital deficit from $118 million to $44.5 million.PROCEEDINGS

~~Management believes that~~From ~~the~~time ~~Partnership~~to ~~will~~time ~~comply with all~~ the ~~requirements~~Partnership ~~for~~is ~~obtaining~~involved ~~the financing and believes that cash and cash equivalents on hand, anticipated growth~~ in ~~revenues,~~litigation ~~vendor~~arising ~~financing~~from ~~and~~ the ~~permanent financing will be~~ ~~adequate~~ordinary tocourse ~~fund~~of ~~its operations during such period. However~~business, insome ~~the absence~~ of ~~improved~~which ~~operating results~~is ~~and~~ongoing. The ~~cash~~General ~~flows,~~Partner ~~and~~does ~~without~~not ~~the~~believe ~~closing~~that ~~of its contemplated permanent~~any ~~financing,~~litigation involving the Partnership ~~may~~will ~~face~~have ~~liquidity problems to fund its operations and meet its obligations. As~~ a ~~result~~material ~~of these~~adverse ~~matters,~~effect ~~substantial~~on ~~doubt exists about~~ the Partnership’s ~~ability to continue~~business asor ~~a going concern. The accompanying consolidated~~ financial ~~statements do not include any adjustments that might result from the outcome of this uncertainty~~condition.

3ITEM 2. ~~Recent~~ ~~accounting~~MANAGEMENT’S ~~pronouncements:~~DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

a)		In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). FIN 46 clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” and provides guidance on the identification of entities for which control is achieved through means other than through voting rights (“variable interest entities” or “VIE’s”) and how to determine when and which business enterprise should consolidate the VIE. This new model for consolidation applies to an entity which either (1) the equity investors (if any) do not have a controlling financial interest or (2) the equity investment at risk is insufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties.
		In December 2003, the FASB issued a revision of the interpretation No. 46 to defer the implementation, clarify some of its provisions and to exempt certain entities from its requirements. Management does not expect that the application of this standard will have any effect on the Company’s consolidated results of operations or its financial condition.
b)		In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150 (FAS-150), Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. FAS-150 addresses certain financial instruments that, under previous guidance, could be accounted for as equity, but now must be classified as liabilities in statements of financial position. These financial instruments include: (1) mandatory redeemable financial instruments, (2) obligations to repurchase the issuer’s equity shares by transferring assets, and (3) obligations to issue a variable number of shares. With limited exceptions, FAS-150 is

Forward-looking Statements

This Quarterly Report on Form 10-Q and future filings by the Partnership on Form 10-Q, Form 10-K and Form 8-K and future oral and written statements by the Partnership may include certain forward-looking statements, including (without limitation) statements with respect to anticipated future operating and financial performance, growth opportunities and growth rates, acquisition and divestiture opportunities, and other similar forecasts and statements of expectation. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and “should,” and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements by the Partnership are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. The Partnership disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information, or otherwise.

~~effective~~Actual future ~~for financial instruments entered into or modified after May 31~~performance, ~~2003,~~outcomes and ~~otherwise~~results ismay ~~effective~~differ atmaterially ~~the~~from ~~beginning~~those expressed ofin ~~the~~forward-looking ~~first~~statements ~~interim~~made ~~period~~by ~~beginning after June 15, 2003. The Company does not expect that~~ the ~~adoption~~Partnership ofas ~~FAS-150~~a ~~will~~result ~~have~~ of a ~~material~~number ~~impact on its consolidated results~~ of ~~operations~~important ~~and financial position~~factors. ~~c) In April 2003, the Financial Accounting Standards Board issued Statement~~ Examples of ~~Financial~~these ~~Accounting~~factors ~~Standards No. 149 (FAS-149)~~include, ~~Amendment~~without oflimitation: ~~Statement~~rapid ~~133~~technological ~~on Derivative Instruments~~ developments and ~~Hedging~~changes ~~Activities. FAS-149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded~~ in ~~other~~the ~~contracts,~~telecommunications ~~and~~industry; ~~for~~ongoing ~~hedging~~deregulation ~~activities under FAS 133, Accounting for Derivative Instruments~~ (and ~~Hedging Activities. FAS-149 is effective for contracts entered into or modified after June 30, 2003. The Company does not expect that~~ the resulting ~~adoption~~likelihood of ~~FAS-149~~significantly ~~will~~increased ~~have~~price ~~an impact on its consolidated results of operations~~ and ~~financial position. d~~product/service competition) Inin ~~December 2003,~~ the ~~Financial~~telecommunications ~~Accounting~~industry ~~Standards~~as ~~Board issued~~ a ~~revised~~result ~~Statement~~ of ~~Financial Accounting Standards No. 132 (FAS-132R), Employers’ Disclosures about Pensions and Other Postretirement Benefits, which replaces~~ the Telecommunications ~~previously~~Act ~~issued~~of ~~Statement.~~1996 ~~FAS-132R increases the existing disclosures for defined benefit pension plans~~ and other ~~defined~~similar ~~benefit~~federal postretirement plans. However, it does not change the measurement or recognition of those plans as required under FAS-87, Employers’ Accounting for Pensions, FAS-88, Employers’ Accounting for Settlements and ~~Curtailments~~state ~~of Defined Benefit Pension Plans~~ legislation and ~~for~~the ~~Termination~~federal ~~Benefits,~~ and ~~FAS-106,~~state Employers’ Accounting for Postretirement Benefits Other Than Pensions. Specifically, FAS-132R requires companies to provide additional disclosures about pensions plan assets, benefit obligations, cash flows, rules and ~~benefit~~regulations ~~costs~~enacted ofpursuant ~~defined benefit pension plans and other defined benefit postretirement plans. Also, companies are required~~ to ~~provide~~that legislation; aregulatory ~~breakdown~~limitations of plan assets by category, such as debt, equity and real estate, and to provide certain expected rates of return and target allocation percentages for these asset categories. The Company is currently evaluating the effect of this pronouncement on ~~its financial statement disclosures. e) In April 2002,~~ the ~~FASB~~Partnership’s ~~issued~~ability SFAS No. 145, Rescission of FASB No. 4, 44 and 64, Amendment of SFAS No. 13, and Technical Corrections. SFAS No. 145 rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt – an amendment of APB Opinion No. 30, which required all gains and losses from extinguishments of debt to becompete ~~aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As a result,~~ in the ~~criteria~~telecommunications inservices ~~Opinion~~industry; ~~30 will now be used to classify those gains~~ and ~~losses.~~continuing ~~SFAS~~consolidation ~~No. 145 becomes effective for financial statements issued on or after May 15, 2002. Requirements and guidance of SFAS No. 145 were applied~~ in ~~connection with~~ the telecommunications ~~write-off~~services ~~of the FCC debt discount~~industry. In addition ~~Please refer~~ to ~~Note~~these ~~14 (c). f) In June 2002~~factors, ~~the~~actual ~~FASB~~future ~~issued SFAS No. 146~~performance, ~~Accounting~~outcomes ~~for Costs Associated with Exit or Disposal Activities. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity to be recognized~~ and ~~measured~~results ~~initially~~may differ atmaterially ~~fair~~because ~~value only when the liability is incurred. SFAS No. 146 also establishes that fair value is the objective for initial measurement~~ of the liability. SFAS No. 146 applies to costs associated with an exit activity but does not involve an entity newly acquired in a business combination or with a disposal activity covered by SFAS No. 144. SFAS No. 146 does not apply to costs associated with a retirement covered by SFAS No. 143. SFAS No. 146 became effective for exit or disposal activities that were initiated after December 31other, ~~2002.~~more ~~The~~general ~~implementation~~factors ~~of SFAS No. 146 did not have a material effect on the Partnership’s consolidated financial position or results from operations. g) In December 2002~~including, ~~the FASB issued Interpretation No. 45 (FIN 45)~~without limitation, ~~“Guarantor’s~~general ~~Accounting~~industry and ~~Disclosure~~market ~~Requirements~~conditions ~~for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” For a guarantee subject to FASB Interpretation No. 45, a guarantor is required to: Measure~~ and ~~recognize~~growth ~~the fair value of the guarantee at inception (for many guarantees~~rates, ~~fair value will be determined using a present value method);~~ domestic and ~~Provide~~international ~~new~~economic ~~disclosures regarding the nature of any recourse provisions or assets held as payments~~conditions, ~~the~~governmental ~~current carrying amount of the guarantee liability,~~ and ~~the~~public ~~nature~~policy ~~of any recourse provisions or assets held as collateral that could be liquidated~~ changes and ~~allow~~ the ~~guarantor~~continued toavailability ~~recover all or a portion~~ of ~~its~~financing ~~payments~~ in the ~~event guarantee payments are required. The disclosure requirement of this Interpretation is effective for financial statements for fiscal years ending after December 15~~amounts, ~~2002;~~at ~~it did not have any effect on~~ the ~~Partnership’s~~terms ~~financial statements. The initial recognition~~ and ~~measurement provisions are effective prospectively for guarantees issued or modified~~ on the orconditions ~~after~~necessary ~~January~~to 1,support ~~2003, which did not have any effect on~~ the Partnership’s ~~financial~~future ~~statements~~business.

11Introduction

~~4. LEGAL~~The information ~~PROCEEDINGS~~contained in this Part I, Item 2 updates, and should be read in conjunction with information set forth in Part II, Items 7 and 8, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, in addition to the interim consolidated financial statements and accompanying notes presented in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

~~From~~The ~~time~~Partnership towas ~~time~~formed ~~the~~on ~~Partnership~~January 24, 1995 and is ~~involved~~managed inby ~~litigation~~its ~~arising~~General ~~from~~Partner, SuperTel Communications Corp. The Partnership was organized to acquire, own, consult and operate personal communication services PCS licenses in the Block ~~ordinary~~C ~~course~~band and to take advantage of ~~business~~the benefits that the FCC has set aside for entrepreneurs. The Partnership owns the Puerto Rico Licenses, ~~some~~which consist of ~~which~~two is15 ~~ongoing~~MHz PCS licenses covering Puerto Rico. The ~~General~~California ~~Partner~~Licenses, ~~does~~which ~~not~~consist ~~believe~~of ~~that~~four ~~any~~15 ~~litigation~~MHz ~~involving~~PCS licenses covering the ~~Partnership~~California ~~will~~cities ~~have~~of aEureka, ~~material~~Redding, ~~adverse~~Modesto, ~~effect~~and Merced were sold and transferred to Metro PCS on ~~the~~April 15, ~~Partnership’s~~2004 ~~business~~for or$10,900,000 ~~financial~~cash payment. ~~condition~~The license covering Visalia-Porterville, California, had been previously sold and transferred to Leap Wireless on June 8, 2001 in exchange for $9,500,000 cash payment.

~~ITEM~~The 2.Partnership ~~MANAGEMENT’S~~commenced commercial operations of its ~~DISCUSSION~~PCS ~~AND~~network ~~ANALYSIS~~in OFPuerto ~~FINANCIAL~~Rico ~~CONDITION~~on ~~AND~~September 24, ~~RESULTS~~1999 OFwhen ~~OPERATIONS~~it began offering wireless services in Puerto Rico to the public. Prior to that date, its income had consisted of interest earnings only.

~~Forward-looking~~The ~~Statements~~Partnership established its Puerto Rico network by forming a wholly owned subsidiary, NewComm, on January 29, 1999. On February 4, 1999, the Partnership and NewComm entered into an agreement with TEM, whereby the Partnership contributed its two Puerto Rico Licenses to NewComm and TEM provided NewComm a $19,960,000 loan to develop the Puerto Rico Licenses. TEM’s loan was made pursuant to a secured convertible promissory note (the “Note”) which would be convertible into 49.9% of NewComm’s equity. The Note, however, could not be converted until the FCC authorized TEM to hold more than a 25% equity interest in NewComm. By means of a Stock Purchase Agreement executed on March 12, 2002 (the “Stock Purchase Agreement”), the Partnership agreed to sell shares equal to 0.2% in NewComm to TEM conditioned to obtaining permanent financing and a clear exit path for the Partnership. This transaction was subsequently approved by the Department of Homeland Security and the FCC.

~~This Quarterly Report on Form 10-Q and future filings by the Partnership on Form 10-Q and Form~~ 8-K and future oral and written statements by the Partnership may include certain forward-looking statements, including (without limitation) statements with respect to anticipated future operating and financial performance, growth opportunities and growth rates, acquisition and divestitive opportunities, and other similar forecasts and statements of expectation. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and “should,” and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements by the Partnership are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. The Partnership disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information, or otherwise.

~~Actual~~In ~~future performance~~August 2004, ~~outcomes and results may differ materially from those expressed in forward-looking statements made by~~ the Partnership asretained athe ~~result~~ services of a ~~number~~consulting ~~of important~~firm ~~factors. Examples~~(other ofthan ~~these factors~~its ~~include,~~external ~~without~~auditors) ~~limitation:~~to ~~rapid~~audit ~~technological~~the ~~developments and~~operations ~~changes~~and inperformance ~~the~~of ~~telecommunications~~NewComm ~~industry;~~under ~~ongoing deregulation (and~~ the ~~resulting~~ ~~likelihood~~management of ~~significantly~~TEM. The ~~increased~~results ~~price~~of ~~and product/service competition) in~~ the ~~telecommunications~~audit ~~industry~~were asreported ato ~~result of~~ the ~~Telecommunications~~Board ~~Act~~ of ~~1996~~Directors ~~and~~of ~~other~~NewComm ~~similar~~on ~~federal~~September ~~and~~30, ~~state~~2004, ~~legislation and~~with the ~~federal~~conclusion ~~and state rules and regulations enacted pursuant to~~ that ~~legislation;~~TEM ~~regulatory~~had ~~limitations~~not onperformed adequately. Under the Partnership’s ~~ability~~direction, ~~to compete in~~ the ~~telecommunications~~Board ~~services~~of ~~industry;~~Directors ~~and~~of ~~continuing~~NewComm ~~consolidation~~terminated ~~in the~~TEM ~~telecommunications~~as ~~services~~manager ~~industry. In addition~~under tothe ~~these~~management ~~factors,~~agreement ~~actual~~on ~~future~~October ~~performance~~28, ~~outcomes~~2004. ~~and~~TEM ~~results may~~alleged ~~differ~~unlawful ~~materially~~and ~~because~~wrongful termination of ~~other,~~the ~~more~~technology ~~general~~and ~~factors~~management ~~including, without~~agreement. ~~limitation,~~The ~~general industry and market conditions and growth rates~~Partnership, ~~domestic and~~on ~~international~~behalf ~~economic~~of ~~conditions~~NewComm, ~~governmental~~was ~~and~~proactively ~~public~~seeking ~~policy~~compensation ~~changes~~for ~~and~~damages ~~the~~caused ~~continued~~by ~~availability of financing in~~ the ~~amounts,~~mismanagement atof ~~the~~TEM ~~terms~~either ~~and~~by ~~on the~~settlement ~~conditions~~or ~~necessary~~within ~~to support~~ the arbitration ~~Partnership’s future business~~process.

~~Introduction~~On April 21, 2005, NewComm and its shareholders entered into a Settlement Agreement and Mutual Release in which all the parties resolved all outstanding disputes. The parties agreed to:

~~The information contained~~– A inmutual ~~this~~waiver ~~Part I, Item 2 updates,~~ and ~~should~~release bebetween ~~read~~all in conjunction with, information set forth in Part II, Items 7 and 8, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, in addition to the interim consolidated financial statements and accompanying notes presented in Part 1, Item 1 of this Quarterly Report on Form 10-Qparties.

~~Restatement~~– Payment of $4,392,978.55 in full satisfaction of ~~prior~~the ~~year’s~~technology transfer fee due to TEM ~~financial~~under ~~statements~~the technology transfer agreement through issuance of a convertible promissory note and capitalization.

~~The Partnership’s~~– Payment ~~previously issued financial statements as~~ of ~~and for the years ended December 31~~$2, ~~2004 and 2003 have been restated to correct the accounting for the method used to record the amount of loss incurred on the sale of handsets to customers~~239,492. ~~Effective~~21 ~~January~~in 1,full ~~2003, the~~satisfaction ~~Partnership changed its method~~ of ~~accounting for~~ the ~~loss~~management onfee ~~the~~due ~~sales of handsets~~ to ~~customers,~~TEM ~~from the recognition of such anticipated future loss at~~under the ~~time~~management ofagreement ~~sale,~~through toissuance ~~the establishment~~ of ana ~~inventory~~convertible ~~reserve~~promissory ~~account~~note ~~for that loss at the end of each accounting period. After discussions with staff members from the Securities~~ and ~~Exchange~~ Commission (SEC) of their interpretation of correct accounting treatment of the inherent losses in the value of the Partnership’s handset inventory at the end of an accounting period, the Partnership’s management has decided to re-establish the previous method for inventory pricingcapitalization. ~~Under the reestablished method, the loss on handset sales is recognized at the time of sale.~~

~~The~~– Payment to ~~Partnership~~ClearComm ~~was formed in January 1995~~ and ~~is managed~~TEM byof ~~its General Partner~~$11, ~~SuperTel Communications Corp~~447,758. ~~The~~28 ~~Partnership~~and ~~was organized to acquire~~$11, ~~own~~396,338.88, ~~consult~~respectively, ~~and operate personal communication services PCS licenses~~ in ~~the~~ ~~Block~~full Csatisfaction ~~band and to take advantage~~ of the ~~benefits~~loans ~~that~~granted ~~the FCC has set aside~~ for ~~entrepreneurs. The~~purposes ~~Partnership owns the Puerto Rico Licenses, which consist~~ of ~~two~~meeting 15the ~~MHz PCS licenses covering~~matured ~~Puerto~~portion ~~Rico. The California Licenses, which consist~~ of ~~four~~the 15FCC ~~MHz~~debt ~~PCS~~through ~~licenses covering~~issuance ~~the California cities~~ of ~~Eureka,~~a ~~Redding,~~convertible ~~Modesto,~~promissory ~~and~~note ~~Merced were sold~~ and ~~transferred to Metro PCS on April 15, 2004 for $10,900,000 cash~~ ~~payment~~capitalization. ~~The license covering Visalia-Porterville, California, had been previously sold and transferred to Leap Wireless on June 8, 2001 in exchange for $9,500,000 cash payment.~~

~~The~~– In addition, ~~Partnership~~$62.4 ~~commenced~~million ~~commercial~~in ~~operations~~other ofnotes ~~its~~and interest payable to TEM were ~~PCS~~converted ~~network~~to equity, for a total equity conversion of $ 80.5 million in accounts ~~Puerto~~payable ~~Rico~~to onTEM ~~September 24~~and TEM Puerto Rico, ~~1999~~Inc. ~~when~~Upon itconversion ~~began~~of ~~offering~~all ~~wireless~~convertible ~~services~~promissory innotes, TEM Puerto Rico, toInc. ~~the~~received ~~public.~~ an aggregate ~~Prior~~amount of shares of NewComm equal to ~~that~~49.9% ~~date,~~and ~~its~~the ~~income~~other ~~had~~stockholders ~~consisted~~hold an aggregate amount of ~~interest~~shares ~~earnings~~of ~~only~~NewComm equal to 50.1%.

~~The Partnership established its Puerto Rico network by~~– Forgiveness ~~forming~~from aTEM ~~wholly~~of ~~owned subsidiary~~$1, ~~NewComm~~859, ~~on January 29, 1999~~068. On97 ~~February 4,~~corresponding ~~1999,~~to ~~the~~all ~~Partnership~~amounts ~~and NewComm~~outstanding ~~entered into an agreement~~ with TMmas (a TEM, ~~whereby~~affiliate) under the ~~Partnership~~SCL agreements.

12– Agreement on premium to be paid by TEM/TEM Puerto Rico, Inc. to the other shareholders upon a potential liquidation or a change in control. TEM and/or TEM Puerto Rico, Inc. shall pay a premium from the liquidation/sale proceeds that in any event will not exceed 16.6% of the equity valuation.

~~contributed~~– In the ~~its~~event ~~two~~that ~~Puerto~~as ~~Rico~~of ~~Licenses~~September to30, ~~NewComm~~2006, ~~and TEM provided~~ NewComm’s anet ~~$19~~income,~~960,000~~ ~~loan~~as todetermined ~~develop~~in accordance ~~the~~with ~~Puerto Rico Licenses~~U. ~~TEM’s~~S. ~~loan~~generally ~~was~~accepted ~~made~~accounting ~~pursuant~~principles toand ameasured ~~secured~~on ~~convertible~~the ~~promissory~~basis ~~note~~of ~~(the~~EBITDA ~~“Note”)~~for ~~which~~the ~~would~~twelve-month beperiod ~~convertible~~then ~~into~~ended, ~~49.9% of~~is ~~NewComm’s~~less ~~equity. The Note~~than $10, ~~however~~970, ~~could~~000, ~~not~~TEM bemay ~~converted~~require ~~until~~that the ~~FCC~~Partnership, ~~authorized~~and ~~TEM to hold more than a 25% equity interest in~~ NewComm~~. By~~’s ~~means of~~shareholders, atogether ~~Stock~~with ~~Purchase~~TEM ~~Agreement~~Puerto ~~executed on March 12~~Rico, ~~2002 (the “Stock Purchase Agreement”)~~Inc., ~~the Partnership agreed to~~ sell ~~shares~~their ~~equal~~respective tointerests ~~0.2%~~ in NewComm to ~~TEM conditioned~~ to ~~obtaining permanent financing and~~ a ~~clear~~third ~~exit path for the Partnership~~party. ~~This transaction was subsequently approved by the Department of Homeland Security and the FCC.~~

~~Entry~~– Amend the ~~into~~Stock ~~Material~~Purchase ~~Definitive~~Agreement ~~Agreements~~in order to extend by 3 ½ years, to approximately October 2008, TEM Puerto Rico, Inc.’s option to buy a majority interest in NewComm and to clarify the procedures that would apply upon the sale of NewComm to a third-party purchaser in the event that neither TEM Puerto Rico, Inc. nor the Partnership exercised its rights under the Sale Agreement to purchase NewComm.

~~The transaction among the Partnership, NewComm, and~~– Enter ~~TEM~~into ~~Puerto~~a ~~Rico~~License ~~was~~Brand ~~consummated~~Agreement onthat ~~April 20,~~allows ~~2005~~the ~~pursuant~~Partnership to ~~the~~use ~~terms of~~ the ~~Settlement Agreement. Some of the~~MoviStar ~~most~~brand ~~important~~name ~~provisions~~free of ~~the~~cost ~~Settlement~~for ~~Agreement~~5 ~~are summarized below:~~years.

• The ~~Partnership,~~effectiveness ~~NewComm,~~of ~~and NewComm’s shareholders, on~~ the ~~one~~Settlement ~~hand,~~Agreement ~~and TEM, on the other hand, agreed to release~~was ~~certain~~conditioned ~~claims~~upon ~~each may have against~~ the ~~other~~satisfaction ~~in connection with the performance~~ of certain ~~contracts~~events, ~~previously~~including ~~entered into by~~ the ~~parties.~~following:

~~• NewComm will capitalize the $73.8 million~~– TEM ~~loan~~Puerto ~~(including~~Rico, ~~interest) previously made to it by TEM and Telefónica Móviles S~~Inc.A. ~~and~~becoming ~~will issue a convertible promissory note to~~ the ~~Partnership~~ inholder ~~the~~of ~~amount~~49.9% of ~~the~~NewComm’s ~~loan~~capital stock.

• – The ~~effectiveness of the Settlement~~ ~~Agreement was conditioned upon the satisfaction of certain events, including the following: TEM Puerto Rico becoming the holder of 49.9% of NewComm’s capital stock; the~~ termination of the Joint Venture Agreement, the Management Agreement, and the Technology Transfer Agreement, each of which involved NewComm and included TEM as a party; the amendment of the Stock Purchase Agreement, the Sale Agreement, dated March 12, 2002 (the “Sale Agreement”), among NewComm, TEM Puerto Rico, the Partnership, and the other shareholders of NewComm, and the Shareholders Agreement, dated March 12, 2002 (the “Shareholders Agreement”), among the Partnership, NewComm, TEM Puerto Rico, and the other shareholders of NewComm; TEM’s entry into a line of credit to be used to pay the balance of NewComm’s indebtedness to the FCC; and an extension or refinancing of NewComm’s bridge loan from ABN Amro Bank, N.V.

~~• In~~– The amendment of the ~~event~~Stock ~~that~~Purchase ~~as of September 30~~Agreement, ~~2006~~the Sale Agreement, ~~NewComm’s~~dated ~~net~~March ~~income~~12, 2002 as(the ~~determined~~“Sale inAgreement”), ~~accordance~~among ~~with U.S.~~NewComm, ~~generally~~TEM ~~accepted~~Puerto ~~accounting~~Rico, ~~principles~~Inc., the Partnership, and ~~measured on~~ the ~~basis~~other shareholders of ~~EBITDA~~ ~~for~~NewComm, and the ~~twelve-month~~Shareholders Agreement, ~~period~~dated ~~then~~March ~~ended~~12, is2002 ~~less~~(the ~~than~~“Shareholders ~~$10~~Agreement”),~~970,000,~~ ~~TEM may~~among ~~require that~~ the Partnership, ~~and~~ NewComm~~’s shareholders~~, ~~together with~~ TEM Puerto Rico, ~~sell~~Inc., ~~their~~and ~~respective~~the ~~interests~~other inshareholders of NewComm ~~to a third party~~.

~~• Upon the earlier to occur of a liquidation or sale of NewComm,~~ – TEM ~~Puerto Rico~~’s entry ~~acquisition~~into ofa ~~50.1%~~line of ~~NewComm~~ ~~stock~~credit ~~pursuant~~ to ~~the Stock Purchase Agreement, or the fifth anniversary of the Settlement Agreement’s effective date, TEM Puerto Rico will~~ be ~~required~~used to pay ~~a premium to~~ the ~~Partnership~~balance ~~and~~of NewComm’s ~~other~~ ~~shareholders. The~~indebtedness ~~amount of the premium payment will be calculated pursuant~~ to the ~~terms~~FCC; ~~set~~and ~~forth~~an inextension ~~the~~or ~~Settlement Agreement,~~refinancing ~~but will not exceed 16.6%~~ of ~~the resulting proceeds, net of certain costs, fees, and expenses and minus~~ NewComm’s ~~indebtedness~~bridge loan ~~existing~~from atABN ~~such time~~Amro Bank, N.V.

On April 20 21, 2005, ~~the~~NewComm ~~Stock~~reorganized ~~Purchase Agreement~~its ~~was~~capital ~~amended~~structure ~~in order to, among other things, extend~~ by ~~3 ½~~collapsing its ~~years,~~many toclasses ~~approximately~~of ~~October 2008,~~common ~~TEM~~stock ~~Puerto~~into ~~Rico’s option to buy~~ a ~~majority~~ ~~interest~~single inclass ~~NewComm. In addition, the Sale Agreement was amended in order to clarify the procedures that would apply upon the sale~~ of ~~NewComm~~common ~~to a third-party purchaser in the event that neither TEM Puerto Rico, nor the Partnership exercised its rights under the Sale Agreement to purchase NewComm~~stock.

~~Also~~Subsequently, ~~the Shareholders~~ ~~Agreement was amended and restated~~ on ~~April 20~~August 5, 2005, ~~and provides among other things that once TEM Puerto Rico becomes the holder of more than 50% of~~ NewComm’s ~~capital~~made ~~stock,~~effective ~~TEM~~a ~~Puerto~~Series ~~Rico~~A ~~will~~Convertible ~~have the right to designate four~~Participating ~~directors~~Preferred toStock ~~NewComm’s~~purchase ~~board~~agreement ~~(two~~between ~~more~~itself ~~directors than it currently has the right to designate),~~ and ~~the~~its ~~Partnership~~investors ~~will have the right~~ to ~~designate three~~fund ~~directors~~cash toflow ~~NewComm’s board (one less director than it currently has the right to designate)~~deficiencies. It ~~also~~On ~~provides~~February ~~that~~16, ~~if NewComm proposes to issue additional shares at a price that is deemed fair by TEM Puerto Rico on the basis of an equity valuation~~2006, ~~and~~NewComm ~~TEM~~made ~~Puerto~~effective ~~Rico does~~another ~~not~~Series ~~exercise~~A ~~its~~Convertible ~~preemptive~~Participating ~~rights~~Preferred ~~under~~Stock ~~the~~purchase agreement, ~~then TEM Puerto Rico~~between ~~will~~itself beand ~~obligated to transfer to NewComm’s other shareholders the number of~~ its ~~shares~~ ~~needed~~investors to ~~prevent~~fund ~~the~~cash ~~other~~flow ~~shareholders from being diluted as a result of NewComm’s proposed issuance~~deficiencies.

139

~~Results~~Immediately after the February 16, 2006 closing, the authorized capital of ~~Operations~~NewComm is:

~~Three-month period ended June 30~~1. 50,024.695 ~~2005~~shares ~~compared~~of ~~with~~preferred ~~three-month~~convertible ~~period ended~~of ~~June 30, 2004.~~which:

~~Set~~· 12.372 ~~forth~~designated ~~below~~as isSeries aA-1 ~~summary of the results of operations before other~~convertible ~~income~~participating ~~and expenses for the periods indicated:~~preferred

	Three-Month Periods Ended
	June 30,
	2005			2004			Change
Revenues:
Service revenues	$	22,686,968		$	25,906,148		-12	%
Handsets and accessories sales	1,169,624			1,228,194			-5	%
Total Revenues	23,856,592			27,134,342			-12	%
Expenses:
Operating expenses, excluding depreciation expense	20,809,331			26,356,732			-21	%
Income (loss) from operations	3,047,261			777,610			292	%
Interest expense	(2,913,539		)	(2,321,032		)	26	%
Income (loss) before other income (expense)	$	133,722		$	(1,543,422	)	-109	%

· 12.323 designated as Series A-2 convertible participating preferred

~~Revenues~~· 25,645.165 designated as Series A-3 convertible participating preferred

~~The Partnership’s revenues for the three-month period ended June 30~~· 24,~~-2005 decreased by 12% from $27~~354.1835 ~~million~~designated ~~to $23.9~~ as ~~compared~~ toSeries ~~the same period in 2004. Total revenues include service as well as handset and accessories revenues. Service revenues for the three~~A-~~month period ended June 30, 2005~~4 ~~decreased~~convertible byparticipating 12% when compared to the same period in 2004 while handset and accessories sales decreased by 5%. The decrease in handsets and accessories revenues is mainly due to handset units pricing adjustments. The decrease in service revenues is related to tighter credit policies and a reduction in the Partnership’s customer base during the second quarter of 2005.preferred

142. 52,044.142 shares of common stock, 2,019.447 of which are issued and outstanding and 50,024.695 are reserved for the issuance upon the conversion of the Series A Convertible Preferred Stock.

~~Expenses~~Results of Operations

~~The following table shows the variances for the three~~ Three-month ~~period~~ period ended June 30, ~~2005~~2006 as compared towith ~~the~~three-month ~~same~~ period inended June 30, ~~2004~~2005.

	Three-months ended June 30,				%
Expenses	2005		2004		Change
Cost of handset and accessories	$	4,362,624	$	5,652,167	-23	%
Interconnection expense	807,907		1,065,425		-24	%
Sales and dealers commissions	1,891,224		2,533,551		-25	%
Salaries and benefits	3,859,776		3,955,461		-2	%
Depreciation	4,524,200		4,388,884		3	%
Advertising expense	1,382,099		1,857,480		-26	%
Legal and professional services	287,520		851,391		-66	%
Provision for doubtful accounts	3,293,557		2,365,150		39	%
Rent expense	1,824,870		1,731,547		5	%
Taxes other than income	529,874		841,109		-37	%
Network Operation and Maintenance	2,011,529		1,726,390		17	%
Other expenses	-136,634		2,426,762		-106	%
Management fee to General Partner	68,750		68,750		0	%
Services rendered by related parties	626,235		1,258,326		-50	%
Loss on Sale of California License	—		25,832		-100	%
Total expenses	$	25,333,531	$	30,748,225	-18	%

Set forth below is a summary of the results of operations before other income and expenses for the periods indicated:

Expenses for the three-month period ended June 30, 2005 totaled $25,333,531 as compared to $30,748,225 for the same period in 2004. There was an overall reduction of 18% in operating expenses or $5.4 million during the second quarter of 2005.

	Three-Month Periods Ended
	June 30,
	2006			2005			Change
Revenues:
Service revenues	$	16,793,646		$	22,686,968		-26	%
Handsets and accessories sales	1,504,873			1,169,624			29	%

Total Revenues	18,298,519			23,856,592			-23	%
Expenses:
Operating expenses, excluding depreciation expense	16,581,254			20,809,331			-20	%

Income (loss) from operations	1,717,265			3,047,261			-44	%

Interest expense	(4,106,105		)	(2,913,539		)	41	%

Income (loss) before other income (expense)	$	(2,388,840	)	$	133,722		-1886	%

The overall decrease in expenses is mainly due to decreases in the cost of handsets and accessories sold, interconnection expenses, sales and dealers commissions, legal and professional fees, and taxes other than income.Revenues

~~Income~~The Partnership’s revenues for the three-month period ended June 30, 2006 decreased by 23% from ~~Operations~~$23.9 million to $18.3 million as compared to the same period in 2005. Total revenues include service as well as handset and accessories revenues. Service revenues for the three-month period ended June 30, 2006 decreased by 26% when compared to the same period in 2005 while handset and accessories sales increased by 29%. The increase in handsets and accessories revenues is mainly due to the shift from the handset subsidy policy whereby a customer is now required to purchase the handset at competitive prices under the new available plans. The decrease in service revenues is related to tighter credit policies and a reduction in the Partnership’s customer base during the second quarter of 2006.

Income from operations reflects the ability of the Partnership to generate positive cash flows from its operations, which does not take into consideration expenses such as amortization, depreciation and interest that must be reported for generally accepted accounting principles (GAAP) to arrive at the net income or loss.10

Income from operations for the three month period ended June 30, 2005 of $3,047,261 shows a significant increase of 292% or $2.3 million as compared to the income from operations for the same period in 2004. This increase in income from operations is related to overall 18% decrease in expenses.Expenses

~~Interest~~The ~~expense~~following table shows the variances for the three -month period ended June 30, ~~2005 of~~2006 ~~$2.9~~as ~~million~~compared ~~($2.3~~to ~~million in 2004) reduce~~ the ~~income from operations and result in net income before other income and expenses of $133,722 for the second quarter of 2005 and a loss of $1,543,422 for the~~ same period in ~~2004; an overall reduction in net loss of 109% when compared to 2004~~2005. ~~Depreciation expense~~

Expenses	Three-months ended June 30,				%
	2006		2005		Change

Cost of handset and accessories	3,069,195		$	4,362,624	-30	%
Interconnection expense	73,120		807,907		-91	%
Sales and dealers commissions	1,206,131		1,891,224		-36	%
Salaries and benefits	3,408,346		3,859,776		-12	%
Depreciation	4,696,195		4,524,200		4	%
Advertising expense	424,118		1,382,099		-69	%
Legal and professional services	836,601		287,520		191	%
Provision for doubtful accounts	909,352		3,293,557		-72	%
Rent expense	2,119,792		1,824,870		16	%
Taxes other than income	751,782		529,874		42	%
Network Operation and Maintenance	2,029,605		2,011,529		1	%
Other expenses	1,610,897		-136,634		-1279	%
Management fee to General Partner	125,000		68,750		82	%
Services rendered by related parties	17,315		626,235		-97	%

Total expenses	$	21,277,449	$	25,333,531	-16	%

ofExpenses for ~~$4.4~~the ~~million~~three-month ~~($4.3~~period ~~million~~ended inJune 30, ~~2004)~~2006 totaled $21,277,449 aas compared ~~non-cash~~to ~~item~~$25,333,531 ~~further~~for ~~reduces~~ the ~~book~~same ~~income~~period toin $42005.3 There ~~million~~was an overall reduction of 16% in operating ~~2005~~expenses (or $64 million induring ~~2004)~~the second quarter of 2006.

16The overall decrease in expenses is mainly due to decreases in the cost of handsets and accessories sold, interconnection expenses, sales and dealers commissions, advertising expense, and the provision for doubtful accounts. The increase in legal and professional fees is related to arbitration proceedings being currently held between the Partnership and Telefonica.

~~Six-month~~Income ~~period ended June 30, 2005 compared~~from ~~with six-month period ended June 30, 2004.~~Operations

~~The~~Income from ~~following~~operations ~~table~~reflects ~~summarizes~~the ~~changes~~ability inof ~~certain~~the ~~financial~~Partnership ~~information~~to generate positive cash flows from its operations, which does not take into consideration expenses such as amortization, depreciation and interest that must be reported for generally accepted accounting principles (GAAP) to arrive at the ~~period~~net ~~indicated:~~income or loss.

	Six-Month Periods Ended
	June 30,
	2005			2004			Change
Revenues:
Service revenues	$	45,565,488		$	52,784,373		-14	%
Handsets and accessories sales	1,907,084			2,664,790			-28	%
Total Revenues	47,472,572			55,449,163			-14	%
Expenses:
Operating expenses, excluding depreciation expense	42,670,000			52,618,142			-19	%
Income (loss) from operations	4,802,572			2,831,021			70	%
Interest expense	(5,968,121		)	(4,687,799		)	27	%
Income (loss) before other income (expense), excluding depreciation expense	$	(1,165,549	)	$	(1,856,778	)	-37	%

Income from operations for the three-month period ended June 30, 2006 of $1,717,265 shows a significant decrease of 44% or $1.3 million as compared to the income from operations for the same period in 2005. This decrease in income from operations is related to overall 23% reduction in revenues.

~~Revenues~~Interest expense for the three month-period ended June 30, 2006 of $4.1 million ($2.9 million in 2005) reduce the income from operations and result in net loss before other income and expenses of $2.4 million for the second quarter of 2006 and a net income of $133,722 for the same period in 2005; an overall increase in net loss of 1886% when compared to 2005. Depreciation expense of $4.7million ($4.4 million in 2005), a non-cash item, further reduces the book income to $7.1 million in 2005 ($4.3 million in 2005).

The Partnership’s revenues for the six-month period ended June 30, 2005 totaled $47,472,572 as compared to $55,449,163 for the same period in 2004. Revenues for the six-month period ended June 30, 2005 included $45,565,488 in service revenues and $1,907,084 in handset and accessories sales generated from NewComm’s wireless operations, as compared to $52,784,373 and $2,664,790 respectively, for the same period in 2004. The 14% decrease in service revenues is consistent with a decrease in the Partnership’s customer base which was offset by an increase in airtime on contract subscribers. The decrease in handset and accessories sales is related to pricing adjustments and a slight reduction on the handset subsidy on the handsets sold.11

17Six-month period ended June 30, 2006 compared with six-month period ended June 30, 2005.

~~Expenses~~The following table summarizes changes in certain financial information for the period indicated:

The following table shows the variances for the six month period ended June 30, 2005 as compared to the same period in 2004:

	Six-Month Periods Ended
	June 30,
	2006			2005			Change
Revenues:
Service revenues	$	34,269,470		$	45,565,488		-25	%
Handsets and accessories sales	3,156,001			1,907,084			65	%

Total Revenues	37,425,471			47,472,572			-21	%
Expenses:
Operating expenses, excluding depreciation expense	35,001,681			42,670,000			-18	%

Income (loss) from operations	2,423,790			4,802,572			-50	%

Interest expense	(8,128,965		)	(5,968,121		)	36	%

Income (loss) before other income (expense), excluding depreciation expense	$	(5,705,175	)	$	(1,165,549	)	389	%

	Six-months ended June 30,		%
Expenses	2005	2004	Variances
Cost of handset and accessories	9,047,636	11,591,131	-22	%
Interconnection expense	1,603,484	2,040,979	-21	%
Sales and dealers commissions	3,925,924	5,380,383	-27	%
Salaries and benefits	7,773,695	7,989,871	-3	%
Depreciation	9,095,668	8,693,346	5	%
Advertising expense	2,092,602	3,314,146	-37	%
Legal and professional services	679,302	1,564,743	-57	%
Provision for doubtful accounts	5,482,126	4,711,950	16	%
Rent expense	3,617,963	3,367,372	7	%
Taxes other than income	1,572,106	1,849,647	-15	%
Network Operation and Maintenance	3,952,237	3,292,937	20	%
Other expenses	1,396,574	4,777,609	-71	%
Management fee to General Partner	137,500	137,500	0	%
Services rendered by related parties	1,418,851	2,586,220	-45	%
Loss on Sale of California License	—	25,832	-100	%
Total expenses	51,795,668	61,323,666	-16	%

Revenues

~~Expenses~~The Partnership’s revenues for the six-month period ended June 30, ~~2005~~ 2006 totaled $5137,~~795~~425,~~668~~471, as compared to $6147,~~323~~472,~~666~~572 for the same period in ~~2004.~~ ~~During~~2005. Revenues for the six-month period ended June 30, ~~2005~~2006 included $34,269,470 ~~the~~in ~~Partnership’s expenses~~service ~~decrease~~revenues byand ~~16%~~$3,156,001 ~~due~~in tohandset ~~pricing~~and ~~adjustments~~accessories ~~which~~sales generated ~~reduced~~from ~~the~~NewComm’s ~~handset subsidy~~wireless onoperations, ~~the~~as ~~purchase~~compared ofto ~~handsets~~$45,565,488 and $1,907,084 ~~contributed~~respectively, tofor the 22same period in 2005. The 25% ~~reduction~~decrease in service revenues is ~~cost~~consistent ofwith ~~handsets~~a ~~and~~decrease ~~accessories. The Partnership~~in ~~managed~~the toPartnership’s ~~reduce~~customer ~~overall~~base ~~expenses~~which was offset by ~~implementing~~an ~~new~~increase ~~operations procedures~~in ~~and~~airtime ~~eliminating~~on ~~various~~contract ~~outsourcing~~subscribers. The ~~contracts~~increase in handset and accessories sales is related to ~~inventory~~the reduction on the ~~management~~handset ~~and~~subsidy ~~customer~~on ~~service~~the handsets sold.

~~Income from Operations~~12

~~Income~~The following ~~from~~table ~~operations~~shows the variances for the six -month period ended June 30, 2006 ~~2005 of $4.8 shows an increase of 70%~~ as compared to the ~~income from operations for the~~ same period in ~~2004. This increase in income from operations is mainly due to the overall decrease in expenses and to the reduction in the cost of acquiring new customers.~~2005:

Interest expense for the six- month period ended June 30, 2005 of $6.0 million ($4.7 million in 2004) reduce income from operations and result in a net loss before other income (expense) of $1.2 million for the second quarter of 2005 ($1.9 million in 2004); an overall reduction in net loss before other income (expense) of 37% when compared to 2004. Depreciation expense of $9.0 million ($8.7million in 2004) reduces the Partnership’s book income but as a non-cash item it does not represent additional disbursements for operations.

Expenses	Six-months ended June 30,				%
	2006		2005		Variances

Cost of handset and accessories	$	6,822,385	$	9,047,636	-25	%
Interconnection expense	699,157		1,603,484		-56	%
Sales and dealers commissions	2,352,013		3,925,924		-40	%
Salaries and benefits	7,363,951		7,773,695		-5	%
Depreciation	9,387,588		9,095,668		3	%
Advertising expense	720,198		2,092,602		-66	%
Legal and professional services	1,384,454		679,302		104	%
Provision for doubtful accounts	2,308,384		5,482,126		-58	%
Rent expense	4,238,824		3,617,963		17	%
Taxes other than income	1,718,196		1,572,106		9	%
Network Operation and Maintenance	3,984,441		3,952,237		1	%
Other expenses	3,126,416		1,396,574		124	%
Management fee to General Partner	250,000		137,500		82	%
Services rendered by related parties	33,262		1,418,851		-98	%

Total expenses	$	44,389,269	$	51,795,668	-14	%

~~The~~Expenses for ~~increase~~the insix-month ~~depreciation~~period ~~expense~~ended isJune 30, ~~related~~2006 totaled $44,389,269 as compared to $51,795,668 for the ~~increase~~ same period in 2005. During the ~~depreciable~~six-month period ~~assets~~ended ~~placed~~June 30, 2006, the Partnership’s expenses decreased by 14% due to pricing adjustments which reduced the handset subsidy on the purchase of handsets and contributed to the 25% reduction in cost of handsets and accessories. The Partnership managed to reduce overall expenses by implementing new operations procedures and eliminating various outsourcing contracts related to inventory management and customer service. The ~~during~~increase in legal and professional services is related to the ~~period~~arbitration proceedings being currently held between the Partnership and Telefonica.

~~Liquidity~~Income ~~and Capital Resources~~from Operations

AsIncome offrom ~~June 30,~~operations ~~2005,~~reflects the ~~Partnership~~ability ~~had~~of ~~cash~~the ~~and~~Partnership ~~cash~~to ~~equivalents~~generate ~~amounting~~positive tocash ~~$10~~flows ~~million~~from its operations, which ~~are~~does ~~mostly~~not ~~related~~take tointo ~~proceeds~~consideration ~~from~~expenses such ~~the~~as ~~sale~~amortization, ofdepreciation ~~the California~~and ~~licenses~~interest tothat ~~Metro~~must ~~PCS~~be inreported ~~the~~for generally ~~second~~accepted ~~quarter,~~accounting ~~2004~~principles ~~for~~(GAAP) ato ~~cash~~arrive ~~payment of~~to ~~$10.9~~the ~~million~~net income or loss.

18Income from operations for the six-month period ended June 30, 2006 of $2.4 million shows a reduction of 50% as compared to the income from operations for the same period in 2005. This decrease in income from operations is mainly due to the overall decrease in revenues due to the reduction of the customer base.

~~As part of the~~Interest ~~agreement~~expense ~~with~~for ~~TLD, NewComm entered into a contract with Lucent Technologies, Inc. (“Lucent”) that required Lucent to build a network that uses~~ the ~~Code Division~~six-month ~~Multiple~~period ~~Access~~ended ~~(“CDMA”) protocol.~~June ~~The~~30, ~~total~~2006 ~~cost~~ of ~~the original network was approximately~~ $~~125 million~~8. ~~During~~1 ~~2000,~~million ~~NewComm’s management and Lucent agreed on formally extending the payment of up to~~ ($616.0 million ofin ~~the~~2005) ~~total~~reduce ~~amount~~income offrom ~~network~~operations ~~construction~~and ~~payable,~~result atin ~~the time, under~~ a ~~formal~~net ~~financing~~loss ~~agreement. On~~before ~~June 4,~~other ~~2003,~~income ~~NewComm~~(expense) ~~entered into a Senior Credit Agreement with Lucent, which extended the maturity date~~ of ~~the~~ $~~51.~~5.7 million ~~remaining~~for on the ~~credit facility~~second toquarter ~~September 30, 2009, with interest at 8% annually. In July 2005, Lucent sold the Note, which at the time had a principal balance~~ of ~~$48.5~~ ~~million,~~2006 ~~to D.B. Zwirn & Co.~~ (“D$1.~~B. Zwirn”). The Company signed~~2 amillion ~~Forbearance~~in ~~Agreement with D.B Zwirn on July 14,~~ 2005); ~~and~~an ~~was~~overall ~~later~~reduction ~~extended~~in ~~until August~~net ~~22,~~income ~~2005.~~before ~~NewComm~~other ~~is currently negotiating a new~~income ~~credit facility with~~(expense) ~~D.B.~~of ~~Zwirn~~389% ~~and~~when ~~expects~~compared to ~~close~~ ~~on a new credit before August 31,~~ 2005. ~~The Company expects that the principal balance~~ ~~under~~Depreciation ~~the~~expense ~~new~~of ~~credit agreement with D~~$9.B.4 ~~Zwirn~~million ~~will be~~ ($539.30 million, ~~with~~in ~~a term~~2005) ~~until~~reduces ~~January 31, 2006 and a floating interest rate of LIBOR plus 700~~the ~~basis~~Partnership’s ~~points.~~book ~~The~~income ~~facility~~but ~~includes~~as ~~$48.5~~a ~~million~~non-cash ofitem ~~principal,~~it ~~$2.0~~does ~~million~~not ofrepresent ~~accrued interest and $4.0 million~~ additional ~~funding~~disbursements for ~~working capital and general purpose needs~~operations.

~~In addition, the Partnership owes the United States~~The ~~federal~~increase ~~government~~in ~~approximately~~depreciation ~~$24~~expense ~~million~~is ~~plus~~related ~~accrued~~to ~~interest~~the atincrease ~~6.5%~~ in ~~connection~~ ~~with~~ the ~~acquisition of its PCS licenses. TEM has secured the~~depreciable ~~repayment~~assets ofplaced ~~this~~in ~~debt~~service byduring ~~means of a subordinated line of credit guaranteed as described on~~ the ~~Settlement Agreement~~period.

OnLiquidity ~~March 2, 2002, the Partnership sold 4.08% of NewComm to a group of investors led by Fleet Development Ventures for $13 million. During the second quarter of 2002, the Partnership~~ and ~~TLD contributed approximately $9 million each to~~ ~~NewComm~~Capital in the form of equity and convertible debt, respectively. The Partnership believes it has obtained sufficient funds, together with TLD, to provide NewComm with the capital necessary for the Project Finance Facility and to fully fund NewComm’s operations.Resources

~~The~~As ~~Partnership~~of June ~~anticipates~~30, ~~that~~2006, ~~earnings~~the ~~and~~Partnership had cash ~~distributions~~ ~~derived~~and ~~from~~cash ~~its~~equivalents ~~Puerto~~amounting ~~Rico Network, interim and permanent~~to ~~financing and~~$4,684,382, ifwhich ~~necessary,~~are ~~additional~~mostly ~~capital~~related ~~calls~~to proceeds from ~~its~~the ~~Investors~~sale ~~or accessing~~of the Visalia-Porterville ~~public~~and ~~capital~~California ~~markets,~~licenses ~~should~~in ~~provide~~prior itperiods ~~with~~and the ~~liquidity to~~Fleet ~~meet its obligations~~Transaction.

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK~~13

~~The~~ITEM Partnership’s exposure to market risk through derivative financial instruments and other financial instruments is not material because the Partnership does not use derivative financial instruments and does not have foreign currency exchange risks3. ~~The~~ ~~Partnership~~QUANTITATIVE ~~invests~~AND ~~cash~~QUALITATIVE ~~balances~~DISCLOSURE inABOUT ~~excess~~MARKET of operating requirements in short-term money market funds. As of June 30, 2005, the Partnership had cash equivalents and short-term investments of approximately $10,000,000 consisting of cash and highly liquid, short-term investments in money market funds.RISK

The Partnership’s ~~cash~~exposure ~~and~~to ~~cash~~market ~~equivalents~~risk ~~will~~through derivative ~~increase~~financial orinstruments ~~decrease~~and byother ~~an immaterial~~financial ~~amount~~instruments ifis ~~market~~not material ~~interest~~because ~~rates~~the ~~increase~~Partnership ordoes ~~decrease,~~not ~~and~~use ~~therefore, its~~derivative ~~exposure~~financial toinstruments and ~~interest~~does ~~rate~~not ~~changes~~have ~~has~~foreign ~~been~~currency ~~immaterial~~exchange risks. The Partnership’s ~~loans~~invests ~~payable~~cash tobalances ~~the FCC~~in ~~have~~excess ~~a fixed interest rate~~ of ~~6.5%~~operating ~~and~~requirements ~~therefore~~in ~~are~~short-term ~~not~~money ~~exposed~~market ~~to interest rate risks~~funds. ~~The~~As ~~TEM~~of ~~Note~~June ~~relating~~30, ~~to indebtedness~~2006, ofthe ~~NewComm~~Partnership ~~bears~~had ~~interest~~cash equivalents atand ~~the~~short-term ~~floating~~investments ~~rate~~ of ~~the~~approximately ~~90-day~~$4,684,382 ~~LIBOR~~consisting ~~plus~~of ~~1.5%~~cash and ~~has~~highly ~~been~~liquid, ~~extended~~short-term toinvestments ~~December 2004~~in money market funds.

AnThe ~~agreement restructuring Lucent~~Partnership’s ~~outstanding~~cash ~~debt~~and ~~was~~cash ~~executed~~equivalents onwill ~~June 4, 2003. In~~increase ~~July~~or ~~2005,~~decrease ~~Lucent~~by ~~sold~~an immaterial ~~the~~amount ~~Note,~~if ~~which~~market atinterest ~~the~~rates ~~time had~~increase aor ~~principal~~decrease, ~~balance~~and ~~of $48.5 million~~therefore, its exposure to ~~D.B.~~interest ~~Zwirn~~rate &changes ~~Co.~~has ~~(“D.B.~~been ~~Zwirn”)~~immaterial. The ~~Company~~Partnership’s ~~signed~~loans apayable ~~Forbearance~~to ~~Agreement~~the ~~with~~FCC have ~~D.B~~a ~~Zwirn~~fixed oninterest ~~July~~rate ~~14,~~of ~~2005~~6.5% and ~~was~~ ~~later~~therefore ~~extended~~are ~~until~~not ~~August~~exposed ~~22,~~to ~~2005~~interest rate risks. The ~~NewComm~~TEM isNote ~~currently~~has ~~negotiating a~~been ~~new~~converted ~~credit facility with~~into ~~D.B.~~equity ~~Zwirn~~as ~~and~~described ~~expects to close~~ on ~~a new~~the ~~credit~~Settlement ~~agreement before August 31, 2005~~Agreement.

~~Controls~~ITEM ~~and~~4. ~~Procedures~~CONTROLS AND PROCEDURES

The Partnership’s Chief Executive Officer, Javier O. Lamoso, and the Partnership’s Chief Financial Officer, Edileen Salicrup, have evaluated the Partnership’s disclosure controls and procedures within 90 days of the filing of this report.

Mr. Lamoso and Ms. Salicrup have concluded that the Partnership’s disclosure controls and procedures provide reasonable ~~assurance~~ assurance that the Partnership can meet its disclosure obligations. The Partnership’s disclosure controls and procedures are based upon a roll-up of financial and non-financial ~~reporting~~information ~~that~~concerning ~~is consolidated by TEM pursuant to~~ the Partnership’s ~~Management~~and ~~Agreement with TEM~~NewComm. The reporting process is designed to ensure that information required to be disclosed by the Partnership in the reports that it files or submits with the Commission is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

There have been significant changes in the Partnership’s internal controls that have affected these controls subsequent to the date of their evaluation. The Partnership is currently improving internal controls on its billings and collections procedures and continues to assess other areas in which internal controls may be extended or modified.14

19PART II: OTHER INFORMATION

~~PART~~ITEM ~~II:~~1. ~~OTHER~~LEGAL ~~INFORMATION~~PROCEEDINGS

~~ITEM~~Information regarding legal proceedings is disclosed in Part I, Item 1~~. LEGAL~~, ~~PROCEEDINGS~~Notes to Interim Consolidated Financial Statements (unaudited), Section 4, and is hereby incorporated into Part II, Item 1 by this reference.

Information regardingITEM legal proceedings is disclosed in Part I, Item 1, Notes to Interim Consolidated Financial Statements (unaudited), Section 4,. andSUBMISSION isOF hereby incorporatedMATTERS intoTO PartA II,VOTE ItemOF 1LIMITED by this reference.PARTNERS

~~ITEM~~On September 16, 2005 the Partnership’s General Partner, SuperTel Communications Corp., initiated a consent solicitation among its partners proposing to extend the Partnership’s termination date until December 31, 2010. By November 30, 2005, the final day of the solicitation period, a total of 2,072.7 Partnership Units were voted representing 74.96% of the 2,765.20 Partnership Units outstanding and entitled to vote. Of the Partnership Units voted, 1,920.6 Partnership Units (92% of the participants) voted in favor of the extension, 129. ~~EXHIBITS~~3 ~~AND~~Partnership ~~REPORTS~~Units ONvoted against ~~FORM~~the extension and 22.8-K abstained. As a result, the Partnership’s partners approved the amendment to the Partnership’s Agreement of Limited Partnership, as previously amended, to extend the latest date on which the Partnership will dissolve from December 31, 2005 to December 31, 2010.

~~(a) List~~ITEM of6. ~~Exhibits~~EXHIBITS AND REPORTS ON FORM 8-K

Exhibit 31.1:	Certification of Chief Executive Officer
Exhibit 31.2:	Certification of Chief Financial Officer
Exhibit 32.1:	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
Exhibit 32.2:	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

(a) List of Exhibits

~~ITEMS~~Exhibit 31.1: Certification 2,of 3,Chief 4Executive ~~and~~Officer pursuant 5to ~~are not applicable and have been omitted~~Rule 13a-14(a)/15d-14(a).

20Exhibit 31.2: Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

~~SIGNATURES~~Exhibit 32.1: Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.

Exhibit 32.2: Certification Pursuant to ~~the requirements~~ Section 1350 of ~~the~~Chapter ~~Securities Exchange~~63 ~~Act~~ of ~~1934,~~Title ~~the~~18 ~~registrant~~of ~~has duly caused this report to be signed on its behalf by~~ the ~~undersigned,~~United ~~thereunto~~States ~~duly authorized~~Code.

		ClearComm, L.P.
	By:	SuperTel Communications Corp.
Date: August 23, 2005		By:	/s/ Javier O. Lamoso
		Name: Javier O. Lamoso
		Title: President

(b) No reports on Form 8-K have been filed during the quarter for which this report is filed.

21ITEMS 2, 3 and 5 are not applicable and have been omitted.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ClearComm, L.P.


	By:	SuperTel Communications Corp.
	Its:	General Partner


Date: August 14, 2006	By:	/s/ Javier O. Lamoso
	Name:	Javier O. Lamoso
	Title:	President

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