Ladies and gentlemen, greetings and welcome to the TDS and U.S. Cellular Second Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jane McCahon. Thank you. You may begin. Jane W. McCahon: Thank you, Adam, and good morning, everyone. Thanks for joining us. I want to make you all aware of the presentation we've prepared to accompany our comments this morning, which you can find on the Investor Relations sections of the TDS and U.S. Cellular websites. With me today and offering prepared comments, from U.S. Cellular, Ken Meyers, President and Chief Executive Officer; Steve Campbell, Executive Vice President and Chief Financial Officer; from TDS Telecom, Vicki Villacrez, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and U.S. Cellular Investor Relations websites. Please see those websites for slides referred to on this call, including non-GAAP reconciliations. We provide guidance for both adjusted OIBDA and adjusted EBITDA to highlight the contributions of U.S. Cellular's wireless partnerships. For TDS Telecom, these are basically the same number. We revised one non-GAAP measure in response to SEC comments around the clarity and use of such measures. Given the close similarities between the term operating cash flow and cash flow from operating activities as presented on our consolidated statement of cash flows, going forward, we will change our use of the term operating cash flow to adjusted OIBDA in our earnings releases, investor decks and other public filings where this metric is used. There is no change to the calculation of this measure, simply a label change. As shown on Slide 2, the information set forth in the presentation and discussed during this call contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the safe harbor paragraphs in our press releases and the extended versions included in our SEC filings. Shortly after we released our earnings and before the call, TDS and U.S. Cellular filed SEC Forms 8-K, including today's releases, and filed our SEC Forms 10-Q. Later today, we will also be filing Forms F-3 as we are registering additional shares for our dividend reinvestment plan. Taking a quick look at the upcoming IR schedule, Slide 3. We'll be presenting at the Drexel Hamilton conference on September 6 in New York, and we will be hosting our annual analyst meeting in conjunction with the GSM Mobile World Congress Americas in partnership with CTIA meetings in San Francisco on September 13. And then first week in October, we will be in Europe. Please let us know if you like information about any of these events. And do keep in mind that TDS has an open-door policy. So if you are in the Chicago area and would like to meet with members of management, the Investor Relations team will try to accommodate you, calendars permitting. Now I'd like to turn to Ken -- call over to Ken Meyers.

Thanks, Jane. Good morning, and thanks for joining us today. Overall, I'm really pleased with our results for the second quarter, and in fact, just how the first half has played out. We started out a little slow this year on some growth metrics, and we have closed the gap while continuing to work on costs across the enterprise and investing in our network to move along the path to Voice over LTE. Our top priority coming into 2017 was to protect our customer base given the extremely competitive environment. To date, we're achieving this goal. Our new Total Plans, which include an unlimited option, contributed to the success. So, too, has our service-oriented culture and those ongoing investments into our network. All of these efforts resulted in record low handset churn of just 0.91% during the quarter. In addition to the low churn, we are also able to increase handset gross adds. The combination of these 2 successes produced growth in our handset customer base. In fact, I really like the mix of business this quarter. 83% of our postpaid net adds were handset net adds, a very different picture than a year ago when it was all about connected devices. Our Total Plans played a key role in meeting customer needs this quarter. I'm talking about both new and existing customers. As a reminder, our Total Plans, our pricing construct, that simplifies things and eliminated over surcharges. Included in this construct are our unlimited plans. We ended the quarter with 1.2 million subscribers on the Total Plans, representing 27% of our postpaid lines. Approximately 34% of the customers on these Total Plans have chosen unlimited option. And while I still have concerns about the long-term economics of unlimited plans, I am pleased with our second quarter subscriber results, both the plan mix and the volume. They're proof that customers value both the quality of our network and our service orientation. As the financial implications of these plans, the whole portfolio is right about where we expect it to be at the beginning of the year even though, at that time, unlimited plans were not yet on our radar screen. The year-over-year change in average revenue per unit is a result of many factors. Clearly, the biggest, industry pricing environment, which has been weak. There's also been impacts from the change in mix and the impact of EIP 2. Going forward, the EIP impact would be gone in another quarter or so, and the mix impact of connected devices will lessen, too. In terms of taking costs out of the business, I want to commend the organization on its cost-control activities, which can be seen across the board in systems operations, cost of equipment sold and in SG&A. Going into the back half of the year, we are expecting multiple iconic device launches, and we'll be watching competitive activity closely. As I said, protecting our current customer base is one of our top priorities for the year. Second quarter, we ran some fairly aggressive promotions in part to help clear out inventory in advance of these upcoming launches. We did not have any significant connected device promotions in the quarter. You can see the slowdown in connected activities as follows: Our focus on handsets is driven by the relative ARPU and the overall better economics of those devices. Turning to Slide 6. We continue to invest in our network to meet the growing demand of our customers. In May, we launched Voice over LTE in our first market, Iowa. And we're continuing to prepare for the next phase of Voice over LTE in early 2018. Overall, the Iowa launch went very smoothly with no negative customer impacts. And anecdotally, we've heard from our customers that they enjoy the simultaneous voice and data functionality. We've just started to turn on Voice over LTE roaming for one GSM carrier in Iowa and hope to have another VoLTE roaming agreement operationalized before year-end. Also, as shown on Slide 6, total data usage has grown 51% on a year-over-year basis and is up 24% sequentially. The sequential move is largely impacted by the rollout of Total Plans and unlimited plans. While overall data usage averages about 2.8 gigs per customer per month, customers on our unlimited plan are averaging almost 3x that level. We continue to monitor and assess data usage and the implications on our network plans. To date, our engineers have been able to meet this increased demand within our current year capital plans. And as such, we have not adjusted our capital expenditure guidance for 2017 at this time. Continuing my update on our progress on our 2017 strategic imperatives, Slide 7. We continue to drive high-margin revenue streams from accessory sales and device protection. Our EIP customers are holding their devices longer, making device protection even more important to them. As a result, penetration of this feature has grown to 40%. A big driver to this up-trade was work done earlier this year to roll out the first third-party device protection plan to incorporate AppleCare, a great partnership between our insurance carrier partner, Assurant, Apple and our marketing team, which produced this marketplace first. As I mentioned, Voice over LTE deployments will enable additional roaming revenue opportunities. Our first implementation just occurred, and we are working on our second. While this year's opportunity is somewhat limited, since only Iowa has Voice over LTE and just for part of the year, this work lays the foundation for future growth in roaming in 2018 as we expand our Voice over LTE footprint. For well over a year, we have been imploring the FCC to collect better data concerning the scope of work yet to be done to provide wireless broadband access to rural America. Just yesterday, the FCC adopted an important order that will put in motion the collection of more accurate information about where wireless broadband coverage is lacking in rural areas. This is an important first step as the FCC and industry prepares for the dispersal of finite universal funds under the Mobility Fund II program. We applaud the FCC's actions and look forward to working with them in the coming months on the design of an auction that will best target these limited funds into the rural areas most in need of coverage. We're grateful for the funds being allocated to Mobility Fund II, but believe a case can easily be made for substantial additional government support to accelerate wireless broadband coverage to rural America to meet the congressional mandate for servicing quality between urban and rural areas. Finally, I'm excited to welcome a new member to the team. Jay Spenchian has joined the company as Senior Vice President of Marketing. I'm sure he'll be joining these calls at some time in the future. So in summary, I want to congratulate the entire team on this first half result, especially in this highly competitive environment. And now, I'll turn the phone call over to Steve to go into some of the details. Steve?

Thank you, Ken. Good morning, everyone. I'm going to start this morning by commenting on postpaid connection activity, shown on Slide 8 of the presentation. As I'm sure you know, postpaid is the most important segment of our business, representing more than 90% of our retail connections. We had 174,000 postpaid gross additions for the second quarter of 2017. This included 123,000 handset gross additions, which increased by 7% year-over-year. As Ken mentioned earlier, our new Total Plans, as well as strong promotions on popular devices, contributed to the success. We also had very low postpaid churn of 1.13% for the second quarter this year compared to 1.2% for last year. As a result of both improved sales results and lower churn, our postpaid customer base grew by 23,000 total connections, including 19,000 handset connections. That represents a significant uptick from last year when we experienced a net loss of 13,000 handset connections and also from last quarter, when we experienced a net loss of 28,000 handset connections. And again, as Ken said earlier, we like the mix of this quarter's net additions, which is heavily weighted towards higher ARPU handsets rather than towards connected devices, as was the case last year. Just to complete the picture on our subscriber results, I'll mention a couple of other items that aren't shown. First, in addition to our handset net additions, we continue to have customers upgrading from feature phones to smartphones. Including those upgrades, total smartphone connections increased by 66,000 for the quarter. Also, we had 3,000 prepaid net additions for the second quarter. Therefore, our total retail net additions were 26,000. We ended the quarter with almost 5 million retail connections, which is about 1% higher than a year ago. So let me say a little more about the postpaid churn rate. Handset churn for the second quarter of 2017 was 0.91%, a record low for the company. It was down from both last year's 1.1% and the previous quarter's 1.08%. Connected devices churn was 2.35% for the second quarter of 2017, down a bit sequentially, but still relatively high as the penny tablets sold in connection with various promotions over the past couple of years continued to roll off. Let's go to Slide 10 to look at revenues. As a reminder, effective January 1 of this year, we made a change in how we report imputed interest income from equipment installment plans. That income is now being reported as a component of service revenues rather than as interest income below the operating income line, consistent with the approach that has evolved and is now being followed by most industry participants. The number shown here and in subsequent slides are presented on a comparative basis using the revised approach. So to begin, service revenues for the second quarter of this year were $740 million, down $34 million or about 4% year-over-year. The largest component of service revenues and the main driver of the decrease was retail service revenues, which, at $647 million for the quarter, decreased by about 5%, driven by lower average revenue per user, reflective of the industry-wide price competition. Changes in the other components of service revenues were offsetting. However, I want to say a few words about roaming. Inbound roaming revenue for the quarter was $31 million, down from last year, primarily due to lower contract rates on data traffic. Over the past year, the mix of data traffic has shifted significantly from 3G to 4G, which has lower rates. But I want to remind you again that, while lower data rates are putting downward pressure on revenues, at the same time, they are providing a significant benefit in the form of reduced expenses for our outbound data roaming. For the second quarter, the total dollar benefit of lower rates on outbound roaming was more than 3x the rate-related reduction in roaming revenues. Equipment sales revenues increased 2% to $223 million due to a mix shift from connected devices to smartphones and an increase in the proportion of new device sales made under equipment installment plans versus subsidy plans. The percentage of postpaid device sales on installment plans during the second quarter was 81%, very similar to the first quarter, and up from 69% a year ago. At the end of the second quarter, approximately 49% of our postpaid connections had an installment plan. We do expect that penetration figure to continue to increase over the balance of this year, given that all of our device sales to retail customers are now being done on installment plans. Slide 11 provides some additional information related to postpaid revenue. Average revenue per user for the second quarter of 2017, which is shown as the dark portion of the bars in the graph at the left, was $44.60, down 6% year-over-year, reflective of industry-wide price competition. Given the continuing migration to equipment installment plan pricing, the average billings per user, which includes installment billings, shows the total amount collected from customers every month. As you see, this more inclusive measure was $55.19 for the second quarter, down only very modestly year-over-year. Average revenue per account, shown in the graph at the right, also was down 4% year-over-year, while average billings per account was up very slightly, about 0.2%. Now let's move to our profitability measures. Adjusted operating income before depreciation, amortization and accretion and gains and losses for the second quarter of this year was $163 million, down about 9% from a year ago due to lower revenues, as I already discussed. Note that total cash expenses of $800 million decreased by 2% overall year-over-year, offsetting some of that revenue decline with decreases in each major category. Total data usage on our network grew by 51% year-over-year, yet system operations expense decreased by 2%, helped by lower roaming costs. Shown next is adjusted earnings before interest, taxes, depreciation, amortization and accretion and gains and losses. This measure incorporates the earnings from our equity method partnerships along with interest and dividend income. It totaled $198 million for this year's second quarter compared to $218 million last year. Earnings from unconsolidated entities decreased 9% to $33 million this year, including $17 million from the LA Partnership. In April, we received a $30 million distribution from the LA Partnership. A few words about the cash flow statement. Cash flows from operating activities for the first 6 months of 2017 were $220 million, while net cash used in investing activities totaled $327 million. Significant investments were made in our network, primarily for the deployment of VoLTE technology and an office systems capabilities. We also made the final payment of $186 million due for licenses acquired in the 600 megahertz auction. At June 30, cash and equivalents totaled $472 million. In addition to that existing cash balance, U.S. Cellular has $298 million of unused borrowing capacity under its revolving credit facility. We believe that these resources, both cash on hand and available, are sufficient to meet our operating, investment and debt service requirements for the remainder of this year. And just a reminder, as I mentioned last quarter, U.S. Cellular has formed a special-purpose entity to facilitate a securitized borrowing utilizing its equipment installment plan receivables. When completed later this year, the borrowing arrangement will provide another attractive and flexible financing vehicle that we could use in the future, as needed. Next I'll cover our guidance for the full year 2017, which is shown on Slide 14. For comparison, we're showing our 2016 actual results, which have been recast to reflect the change in the classification of imputed interest income. The guidance for 2017 is unchanged from that which we provided in May. Our results so far this year, as Ken said, have been tracking very much in line with our expectations. We believe that the competitive environment remains very unsettled for a variety of reasons. For example, the overall pricing environment, continuing customer migration to equipment installment plans and our Total Plans with the related impacts on ARPU and network costs, customer phone upgrade activity, the expectation of multiple iconic device launches later this year, among other factors. Obviously, how these factors play out over the rest of the year could impact our actual results and where they fall in the ranges provided. Now I'll turn the call over to Vicki Villacrez to talk about TDS Telecom. Vicki?

Okay. Thank you, Steve, and good morning, everyone. We continue to make progress toward our strategic priorities for 2017, as shown on Slide 16, which I will cover as I speak to each segment's results for the quarter. Moving on to Slide 17. TDS Telecom's overall results for the second quarter were mixed with strong growth in broadband and IPTV revenues, offset by lower equipment revenue in HMS, resulting in total revenues decreasing 6%. However, adjusted EBITDA increased 3% as HMS equipment sales have much lower margins when compared to wireline and cable margins. Capital expenditures in the quarter increased 6%. We expect higher spending in the second half of 2017 as we've completed most of our engineering and design work and are beginning the construction phases of the A-CAM build-out. We have network builds underway in all 25 states and are on target to have enhanced speeds available to customers in several states by the end of the year. Now let's turn to our segments, beginning with wireline on Slide 18. We continue to meet the demands of our customers for higher broadband speeds and IPTV services by leveraging the fiber deployments we have made in select ILEC markets. Approximately 19% of our network route miles are built with fiber as a direct result of our fiber deployment strategy over the last several years. A-CAM, along with state broadband programs, will enable us to drive fiber even deeper into our network. We will continue to evaluate future opportunities to bring fiber to more service addresses both inside our current footprint as well as in adjacent areas. One example of how we are looking to extend our fiber footprint is in Sun Prairie, Wisconsin. We acquired the fiber assets of the small municipality adjacent to our operations in the Madison area this quarter, as a trial to expand beyond our ILEC footprint and leverage our strong brand reputation and marketing expertise to drive additional growth opportunities. Our network investments are driving positive results, as shown in the metrics on the bottom of the slide. IPTV connections grew 12%, adding 5,000 connections compared to the prior year. We are offering a variety of speeds up to 1 gig service in all IPTV markets. Residential customers continue to choose higher speeds in our ILEC markets, and approximately 22% of our customers are now taking 50-megabit services or greater. This, along with price increases, contributed to a 6% increase in average residential revenue per connection in the quarter. In addition, churn continues to remain very low. Looking at the wireline financial results on Slide 19. Residential revenues increased 5% due primarily to the continued growth of IPTV connections, price increases and the impact from a discontinued customer loyalty program. Commercial revenues decreased 6%, and this was primarily driven by lower CLEC sales, resulting from our strategy to refocus the business on serving customers who do not require leased facilities, which will also translate into lower costs and higher profitability going forward. Wholesale revenues increased $5 million or 10% due to support received under the A-CAM program, which was effective January 1 of this year and is helping to fund our obligations under this program. Total wireline revenues increased 3% to $181 million. Wireline cash expenses were relatively flat, as the reduced cost of provisioning our declining voice services was offset by the growth in IPTV content costs. As a result, wireline adjusted EBITDA increased $5 million or 8%, improving margin to 37.4%. Before I move to the cable segment, yesterday -- today, actually, we have announced the acquisition of Crestview Cable Communications in Central Oregon. This acquisition is adjacent to our existing Bend operations and adds more than 21,000 service addresses and is an example of the type of tuck-in we are looking for. We expect to close this acquisition in the fourth quarter. Turning to Slide 20. We were very pleased with our cable performance. Total cable connections grew 3% to 297,000, primarily driven by the 12% increase in total broadband connections. This was the fifth consecutive quarter with double-digit broadband connection growth. As a result, broadband penetration increased 300 basis points compared to the prior year, as households passed grew 2.9%. On Slide 21, total cable revenues increased 12% to $51 million, driven by growth in both residential and commercial connections. Cash expenses increased 2% due primarily to higher programming content costs, offset by cost-control efforts. As a result, cable adjusted EBITDA increased $5 million to $14 million in the quarter, improving margins 700 basis points to 28%. Turning to the HMS segment and speaking to both Slides 22 and 23. HMS revenues decreased 37% in the quarter. This was driven by a 51% decline in equipment revenue when compared to a strong second quarter last year. Lower equipment sales to a few large customers contributed to this decline. We believe this quarter is unusually low, and we expect equipment sales levels to rebound to some degree in the second half of the year. Service revenues also decreased 16% due primarily to decreased maintenance agreements which track with equipment sales. Hosting revenues were flat in the quarter as customer churn and compression offset revenue growth from new sales. Cash expenses were down 30%, primarily due to the lower cost of goods sold. Other cash expenses were also down due primarily to lower sales commissions. Adjusted EBITDA decreased $7 million to break even in the quarter. Clearly, the quarter did not meet our expectations for the HMS segment even though equipment sales can have wide swings. Remember that we had a 21% increase last quarter. We are still not satisfied, however, with the overall level of sales, and the team remains focused on sales execution as their top priority. Our 2017 guidance, on Slide 24, is unchanged from the guidance we shared in February. Given the lower HMS equipment sales, we are expecting to be at the low end of our operating revenue range and are pressing hard on HMS to produce stronger sales. As I said earlier, HMS equipment sales carried very low margins, so shortfalls in that category do not have a material effect on adjusted EBITDA. And we remain very comfortable with our company guidance for that metric. As I also mentioned last quarter, our capital spending will increase through the remainder of the year to support our A-CAM build-outs, and we still expect to meet our $225 million guidance target. Now I'll turn the call back over to Jane. Jane W. McCahon: Thanks, Vicki. And Adam, we're ready to take questions.

[Operator Instructions] Our first question comes from the line of Ric Prentiss from Raymond James.

Couple of questions on the U.S. Cellular side. Obviously, nice churn and returning to positive postpaid adds on the phone side. I wanted to probe a little deeper on unlimited then. Ken, you mentioned the Total Plan, but then you also mentioned a percent that were unlimited. What percent of your base is on unlimited? And what kind of take rate did you see on unlimited in the quarter?

So if you take the numbers, it turns out about 9% to 10%, I think, of our customers in total are on unlimited right now. Yes, 34% on the Total Plans and 27% of that -- I'm going to get around 9% to 10%. And the other question?

Yes, within the quarter, was that just offer so that's 9% of your base just in 1 quarter of offering?

Well, technically, we rolled it out 1 month left in the first quarter. But if you think about it, we rolled those plans out in end of February, and 27% of our -- 34% of our customers have already moved to this construct.

Okay. Also, when you think about competition, several of the other operators talked about July. They've seen some change in the behavior in July. Even Shenandoah came out yesterday and said, they had their best July ever. Did you notice any change in the competitive dynamics in July versus 2Q?

Nothing notable, no.

Okay. And then as you think about postpaid phone churn, obviously, a really no number. Can it go lower from here? Or what are your thoughts?

I don't know because what I find fascinating when I look at all the Q2 numbers out there is everybody showed growth in handsets almost, and everybody had low churn. Now some of the things going on with EIP and other things help hold down churn, but I just wonder whether there is a bubble out there of churn that's across the industry because everybody is -- we didn't see that kind of population growth. And everybody's had new handset. So I don't know how that plays out in the next quarter.

And so that bubble be timed around the iconic device launches possibly? Or what are you thinking?

I don't know. I just -- I wonder whether we've got something going on where someone's connected, but they haven't disconnected yet or whatever. I just don't know how we get them. We all grow handsets in a market that's fully saturated right now. So yes, something isn't lining up with me right now. Having said that, I'm real happy with what I saw in July. I'm real happy with everything we're seeing in our stores, but something just doesn't add up when I look at it at the macro level.

Great. And last one for me is the obligatory. Everyone seems to be talking to everyone, wireless companies to wireless companies, cable companies, technology companies. Can you update us about kind of how USM views the landscape and maybe the controlling shareholders as far as there've been any update as far as their view of how strategic options might play out? Because it seems almost rumor du jour out there.

It's an amazing environment right now because, right, we've got the rumors, but you also have the conversations going on not in private, but in public. As far as company goes, I can tell you that there's a SEC form...

13D.

13D, that the trust filed many years ago that lays out their intentions. And it's my understanding that if those intentions ever changed, they have to change their 13D. So as long as the file is out there, I've got to assume there has been no changes. We continue to do all we can to serve our customers and continue to grow the business. I'm really pleased with what we saw in terms of growth this quarter. It has a nice -- I think, for the first half, it's kind of a nice balanced picture, right. I mean, we've got the growth coming back. Cash flow is doing well. We continue to manage the cost side of the house, and we continue to strengthen the team. And I talked about a new addition in the marketing area, too. So I'm pretty hopeful of where we sit today. I'm fully aware that the competitive landscape could change depending upon who does what to whom. But until something happens, it's pure speculation in terms of how it would impact us.

Our next question comes from the line of Phil Cusick from JPMorgan. Jane W. McCahon: Phil, are you there?

There we are. Can you hear me? Jane W. McCahon: Yes, we can.

Okay. Sorry about that. So first following up on Ric. Can you talk about the churn reduction, Ken? Was this fewer customers calling in and asking for something? Was it a better retention tool than you had before? Or is there something else going on? Was the reduction mostly in voluntary? Or was involuntary down as well?

Well, I'm going to let Steve give you a little bit of color around the voluntary/involuntary first.

Yes. So when you look year to year, voluntary was pretty comparable, down a couple of basis points. We also had a decline in involuntary, little larger, 5 or 6 basis point improvement.

And when you look at it, I think there's a couple of things going on there. One is, for us, the rollout of our Total Plans, we're able to meet the needs of customers that perhaps we weren't able to meet earlier in the year, first quarter and the second quarter, which eliminated one of the potential dissatisfiers there. The combination of the EIP plans, again, meeting customer needs differently and the strong performance in the involuntary or nonpaid area, all contributed to it.

But it sounds like you had, again, sort of a very good retention tool for people who maybe weren't happy with price-to-value relationship versus some other carriers. Is that a fair way to look at it?

I don't know that -- we have. I think we're able to meet their needs as well as anyplace else, and they have the -- they have and appreciate -- they know the network value that we deliver to them. And so what we've seen probably the last -- maybe as much as the half year, but clearly, in the quarter, as we saw a good number of returning customers from some of the lower-priced carriers, we're -- anecdotally, what we're hearing in the stores is that they're coming back for coverage. They love our price and came back for coverage.

And can you talk about any -- what sort of usage changes did you see? Any changes in the network speeds because of the increased amount of traffic?

Well, our main unlimited product has a speed limiter built into it, okay? And so what happens when you -- when we look at our average speed, our average speed went down, but that's because we -- that's measured -- that's what we're delivering. And so with 10% of our customers taking a speed-capped product, your average comes down, but we have not seen any notable network issues at all at this point.

Okay. And then one for Vicki, if I can. The small cable acquisition. I apologize, I didn't see this anywhere else. Is that 21,000 homes that are customers or passed? And can you talk about the price or the multiple paid and what's the sort of status of that footprint and plan?

Yes. So today, we are announcing the acquisition of Crestview Communications, and this is a great example of a tuck-in that we're interested in. It's adjacent to our current footprint. It's family-owned and underpenetrated. But it is relatively small. So the 21,000 is homes passed, okay? So that's 21,000 service addresses. And so it's -- while it's relatively small, it is important to our service that we're providing our customers in Central Oregon, and we're not disclosing the price. Immaterial, immaterial.

And the footprint, is that an upgraded footprint? Or do you have to do work yourself?

Yes. Actually, there's upgraded footprint in several of the communities. And it's also -- because it's adjacent to our Bend Oregon operations, it will leverage fiber and other investments that we've already made to help fortify that network in Central Oregon.

Our next question comes from the line of Simon Flannery from Morgan Stanley.

It's Spencer for Simon. Just a follow-up to the postpaid number and maybe some of the drivers outside of churn. Can you provide any details on maybe the porting ratios? And are you seeing any prepaid to postpaid switching?

I've seen a lot of prepaid to postpaid switching one way or another. Porting ratios, we haven't disclosed the actual numbers, but I can think of -- I can say that improvement in those ratios clearly in the quarter as evidenced by the increase in gross adds.

Okay. Great. And then maybe just a quick comment on your updated capital allocation policy. Some of your peers in the telecom space have recently made some changes. Can you just give us related thoughts there?

This is Doug, Spencer. No change to the [indiscernible] policy at this point. We're sticking with the 75%-25% allocation. Actually, over the past several years, we're ahead of that allocation as far as the shareholders are concerned. But yes, we revisit that periodically, but no change right now.

[Operator Instructions] Our next question comes from the line of Willis Brucker from Gabelli & Company.

Hello? Jane W. McCahon: Hello?

This is Sergey. I don't know why the name was different. But the first question is for Ken. So we are witnessing more and more fixed mobile convergence. And obviously, fiber is an important element that supports 4G networks, and it will become even more vital in the 5G world. Could you share your thoughts on fixed mobile convergence as it relates to U.S. Cellular business and its applicability in your markets, as you're moving to 5G? And also, do you see a need or an opportunity for U.S. Cellular to partner with cable companies' ILECs or fiber operators in your wireless footprint for both defensive purposes and also potential to generate incremental revenues?

Thanks, Sergey. Today, we actually work closely with a lot of the cable companies as they provide backhaul to us in many, many markets, primarily the Ethernet that we're using in those markets. And that's been a key component of our backhaul strategy. For the last couple of years, has that, Mike?

That's correct.

Talk a little about how you see fiber playing out in -- given the traffic levels in our markets.

Yes. So the Ethernet that we use today is based on fiber from the providers that we source it from. And we think that's got a long runway in terms of meeting our capacity needs with the road map of LTE higher throughputs. But I do believe, as you migrate to 5G and the wide bandwidth and speeds it offers, you'll have to deploy fiber. And so we're participating in the standards to see how that evolves, learning how the business models and the use cases that underpin those business models are developing. And if we see an opportunity in our markets, we're going to evaluate that and then try to capitalize on those opportunities.

Okay, great. Another question, it kind of relates to both TDS Telecom and U.S. Cellular. Microsoft has recently published a white paper on potential use of TV white spaces for broadband access and potentially plans to invest in partnerships with telecom companies in rural areas or underserved and unserved rural areas. What are your initial thoughts on the Microsoft's proposals? And how do you see this -- whether this is a threat, whether this is an opportunity, looking at it from both TDS Telecom's and U.S. Cellular's perspectives?

Yes, Sergey. This is Mike. I'll take that one. So first, let me start off with how we view unlicensed technology in general. Given our business model, we think having a solid, deep portfolio of licensed spectrum is critical to delivering a consistent high-quality experience. That said, we do think unlicensed technologies enabled by LTE/LAA allow us to opportunistically deal with short spikes in capacity demands as well as short spikes in speeds. And those 2 technologies allow us to really manage interference in a way that I think some unlicensed technologies are not able to, such as the one that you're referring to. I think what Microsoft is proposing and the technology that underpins that needs to be proven out yet, depends a lot on the propagation modeling to understand the interference. And if you're going to deliver a high quality, that has to work perfectly. And while it's been tested in labs and other environments, I don't think it's been subjected to a real-world environment to prove that it can work well. And so we're going to be following that. And again, if there's an opportunity there, we're going to be all over it.

Great. And another one for Ken. Going back to kind of M&A landscape, following up on Philip's question. So I guess, we see all the speculation. And obviously, you said that there's a lot of negotiations in public. I guess, as you look at various scenarios, are there any scenarios that you are, let's say, rooting for? And how could you participate in industry consolidation over the next...?

I am -- am I rooting for any? Any that allow for: a, improved pricing in the industry. That gets my attention all day long. And I don't mind a couple of big gorillas getting together because, every time they do that, there is going to be a lot of swirl and give us some opportunity in the marketplace. Since I'm not driving this, I don't have a strong opinion who goes where. I just want to see it happen.

I see. Last question for Vicki. Following up on the cable acquisition. So obviously, this one is small and it's adjacent to one of your properties. But as you look at the deal activity in the cable space, obviously, we've seen a lot of acquisitions and larger deals since last 3 months as Wave going to TPG and Atlantic Broadband buying the rest of MetroCast. Could you share your thoughts on the growing deal environment and the potential deal pipeline for your guys? Has it increased, decreased or any changes over the last 3 to 6 months?

I would -- as I commented last quarter as well, we've seen deals of various sizes. This is an example of a small one. But we have seen deals of various sizes in our pipeline. And as I've said, we're currently active.

Our next question comes from the line of Barry Sine from Drexel Hamilton.

Can you hear me now? Jane W. McCahon: Yes, we can.

Okay. It seems to be there's a bit of an evolution in your thinking on unlimited and your comfort with that and your ability to compete in the market. It seemed to me, when unlimited first came out, you guys were a little bit concerned. You've launched plans now. You're controlling network usage by limiting speeds. You're still growing subscribers. Your churn is low. Are you a little more confident in your ability in this new environment to be competitive and grow than originally you were?

So I wasn't and I'm not worried about our ability to compete with unlimited. I'm worried about the implications of long-term economics in the industry when you, in effect, cap revenue and you allow for usage that, I don't know, anywhere from 4 to 6x the current level out there. And so I think there are some long-term implications around going to unlimited across the industry. It just don't make sense to cap revenue and have a requirement for variable investment in capacity. But in terms of our ability to roll it out, in terms of the sufficiency of spectrum that we have right now, our engineers' ability to deliver that, that hasn't been my concern. Those all fall in what I think are short-term controllable, short term being the next couple of years. But long term, I don't think that the financial implications are healthy.

Okay. That clarifies. And then also on the VoLTE. You rolled out Iowa now. You have a bit of an experience there. My recollection is that your rollout plans have been rather extended because of CapEx. You're trying to control CapEx. Can you give us an update on your expectations for VoLTE rollout? And then what kind of financial impact, I'm assuming VoLTE inbound roaming revenue shows up in roaming revenue? What kind of financial impact might we see from future VoLTE rollouts?

Okay. So our rollout of voice over LTE is not -- our strategy is not formed by some financial constraints. Rather, it is a recognition that VoLTE is a very different animal than the CDMA voice network that we had. There are companies that have been rolling this out for 5 or 6 years before they ever got to a point they were ready to step on the gas. So we've been very deliberate. There are some big learnings to go along. There are requirements for handset OEMs to deliver software. That has probably even one of the longer poles in the tent, has been waiting for the software we need out of various handset suppliers. So our plan has always been, with every technology rollout, to do it over 3 years or so, so that we have a manageable change effort across the organization as opposed to trying to do it all in 1 year and having big ups and downs in your engineering workload. Next year, I would expect multiple markets to be in the 2018 rollout. And then with the -- most of it being completed in 2019. As we talked about roaming, what we said is, what's interesting about VoLTE is, VoLTE will be the first time that all the carriers, in effect, are on the same technology. And so, well historically, we have been unable to meet the roaming needs of 2 of the nationals, those that have CDMA voice, we really weren't able to handle the needs of the other 2 carriers. And so this, in effect, doubled our addressable market. Not much of an effect at all in '17 because of -- it's just Iowa half a year. But starting next year, I expect to see some meaningful growth in the roaming traffic as we roll out VoLTE to more markets.

[Operator Instructions] Jane W. McCahon: Adam, I think we are out of time for today. So we are going to wrap it up. If folks have follow-up questions, please give us a call. Thanks very much for joining us.

Ladies and gentlemen, this does conclude the teleconference for today. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.