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<SEC-DOCUMENT>0000020520-06-000026.txt : 20061207
<SEC-HEADER>0000020520-06-000026.hdr.sgml : 20061207
<ACCEPTANCE-DATETIME>20060531163300
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000020520-06-000026
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060531

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CITIZENS COMMUNICATIONS CO
		CENTRAL INDEX KEY:			0000020520
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
		IRS NUMBER:				060619596
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		HIGH RIDGE PK BLDG 3
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06905
		BUSINESS PHONE:		2036145600

	MAIL ADDRESS:	
		STREET 1:		THREE HIGH RIDGE PARK
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06905

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CITIZENS UTILITIES CO
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>


                         Citizens Communications Company
                                3 High Ridge Park
                           Stamford, Connecticut 06905
                                 (203) 614-5675

                                  May 31, 2006


CONFIDENTIAL   PORTION  MARKED   [*******]  HAS  BEEN  OMITTED   PURSUANT  TO  A
CONFIDENTIAL  TREATMENT  REQUEST AND FILED  SEPARATELY  WITH THE  SECURITIES AND
EXCHANGE COMMISSION.


BY EDGAR - CORRESPONDENCE
- -------------------------

U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC  20549
Attention:  Larry Spirgel

Re:      Citizens Communications Company
         Form 10-K/A #1 for Fiscal Year Ended December 31, 2005
         Filed March 2, 2006
         File No. 1-11001

Ladies and Gentlemen:

     Citizens Communications Company (the "Company") is hereby responding to the
comments of the Staff of the Securities and Exchange Commission set forth in the
letter  dated April 25, 2006 with respect to the above  referenced  Form 10-K/A.
For your  convenience,  each comment from the comment  letter is repeated  here,
followed by the Company's response and the paragraph numbering below corresponds
to the numbering in the comment letter.


<PAGE>

Comment 1
- ---------

Form 10-K/A for Fiscal Year Ended December 31, 2005
- ---------------------------------------------------
Managements Discussion and Analysis, page 22
- --------------------------------------------

Refer to the top carryover  paragraph of page F-13 and to the sixth paragraph of
page F-39. With a view to additional disclosure, tell us about your asbestos and
other environmental  contamination  contingencies and obligations. In reasonable
detail,  describe these  environmental  problems.  Tell us of any amount accrued
and/or  charged to  operations.  Describe how these  amounts  correspond  to the
underlying events. Provide us with an analysis of your expected trends in future
environmental  costs.  See Staff  Accounting  Bulletin Topic 5Y. We believe that
environmental  liabilities  typically  are of such  significance  that  detailed
disclosures  regarding judgments and assumptions  underlying the recognition and
measurement of the liabilities are necessary to prevent the financial statements
from  being  misleading  and to  inform  readers  fully  regarding  the range of
reasonable possible outcomes that could have a material effect on a registrant's
financial condition, results of operations, or liquidity.

     Among the disclosures called for in the SAB are as follows:

     -    Circumstances   affecting  the   reliability  and  precision  of  loss
          estimates;

     -    The extent to which unasserted  claims are reflected in any accrual or
          may affect the magnitude of the contingency;

     -    Whether,  and to what  extent,  losses may be  recoverable  from third
          parties;

     -    The contribution of other parties;

     -    The period in which claims for recovery may be realized;

     -    The likelihood that claims for recovery may be contested;

     -    The  financial  condition  of third  parties  from which  recovery  is
          expected;

     -    The timing of payments of accrued and unrecognized amounts;

     -    The material  components of the accruals and  significant  assumptions
          underlying estimates;

     -    The recurring costs of managing hazardous substances and pollutions in
          ongoing operations;

                                       2
<PAGE>

     -    Capital  expenditures  to limit or  monitor  hazardous  substances  or
          pollutants;

     -    Mandated expenditures to remediate previously contaminated sites;

     -    Other infrequent or non-recurring  clean-up  expenditures  that can be
          anticipated, but which are not required in the present circumstances;

     -    Disaggregated  disclosure that describes accrued and reasonable likely
          losses  with  respect  to  particular  environmental  sites  that  are
          individually material;

     -    The  consequences  on  amounts  accrued  and the range  estimates  for
          investigations  and  remediations  that are in  different  stages with
          respect to individual sites.

Response
- --------

We refer the staff to our response at comment  number (3) for our  discussion of
environmental  matters concerning poles and asbestos. We respond in this comment
to  questions  concerning  the  Company's  disclosure  on page  F-39 of its Form
10-K/A.

The lawsuit in Bangor,  Maine does not arise from any of our current operations,
but is instead a "legacy"  problem arising out of a 1948 acquisition by Citizens
of Bangor Gas  Company.  Bangor Gas had owned and  operated a  Manufactured  Gas
Plant (MGP) in Bangor since the 1850's.  Citizens has not operated that facility
since 1963. We are not aware of Citizens  having similar  potential  exposure at
any other sites.

This case is different from many "onsite" contamination cases in which liability
is acknowledged  and the only issue is over the potential  costs of cleanup.  On
the contrary,  we have been disputing our liability since we became aware of the
City of Bangor's  claims  against us with  respect to the  contamination  in the
Penobskot River.

In  addition,  as we  stated  in  the  Form10-K/A,  we  have  sued a  number  of
publicly-held third parties who may have contributed to the contamination in the
Penobskot  River.  We also have  brought  suit  against a number of our historic
insurance  carriers to require them to  reimburse  us for our defense  costs and
indemnify  us against any loss  related to the  lawsuit.  We believe the various
third party defendants and almost all of the insurance  carriers are financially
capable of bearing whatever responsibility they might have in this matter.

********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
************************.


                                       3
<PAGE>

We considered the disclosure  requirements  of SAB Topic 5Y and believe that our
disclosure is adequate:

     -    Circumstances   affecting  the   reliability  and  precision  of  loss
          estimates - **********************************************************
          *******************.

     -    The extent to which unasserted  claims are reflected in any accrual or
          may affect the magnitude of the contingency - not applicable.

     -    Whether,  and to what  extent,  losses may be  recoverable  from third
          parties - although we have stated in our disclosure  that we have sued
          a number of third parties,  further  discussion is not warranted since
          no loss has been sustained.

     -    The  contribution  of other parties - not  applicable,  as no loss has
          been sustained (although we have stated in our disclosure that we have
          sued a number of third parties and insurance carriers).

     -    The period,  likelihood and financial  condition of parties from which
          recovery  may be  realized - all not  applicable,  as no loss has been
          sustained (although we have stated in our disclosure that we have sued
          a number of third parties)

     -    Timing  of  payments  of  accrual  and  unrecognized   amounts  -  not
          applicable,  the  court  has  still not  rendered  a  decision  in the
          liability phase of the trial and no payments have been made.

     -    The material  components of the accruals and  significant  assumptions
          underlying estimates - **********************************.

     -    Recurring costs - not applicable.

     -    Capital expenditures - not applicable.

     -    Mandated expenditures - not applicable.

     -    Other infrequent or non-recurring  clean-up  expenditures  that can be
          anticipated, but which are not required in the present circumstances -
          not applicable.

     -    Disaggregated  disclosure that describes accrued and reasonably likely
          losses  with  respect  to  particular  environmental  sites  that  are
          individually immaterial - not applicable, as we have no such accruals.


                                       4
<PAGE>

     -    The  consequences  on amounts  accrued and the range of estimates  for
          investigations  and remediations with respect to individual sites; not
          applicable.


                                       5
<PAGE>

Comment 2
- ---------

(a) Liquidity and Capital Resources, page 24
- --------------------------------------------

Refer to the third and  fourth  paragraphs  of page 24,  which  states  that you
intend  to  allocate  significant  capital  resources  to  high-speed  internet,
wireless  and VOIP  services,  and that you  expect  to  increase  2006  capital
expenditures  to build  wireless data networks and expand current data networks.
With a view to expanded disclosure,  tell us in greater detail how you intend to
increase  material  capital  expenditures for each of these purposes during 2006
and beyond  those next twelve  months.  Describe the planned  build-out  and the
technologies  that you plan to employ.  Describe  how these new plant  resources
will interphase with your current copper-line networks. Tell us how much optical
fiber,  wireless  and other plant  resource  you plan to install.  How much will
these new plant  resources cost? Tell us the planned sources of capital that you
plan to rely upon to  finance  these  new plant  assets.  We  believe  that your
discussion of capital  resources  should  include a more detailed  discussion of
your material  capital  expenditures for the 12-month period following your most
recent balance sheet date and beyond as required by financial  Reporting Release
Codification Section 501.03.a.

Response
- --------

Capital  Expenditures for our Incumbent Local Exchange Carrier business ("ILEC")
were  approximately  $252,213,000,  $263,193,000  and $243,445,000 for the three
years ended December 31, 2005, 2004 and 2003,  respectively.  For the year ended
2006,  we have  budgeted  our ILEC  capital  expenditures  to be in the range of
$270,000,000 to $280,000,000.

The 2006 plan  represents an  approximate  10% increase over our historic  three
year average ($25 million over a base of $253 million).

We have not made a dramatic  change in the total level of spending or the mix of
our  spending.  Our budget for 2006  contemplates  and allows for the  continued
upgrade of our existing  facilities (the vast majority of our capital  spending)
while allocating certain capital for  non-traditional  service offerings such as
wireless,  VOIP and super high-speed  internet.  These investments are less than
10%  of our  total  capital  spending.  In  addition,  there  are  no  long-term
commitments  for  capital  expenditures  either  made or expected as a result of
expanding  into these  service  offerings.  We have adjusted the language in our
recently filed 10-Q for the three months ended March 31, 2006 as follows:

For the three months ended March 31, 2006, our capital  expenditures  were $43.8
million.  We  continue  to  closely  scrutinize  all  of our  capital  projects,
emphasize  return on investment and focus our capital  expenditures on areas and
services that have the greatest opportunities with respect to revenue growth and
cost reduction.  We anticipate  capital  expenditures of approximately  $270.0 -
280.0 million for 2006.

                                       6
<PAGE>

Comment 3
- ---------

Financial Statements
- --------------------
Accounting for Conditional Asset Retirement Obligations, page F-13
- ------------------------------------------------------------------

Refer to the top carryover paragraph of page F-14, which indicates that you have
unrecorded  legal  obligations  to remove  poles and  asbestos.  Describe  these
obligations and tell us why you are unable to estimate them. What information is
not currently available?  Explain to us why this information is necessary.  Tell
us when  and  under  what  circumstances  this  information  will or may  become
available. Describe how you applied the guidance of SFAS 143 and FIN 47 to these
obligations.

Response - Poles
- --------

In evaluating the standards we determined  that there is no obligation to remove
poles.  However, an asset retirement  obligation for the disposal of poles could
exist if (1) a sufficient  number of poles were  removed,  (2) the poles removed
still retained  enough  chemical to qualify as a hazardous  waste,  (3) that the
disposal  costs would be incremental  to normal  disposal costs (i.e.  something
other than ordinary trash disposal).

Whether any  particular  pole contains  enough  hazardous  material to reach the
threshold of being  considered a hazardous waste is  indeterminate.  The Company
would need to evaluate on a case by case (pole by pole) basis at the time a pole
is replaced,  whether that pole is hazardous and what the cost of disposal would
be at that  time.  We have no legal nor an  operational  timetable  to remove or
replace  poles.  Only the  costs to  dispose  of poles  that  contain  hazardous
material  still above the hazardous  threshold at the time of removal would need
to be accounted  for as an asset  retirement  obligation.  We have no reasonable
basis for making such a determination  until a pole has been damaged by weather,
vehicle accidents, etc. The timing of those events occurring cannot be predicted
with reasonable accuracy and, accordingly,  an estimate of whether the poles are
hazardous cannot be determined.

It is important to also understand that the Company's telephone  operations were
acquired by acquisition  primarily during the late 1990's and early 2000's.  The
records the Company inherited  indicate that we have poles in service ranging as
far back as 100 years.

Wood poles have been primarily  treated with three types of  preservatives  over
the years.

     -    Pentachlorophenol
     -    Chromated copper arsenic
     -    Creosote


                                       7
<PAGE>

With  respect to  pentachlorophenol,  Citizens  utilizes  "Material  Safety Data
Sheets"  prepared  by Koppers  Industris,  Inc.  as  required by the OSHA Hazard
Communication  Standard (29 CFR 19(0.(200).  The Koppers  instructions for waste
disposal of wood treated with  pentachlorophenol  indicate disposal "by ordinary
trash collection or burial."

Chromated  copper  arsenic is the  treatment  commonly  applied  to  residential
decking  material  and outdoor  wooden play sets.  There are no federal or state
regulations  (in the 23 States that we operate) that requires  special  disposal
procedures.

Creosote  however is the oldest of the three  types of  preservatives  and would
only exist in limited quantities.  We do not believe that the levels of creosote
in the poles that were so treated remain in sufficient  quantities to qualify as
a hazardous waste.

As a result,  if we could  eliminate the  uncertainties  noted above, we believe
that we would not have a material ARO liability for poles.

Response - Asbestos
- --------

The Company has no plans for any major building  renovations in the  foreseeable
future,  with only a small number of roof  replacements  scheduled in 2006 (none
will  involve  disturbing  asbestos).  According  to  paragraph  5(b) of FIN 47,
examples of information  that are expected to provide a basis for estimating the
potential  settlement  dates  include  an  assessment  of  management's  intent.
Regarding  roof repairs,  if a roof were in need of repair it is the practice of
the  building  facilities  group to first  attempt to patch over the roof damage
without  replacing the roof structure  thereby  avoiding the  disturbance of any
asbestos.

The Company has no plans or expectation of plans to undertake a major renovation
that would require the removal of asbestos.  Therefore, the Company is unable to
reasonably  estimate the fair value of the liability as the  settlement  date or
range  of  potential  settlement  dates is not  available.  The  Company  has an
indeterminate  settlement date for the asbestos  obligation as the range of time
over  which the  Company  may  settle  the  obligation  is  unknown or cannot be
reasonably estimated.

Due to the  uncertainty of the time period,  we concluded that our liability for
asbestos  removal was  indeterminate;  we are unable to more clearly define when
and indeed if ever,  we will  disturb  the  asbestos in our  buildings.  We will
evaluate  any  potential  liability  for asbestos  removal as our capital  plans
change.


                                       8
<PAGE>

Comment 4
- ---------

(4) Property, Plant and Equipment, page F-14
- --------------------------------------------

Refer to the last paragraph of page 35 of your Form 10-K/A, which discloses that
you expect that your depreciation  expense will decline in 2006 by approximately
12.5% compared to 2005,  because you have extended the remaining useful lives of
your copper facilities to a range of 26 to 30 years from approximately 16 years.
Give  us an  analysis  and  tell  us  which  facilities  are  involved,  whether
"last-mile",  distribution  copper or other facilities.  Describe the finding of
the  independent  study.  In light of the  intensifying  competition  and  rapid
technological change in your industry, tell us why it is appropriate to increase
the depreciable lives of your copper  facilities.  Address the continuing impact
of the  expansion  of  broadband  services  on your  customers'  utilization  of
"copper-pairs"  (see the  penultimate  paragraph  of page 4).  Also  address the
impact of expected demand for higher broadband data rates. Will market pressures
force you to replace distribution copper with fiber? If so, tell us when.

Response
- --------

During October 2005, we obtained an independent study of the useful lives of our
plant.  This  study  was  performed  by  Foster  Associates  ("Foster"),  who is
knowledgeable  in the industry and has extensive  experience  with  depreciation
studies.  The lives  developed  by the study  were  adopted  and used to compute
depreciation  expense going  forward,  effective  October 1, 2005. The Company's
last independent  evaluation of its depreciation  rates was completed in October
2001.  While many of the proposed lives for 2005 changed  marginally  from those
used during the period 2001 to September 30, 2005,  certain categories of assets
were more significantly  affected. Some categories of assets had lives extended,
while others had lives shortened.

After we reviewed the results of the study,  we  discussed  the results with our
engineers and Foster and noted that there was an overall increase in the average
remaining lives of our copper cable assets, and a corresponding overall decrease
in the average remaining lives of our switching software assets.

Copper Cable: Remaining useful life has been extended from 16 years to 26 years

In  reviewing  the lives in the study  and the  lives/rates  in place in 2004 we
concluded that the results of the study in 2005 support our business  experience
that the life of all of our copper cable  should be  extended.  While our access
lines are  decreasing,  our  losses are  primarily  due to people  moving.  As a
result,  the drop to a home may be out of use but the plant  running  past every
home or  business  is working  plant that  services  homes and  businesses  with
dial-tone and/or high speed  broadband.  During the period 2002 through 2004 our
useful  life  for  copper  was  16.9  years  (as   determined   by   independent
appraisal/study  at the end of  Fiscal  2001),  which  was at the low end of the
Federal Communication Commission ("FCC"), State of Wisconsin Commission (used as
an example) and Technology Futures Inc. ranges of 20-26, 17-22, and 15-22 years,
respectively. In reviewing our asset lives in 2005, we were aware that the lives
were being  extended  for this asset class and we were  getting  more use of the
copper cable as a result of technological  changes in the industry (fiber is not
being used by rural local exchange carriers as much as originally  anticipated).
The study is consistent with our  expectation  that the lives should be extended
for the copper cable.


                                       9
<PAGE>

Switching  Software:  The whole life has been  shortened from  approximately  10
years  to 5 years  and the  average  remaining  life  has  been  shortened  from
approximately 5 years to a range of 2 to 4 years.

We discussed the decrease in the life for switching  software with our engineers
who indicated  that the results of the study are  consistent  with the engineers
view  regarding  the useful life of this asset.  The decrease in the useful life
for switching  software is due to the  frequency of the  upgrades.  The software
needs to be current in order for the company to obtain  technical  support.  The
upgrades in many cases are as expensive as the initial software.  As vendors are
selling  less  hardware,  they are  selling  more  patches  and  upgrades to the
original core software, sometimes as frequently as every 2 - 3 years. The use of
a 5 year  life  for  this  asset  class is  appropriate  based on  technological
advances and the Company's  expected  capital  expenditures.  This is consistent
with the reduction in life proposed by the State of Wisconsin.

The Wisconsin  State  Telecommunications  Association  proposed that the service
life for accounts 2212 (Digital  Electronic  Switching) should be shortened to 5
years,  a life  similar to computer  equipment,  due to consumer  pressures  for
faster  broadband  services  and the  evolution  within  the  telecommunications
industry to soft  switches  and higher  bandwidth  digital  loop  carrier in the
network.  This is also  consistent with recent  experience and discussions  with
Company engineers.

Numerous   external  sources  exist  that  affirm  the  Company's   depreciation
estimates.  These sources include studies of depreciation rates performed by the
FCC and State regulatory  commissions.  Foster utilized the same data sources in
arriving at the recommended lives in its 2005 study.

The results of the study and the proposed  corresponding average remaining lives
are consistent with our  expectation of the Company's  future usage of plant and
our capital  expenditures  program.  The  extension of the copper cable lives is
consistent  with the Company's  experience that the lives are  lengthening.  The
expected  increase in the useful life of the copper  cable  results from placing
electronic equipment closer to the home which permits increased functionality of
the copper, and more frequent upgrades to the switching software in recent years
have enabled us to increase bandwidth over the copper cable lines. Lastly, while
some  companies  in our industry  are  building  fiber to the home,  the current
trends  for  broadband  applications  do not  require  fiber  to the  home  and,
accordingly,  the trends for fiber and the  economics  to pay for it do not make
this replacement compelling.


                                       10
<PAGE>

A brief historical summary of the Company's depreciation expense used to support
the Company's  10-K  disclosure and assertion  that  depreciation  expense would
decline by 12.5% in 2006 is as follows:

                                 ($ in millions)
<TABLE>
<CAPTION>
                                                                                 Expected
                                                     2003     2004      2005        2006
                                                     ----     ----      ----        ----
<S>                                                  <C>      <C>       <C>        <C>
Net depreciable plant (beginning of the year)        3,690    3,531     3,336      3,186

Depreciation expense recorded                         468      446       416        364

Expense/Net plant                                    12.7%    12.6%     12.5%      11.4%

Capital expenditures (during the year)                278      276       275        280

  (All data includes ELI)
</TABLE>

As our  table  shows,  depreciation  expense  declines  from  $416 in 2005 to an
expected $364, a drop of $52 or 12.5%.

The Company uses the group composite  methodology for depreciation  which relies
upon net depreciable plant in its calculation. As demonstrated, our depreciation
expense has declined over the period 2003 to 2005 as a result of a declining net
asset base, and a similar  decline occurs in 2006  regardless of the application
of new life estimates.  We have adjusted the language in our most recently filed
10-Q to state that the expected decline is the result of these factors. The 10-Q
disclosure  states that:  "The decrease is due to a declining asset base and the
result of extending the  remaining  useful lives of our copper  facilities  from
approximately  16 years to a range of 26 to 30 years. The decrease was partially
offset by the  shortening of lives for our  switching  software  assets,  all in
accordance with the independent study."


                                       11

<PAGE>

Comment 5
- ---------

(8) Discontinued Operations, page F-16
- --------------------------------------

Refer to the second  paragraph  and the bottom table of page F-16 and explain to
us in more  detail why taxes  substantially  reduced  your gain from the sale of
CCUSA.  Give us an analysis of the tax charge that  reflects  the effects of all
factors that went into your tax charge for this line-item.

Response
- --------

There are  significant  permanent  basis  differences  between book and tax. The
basis difference resulted in a lower book gain, compared to the tax gain.

CCUSA was acquired with shares of Citizens  Communications  stock in 1997 and in
accordance  with  purchase  accounting,   the  Company  recorded  goodwill  upon
acquisition.  This goodwill asset has no tax basis. In accordance with paragraph
9d of FASB  Statement  109  deferred  taxes  were  not  recorded  for the  basis
difference associated with the goodwill.

Computation Summarized:             $(000,000)

                                                         Book     Tax

Sales Proceeds                                           43.6     43.6
Basis in Tangible Assets (Net)                           (2.1)    (1.2)
Basis in GW                                             (18.8)       0
Other Items                                              (8.6)    (3.0)
                                                        -----     ----
Total Gain(1)                                            14.1     39.4
                                                        =====
State Tax Expense                                                 (1.3)
Federal Tax Expense (35%)                                        (13.3)
Tax Benefit for timing differences and
   other items                                                     1.5
                                                                  ----
Total Tax Expense- Discontinued Op (2)                           (13.1)
                                                                  ====
Book Gain (1)                                           14.1
Tax Expense (2)                                        (13.1)
                                                       =====
Book Gain After Tax                                      1.0
                                                       =====

                                       12
<PAGE>

Comment 6
- ---------

(13) Management Succession and Strategic Alternatives Expenses, page F-21
- -------------------------------------------------------------------------

Refer to the last paragraph of page F-21. Give us an analysis showing the equity
instruments  that  were  accelerated.  Indicate  the stock  plans to which  they
pertain.  Describe  how the  accelerated  terms were changed and explain how you
determined  the  value  of the  $33.6  (actually  $36.6)  non-cash  expense  for
accelerated  stock benefits.  Please give us your  calculations and refer to all
pertinent authoritative accounting literature in your response.

Response
- --------

Pursuant to Section 1.2(a) of the Separation Agreement, the awards were modified
to accelerate vesting. The agreement states (in part):

"All of the Options and Restricted Stock that have not already vested shall vest
and the Options  shall become fully  exercisable,  and all  restrictions  on the
Restricted  Stock shall lapse,  and all of the Options shall remain  exercisable
until  (and  may not be  exercised  at any  time  after)  the  later  of (I) the
expiration date of the Options as set forth in the applicable  Award  documents,
as if no termination  of employment had occurred and (II) the first  anniversary
of the Termination Date".

Authoritative Accounting Literature used to Value Acceleration:

At the time of this  transaction  (separation of two executives) we followed APB
Opinion  25 to  account  for Stock  Based  Compensation  Plans.  The  separation
agreements  required us to apply paragraphs 36 and 37 of FASB Interpretation 44.
Paragraph 36 states that additional  compensation expense is to be recorded as a
result of a modification to an award.  Below please find the methodology used to
calculate the  additional  or  accelerated  compensation  expense as a result of
award modifications.

The awards were modified as follows:

Restricted  Stock -  Restricted  awards  are  valued  at the time of  grant  and
expensed  ratably over the vesting period.  As a result of the change in vesting
period  (immediate  full vest) we expensed all  "unamortized"  restricted  stock
compensation.

Stock options - For all grants where the exercise  price was lower than the fair
market value on the date of  termination,  a charge was taken for the difference
between the exercise price and the fair market value.

During our review of this response we noted that certain  awards were treated as
modifications  while other  awards were not  treated as  modifications.  We also
noted that after reviewing the employment  agreement of Len Tow, his award grant
documentation  and his  separation  agreement,  as well as the  incentive  award
agreement documentation of Scott Schneider, certain award grants should not have
been  treated  as  modifications  and vice  versa.  These  errors  result  in an
immaterial difference of approximately $500,000 (over-expensed).


                                       13
<PAGE>

Non-Cash Expense for Accelerated Stock Benefits

              Restricted Stock             $35,754,929  (Attachment A)

              Stock Options                    862,710  (Attachment B)

                               Total       $36,617,639



                                       14
<PAGE>
<TABLE>
<CAPTION>

                                  Attachment A
                          Citizens Communications Corp
                          SEC Comments Dated 4/25/2006
 Response to Comment 6. Management Succession and Strategic Alternatives Expenses
                                Restricted Stock

                                                                                           Expensed Prior to
                                                                             Total            Separation         Non-Cash
     Stock               Plan           Grant Date  Shares     Price      Comp Expense       July 9, 2004         Expense
- ----------------  ------------------------------------------- ---------  ------------------------------------  ------------

<S>               <C>                  <C>          <C>        <C>           <C>                  <C>             <C>
Restricted        Employment Contract   7/11/1996    500,000    13.050        6,525,000            6,157,500       367,500

Units             Equity Incentive Plan  1/1/1998      4,070    13.050           53,114                    0        53,114

Units             Equity Incentive Plan  1/1/1999      5,820    13.050           75,951                    0        75,951

Units             Employment Contract   6/11/1999    225,000    13.050        2,936,250                    0     2,936,250

Units             Equity Incentive Plan  1/1/2000      4,104    13.050           53,557                    0        53,557

Units             Employment Contract   5/18/2000     72,727    13.050          949,087                    0       949,087

Restricted        Employment Contract   10/1/2000  1,000,000    13.050       13,050,000            7,389,000     5,661,000

Restricted        Employment Contract   2/18/2000  1,518,750    15.875       24,110,156           10,849,568    13,260,588

Units             Equity Incentive Plan 6/18/2001    100,000    13.050        1,305,000                    0     1,305,000

Restricted        Equity Incentive Plan 5/16/2002    200,000     9.520        1,904,000              897,007     1,006,993

Restricted        Employment Contract   5/16/2002    250,000     9.520        2,380,000            1,081,817     1,298,183

Restricted        Equity Incentive Plan 3/13/2003    155,000     9.390        1,455,450              646,866       808,584

Restricted        Equity Incentive Plan 2/19/2004    171,000    12.400        2,120,400              294,500     1,825,900

Restricted        Equity Incentive Plan 3/11/2004    200,000    12.590        2,518,000              279,778     2,238,222

Restricted        Separation Agreement   7/9/2004    300,000    13.050        3,915,000                    0     3,915,000



                                                   ----------            --------------- --------------------  ------------
Total                                              4,706,471                 63,350,965           27,596,036    35,754,929
                                                   ==========            =============== ====================  ============
</TABLE>

Note:  Stock Units Convert to Stock at Retirement


                                       15
<PAGE>
<TABLE>
<CAPTION>

                                  Attachment B
                          Citizens Communications Corp
                          SEC Comments Dated 4/25/2006
 Response to Comment 6. Management Succession and Stragegic Alternatives Expenses
                                  Stock Options


                                                      Vested/Unexercised           Exercise                         Non-Cash
          Plan                        Grant Date        at Separation               Price            FMV            Expense
- -------------------------    -----------------------------------------------    ------------    ------------   ------------------

<S>                                    <C>                         <C>              <C>              <C>                <C>
Equity Incentive Plan                  2/16/1996                    227,746          10.571           13.05              564,810

Equity Incentive Plan                  6/18/2001                     48,750           12.37           13.05               33,150

Equity Incentive Plan                  5/16/2002                     75,000            9.52           13.05              264,750


                                                    ------------------------                                   ------------------
Total                                                               351,496                                              862,710
                                                    ========================                                   ==================

</TABLE>

                                       16
<PAGE>

Comment 7
- ---------

(15) Company Obligated Mandatorily Redeemable Convertible Preferred Securities,
- -------------------------------------------------------------------------------
 page F-22
- ----------

We note that the first paragraph of page F-23 indicates that you  deconsolidated
Citizens Utilities Trust and Citizens Utilities Capital L.P. on January 1, 2004.
Give us a reasonably detailed description of Citizens Utilities Trust,  Citizens
Utilities  Capital L.P. and your EPPICS.  Explain how you applied the provisions
of FIN 46R and why it was appropriate to deconsolidate both of these affiliates.

Response
- --------

The Company  applied FIN 46R to its EPPICS,  Citizens  Utilities Trust ("Trust")
and Citizens  Utilities Capital L.P. ("LP") and determined that the Trust and LP
were variable interest  entities ("VIE").  Both entities are VIE's because their
activities  are so restricted  and  predetermined  that the security  holders of
these entities lack the direct or indirect ability to make decisions about their
activities  through  voting rights or similar  rights.  Neither the Trust nor LP
have any operations.  Both are entirely dependent on Citizens for the receipt of
cash,  and they  serve as a simple  conduit to pay the  dividends  on the EPPICS
securities.  The  investors are the primary  beneficiaries  of the Trust and the
Trust is the primary beneficiary of the Partnership.  The determination of which
party  consolidates  the Trust and  Partnership  under FIN 46R  depends on which
parties hold a variable interest in the Trust and Partnership and whether any of
those parties hold an interest that absorbs a majority of the expected losses of
the Trust and Partnership or receives a majority of the residual  returns of the
trust.  Since  the  primary  beneficiary  of the Trust  and  Partnership  is not
Citizens,  Citizens was required to deconsolidate the Trust and Partnership upon
the adoption of FIN 46R.

A similar  structure and its resulting  accounting  treatment  under FIN 46R was
used as an  example on page 100 of KPMG's  Consolidation  of  Variable  Interest
Entities An  analysis  of FASB  Interpretation  No. 46. Our  treatment  of these
entities follows KPMG's interpretation.

We include the following  description of Citizens  Utilities  Trust and Citizens
Utilities  Capital L.P.  from the EPPICS  prospectus  dated  January 16, 1996 as
filed by Citizens Utilities Trust and Citizens Utilities.

Citizens Utilities Capital L.P.

Citizens Utilities Capital L.P. is a special purpose limited  partnership formed
under the laws of the State of Delaware. All of its partnership interests (other
than the  Partnership  Preferred  Securities  and the  interests  of any Special
Representative,  as defined  herein)  will be  beneficially  owned  directly  or
indirectly by Citizens (the "General  Partnership  Security" and,  together with
the Partnership Preferred Securities, the "Partnership Securities"). Citizens or
one of its  wholly  owned  subsidiaries  will be the  sole  general  partner  of
Citizens Capital and will contribute capital to the extent required to establish
and maintain a General  Partnership  Security  equal to at least 3% of the total
capital of the Partnership. Citizens Capital exists for the sole purposes of (i)
raising  capital through the one-time  issuance of its  Partnership  Securities,

                                       17
<PAGE>

(ii) loaning such  capital to Citizens in exchange for  Convertible  Debentures,
(iii)  collecting  quarterly  interest  payments on the Convertible  Debentures,
placing  orders  with  brokers to sell shares of Common  Stock  received as such
interest  payments  and  paying  the  required  quarterly  distributions  on its
Partnership  Securities,  (iv)  effecting  the  conversion  of  the  Partnership
Preferred  Securities  into Common Stock Series A and (v) engaging in only those
other  activities  necessary or incidental  thereto.  The partnership  will hold
title to the  Convertible  Debentures  and will have the power to  exercise  all
rights,  powers and  privileges  under the Indenture (as defined  herein) as the
holder of the Convertible Debentures.

Citizens Utilities Trust

Citizens Utilities Trust, the issuer of the Convertible Preferred Securities, is
a statutory  business  trust formed under the Delaware  Business  Trust Act (the
"Trust Act") pursuant to a declaration  of trust,  dated as of October 13, 1995,
executed by  Citizens,  as sponsor,  and the  trustees  specified  therein.  The
declaration of trust will be qualified as an indenture under the Trust Indenture
Act of 1939 (the "Trust Indenture Act"). Citizens owns and will own, directly or
indirectly,  all of the Convertible  Common Securities of the Trust,  which will
amount to at least 3% of the total  capital of the Trust.  The Trust  exists for
the sole purposes of (i) issuing its Trust  Securities,  (ii)  contributing  the
proceeds  thereof  to the  Partnership  to  acquire  the  Partnership  Preferred
Securities  and (iii)  engaging  in only those  other  activities  necessary  or
incidental thereto.


                                       18
<PAGE>

Comment 8
- ---------

(17) Sock Plans, page F-23
- --------------------------

We note that the number and exercise  price of all of your  outstanding  options
were changed in response to the special $2.00  dividend paid in September  2004.
Describe and quantify how you changed the terms of these  options and explain to
us how you applied the guidance of FIN 44 and EITF 00-23.

Response
- --------

FIN 44 requires that Company meet very specific  criteria to avoid variable plan
accounting  when  repricing  existing  options in  response  to a special  large
non-recurring dividend. The two key criteria are as follows (paragraph 53):

     1)   The  aggregate  intrinsic  value of the  award  immediately  after the
          change is not greater than the aggregate  intrinsic value of the award
          immediately before the change.
     2)   The ratio of the  exercise  price per  share to the  market  value per
          share is not reduced.

EITF 00-23  suggests  that the Company  would have been subject to variable plan
accounting  if the Company had not made the  appropriate  changes in response to
the special dividend.

We have applied the guidance of paragraph 53 of FIN 44 and provide the following
actual  example (all option  grants of the Company were  reissued/repriced  in a
similar fashion):

Option  grant of  12/13/94:  36,352  shares  at an  exercise  price of $7.75 was
repriced and reissued as 42,215 shares at an exercise price of $6.67.

Intrinsic Value Test:  (slight difference due to rounding)
- ---------------------

                  Before:  36,352 x 7.75 = $281,728
                  After:   42,215 x 6.67 = $281,574

Ratio Test:
- -----------

         Market value before dividend $14.40, after dividend $12.40

            Ratio  Before:  7.75/14.40 = 53.8%
                   After:   6.67/12.40 = 53.8%



                                       19
<PAGE>

Comment 9
- ---------

(19)     Income Taxes, page F-27
- --------------------------------

The  first  table  on page  F-27  discloses  that  adjustments  to tax  reserves
significantly reduced your provisions of income taxes in each of the three years
presented.  Describe  these  reserves  for us. Tell us when and why the original
accruals  were made and how you  applied  the  guidance  of SFAS 5. Tell us what
happen and how these obligations were reduced or settled in your favor.

Response
- --------

Description of Tax Reserves
- ---------------------------

The tax reserve adjustment referred to in the first table on page F-27 pertained
to  income  tax  liability  accruals  for both  federal  and  state  income  tax
contingencies.  The tax years  covered by the accruals  were 1997 through  2001,
which is the latest  federal audit cycle  completed for Citizens by the Internal
Revenue  Service  ("IRS").  The most  significant  federal and state  income tax
reserves have been summarized below under the category "Federal and State Income
Tax Contingencies".

Accounting Methodology
- ----------------------

The Company  applied the  provisions  of  paragraph 8 of  Statement of Financial
Accounting  Standards No. 5 (SFAS 5) and the provisions of SFAS 109 in recording
(or releasing) liabilities, including interest, for the income tax contingencies
that were  recognized  in the years 2003  through  2005.  The  Company  has also
complied  with the  provisions  of  paragraph  14 of SFAS 5 by not  accruing for
general or  unspecified  contingencies  during the same  periods.  The liability
maintained on the Company's  balance sheet for these audit years  included items
that had both been raised by the IRS in previous  audit cycles as well as issues
that had not been raised but were expected to be  challenged  during the current
cycle, in management's best judgment, on both a federal and state level.

Background of Federal Audit Cycle during the period
- ---------------------------------------------------

The federal income tax audit cycle for 1997 through 2001 commenced in the second
quarter of 2002 (with  appropriate  waivers  granted by the Company for relevant
years) and was  completed  in the 3rd quarter of 2004.  During the course of the
IRS' fieldwork,  the Company granted an additional  waiver of time to keep these
tax years  open  effectively  through  December  31,  2005.  The IRS  issued its
examination  report to the Company in August of 2004 and the  Company  agreed to
the  proposed  adjustments.   The  Congressional  Joint  Committee  on  Taxation
completed its  consideration of the examination  report in September of 2004 and
took no exceptions to the conclusions  and adjustments  reached in the report by
the IRS.


                                       20
<PAGE>

Federal and State Income Tax Contingencies
- ------------------------------------------

The  following  summarizes  the most  significant  federal and state  income tax
contingencies that were resolved and concluded during 2003-2005:

     Federal Income Tax Contingencies
     --------------------------------

     -    1997-1998 Company Owned Life Insurance (COLI)
          ---------------------------------------------

          The Company  purchased  insurance to cover losses  associated with the
          death  of  employees.  The  Company  borrowed  funds to  purchase  the
          insurance,  resulting in an interest deduction, while the value on the
          insurance policy increased on a tax-free basis. The IRS challenged the
          tax benefits that were being claimed by taxpayers, including Citizens,
          in COLI programs.

          The IRS established a settlement policy for applicable  taxpayers in a
          compliance  initiative program that allowed for a deduction for 20% of
          interest  paid on the  policies  and 20% of  administration  fees.  In
          addition,  20%  of the  proceeds  of  termination  value  received  on
          surrender of the policies were taxed.

     -    1997-2001 Software Development
          ------------------------------
          The Company has  established  an accounting  method for federal income
          tax purposes of deducting costs  associated  with developing  internal
          software in the tax year the costs are incurred. During the applicable
          years, we had software  initiatives that included elements of "process
          changes."  Although the process  changes were directly  related to and
          were required as part of the software development,  these expenses did
          not specifically involve programming software.

          A  contingency  reserve  was  established  in the  event  that the IRS
          required the process expenses to be capitalized.

     -    ***********************************************
          -----------------------------------------------

          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          *****************************************.

          **********************************************************************
          ******************************************************.

                                       21

<PAGE>


     -    1997 Bad Debt Write-off in Long Distance
          ----------------------------------------

          We followed a book write-off of bad debts related to our long distance
          operations  for tax  purposes.  After  the  IRS  inquired  about  this
          write-off  a  contingency  reserve  was  established  for an  expected
          disallowance  of the deduction due to the  inadequacy of the available
          supporting documents.

     -    *********************************
          ---------------------------------

          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          ****************************.

     -    ********************************
          --------------------------------

          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          ****************************************.


     State Income Tax Contingencies
     ------------------------------

     -    ***********************************************
          -----------------------------------------------

          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          ***************************.


                                       22
<PAGE>


     -    ************************
          ------------------------

          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          ****************.

     -    1997-2000 West Virginia Step-up Depreciation
          --------------------------------------------

          Citizens (the parent company) sold assets to CTC West Virginia at fair
          market  value  resulting  in a gain for  Citizens and a step-up in tax
          basis  for  CTC  West  Virginia.   A  state  income  tax  reserve  was
          established  in the event that the state of West  Virginia  disallowed
          the depreciation deductions based upon the relationship of the parties
          involved.

     -    1995-2000 Arizona Unitary & Pollution Audit
          -------------------------------------------

          The state of Arizona  commenced  an audit for the years  1995  through
          2000 in the 4th quarter of 2002.  The Company  filed its Arizona state
          income tax returns on a unitary  basis from 1998 to 2000.  Issues that
          arose in the  course of the audit that were  being  challenged  by the
          state included filing on a unitary basis,  interest expense deductions
          and   the    apportionment    of   salaries    from   the    Company's
          telecommunications  headquarters in Dallas,  Texas. Also at risk was a
          step-up in basis  driven  depreciation  deduction  similar to the West
          Virginia transaction described above.

     -    ********************
          --------------------

          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          **********************************************************************
          ********************************************************.

     -    1997-2002 Non-Taxable Income
          ----------------------------

          We had a significant  investment  portfolio prior to the year 2000. We
          operate in many  states that use a "unitary"  or  consolidated  income
          basis for state taxation. Consistent with case law and state statutes,
          we excluded investment  earnings from the unitary state filings,  only
          subjecting  the  income to tax in the state of  principal  management,
          Connecticut.


                                       23
<PAGE>

          A reserve for challenge to the exclusion was  established in the event
          of audit adjustments in the unitary states.

     -    1999-2001 Tennessee & Wisconsin Apportionment
          ---------------------------------------------

          Citizens   Telecom  Service  Co.   ("CTSC")  was  the   administrative
          headquarters  located  in  Dallas,  Texas  for  all of  our  telephone
          properties.   The  costs  associated  with  that  company,   including
          salaries,  were  allocated  to the various  telephone  properties.  We
          adjusted  the  payroll  apportionment  factor  for the  Tennessee  and
          Wisconsin  properties  to reflect  services  provided by CTSC to those
          properties,  thus reducing the overall  apportionment  factor in those
          states.  Since the CTSC  employees were not employees of the telephone
          companies,  those states could adjust the apportionment factor upwards
          increasing the state tax liability.

Description of Credit Recognized for Year Ending 2003
- -----------------------------------------------------

The credit recognized by the Company in 2003 reflected the preliminary  findings
of a segment of the IRS fieldwork concluded in the second quarter. Specifically,
the IRS' engineering specialist completed his fieldwork related to the Company's
fixed assets,  depreciation,  capitalization  policies and processes,  etc. That
review  concluded in May 2003. As such, in management's  judgment,  the reserves
maintained  for the  remaining  balances  for the  following  audit  issues were
recognized:    1997-2001   Software   development,    **************************
**************************************.  The issue related to Company Owned Life
Insurance (COLI) was also reversed as the IRS and the Company reached  agreement
on a settlement  consistent  with the IRS' COLI  settlement  program.  The state
income tax  reserve  for the above  federal  issues was also  reversed  based on
management's  conclusion  that the states would follow the federal  treatment of
these issues.

Description of Credit Recognized for Year Ending 2004
- -----------------------------------------------------

As noted above,  the IRS concluded  its audit of the  1997-2001  audit years and
issued its report in the 3rd quarter of 2004.  Further,  the IRS did not propose
adjustments  for the remaining  federal  income tax exposures for which reserves
were still  maintained.  Accordingly,  the Company reversed the reserves.  These
items     included    1997    bad    debt    write-off    in    long    distance
*************************************.  The Company also  reversed  state income
tax reserves previously  established for federal issues based on the expectation
that the states would follow the federal tax treatment of the items. The Company
also reversed the remaining income tax reserves for the Arizona state income tax
contingencies,  net of  federal  benefit,  as the audit was  settled  in the 3rd
quarter of 2004.


                                       24
<PAGE>

Description of credit recognition for the year ending 2005
- ----------------------------------------------------------

The credits  recognized by the Company in 2005 were the result of the expiration
of the statute of  limitations  for all state  liabilities  that remained on the
books for the audit years 1997  through  2001 (except for the state of Tennessee
discussed below).  The audit years 1997 through 2001 generally  remained open at
the state level until the federal waiver expired,  effectively,  at December 31,
2005. At any time up until that date a state could have  provided  notice to the
Company that an  examination of those years was  forthcoming.  Based on the fact
that no state  provided  notice to the  Company of their  intent to audit  those
years  (except  Tennessee)  by  December  31,  2005,  the Company  reversed  the
liabilities that had been maintained.

The    state    issues    reversed    in   2005    included    the    following:
********************************************************************** 1997-2000
West Virginia Step-up Depreciation;  ********************  1997-2002 Non-taxable
income; and 1999-2001 Wisconsin apportionment.

The state of Tennessee  conducted an audit of the years 1999 through 2002 during
2005 and concluded their fieldwork in the 4th quarter.  The Company was assessed
tax and interest for issues  including  disallowance of depreciation  deductions
and  apportionment  factors.  The state tax reserves  maintained  for  Tennessee
related  issues were all  reversed at year-end  2005 net of the payment  made to
close the audit for those years.

                                       25
<PAGE>


     Please be advised that the Company hereby acknowledges that (i) the Company
is  responsible  for the adequacy and accuracy of the  disclosure in its filings
with the  Commission;  (ii) the Staff  comments  or  changes  to  disclosure  in
response to the Staff comments do not foreclose the  Commission  from taking any
action with  respect to the filings with the  Commission;  and (iii) the Company
may not assert Staff  comments as a defense in any  proceeding  initiated by the
Commission or any person under the federal securities laws of the United States.

     If the Staff has any additional  questions or comments,  kindly contact the
undersigned at (203) 614-5769.


                                        Sincerely,



                                        /s/ Donald R. Shassian
                                        ----------------------
                                        Donald R. Shassian
                                        Chief Financial Officer


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
