Fairport, New York-based corporate phone provider, Paetec Holding Corp., has agreed to purchase the troubled competitive local exchange carrier (CLEC), McLeodUSA, for $492 million.

The acquisition of McLeodUSA, which offers telephone and high-speed internet services in Detroit, Denver, Phoenix, and numerous other U.S. cities, will increase Paetec’s customer base by almost a third, and give it a presence in almost all of America’s top-50 urban markets. The deal will also give Paetec access to McLeodUSA’s 20-state fiber-optic broadband network, a key asset in today’s next-generation telecommunications marketplace.

“It positions them more effectively to compete,” said Raimundo Archibold, an analyst with Kaufman Brothers. Small business customers who currently deal with big incumbent phone providers like AT&T and Verizon “may not be getting the attention that they deserve or certainly the level of service that they think they should,” Archibold explained.

McLeodUSA investors will be given 1.3 Paetec shares, worth about $15.50, for each McLeod share they own, Paetec said Monday in a statement.