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                                                                   Exhibit 10.38

               INTERCONNECTION, RESALE AND UNBUNDLING AGREEMENT



                                    BETWEEN



                          GTE NORTHWEST INCORPORATED



                                      AND



                           ELECTRIC LIGHTWAVE, INC.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                  <C>
ARTICLE I
SCOPE AND INTENT OF AGREEMENT......................................................    I-1

ARTICLE II
DEFINITIONS........................................................................   II-1
1.   General Definitions...........................................................   II-1
      1.1  "Access Service Request"................................................   II-1
      1.2  "Act"...................................................................   II-1
      1.3  "Affiliate".............................................................   II-1
      1.4  "AMA"...................................................................   II-1
      1.5  "Applicable Law"........................................................   II-1
      1.6  "Automatic Location Identification/Data Management System" ("ALI/DMS")..   II-1
      1.7  "Automatic Number Identification" ("ANI")...............................   II-1
      1.8  "Bill-and-Keep Arrangement".............................................   II-2
      1.9  "Bona Fide Request" ("BFR").............................................   II-2
     1.10  "Business Day"..........................................................   II-2
     1.11  "Central Office Switch".................................................   II-2
     1.12  "Centralized Message Distribution System" ("CMDS")......................   II-2
     1.13  "CLLI codes"............................................................   II-2
     1.14  "Commercial Mobile Radio Services" ("CMRS").............................   II-2
     1.15  "Commission"............................................................   II-2
     1.16  "Common Channel Signaling" ("CCS")......................................   II-2
     1.17  "Competitive Local Exchange Carrier" ("CLEC")...........................   II-2
     1.18  "Conduit"...............................................................   II-2
     1.19  "Currently Available"...................................................   II-3
     1.20  "Customer"..............................................................   II-3
     1.21  "Customer Usage Data"...................................................   II-3
     1.22  "Dedicated Transport"...................................................   II-3
     1.23  "DS-1"..................................................................   II-3
     1.24  "DS-3"..................................................................   II-3
     1.25  "Electronic File Transfer"..............................................   II-3
     1.26  "EMR"...................................................................   II-3
     1.27  "Enhanced 911 Service" ("E-911 Service")................................   II-3
     1.28  "Exchange Service"......................................................   II-3
     1.29  "Expanded Interconnection Service" ("EIS")..............................   II-4
     1.30  "Facility"..............................................................   II-4
     1.31  "FCC"...................................................................   II-4
     1.32  "GTOC"..................................................................   II-4
     1.33  "Guide".................................................................   II-4
     1.34  "Hazardous Chemical"....................................................   II-4
     1.35  "Hazardous Waste".......................................................   II-4
</TABLE>

                                       i
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<TABLE>
<S>                                                                                  <C>
     1.36  "Imminent Danger".......................................................   II-4
     1.37  "Incumbent Local Exchange Carrier" ("ILEC").............................   II-4
     1.38  "Interim Number Portability (INP)"......................................   II-5
     1.39  "Interconnection Facility"..............................................   II-5
     1.40  "Interconnection Point" ("IP")..........................................   II-5
     1.41  "Interexchange Carrier" ("IXC").........................................   II-5
     1.42  "ISDN User Part" ("ISUP")...............................................   II-5
     1.43  "LATA"..................................................................   II-5
     1.44  "Line Information Data Base" ("LIDB")...................................   II-5
     1.45  "Line Side".............................................................   II-5
     1.46  "Local Exchange Carrier" ("LEC")........................................   II-5
     1.47  "Local Exchange Routing Guide" ("LERG").................................   II-5
     1.48  "Local Number Portability" ("LNP")......................................   II-6
     1.49  "Local Traffic".........................................................   II-6
     1.50  "Main Distribution Frame" ("MDF").......................................   II-6
     1.51  "Meet-Point Billing" ("MPB")............................................   II-6
     1.52  "MECAB".................................................................   II-6
     1.53  "MECOD".................................................................   II-6
     1.54  "Mid-Span Fiber Meet"...................................................   II-6
     1.55  "NANP"..................................................................   II-7
     1.56  "Network Interface Device" ("NID")......................................   II-7
     1.57  "Numbering Plan Area" ("NPA")...........................................   II-7
     1.58  "NXX", "NXX Code", "Central Office Code" or "CO Code"...................   II-7
     1.59  "911 Service"...........................................................   II-7
     1.60  "Owner and Operator"....................................................   II-7
     1.61  "Pole Attachment".......................................................   II-7
     1.62  "Provider"..............................................................   II-7
     1.63  "Public Safety Answering Point" ("PSAP")................................   II-7
     1.64  "Rate Center"...........................................................   II-8
     1.65  "Right-of-Way" ("ROW")..................................................   II-8
     1.66  "Routing Point".........................................................   II-8
     1.67  "Service Control Point" ("SCP").........................................   II-8
     1.68  "Service Switching Point" ("SSP").......................................   II-8
     1.69  "Shared Transport"......................................................   II-8
     1.70  "Signaling Point" ("SP")................................................   II-9
     1.71  "Signaling System 7" ("SS7")............................................   II-9
     1.72  "Signal Transfer Point" ("STP").........................................   II-9
     1.73  "Subsidiary"............................................................   II-9
     1.74  "Synchronous Optical Network" ("SONET").................................   II-9
     1.75  "Switched Access Service"...............................................   II-9
     1.76  "Telecommunications Services"...........................................   II-9
     1.77  "Third Party Contamination".............................................   II-9
     1.78  "Trunk Side"............................................................   II-9
     1.79  "Unbundled Network Elements" ("UNEs")...................................   II-9
     1.80  "Undefined Terms".......................................................  II-10
</TABLE>

                                      ii
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<TABLE>
<S>                                                                                  <C>
     1.81  "Vertical Features" (including "CLASS Features")........................  II-10
     1.82  "Wire Center"...........................................................  II-10

ARTICLE III
GENERAL PROVISIONS.................................................................  III-1

1.   Scope of General Provisions...................................................  III-1

2.   Term and Termination..........................................................  III-1
     2.1   Term....................................................................  III-1
     2.2   Post-Termination Arrangements...........................................  III-1
     2.3   Termination Upon Default................................................  III-1
     2.4   Termination Upon Sale...................................................  III-2
     2.5   Liability upon Termination..............................................  III-2

3.   Amendments....................................................................  III-2

4.   Assignment....................................................................  III-2

5.   Authority.....................................................................  III-2

6.   Responsibility for Payment....................................................  III-2

7.   Billing and Payment...........................................................  III-3
     7.1  Dispute..................................................................  III-3
     7.2  Late Payment Charge......................................................  III-3
     7.3  Due Date.................................................................  III-3
     7.4  Audits...................................................................  III-3

8.   Binding Effect................................................................  III-3

9.   Capacity Planning and Forecasting.............................................  III-4

10.  Compliance with Laws and Regulations..........................................  III-4

11.  Confidential Information......................................................  III-4
     11.1  Identification..........................................................  III-4
     11.2  Handling................................................................  III-5
     11.3  Exceptions..............................................................  III-5
     11.4  Survival................................................................  III-5

12.  Consent.......................................................................  III-6

13.  Cooperation on Fraud Minimization.............................................  III-6
</TABLE>

                                      iii

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<TABLE>
<S>                                                                                  <C>
14.  Dispute Resolution............................................................  III-6
     14.1  Alternative to Litigation...............................................  III-6
     14.2  Negotiations............................................................  III-6
     14.3  Arbitration.............................................................  III-7
     14.4  Expedited Arbitration Procedures........................................  III-7
     14.5  Costs...................................................................  III-7
     14.6  Continuous Service......................................................  III-7

15.  Entire Agreement..............................................................  III-8

16.  Expenses......................................................................  III-8

17.  Force Majeure.................................................................  III-8

18.  Good Faith Performance........................................................  III-8

19.  Governing Law.................................................................  III-8

20.  Standard Practices............................................................  III-8

21.  Headings......................................................................  III-9

22.  Independent Contractor Relationship...........................................  III-9

23.  Law Enforcement Interface.....................................................  III-9

24.  Liability and Indemnity.......................................................  III-9
     24.1  Indemnification.........................................................  III-10
     24.2  End User and Content-Related Claims.....................................  III-10
     24.3  DISCLAIMER..............................................................  III-10
     24.4  Limitation of Liability.................................................  III-11
     24.5  Intellectual Property...................................................  III-11

25.  Multiple Counterparts.........................................................  III-11

26.  No Offer......................................................................  III-11

27.  No Third Party Beneficiaries..................................................  III-11

28.  Notices.......................................................................  III-11

29.  Protection....................................................................  III-12
     29.1  Impairment of Service...................................................  III-12
     29.2  Resolution..............................................................  III-13
</TABLE>

                                      iv
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<TABLE>
<S>                                                                                  <C>
30.  Publicity.....................................................................  III-13

31.  Regulatory Agency Control.....................................................  III-13

32.  Changes in Legal Requirements.................................................  III-13

33.  Effective Date................................................................  III-13

34.  Regulatory Matters............................................................  III-13

35.  Rule of Construction..........................................................  III-14

36.  Section References............................................................  III-14

37.  Service Standards.............................................................  III-15

38.  Severability..................................................................  III-15

39.  Subcontractors................................................................  III-15

40.  Subsequent Law................................................................  III-15

41.  Taxes.........................................................................  III-15

42.  Trademarks and Trade Names....................................................  III-16

43.  Waiver........................................................................  III-16

44.  Environmental Responsibility..................................................  III-16

45.  TBD Prices....................................................................  III-18

46.  Amendment of Certain Rates, Terms, and Conditions.............................  III-18

ARTICLE IV
GENERAL RULES GOVERNING RESOLD SERVICES AND UNBUNDLED
     ELEMENTS......................................................................    IV-1

1.   General.......................................................................    IV-1

2.   Liability of GTE..............................................................    IV-1
     2.1   Inapplicability of Tariff Liability.....................................    IV-1
     2.2   ELI Tariffs or Contracts................................................    IV-1
     2.3   No Liability for Errors.................................................    IV-1
</TABLE>

                                       v
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<TABLE>
<S>                                                                                  <C>
3.   Unauthorized Changes..........................................................    IV-2
     3.1   Procedures..............................................................    IV-2

4.   Impact of Payment of Charges on Service.......................................    IV-2

5.   Unlawful Use of Service.......................................................    IV-3

6.   Timing of Messages............................................................    IV-3

7.   Procedures For Preordering, Ordering, Provisioning, Etc.......................    IV-3

8.   Letter of Authorization.......................................................    IV-3
     8.1   Customer Proprietary Network Information................................    IV-3
     8.2   Order Processing........................................................    IV-4

9.   Customer Contacts.............................................................    IV-4

ARTICLE V
INTERCONNECTION AND TRANSPORT AND TERMINATION OF TRAFFIC...........................     V-1

1.   Services Covered by This Article..............................................     V-1
     1.1   Types of Services.......................................................     V-1

2.   Billing and Rates.............................................................     V-1
     2.1   Rates and Charges.......................................................     V-1
     2.2   Billing.................................................................     V-1
     2.3   Billing Specifications..................................................     V-1
     2.4   Billing Disputes........................................................     V-2

3.   Transport and Termination of Traffic..........................................     V-2
     3.1   Traffic to be Exchanged.................................................     V-2
     3.2   Compensation For Exchange Of Traffic....................................     V-2
     3.3   Tandem and Transit Switching Traffic....................................     V-3
     3.4   Inter-Tandem Switching..................................................     V-3
     3.5   IntraLATA Toll Compensation Plan........................................     V-4

4.   Direct Network Interconnection................................................     V-4
     4.1   Network Interconnection Architecture....................................     V-4
     4.2   Compensation............................................................     V-5
     4.3   Trunking Requirements...................................................     V-6
     4.4   Network Redesigns Initiated by GTE......................................     V-7
     4.5   Calling Scopes for Tandem and End Office Interconnection................     V-8
     4.6   Trunk Forecasting.......................................................     V-8
     4.7   Trunk Facility Underutilization.........................................     V-9
</TABLE>

                                      vi
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<TABLE>
<S>                                                                                  <C>
5.   Indirect Network Interconnection..............................................     V-9

6.   Number Resources..............................................................     V-9
     6.1   Number Assignment.......................................................     V-9
     6.2   Rate Centers............................................................     V-9
     6.3   Routing Points..........................................................    V-10
     6.4   Code and Numbers Administration.........................................    V-10
     6.5   Programming Switches....................................................    V-10

7.   Number Portability............................................................    V-10
     7.1   General.................................................................    V-10
     7.2   Interim Number Portability..............................................    V-10
     7.3   Remote Call Forwarding..................................................    V-11

8.  Meet-Point Billing for Switched Access Service.................................    V-11
     8.1   Meet-Point Arrangements.................................................    V-11
     8.2   Access Compensation.....................................................    V-12

9.   Common Channel Signaling......................................................    V-12
     9.1   Service Description.....................................................    V-12
     9.2   Signaling Parameters....................................................    V-13
     9.3   Privacy Indicators......................................................    V-13
     9.4   Connection Through STP..................................................    V-13
     9.5   Multi-Frequency Signaling...............................................    V-13

10.  Service Quality and Performance...............................................    V-13

11.  Network Outages...............................................................    V-13

ARTICLE VI RESALE OF SERVICES......................................................    VI-1

1.   General.......................................................................    VI-1

2.   Terms and Conditions..........................................................    VI-1
     2.1   Quality and Performance.................................................    VI-1
     2.2   Restrictions on Resale..................................................    VI-1
     2.3   Restrictions on Discount of Retail Services.............................    VI-1
     2.4   Resale to Other Carriers................................................    VI-1
     2.5   Interim Universal Service Fund Charge for Wholesale Services............    VI-2

3.   Ordering and Billing..........................................................    VI-2
     3.1   Local Service Request...................................................    VI-2
     3.2   Certificate of Operating Authority......................................    VI-2
</TABLE>

                                      vii
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<TABLE>
<S>                                                                                  <C>
     3.3   Directory Assistance Listings...........................................    VI-2
     3.4   Nonrecurring Charges....................................................    VI-2
     3.5   Transfers Between ELI and Another Reseller of GTE Services..............    VI-2
     3.6   Local Calling Detail....................................................    VI-3
     3.7   Procedures..............................................................    VI-3
     3.8   LIDB....................................................................    VI-3
     3.9   "OLN"...................................................................    VI-3

4.   Maintenance...................................................................    VI-3
     4.1   Maintenance, Testing and Repair.........................................    VI-3
     4.2   Specifics and Procedures for Maintenance................................    VI-3

5.   Services Available for Resale.................................................    VI-3
     5.1   Description of Local Exchange Services Available for Resale.............    VI-3
     5.2   Other Services Available for Resale.....................................    VI-4
     5.3   Rates...................................................................    VI-4
     5.4   Grandfathered Services..................................................    VI-4
     5.5   Access..................................................................    VI-4
     5.6   Operator Services ("OS") and Directory Assistance ("DA")................    VI-4

ARTICLE VII
UNBUNDLED NETWORK ELEMENTS.........................................................   VII-1

1.   General.......................................................................   VII-1

2.   Unbundled Network Elements....................................................   VII-2
     2.1   Categories..............................................................   VII-2
     2.2   Prices..................................................................   VII-2
     2.3   Interconnection to Unbundled Elements...................................   VII-2
     2.4   Service Quality.........................................................   VII-3
     2.5   Nondiscriminatory Provision and Support.................................   VII-3

3.   Network Interface Device......................................................   VII-3
     3.1   Direct Connection.......................................................   VII-4
     3.2   NID to NID Connection...................................................   VII-4
     3.3   Removal of Cable Pairs..................................................   VII-4
     3.4   Maintenance.............................................................   VII-4
     3.5   Collocation Requirement.................................................   VII-5

4.   Loop Elements.................................................................   VII-5
     4.1   Service Description.....................................................   VII-5
     4.2   Categories of Loops.....................................................   VII-5
     4.3   Conditioned Loops.......................................................   VII-6
     4.4   Loop Testing............................................................   VII-6
     4.5   Pair Gain Technologies..................................................   VII-7
</TABLE>

                                     viii
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<TABLE>
<S>                                                                                  <C>
     4.6   Unbundled Loop Facility Certification...................................   VII-7
     4.7   Compatibility...........................................................   VII-8
     4.8   Subloops................................................................   VII-8
     4.9   Loop Identification.....................................................   VII-9

5.   Port and Local Switching Elements.............................................   VII-9
     5.1   Port....................................................................   VII-9
     5.2   Ports Available as Unbundled Network Elements...........................   VII-9
     5.3   Port Prices.............................................................   VII-9
     5.4   Local Switching.........................................................   VII-9
     5.5   Compliance with Section 2.3.............................................  VII-10
     5.6   Shared Transport........................................................  VII-10

6.   Dedicated Transport...........................................................  VII-11

7.   SS7 Transport and Signaling...................................................  VII-12

8.   LIDB Services.................................................................  VII-12

9.   Database 800-Type Services....................................................  VII-12

10.  Operator Services ("OS") and Directory Assistance ("DA")......................  VII-12

11.  Customized Routing............................................................  VII-13

12.  Advanced Intelligent Network Access (AIN).....................................  VII-13

13.  Directory Assistance Listing..................................................  VII-13

14.  Operational Support Systems ("OSS")...........................................  VII-14

ARTICLE VIII ADDITIONAL SERVICES AND COORDINATED SERVICE ARRANGEMENTS..............  VIII-1

1.   Bona Fide Request Process.....................................................  VIII-1
     1.1   Intent..................................................................  VIII-1
     1.2   Process.................................................................  VIII-1

2.   Transfer of Service Announcements.............................................  VIII-2

3.   Misdirected Calls.............................................................  VIII-2

4.   911/E911 Arrangements.........................................................  VIII-2
     4.1   Description of Service..................................................  VIII-2
     4.2   Transport...............................................................  VIII-3
</TABLE>

                                      ix
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<TABLE>
<S>                                                                                        <C>
     4.3   Cooperation and Level of Performance..........................................   VIII-3
     4.4   Basic 911 and E911 General Requirements.......................................   VIII-3
     4.5   Compensation..................................................................   VIII-9

5.   Information Services Traffic........................................................   VIII-9
     5.1   Billing and Collection and Information Service Provider ("ISP") Remuneration..   VIII-9
     5.2   900-976 Call Blocking.........................................................   VIII-9
     5.3    Miscellaneous................................................................   VIII-9

6.   Telephone Relay Service.............................................................   VIII-9

7.   Directory Assistance ("DA") and Operator Services ("OS")............................   VIII-9
     7.1   Directory Assistance Calls....................................................   VIII-9
     7.2   Operator Services Calls.......................................................  VIII-10

8.   Directory Assistance Listings Information...........................................  VIII-10

9.   Directory Listings and Directory Distribution.......................................  VIII-11

10.  Busy Line Verification and Busy Line Verification Interrupt.........................  VIII-12

11.  SAG.................................................................................  VIII-12

12.  Dialing Format Changes..............................................................  VIII-13

13.  Operational Support Systems ("OSS").................................................  VIII-12

ARTICLE IX
COLLOCATION..............................................................................     IX-1

1.   Physical Collocation................................................................     IX-1
     1.1  Space Planning.................................................................     IX-1
     1.2  Connection to Customer Loops and Ports.........................................     IX-2
     1.3  Connection to Other Collocated Carriers........................................     IX-3
     1.4  Choice of Vendor...............................................................     IX-3
     1.5  Monitoring.....................................................................     IX-3
     1.6  Phone Service..................................................................     IX-3
     1.7  Intraoffice Diversity..........................................................     IX-3
     1.8  Proprietary Information........................................................     IX-3
     1.9  Notification of Modifications..................................................     IX-4
     1.10  Drawings......................................................................     IX-4
     1.11  Construction of Space.........................................................     IX-4
     1.12  Connection Equipment..........................................................     IX-6
     1.13  Access to ELI Collocation Space...............................................     IX-6
     1.14  Common Collocation Space......................................................     IX-7
</TABLE>

                                       x
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<TABLE>
<S>                                                                                  <C>
2.   Virtual Collocation...........................................................  IX-7
     2.1   Conversion from Virtual to Physical Collocation.........................  IX-7
     2.2   Conversion from Physical to Virtual Collocation.........................  IX-7
     2.3   Vendors.................................................................  IX-8
     2.4   Inspection..............................................................  IX-8

3.   Fixed Wireless Collocation....................................................  IX-8

ARTICLE X ACCESS TO POLES, DUCTS, CONDUITS AND RIGHTS-OF-WAY.......................   X-1

APPENDIX A.........................................................................   A-1

APPENDIX B.........................................................................   B-1

APPENDIX C
RATES AND CHARGES FOR TRANSPORT AND TERMINATION OF TRAFFIC.........................   C-1

APPENDIX D.........................................................................   D-1

APPENDIX E
SERVICES AVAILABLE FOR RESALE.....................................................   E-1

APPENDIX F
PRICES FOR UNBUNDLED ELEMENTS.....................................................   F-2

APPENDIX G
RATES AND CHARGES FOR 911/E911 ARRANGEMENTS.......................................   G-1

APPENDIX H
SERVICE ORDERING, PROVISIONING, BILLING AND MAINTENANCE...........................   H-1

APPENDIX I
SS7 SERVICES......................................................................   I-1

APPENDIX J
POLE ATTACHMENT AGREEMENT..........................................................   J-1

APPENDIX K
CONDUIT OCCUPANCY AGREEMENT........................................................   K-1

APPENDIX L
RECIPROCAL COMPENSATION FOR CALL TERMINATION
</TABLE>

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<TABLE>
<S>                                                                                  <C>
WHEN ELI USES GTE UNBUNDLED PORTS,
LOCAL SWITCHING & SHARED TRANSPORT.................................................    L-1

APPENDIX 37A PERFORMANCE MEASURES..................................................  37A-1

APPENDIX 46A AT&T TERMS............................................................  46A-1

APPENDIX 46B GTE TERMS.............................................................  46B-1
</TABLE>

                                      xii
<PAGE>

     This Interconnection, Resale and Unbundling Agreement (the "Agreement"), is
by and between GTE Northwest Incorporated, with its address for purposes of this
Agreement at 600 Hidden Ridge Drive, Irving, Texas 75038 ("GTE"), and Electric
Lightwave, Inc., in its capacity as a certified provider of local exchange
service ("ELI"), with its address for this Agreement at 4400 N.E. 77th Avenue,
Vancouver, Washington 98662 (GTE and ELI being referred to collectively as the
"Parties" and individually as a "Party").  This Agreement covers services in the
state of Oregon only (the "State").

     WHEREAS, interconnection between competing Local Exchange Carriers ("LECs")
is necessary and desirable for the mutual exchange and termination of traffic
originating on each LEC's network; and

     WHEREAS, the Parties desire to exchange such traffic and related signaling
in a technically and economically efficient manner at defined interconnection
points; and

     WHEREAS, the Parties wish to enter into an agreement to interconnect their
respective telecommunications networks on terms that are fair and equitable to
both Parties; and

     WHEREAS, Section 251 of the Telecommunications Act of 1996 (the "Act")
imposes specific obligations on LECs with respect to the interconnection of
their networks, resale of their telecommunications services, access to their
poles, ducts, conduits and rights-of-way and, in certain cases, the offering of
certain unbundled network elements and physical collocation of equipment in LEC
premises; and

     WHEREAS, GTE is entering, under protest, into certain aspects of this
Agreement that incorporate adverse results from (i) the AT&T/GTE arbitration,
Docket No.ARB 5 approved by the Commission in this State and is doing so in
order to avoid the expense of arbitration, and (ii) arbitrated issues in the
ELI/GTE arbitration, Docket No. ARB 91, and is doing so by Order No. 99-218 of
the Oregon Public Utility Commission, while at the same time preserving its
legal positions, rights and remedies;

     NOW, THEREFORE, in consideration of the mutual provisions contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, GTE and ELI hereby covenant and agree as follows:
<PAGE>

                                   ARTICLE I
                         SCOPE AND INTENT OF AGREEMENT


Pursuant to this Agreement, the Parties will extend certain arrangements to one
another within each area in which they both operate within the State for
purposes of interconnection and the exchange of traffic between their respective
networks and access to poles, ducts, conduits and rights-of-way.  This Agreement
also governs the purchase by ELI of certain telecommunications services provided
by GTE in those service areas where GTE is the "incumbent local exchange
carrier" in accordance with Section 251(h) of the Act for resale by ELI, the
purchase by ELI of certain unbundled network elements from GTE, and the terms
and conditions of the collocation of certain equipment of ELI in the premises of
GTE.  This Agreement is an integrated package that reflects a balancing of
interests critical to the Parties.  This Agreement will be submitted to the
Oregon Public Utility Commission for approval.  The Parties agree that their
entrance into this Agreement is without prejudice to and does not waive any
positions they may have taken previously, or may take in the future, in any
legislative, regulatory, judicial or other public forum addressing any matters,
including matters related to the same types of arrangements and/or matters
related to GTE's cost recovery covered in this Agreement.  ELI agrees to
negotiate nondiscriminatory terms and conditions for the provision of services
and facilities to GTE.  GTE's execution of this Agreement is not a concession or
waiver in any manner concerning its position that certain of the rates, terms
and conditions contained herein are unlawful, illegal and improper.

The services and facilities to be provided to ELI by GTE in satisfaction of this
Agreement may be provided pursuant to GTE tariffs and then current practices.
Should such services and facilities be modified by tariff or by Order, including
any modifications resulting from other Commission proceedings, federal court
review or other final judicial action, such modifications will be deemed to
automatically supersede any rates and terms and conditions of this Agreement.
GTE will provide notification to ELI before such a tariff becomes effective, and
ELI may provide input on such proposed tariff.  The Parties shall cooperate with
one another for the purpose of incorporating required modifications into this
agreement.

                                      I-1
<PAGE>

                                   ARTICLE II
                                  DEFINITIONS


1.   General Definitions.  Except as otherwise specified herein, the following
     -------------------
     definitions shall apply to all Articles and Appendices contained in this
     Agreement.  Additional definitions that are specific to the matters covered
     in a particular Article may appear in that Article.  To the extent that
     there may be any conflict between a definition set forth in this Article II
     and any definition in a specific Article or Appendix, the definition set
     forth in the specific Article or Appendix shall control with respect to
     that Article or Appendix.

1.1. "Access Service Request" ("ASR") means an industry standard form used by
     the Parties to add, establish, change or disconnect services or trunks for
     the purposes of Interconnection.

1.2. "Act" means the Telecommunications Act of 1996, Public Law 104-104 of the
     104th United States Congress effective February 8, 1996.

1.3. "Affiliate" of a Party means a person, corporation or other legal entity
     that, directly or indirectly, owns or controls a Party, or is owned or
     controlled by, or is under common ownership or control with a Party.

1.4. "AMA" means the Automated Message Accounting structure inherent in switch
     technology that initially records telecommunication message information.
     AMA format is contained in the Automated Message Accounting document,
     published by Bellcore as GR-1100-CORE which defines the industry standard
     for message recording.

1.5. "Applicable Law" shall mean all laws, statutes, common law, regulations,
     ordinances, codes, rules, guidelines, orders, permits, and approvals of any
     Governmental Authority, which apply or relate to the subject matter of this
     Agreement.

1.6. "Automatic Location Identification/Data Management System" ("ALI/DMS")
     means the emergency services (E911/911) database containing customer
     location information (including name, address, telephone number, and
     sometimes special information from the local service provider) used to
     process subscriber access records into Automatic Location Identification
     (ALI) records.  From this database, records are forwarded to GTE's ALI
     Gateway for downloading by local ALI database systems to be available for
     retrieval in response to ANI from a 9-1-1 call.  Also, from this database,
     GTE will upload to its selective routers the selective router ALI (SR/ALI)
     which is used to determine to which Public Safety Answering Point ("PSAP")
     to route the call.

1.7. "Automatic Number Identification" ("ANI") refers to the number transmitted
     through the network identifying the calling party.

                                     II-1
<PAGE>

1.8.  "Bill-and-Keep Arrangement" means a compensation arrangement whereby the
      Parties do not render bills to each other for certain forms of interim
      local number portability or, under certain circumstances, the termination
      of local traffic specified in this Agreement and whereby the Parties
      terminate local exchange traffic originating from end-users served by the
      networks of the other Party without explicit charging among or between
      said carriers for such traffic exchange.

1.9.  "Bona Fide Request" ("BFR") process is intended to be used when requesting
      customized Service Orders for certain services, features, capabilities or
      functionality defined and agreed upon by the Parties as services to be
      ordered as Bona Fide Requests.

1.10. "Business Day" shall mean Monday through Friday, except for holidays on
      which the U.S. mail is not delivered.

1.11. "Central Office Switch" means a switch used to provide telecommunications
      services including (i) "End Office Switches" which are Class 5 switches
                              -------------------
      from which end user Exchange Services are directly connected and offered,
      and (ii) "Tandem Office Switches" which are Class 4 switches which are
                ----------------------
      used to connect and switch trunk circuits between and among central office
      switches. Central office switches may be employed as combination end
      office/tandem office switches (combination Class 5/Class 4).

1.12. "Centralized Message Distribution System" ("CMDS") means the billing
      record and clearing house transport system that the Regional Bell
      Operating Companies ("RBOCs") and other incumbent LECs use to efficiently
      exchange out collects and in collects as well as Carrier Access Billing
      System ("CABS") records.

1.13. "CLLI codes" means Common Language Location Identifier Codes.

1.14. "Commercial Mobile Radio Services" ("CMRS") means a radio communication
      service provided pursuant to 47 U.S.C. (S) 332(d)(1), as interpreted by
      the FCC and the federal courts.

1.15. "Commission" means the Oregon Public Utilities Commission.

1.16. "Common Channel Signaling" ("CCS") means a high-speed specialized packet-
      switched communications network that is separate (out-of-band) from the
      public packet-switched and message networks. CCS carries addressed
      signaling messages for individual trunk circuits and/or database-related
      services between Signaling Points in the CCS network using SS7 signaling
      protocol.

1.17. "Competitive Local Exchange Carrier" ("CLEC") means any company or person
      authorized to provide local exchange services in competition with an ILEC.

1.18. "Conduit" has the meaning as set forth in Article X and Appendix K of
                                                              ----------
      this Agreement.

                                     II-2
<PAGE>

1.19. "Customer" may mean GTE or ELI depending on the context and which Party
      is receiving the service from the other Party.

1.20. "Currently Available" means existing as part of GTE's network at the time
      of the requested order or service and does not include any service,
      feature, function, or capability that GTE either does not provide to
      itself or to its own end users, or does not have the capability to
      provide.

1.21. "Customer Usage Data" means that the local telecommunications services
      usage data of an ELI customer, measured in minutes, sub-minute increments,
      message units, or otherwise, that is recorded and exchanged by the
      Parties.

1.22. "Dedicated Transport" means an Unbundled Network Element that is purchased
      for the purpose of transporting Telecommunications Services between
      designated Service Wire Centers ("SWCs"). Dedicated Transport may extend
      between two GTE SWCs (Interoffice Dedicated Transport ("IDT")) or may
      extend from the GTE SWC to the CLEC premise (CLEC Dedicated Transport
      ("CDT")). CDT remains within the exchange boundaries of the SWC, while IDT
      traverses exchange boundaries.

1.23. "DS-1" is a digital signal rate of 1.544 Mbps or a service carried at that
      rate.

1.24. "DS-3" is a digital signal rate of 44.736 Mbps or a service carried at
      that rate.

1.25. "Electronic File Transfer" refers to a system or process which utilizes
      an electronic format and protocol to send/receive data files.

1.26. "EMR" means the Exchanged Message Record which is an industry standard
      record used to exchange telecommunications message information among CLECs
      for billable, non-billable, sample, settlement and study data. EMR format
      is defined in BR-010-200-010 CRIS Exchange Message Record, published by
      Bellcore and which defines the industry standard for exchange message
      records.

1.27. "Enhanced 911 Service" ("E-911 Service") is a method of routing 911 calls
      to a Public Service Answering Point that uses a customer location database
      to determine the location to which a call should be routed. E-911 service
      includes the forwarding of the caller's Automatic Number Identification
      ("ANI") to the PSAP where the ANI is used to retrieve and display the
      Automatic Location Identification ("ALI") on a terminal screen at the
      answering Attendant's position, and usually includes selective routing.

1.28. "Exchange Service" refers to all basic access line services, or any other
      services offered to end users which provide end users with a telephonic
      connection to, and a unique telephone number address on, the public
      switched telecommunications network ("PSTN"), and which enable such end
      users to place or receive calls to all other stations on the PSTN.

                                     II-3
<PAGE>

1.29. "Expanded Interconnection Service" ("EIS") has the same meaning as that
      term is used in the FCC's First Report and Order in CC Docket No. 96-98,
      and means a service that provides interconnecting carriers with the
      capability to terminate basic fiber optic transmission facilities,
      including optical terminating equipment and multiplexers, at GTE's wire
      centers and access tandems and interconnect those facilities with the
      facilities of GTE. Microwave and other forms of collocation and
      interconnection with fixed wireless facilities is available on a case-by-
      case basis where feasible.

1.30. "Facility" means all buildings, equipment, structures and other items
      located on a single site or contiguous or adjacent sites owned or operated
      by the same persons or person as used in Article III, Section 44.

1.31. "FCC" means the Federal Communications Commission.

1.32. "GTOC" means GTE Telephone Operating Company.

1.33. "Guide" means the GTE Open Market Transition Order/Processing Guide/CLEC
      Customer Guide, which contains GTE's operating procedures for preordering,
      ordering, provisioning, trouble reporting and repair for resold services
      and Unbundled Network Elements and GTE's CLEC Interconnection Guide which
      provides guidelines for obtaining interconnection of GTE's Switched
      Network with the networks of all certified CLECs for reciprocal exchange
      of traffic. Except as specifically provided otherwise in this Agreement or
      as required by the Act, applicable FCC orders, or State law, service
      ordering, provisioning, billing and maintenance shall be governed by the
      "Guide" which may be amended from time to time by GTE as needed.

1.34. "Hazardous Chemical" means as defined in the U.S. Occupational Safety and
      Health ("OSHA") hazard communication standard (29 CFR (S) 1910.1200), any
      chemical which is a health hazard or physical hazard.

1.35. "Hazardous Waste" means as described in Resource Conservation and Recovery
      Act ("RCRA"), a solid waste(s) which may cause, or significantly
      contribute to an increase in mortality or illness or pose a substantial
      hazard to human health or the environment when improperly treated, stored,
      transported or disposed of or otherwise managed because of its quantity,
      concentration or physical or chemical characteristics.

1.36. "Imminent Danger" means as described in the Occupational Safety and Health
      Act and expanded for environmental matters, any conditions or practices at
      a facility which are such that a danger exists which could reasonably be
      expected to cause death or serious harm or significant damage to the
      environment or natural resources.

1.37. "Incumbent Local Exchange Carrier" ("ILEC") means any local exchange
      carrier that was, as of February 8, 1996, deemed to be a member of the
      Exchange Carrier Association as set forth in 47 C.F.R. (S) 69.601(b) of
      the FCC's regulations.
                                     II-4
<PAGE>

1.38. "Interim Number Portability" ("INP") means the delivery of LNP
      capabilities, from a customer standpoint in terms of call completion, with
      as little impairment of functioning, quality, reliability, and convenience
      as possible and from a carrier standpoint, through the use of existing and
      available call routing, forwarding, and addressing capabilities until the
      implementation of permanent or long-term local number portability.

1.39. "Interconnection Facility" means the physical connection of separate
      pieces of equipment, transmission facilities, etc., within, between and
      among networks, for the transmission and routing of exchange service and
      exchange access.

1.40. "Interconnection Point" ("IP") means the physical point on the network
      where the two parties interconnect. The "IP" is the demarcation point
      between ownership of the transmission facility.

1.41. "Interexchange Carrier" ("IXC") means a telecommunications service
      provider authorized by the FCC to provide interstate and/or international
      long distance communications services between LATAs and/or authorized by
      the State to provide inter- and/or intraLATA long distance communications
      services within the State.

1.42. "ISDN User Part" ("ISUP") means a part of the SS7 protocol that defines
      call setup messages and call takedown messages.

1.43. "LATA" means Local Access and Transport Area. A LATA denotes a geographic
      area for the provision and administration of communications service; i.e.,
      intraLATA or interLATA.

1.44. "Line Information Data Base" ("LIDB") means one or all, as the context may
      require, of the Line Information databases owned individually by GTE and
      other entities which provide, among other things, calling card validation
      functionality for telephone line number cards issued by GTE and other
      entities. A LIDB also contains validation data for collect and third
      number-billed calls; i.e., Billed Number Screening.

1.45. "Line Side" refers to an end office switch connection that has been
      programmed to treat the circuit as a local line connected to a NID. Line
      side connections offer only those transmission and signaling features
      appropriate for a connection between an end office and a NID.

1.46. "Local Exchange Carrier" ("LEC") means any company certified by the
      Commission to provide local exchange telecommunications service. This
      includes the Parties to this Agreement.

1.47. "Local Exchange Routing Guide" ("LERG") means the Bellcore reference
      customarily used to identify NPA-NXX routing and homing information, as
      well as network element and equipment designation.

                                     II-5
<PAGE>

1.48. "Local Number Portability" ("LNP") means the ability of users of
      telecommunications services to retain, at the same location, existing
      telecommunications numbers without impairment of quality, reliability, or
      convenience when switching from one LEC to another.

1.49. "Local Traffic" means traffic that is originated by an end user of one
      Party and terminates to the end user of the other Party within GTE's then
      current local serving area, including mandatory local calling scope
      arrangements. A mandatory local calling scope arrangement is an
      arrangement that provides end users a local calling scope, Extended Area
      Service ("EAS"), beyond their basic exchange serving area. Local Traffic
      does not include optional local calling scopes (i.e., optional rate
           ---
      packages that permit the end user to choose a local calling scope beyond
      their basic exchange serving area for an additional fee), referred to
      hereafter as "optional EAS." Local Traffic excludes Enhanced Service
      Provider (ESP) traffic (e.g., Internet, 900-976, etc.) and Internet
      Protocol based voice or fax telephony. For purposes of this Agreement,
      Internet traffic is subject to reciprocal compensation, rates and terms,
      pending adoption of a replacement rate pursuant to a federal rule
      establishing an appropriate interstate compensation mechanism, if
      appropriate.

1.50. "Main Distribution Frame" ("MDF") means the distribution frame used to
      interconnect cable pairs and line trunk equipment terminating on a
      switching system.

1.51. "Meet-Point Billing" ("MPB") refers to an arrangement whereby two LECs
      jointly provide the transport element of a switched access service to one
      of the LEC's end office switches, with each LEC receiving an appropriate
      share of the transport element revenues as defined by their effective
      access tariffs.

1.52. "MECAB" refers to the Multiple Exchange Carrier Access Billing ("MECAB")
      document prepared by the Billing Committee of the Ordering and Billing
      Forum ("OBF"), which functions under the auspices of the Carrier Liaison
      Committee ("CLC") of the Alliance for Telecommunications Industry
      Solutions ("ATIS"). The MECAB document, published by Bellcore as Special
      Report SR-BDS-000983, contains the recommended guidelines for the billing
      of an access service provided by two or more LECs, or by one LEC in two or
      more states within a single LATA.

1.53. "MECOD" refers to the Multiple Exchange Carriers Ordering and Design
      ("MECOD") Guidelines for Access Services - Industry Support Interface, a
      document developed by the Ordering/Provisioning Committee under the
      auspices of the Ordering and Billing Forum ("OBF"), which functions under
      the auspices of the Carrier Liaison Committee ("CLC") of the Alliance for
      Telecommunications Industry Solutions ("ATIS"). The MECOD document,
      published by Bellcore as Special Report SR-STS-002643, establish methods
      for processing orders for access service which is to be provided by two or
      more LECs.

1.54. "Mid-Span Fiber Meet" means an Interconnection architecture whereby two
      carriers' fiber transmission facilities meet at a mutually agreed-upon IP.

                                     II-6
<PAGE>

1.55. "NANP" means the "North American Numbering Plan," the system of telephone
      numbering employed in the United States, Canada, Guam, the Northern
      Mariana Islands, and the Caribbean countries that employ NPA 809.

1.56. "Network Interface Device" ("NID") means the point of demarcation between
      the end user's inside wiring and GTE's facilities.

1.57. "Numbering Plan Area" ("NPA") is also sometimes referred to as an area
      code. This is the three digit indicator which is defined by the "A", "B",
      and "C" digits of each 10-digit telephone number within the NANP. Each NPA
      contains 800 possible NXX Codes. There are two general categories of NPA,
      "Geographic NPAs" and "Non-Geographic NPAs". A Geographic NPA is
       ---------------       -------------------
      associated with a defined geographic area, and all telephone numbers
      bearing such NPA are associated with services provided within that
      geographic area. A Non-Geographic NPA, also known as a "Service Access
                                                              --------------
      Code" or "SAC Code" is typically associated with a specialized
      ----      --------
      telecommunications service which may be provided across multiple
      geographic NPA areas. 800, 900, 700, and 888 are examples of Non-
      Geographic NPAs.

1.58. "NXX," "NXX Code," "Central Office Code," or "CO Code" is the three digit
      switch entity indicator which is defined by the "D", "E", and "F" digits
      of a 10-digit telephone number within the NANP. Each NXX Code contains
      10,000 station numbers.

1.59. "911 Service" means a universal telephone number which gives the public
      direct access to the PSAP. Basic 911 service collects 911 calls from one
      or more local exchange switches that serve a geographic area. The calls
      are then sent to the correct authority designated to receive such calls.

1.60. "Owner and Operator" means as used in OSHA regulations, owner is the legal
      entity, including a lessee, which exercises control over management and
      record keeping functions relating to a building or facility. As used in
      the Resource Conservation and Recovery Act (RCRA), operator means the
      person responsible for the overall (or part of the) operations of a
      facility.

1.61. "Pole Attachment" has the meaning as set forth in Article X and Appendix
                                                                      --------
      J of this Agreement.
      -

1.62. "Provider" may mean GTE or ELI depending on the context and which Party
      is providing the service to the other Party.

1.63. "Public Safety Answering Point" ("PSAP") means an answering location for
      E911/911 calls originating in a given area. A PSAP may be designated as
      Primary or Secondary, which refers to the order in which calls are
      directed for answering. Primary PSAPs respond first; Secondary PSAPs
      receive calls on a transfer basis only, and generally serve as a
      centralized answering location for a particular type of emergency

                                     II-7
<PAGE>

      call. PSAPs are staffed by employees of Emergency Response Agencies
      ("ERAs") such as police, fire or emergency medical agencies or by
      employees of a common bureau serving a group of such entities.

1.64. "Rate Center" means the specific geographic point and corresponding
      geographic area that are associated with one or more particular NPA-NXX
      Codes that have been assigned to a LEC for its provision of Exchange
      Services. The geographic point is identified by a specific Vertical and
      Horizontal ("V&H") coordinate that is used to calculate distance-sensitive
      end user traffic to/from the particular NPA-NXXs associated with the
      specific Rate Center.

1.65. "Right-of-way" ("ROW") means the right to use the land or other property
      of another party to place poles, conduits, cables, other structures and
      equipment, or to provide passage to access such structures and equipment.
      A ROW may run under, on, or above public or private property (including
      air space above public or private property) and may include the right to
      use discrete space in buildings, building complexes, or other locations.

1.66. "Routing Point" denotes a location that a LEC has designated on its
      network as the homing (routing) point for traffic that terminates to
      Exchange Services provided by the LEC that bear a certain NPA-NXX
      designation. The Routing Point is used to calculate airline mileage for
      the distance-sensitive transport element charges of Switched Access
      Services. Pursuant to Bellcore Practice BR795-100-100, the Routing Point
      may be an end office location, or a "LEC Consortium Point of
      Interconnection." The Routing Point must be in the same LATA as the
      associated NPA-NXX.

1.67. "Service Control Point" ("SCP") is the node in the signaling network to
      which informational requests for service handling, such as routing, are
      directed and processed. The SCP is a real time database system that, based
      on a query from the SSP, performs subscriber or application-specific
      service logic, and then sends instructions back to the SSP on how to
      continue call processing.

1.68. "Service Switching Point" ("SSP") means a Signaling Point that can launch
      queries to databases and receive/interpret responses used to provide
      specific customer services.

1.69. "Shared Transport" means the physical interoffice facility, not dedicated
      to any one customer, that is used to transport a call between switching
      offices. A central office switch translates the end user dialed digits and
      routes the call over a Common Transport Trunk Group that rides interoffice
      transmission facilities. These trunk groups and the associated interoffice
      transmission facilities are accessible by any end user (GTE end user or
      ELI end user when ELI has purchased unbundled switching), and are referred
      to as "shared transport facilities."

                                     II-8
<PAGE>

1.70. "Signaling Point" ("SP") means a node in the CCS network that originates
      and/or receives signaling messages, or transfers signaling messages from
      one signaling link to another, or both.

1.71. "Signaling System 7" ("SS7") means the signaling protocol, Version 7, of
      the CCS network, based upon American National Standards Institute ("ANSI")
      standards.

1.72. "Signal Transfer Point" ("STP") means a packet switch in the CCS network
      that is used to route signaling messages among SSPs, SCPs and other STPs
      in order to set up calls and to query databases for advanced services.
      GTE's network includes mated pairs of local and regional STPs. STPs are
      provided in pairs for redundancy. GTE STPs conform to ANSI T1.111-8
      standards.

1.73. "Subsidiary" of a Party means a corporation or other legal entity that is
      majority owned by such Party.

1.74. "Synchronous Optical Network" ("SONET") means synchronous electrical
      ("STS") or optical channel ("OC") connections between LECs.

1.75. "Switched Access Service" means the offering of facilities for the purpose
      of the origination or termination of traffic to or from Exchange Service
      customers in a given area pursuant to a switched access tariff. Switched
      Access Services include: Feature Group A, Feature Group B, Feature Group
      C, Feature Group D, 800 access and 900 access services.

1.76. "Telecommunications Services" means the offering of telecommunications for
      a fee directly to the public, or to such classes of users as to be
      effectively available directly to the public, regardless of the facilities
      used.

1.77. "Third Party Contamination" means environmental pollution that is not
      generated by the LEC or CLEC but results from off-site activities
      impacting a facility.

1.78. "Trunk Side" refers to a central office switch connection that is capable
      of, and has been programmed to treat the circuit as, connecting to another
      switching entity, for example, to another central office switch. Trunk
      side connections offer those transmission and signaling features
      appropriate for the connection of switching entities and cannot be used
      for the direct connection of ordinary telephone station sets.

1.79. "Unbundled Network Elements" ("UNEs") generally means a facility or
      equipment used in the provision of a Telecommunications Service. Specific
      references to UNEs contained throughout this Agreement shall be to the
      network elements that are to be unbundled pursuant to Article VII of this
      Agreement. Such UNEs shall include the features, functions, and
      capabilities that are provided by means of such facility or equipment,
      including, where applicable, subscriber numbers, databases, signalling

                                     II-9
<PAGE>

      systems, and information sufficient for billing and collection or used in
      the transmission, routing, or other provision of a Telecommunications
      Service.

1.80. "Undefined Terms" means the Parties acknowledge that terms may appear in
      this Agreement which are not defined and agree that any such terms shall
      be construed in accordance with their customary usage in the
      telecommunications industry as of the effective date of this Agreement.

1.81. "Vertical Features" (including "CLASS Features") means vertical services
      and switch functionalities provided by GTE, including but not necessarily
      limited to: Automatic Call Back; Automatic Recall; Call Forwarding Busy
      Line/Don't Answer; Call Forwarding Don't Answer; Call Forwarding Variable;
      Call Forwarding - Busy Line; Call Trace; Call Waiting; Call Number
      Delivery Blocking Per Call; Calling Number Blocking Per Line; Cancel Call
      Waiting; Distinctive Ringing/Call Waiting; Incoming Call Line
      Identification Delivery; Selective Call Forward; Selective Call Rejection;
      Speed Calling; and Three Way Calling/Call Transfer.

1.82. "Wire Center" means a building or space within a building that serves as
      an aggregation point on a LEC's network, where transmission facilities and
      circuits are connected or switched. "Wire center" can also denote a
      building in which one or more Central Offices, used for the provision of
      exchange services and access services, are located.

                                     II-10
<PAGE>

                                  ARTICLE III
                              GENERAL PROVISIONS


1.    Scope of General Provisions.  Except as may otherwise be set forth in a
      ---------------------------
      particular Article or Appendix of this Agreement, in which case the
      provisions of such Article or Appendix shall control, these General
      Provisions apply to all Articles and Appendices of this Agreement.

2.    Term and Termination.
      --------------------

      2.1  Term.  Subject to the termination provisions contained in this
           ----
           Agreement, the term of this Agreement shall be two (2) years from the
           effective date established pursuant to section 33 of this Article III
           and shall continue in effect for consecutive one (1) year terms until
           either Party gives the other Party at least ninety (90) calendar days
           written notice of termination, which termination shall be effective
           at the end of the then-current term. In the event notice is given
           less than 90 calendar days prior to the end of the current term, this
           Agreement shall remain in effect for 90 calendar days after such
           notice is received, provided, that in no case shall the term be
           extended beyond 90 calendar days after the end of the current term.

     2.2   Post-Termination Arrangements.  Except in the case of termination as
           -----------------------------
           a result of either Party's default or a termination upon sale, for
           service arrangements made available under this Agreement and existing
           at the time of termination, those arrangements shall continue if a
           Party requests negotiations for a new agreement until this Agreement
           has been replaced by a new agreement, or, in the event that either
           Party initiates and pursues in good faith the negotiation of a new
           agreement on or before 90 days prior to the end of the then current
           term, for 180 calendar days following the end of the then-current
           term (as may be extended under subsection 2.1 above), whichever
           occurs first. If a new agreement is not effective within 180 calendar
           days following the end of the then-current term (as may be extended
           under subsection 2.1 above), the existing service arrangements may
           continue without interruption under (a) a new agreement voluntarily
           executed by the Parties; (b) standard terms and conditions approved
           and made generally effective by the Commission, if any; (c) tariff
           terms and conditions made generally available to all CLECs; or (d)
           any rights under Section 252(i) of the Act.

     2.3   Termination Upon Default.  Either Party may terminate this Agreement
           ------------------------
           in whole or in part in the event of a default by the other Party;
           provided however, that the non-defaulting Party notifies the
           defaulting party in writing of the alleged default and that the
           defaulting Party does not cure the alleged default within sixty (60)
           calendar days of receipt of written notice thereof. Default is
           defined to include:

                                     III-1
<PAGE>

           (a)  A Party's insolvency or the initiation of bankruptcy or
           receivership proceedings by or against the Party; or

           (b)  A Party's refusal or failure in any material respect properly to
           perform its obligations under this Agreement, or the violation any of
           the material terms or conditions of this Agreement.

     2.4   Termination Upon Sale.  Notwithstanding anything to the contrary
           ---------------------
           contained herein, a Party may terminate this Agreement as to a
           specific operating area or portion thereof of such Party if such
           Party sells or otherwise transfers the area or portion thereof. The
           Party shall provide the other Party with at least ninety (90)
           calendar days' prior written notice of such termination, which shall
           be effective on the date specified in the notice. Notwithstanding
           termination of this Agreement as to a specific operating area, this
           Agreement shall remain in full force and effect in the remaining
           operating areas.

     2.5   Liability upon Termination.  Termination of this Agreement, or any
           --------------------------
           part hereof, for any cause shall not release either Party from any
           liability which at the time of termination had already accrued to the
           other Party or which thereafter accrues in any respect to any act or
           omission occurring prior to the termination or from an obligation
           which is expressly stated in this Agreement to survive termination.

3.   Amendments.  Any amendment, modification, or supplement to this Agreement
     ----------
     must be in writing and signed by an authorized representative of each
     Party. The term "this Agreement" shall include future amendments,
     modifications, and supplements.

4.   Assignment.  Any assignment by either Party of any right, obligation, or
     ----------
     duty, in whole or in part, or of any interest, without the written consent
     of the other Party shall be void, except that either Party may assign all
     of its rights, and delegate its obligations, liabilities and duties under
     this Agreement, either in whole or in part, to any entity that is, or that
     was immediately preceding such assignment, a Subsidiary or Affiliate of
     that Party without consent, but with written notification.  The
     effectiveness of an assignment shall be conditioned upon the assignee's
     written assumption of the rights, obligations, and duties of the assigning
     Party.

5.   Authority.  Each person whose signature appears on this Agreement
     ---------
     represents and warrants that he or she has authority to bind the Party on
     whose behalf he or she has executed this Agreement.

6.   Responsibility for Payment.  All charges for Services provided under this
     --------------------------
     Agreement will be billed to Customer, including all applicable taxes and
     surcharges.  In addition, the End User Common Line (EUCL) Charge from GTOC
     Tariff FCC No. 1 is applicable to Resold Services that GTE provides to ELI.
     Customer is responsible for payment of charges billed regardless of any
     billing arrangements or situation between Customer and its end user
     customer.

                                     III-2
<PAGE>

7.   Billing and Payment.  Except as provided elsewhere in this Agreement and
     -------------------
     where applicable, ELI and GTE agree to exchange all information to
     accurately, reliably, and properly bill for features, functions and
     services rendered under this Agreement.  Such exchange will be in
     conformance with MECAB and MECOD guidelines to the extent that the Parties
     adhere to those guidelines as part of the billing practices used in their
     normal course of business.  If the Parties are unable to fully exchange the
     necessary information because a Party's billing practices do not conform
     with MECAB or MECOD guidelines, the Parties will negotiate a mutually
     acceptable alternative means of exchanging the information.

     7.1  Dispute.  If one Party disputes a billing statement issued by the
          -------
          other Party, the billed Party shall notify Provider in writing
          regarding the nature and the basis of the dispute within six (6)
          months of the statement date or the dispute shall be waived.  The
          Parties shall diligently work toward resolution of all billing issues
          on an informal basis and, if such efforts are unsuccessful, either
          Party may seek to resolve the dispute through the dispute resolution
          procedures in Section 14 of this Article.  The billed Party may
          withhold payment of disputed funds billed by Provider.  The funds,
          plus accumulated interest, shall be dispersed to the proper Party or
          Parties upon resolution of the dispute.

     7.2  Late Payment Charge.  If any undisputed amount due on the billing
          -------------------
          statement is not received by Provider on the payment due date,
          Provider may charge, and Customer agrees to pay, at Provider's option,
          interest on the past due balance at a rate equal to the lesser of the
          interest rates set forth in the applicable GTE/Contel state access
          tariffs or the GTOC/GSTC FCC No. 1 tariff, one and one-half percent (1
          1/2%) per month or the maximum nonusurious rate of interest under
          applicable law.  Late payment charges shall be included on the next
          statement.

     7.3  Due Date.  Payment is due 30 calendar days from the bill date.
          --------

     7.4  Audits.  Either Party may conduct an audit of the other Party's books
          ------
          and records pertaining to the Services provided under this Agreement,
          no more frequently than once per twelve (12) month period, to evaluate
          the other Party's accuracy of billing, data and invoicing in
          accordance with this Agreement.  Any audit shall be performed as
          follows:  (i) following at least thirty (30) Business Days' prior
          written notice to the audited Party; (ii) subject to the reasonable
          scheduling requirements and limitations of the audited Party: (iii) at
          the auditing Party's sole cost and expense; (iv) of a reasonable scope
          and duration; (v) in a manner so as not to interfere with the audited
          Party's business operations; and (vi) in compliance with the audited
          Party's security rules.

8.   Binding Effect.  This Agreement shall be binding on and inure to the
     --------------
     benefit of the respective successors and permitted assigns of the Parties.

                                     III-3
<PAGE>

9.   Capacity Planning and Forecasting.  Within thirty (30) days from the
     ---------------------------------
     Effective Date of this Agreement, the Parties agree to meet and develop
     joint planning and forecasting responsibilities which are applicable to
     Local Services, including Features, Network Elements, INP, Interconnection
     Services, Collocation, Poles, Conduits and Rights of Way (ROW).  Such
     responsibilities shall include but are not limited to the following:

     (a)  The Parties will establish periodic reviews of network and technology
     plans and will make best efforts to notify one another at least six (6)
     months in advance of changes that would impact either Party's provision of
     services.

     (b)  ELI will furnish to GTE information that provides for state-wide
     annual forecasts of order activity, in-service quantity forecasts, and
     facility/demand forecasts.

     (c)  The Parties will develop joint forecasting responsibilities for
     traffic utilization over trunk groups and yearly forecasted trunk
     quantities.

     (d)  ELI shall notify GTE promptly of changes to current forecasts
     (increase or decrease) that generate a shift in the demand curve for the
     following forecasting period.

10.  Compliance with Laws and Regulations.  Each Party shall comply with all
     ------------------------------------
     federal, state, and local statutes, regulations, rules, ordinances,
     judicial decisions, and administrative rulings applicable to its
     performance under this Agreement.

11.  Confidential Information.
     ------------------------

     11.1  Identification.  Either Party may disclose to the other proprietary
           --------------
           or confidential customer, technical, or business information in
           written, graphic, oral or other tangible or intangible forms
           ("Confidential Information"). In order for information to be
           considered Confidential Information under this Agreement, it must be
           marked "Confidential" or "Proprietary," or bear a marking of similar
           import. Orally or visually disclosed information shall be deemed
           Confidential Information only if contemporaneously identified as such
           and reduced to writing and delivered to the other Party with a
           statement or marking of confidentiality within thirty (30) calendar
           days after oral or visual disclosure.

           Notwithstanding the foregoing, preorders and all orders for Services
           or network elements placed by ELI pursuant to this Agreement, and
           information that would constitute customer proprietary network
           information of ELI end user customers pursuant to the Act and the
           rules and regulations of the FCC, as well as recorded usage
           information with respect to ELI end users, whether disclosed by ELI
           to GTE or otherwise acquired by GTE in the course of its performance
           under this Agreement, and where GTE is the NANP Number Plan
           Administrator, ELI information submitted to GTE in connection with
           such responsibilities shall be deemed Confidential Information of ELI
           for all purposes under this Agreement whether or not specifically
           marked or designated as confidential or proprietary.

                                     III-4
<PAGE>

     11.2  Handling.  In order to protect such Confidential Information from
           --------
           improper disclosure, each Party agrees:

           (a)  That all Confidential Information shall be and shall remain the
           exclusive property of the Party that disclosed the Confidential
           Information ("Source");

           (b)  To limit access to such Confidential Information to authorized
           employees who have a need to know the Confidential Information for
           performance of this Agreement;

           (c)  To keep such Confidential Information confidential and to use
           the same level of care to prevent disclosure or unauthorized use of
           the received Confidential Information as it exercises in protecting
           its own Confidential Information of a similar nature;

           (d)  Not to copy, publish, or disclose such Confidential Information
           to others or authorize anyone else to copy, publish, or disclose such
           Confidential Information to others without the prior written approval
           of the Source;

           (e)  To return promptly any copies of such Confidential Information
           to the Source at its request; and

           (f)  To use such Confidential Information only for purposes of
           fulfilling work or services performed hereunder and for other
           purposes only upon such terms as may be agreed upon between the
           Parties in writing.

     11.3  Exceptions.  These obligations shall not apply to any Confidential
           ----------
           Information that was legally in the recipient's possession prior to
           receipt from the Source, was received in good faith from a Third
           Party not subject to a confidential obligation to the Source, now is
           or later becomes publicly known through no breach of confidential
           obligation by the recipient, was developed by the recipient without
           the developing persons having access to any of the Confidential
           Information received in confidence from the Source, or that is
           required to be disclosed pursuant to subpoena or other process issued
           by a court or administrative agency having appropriate jurisdiction,
           provided, however, that the recipient shall give prior notice to the
           Source and shall reasonably cooperate if the Source deems it
           necessary to seek protective arrangements.

     11.4  Survival.  The obligation of confidentiality and use with respect to
           --------
           Confidential Information disclosed by one Party to the other shall
           survive any termination of this Agreement for a period of three (3)
           years from the date of the initial disclosure of the Confidential
           Information.
                                     III-5
<PAGE>

12.  Consent.  Where consent, approval, or mutual agreement is required of a
     -------
     Party, it shall not be unreasonably withheld or delayed.

13.  Cooperation on Fraud Minimization.  Each Party assumes responsibility for
     ---------------------------------
     all fraud associated with its end user customers and accounts.  Neither
     Party shall have responsibility for, or be required to investigate or make
     adjustments to the other Party's account in cases of fraud.  The Parties
     agree that they shall cooperate with one another to resolve cases of fraud.
     The Parties' fraud minimization procedures are to be cost effective and
     implemented so as not to unduly burden or harm one Party as compared to the
     other.

14.  Dispute Resolution.
     ------------------

     14.1 Alternative to Litigation.  Except as provided under Section 252 of
          -------------------------
          the Act with respect to the approval of this Agreement by the
          Commission, the Parties desire to resolve disputes arising out of or
          relating to this Agreement without litigation.  Accordingly, except
          for action seeking a temporary restraining order or an injunction
          related to the purposes of this Agreement, or suit to compel
          compliance with this dispute resolution process, the Parties agree to
          use the following alternative dispute resolution procedures as their
          preferred remedy with respect to any controversy or claim arising out
          of or relating to this Agreement or its breach; provided, however,
          that in the event the negotiations referenced in Section 14.2 below do
          not resolve the dispute within sixty (60) Business Days (or five (5)
          Business Days as provided in Section 14.4) of the initial written
          request, either Party may elect, before filing a claim or response in
          arbitration (as the case may be) to submit an otherwise arbitrable
          dispute to the Commission, the FCC, or a court of appropriate
          jurisdiction.

     14.2 Negotiations.  At the written request of a Party, each Party will
          ------------
          appoint a knowledgeable, responsible representative to meet and
          negotiate in good faith to resolve any dispute arising out of or
          relating to this Agreement.  The Parties intend that these
          negotiations be conducted by non-lawyer, business representatives.
          The location, format, frequency, duration, and conclusion of these
          discussions shall be left to the discretion of the representatives.
          Upon agreement, the representatives may utilize other alternative
          dispute resolution procedures such as mediation to assist in the
          negotiations.  Discussions and correspondence among the
          representatives for purposes of these negotiations shall be treated as
          confidential information developed for purposes of settlement, exempt
          from discovery, and shall not be admissible in the arbitration
          described below or in any lawsuit without the concurrence of all
          Parties.  Documents identified in or provided with such
          communications, which are not prepared for purposes of the
          negotiations, are not so exempted and may, if otherwise discoverable,
          be discovered or otherwise admissible, be admitted in evidence, in the
          arbitration or lawsuit.

                                     III-6
<PAGE>

     14.3  Arbitration.  Subject to Section 14.1 above, if the negotiations do
           -----------
           not resolve the dispute within sixty (60) Business Days of the
           initial written request, the dispute shall be submitted to binding
           arbitration by a single arbitrator pursuant to the Commercial
           Arbitration Rules of the American Arbitration Association except that
           the Parties may select an arbitrator outside American Arbitration
           Association rules upon mutual agreement. A Party may demand such
           arbitration in accordance with the procedures set out in those rules.
           Discovery shall be controlled by the arbitrator and shall be
           permitted to the extent set out in this section. Each Party may
           submit in writing to a Party, and that Party shall so respond to, a
           maximum of any combination of thirty-five (35) (none of which may
           have subparts) of the following: interrogatories, demands to produce
           documents, or requests for admission. Each Party is also entitled to
           take the oral deposition of one individual of another Party.
           Additional discovery may be permitted upon mutual agreement of the
           Parties. The arbitration hearing shall be commenced within sixty (60)
           Business Days of the demand for arbitration. The arbitration shall be
           held in a mutually agreeable city. The arbitrator shall control the
           scheduling so as to process the matter expeditiously. The Parties may
           submit written briefs. The arbitrator shall rule on the dispute by
           issuing a written opinion within thirty (30) Business Days after the
           close of hearings. The times specified in this section may be
           extended upon mutual agreement of the Parties or by the arbitrator
           upon a showing of good cause. Judgment upon the award rendered by the
           arbitrator may be entered in any court having jurisdiction.

     14.4  Expedited Arbitration Procedures.  If the issue to be resolved
           --------------------------------
           through the negotiations referenced in Section 14.2 directly and
           materially affects service to either Party's end user customers, then
           the period of resolution of the dispute through negotiations before
           the dispute is to be submitted to binding arbitration or other legal
           recourse as provided in Section 14.1 shall be five (5) Business Days.
           Once such a service affecting dispute is submitted to arbitration,
           the arbitration shall be conducted pursuant to the expedited
           procedures rules of the Commercial Arbitration Rules of the American
           Arbitration Association (i.e., rules 53 through 57).

     14.5  Costs.  Each Party shall bear its own costs of these procedures,
           -----
           including the costs of responding to reasonable discovery. If the
           arbitrator finds that a Party's discovery requests require the
           responding Party to undertake unreasonable or unnecessarily
           burdensome efforts or expense, the Party seeking discovery shall
           reimburse the responding Party the costs of production of documents
           in response to such requests (including search time and reproduction
           costs). The Parties shall equally split the fees of the arbitration
           and the arbitrator.

     14.6  Continuous Service.  The Parties shall continue providing services to
           ------------------
           each other during the pendency of any dispute resolution procedure,
           and the Parties shall continue to perform their obligations
           (including making payments in accordance with Article IV, Section 4)
           in accordance with this Agreement.

                                     III-7
<PAGE>

15.  Entire Agreement.  This Agreement constitutes the entire agreement of the
     ----------------
     Parties pertaining to the subject matter of this Agreement and supersedes
     all prior agreements, negotiations, proposals, and representations, whether
     written or oral, and all contemporaneous oral agreements, negotiations,
     proposals, and representations concerning such subject matter.  No
     representations, understandings, agreements, or warranties, expressed or
     implied, have been made or relied upon in the making of this Agreement
     other than those specifically set forth herein.

16.  Expenses.  Except as specifically set out in this Agreement, each Party
     --------
     shall be solely responsible for its own expenses involved in all activities
     related to the subject of this Agreement.

17.  Force Majeure.  In the event performance of this Agreement, or any
     -------------
     obligation hereunder, is either directly or indirectly prevented,
     restricted, or interfered with by reason of fire, flood, earthquake or like
     acts of God, wars, revolution, civil commotion, explosion, acts of public
     enemy, embargo, acts of the government in its sovereign capacity, labor
     difficulties, including without limitation, strikes, slowdowns, picketing,
     or boycotts, unavailability of equipment from vendor through no fault of
     the Party responsible for obtaining that equipment, changes requested by
     Customer, or any other circumstances beyond the reasonable control and
     without the fault or negligence of the Party affected, the Party affected,
     upon giving prompt notice to the other party, shall be excused from such
     performance on a day-to-day basis to the extent of such prevention,
     restriction, or interference (and the other Party shall likewise be excused
     from performance of its obligations on a day-to-day basis until the delay,
     restriction or interference has ceased); provided however, that the Party
     so affected shall use diligent efforts to avoid or remove such causes of
     nonperformance and both Parties shall proceed whenever such causes are
     removed or cease.

18.  Good Faith Performance.  In the performance of their obligations under this
     ----------------------
     Agreement, the Parties shall act in good faith.  In situations in which
     notice, consent, approval or similar action by a Party is permitted or
     required by any provision of this Agreement, such action shall not be
     unreasonably delayed, withheld or conditioned.  In addition, each Party
     shall be responsible for labor relations with its own employees.  As soon
     as practicable, a Party experiencing labor difficulties with its employees
     that either directly or indirectly are delaying or otherwise interfering
     with that Party's timely performance under this Agreement shall notify the
     other Party and shall minimize impairment of service to the other Party at
     least to the same extent that the Party minimizes impairment of service to
     its own end-user customers, affiliates, and other carriers.

19.  Governing Law.  This Agreement shall be governed by and construed in
     -------------
     accordance with the domestic laws of the state where the Services are
     provided or the facilities reside.

20.  Standard Practices. The Parties acknowledge that GTE shall be adopting some
     ------------------
     industry standard approaches and/or establishing its own standard
     approaches to various

                                     III-8
<PAGE>

     requirements hereunder applicable to CLEC industry which may be added in
     the Guide. ELI agrees that GTE may implement such approaches to satisfy any
     GTE obligations under this Agreement, to the extent that these approaches
     are otherwise consistent with this Agreement and the nondiscrimination
     requirements of the Act. GTE will provide advanced notification to ELI of
     any material changes in procedures contained in the Guide. Notification may
     be accomplished via standard industry notification processes, GTE's
     internet site, or other appropriate means. ELI may request to be included
     on a standard electronic mail distribution list to be alerted to any
     changes identified on GTE's internet site.

21.  Headings.  The headings in this Agreement are inserted for convenience and
     --------
     identification only and shall not be considered in the interpretation of
     this Agreement.

22.  Independent Contractor Relationship.  The persons who implement this
     -----------------------------------
     Agreement on behalf of each Party shall be solely that Party's employees or
     contractors and shall be under the sole and exclusive direction and control
     of that Party.  They shall not be considered employees or contractors of
     the other Party for any purpose.  Each Party shall remain an independent
     contractor with respect to the other and shall be responsible for
     compliance with all laws, rules and regulations involving, but not limited
     to, employment of labor, hours of labor, health and safety, working
     conditions and payment of wages.  Each Party shall also be responsible for
     payment of taxes, including federal, state and municipal taxes, chargeable
     or assessed with respect to its employees, such as Social Security,
     unemployment, workers' compensation, disability insurance, and federal and
     state withholding.  Each Party shall indemnify the other for any loss,
     damage, liability, claim, demand, or penalty that may be sustained by
     reason of its failure to comply with this provision.

23.  Law Enforcement Interface.
     -------------------------

     23.1  Except to the extent not available in connection with GTE's operation
           of its own business, GTE shall provide seven day a week/twenty-four
           hour a day assistance to law enforcement persons for emergency traps,
           assistance involving emergency traces and emergency information
           retrieval on customer invoked CLASS services, including, without
           limitation, call traces requested by ELI.

     23.2  GTE agrees to work jointly with ELI in security matters to support
           law enforcement agency requirements for taps, traces, court orders,
           etc.  Charges for providing such services for ELI Customers will be
           billed to ELI.

     23.3  GTE will, in non emergency situations, inform the requesting law
           enforcement agencies that the end-user to be wire tapped, traced,
           etc. is an ELI Customer and shall refer them to ELI.

24.  Liability and Indemnity.
     -----------------------

                                     III-9
<PAGE>

     24.1  Indemnification.  Subject to the limitations set forth in Section
           ---------------
           24.4 of this Article III, each Party agrees to release, indemnify,
           defend, and hold harmless the other Party from all losses, claims,
           demands, damages, expenses, suits, or other actions, or any liability
           whatsoever, including, but not limited to, costs and attorney's fees,
           whether suffered, made, instituted, or asserted by any other party or
           person, for invasion of privacy, personal injury to or death of any
           person or persons, or for losses, damages, or destruction of
           property, whether or not owned by others, proximately caused by the
           indemnifying Party's negligence or willful misconduct, regardless of
           form of action. The indemnified Party agrees to notify the other
           Party promptly, in writing, of any written claims, lawsuits, or
           demands for which it is claimed that the indemnifying Party is
           responsible under this Section and to cooperate in every reasonable
           way to facilitate defense or settlement of claims. The indemnifying
           Party shall have complete control over defense of the case and over
           the terms of any proposed settlement or compromise thereof. The
           indemnifying Party shall not be liable under this Section for
           settlement by the indemnified Party or any claim, lawsuit, or demand,
           if the indemnifying Party has not approved the settlement in advance,
           unless the indemnifying Party has had the defense of the claim,
           lawsuit, or demand tendered to it in writing and has failed to assume
           such defense. In the event of such failure to assume defense, the
           indemnifying Party shall be liable for any reasonable settlement made
           by the indemnified Party without approval of the indemnifying Party.

     24.2  End User and Content-Related Claims.  Each Party agrees to release,
           -----------------------------------
           indemnify, defend, and hold harmless the other Party, its affiliates,
           and any third-party provider or operator of facilities involved in
           the provision of Services, Unbundled Network Elements or Facilities
           under this Agreement (collectively, the "Indemnified Party") from all
           losses, claims, demands, damages, expenses, suits, or other actions,
           or any liability whatsoever, including, but not limited to, costs and
           attorney's fees, suffered, made, instituted, or asserted by either
           Party's end users against an Indemnified Party arising from Services,
           Unbundled Network Elements or Facilities. Each Party further agrees
           to release, indemnify, defend, and hold harmless the Indemnified
           Party from all losses, claims, demands, damages, expenses, suits, or
           other actions, or any liability whatsoever, including, but not
           limited to, costs and attorney's fees, suffered, made, instituted, or
           asserted by any Third Party against an Indemnified Party arising from
           or in any way related to actual or alleged defamation, libel,
           slander, interference with or misappropriation of proprietary or
           creative right, or any other injury to any person or property arising
           out of content transmitted by the Indemnified Party or such Party's
           end users, or any other act or omission of the Indemnified Party or
           such Party's end users.

     24.3  DISCLAIMER.  EXCEPT AS SPECIFICALLY PROVIDED TO THE CONTRARY IN THIS
           ----------
           AGREEMENT, PROVIDER MAKES NO REPRESENTATIONS OR WARRANTIES TO
           CUSTOMER CONCERNING THE SPECIFIC QUALITY OF ANY SERVICES, UNBUNDLED
           NETWORK

                                    III-10
<PAGE>

           ELEMENTS OR FACILITIES PROVIDED UNDER THIS AGREEMENT. PROVIDER
           DISCLAIMS, WITHOUT LIMITATION, ANY WARRANTY OR GUARANTEE OF
           MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARISING FROM
           COURSE OF PERFORMANCE, COURSE OF DEALING, OR FROM USAGES OF TRADE.

     24.4  Limitation of Liability.  Each Party's liability, whether in
           -----------------------
           contract, tort or otherwise, shall be limited to direct damages,
           which shall not exceed the monthly charges for the Services,
           Unbundled Network Elements or facilities for the month during which
           the claim of liability arose. Under no circumstance shall either
           Party be responsible or liable for indirect, incidental, or
           consequential damages, including, but not limited to, economic loss
           or lost business or profits, damages arising from the use or
           performance of equipment or software, or the loss of use of software
           or equipment, or any accessories attached thereto, delay, error, or
           loss of data. Should either Party provide advice, make
           recommendations, or supply other analysis related to the Services,
           unbundled network elements or facilities described in this Agreement,
           this limitation of liability shall apply to provision of such advice,
           recommendations, and analysis.

     24.5  Intellectual Property.  Neither Party shall have any obligation to
           ---------------------
           defend, indemnify or hold harmless, or acquire any license or right
           for the benefit of, or owe any other obligation or have any liability
           to, the other based on or arising from any claim, demand, or
           proceeding by any Third Party alleging or asserting that the use of
           any circuit, apparatus, or system, or the use of any software, or the
           performance of any service or method, or the provision or use of any
           facilities by either Party under this Agreement constitutes direct or
           contributory infringement, or misuse or misappropriation of any
           patent, copyright, trademark, trade secret, or any other proprietary
           or intellectual property right of any Third Party.

25.  Multiple Counterparts.  This Agreement may be executed in multiple
     ---------------------
     counterparts, each of which shall be deemed an original, but all of which
     shall together constitute but one and the same document.

26.  No Offer.  This Agreement will be effective only upon execution and
     --------
     delivery by both Parties and approval by the Commission in accordance with
     Section 252 of the Act.

27.  No Third Party Beneficiaries.  Except as may be specifically set forth in
     ----------------------------
     this Agreement, this Agreement does not provide and shall not be construed
     to provide third parties with any remedy, claim, liability, reimbursement,
     cause of action, or other right or privilege.

28.  Notices.  Any notice to a Party required or permitted under this Agreement
     -------
     shall be in writing and shall be deemed to have been received on the date
     of service if served personally, on the date receipt is acknowledged in
     writing by the recipient if delivered by regular U.S. mail, or on the date
     stated on the receipt if delivered by certified or registered mail or by a
     courier service that obtains a written receipt.  Upon prior immediate oral

                                    III-11
<PAGE>

     agreement of the parties' designated recipients identified below, notice
     may also be provided by facsimile, internet or electronic messaging system,
     which shall be effective if sent before 5:00 p.m., recipient's local time,
     on that day, or if sent after 5:00 p.m., recipient's local time, it will be
     effective on the next Business Day following the date sent.  Any notice
     shall be delivered using one of the alternatives mentioned in this section
     and shall be directed to the applicable address indicated below or such
     address as the Party to be notified has designated by giving notice in
     compliance with this section:

     If to GTE:    GTE Northwest Incorporated
                   Attention: Assistant Vice President/Associate General
                   Counsel Service Corporation
                   600 Hidden Ridge, HQEWMNOTICES
                   Irving, Texas  75038
                   Telephone number: 972/718-6361
                   Facsimile number: 972/718-3404
     And
                   GTE Northwest Incorporated
                   Attention: Director-Wholesale Contract Compliance
                   Network Services
                   600 Hidden Ridge - HQEWMNOTICES
                   Irving, TX 75038
                   Telephone number: 972/718-5988
                   Facsimile number: 972/718-1519

     If to ELI:    Electric Lightwave, Inc.
                   Attention: Susan McAdams
                              Vice President, Government and External Affairs
                   4400 NE 77/th/ Avenue,
                   Vancouver, WA
                   Telephone number: 360-816-3236
                   Facsimile number: 360-816-3821

29.  Protection.
     ----------

     29.1  Impairment of Service.  The characteristics and methods of operation
           ---------------------
           of any circuits, facilities or equipment of either Party connected
           with the services, facilities or equipment of the other Party
           pursuant to this Agreement shall not interfere with or impair service
           over any facilities of the other Party, its affiliated companies, or
           its connecting and concurring carriers involved in its services,
           cause damage to their plant, violate any applicable law or regulation
           regarding the invasion of privacy of any communications carried over
           the Party's facilities or create hazards to the employees of either
           Party or to the public (each hereinafter referred to as an
           "Impairment of Service").

                                    III-12
<PAGE>

     29.2  Resolution.  If either Party causes an Impairment in Service, the
           ----------
           Party whose network or service is being impaired (the "Impaired
           Party") shall promptly notify the Party causing the Impairment of
           Service (the "Impairing Party") of the nature and location of the
           problem and that, unless promptly rectified, a temporary
           discontinuance of the use of any circuit, facility or equipment may
           be required. The Impairing Party and the Impaired Party agree to work
           together to attempt to promptly resolve the Impairment of Service. If
           the Impairing Party is unable to promptly remedy the Impairment of
           Service, then the Impaired Party may at its option temporarily
           discontinue the use of the affected circuit, facility or equipment.

30.  Publicity.  Any news release, public announcement, advertising, or any form
     ---------
     of publicity pertaining to this Agreement, provision of Services, Unbundled
     Network Elements or Facilities pursuant to it, or association of the
     Parties with respect to provision of the services described in this
     Agreement, for promotional or other commercial purposes shall be subject to
     prior written approval of both GTE and ELI.

31.  Regulatory Agency Control.  This Agreement shall at all times be subject to
     -------------------------
     changes, modifications, orders, and rulings by the Federal Communications
     Commission and/or the applicable state utility regulatory commission to the
     extent the substance of this Agreement is or becomes subject to the
     jurisdiction of such agency.

32.  Changes in Legal Requirements.  GTE and ELI further agree that the terms
     -----------------------------
     and conditions of this Agreement were composed in order to effectuate the
     legal requirements in effect at the time the Agreement was produced.  Any
     modifications to those requirements that subsequently may be prescribed by
     final and effective action of any federal, state, or local governmental
     authority will be deemed to automatically supersede any terms and
     conditions of this Agreement.  Notwithstanding this section, neither Party
     waives any rights it otherwise has to dispute any action taken or not taken
     by the other Party in reliance on this section 32.

33.  Effective Date.  This Agreement will be effective upon approval by the
     --------------
     Commission in accordance with Section 252 of the Act.  If this Agreement or
     changes or modifications thereto are subject to approval of a regulatory
     agency, the "effective date" of this Agreement for such purposes will be
     the date of such approval.  Such date shall become the "effective date" of
     this Agreement for all purposes, except that ELI shall not submit LSR
     orders for resold services or unbundled network elements under the rates,
     terms, and conditions of this Agreement before the tenth business day after
     the effective date of the Agreement.

34.  Regulatory Matters.  Each Party shall be responsible for obtaining and
     ------------------
     keeping in effect all their own FCC, state regulatory commission, franchise
     authority and other regulatory approvals that may be required in connection
     with the performance of its obligations under this Agreement.

                                    III-13
<PAGE>

35.  Rule of Construction.  No rule of construction requiring interpretation
     --------------------
     against the drafting party hereof shall apply in the interpretation of this
     Agreement.

36.  Section References.  Except as otherwise specified, references within an
     ------------------
     Article of this Agreement to a Section refer to Sections within that same
     Article.

37.  Service Standards.
     -----------------

     37.1  The Parties hereby acknowledge the exchange of Performance Measures
           as described in Appendix 37A. The Performance Measures detail the
           areas of performance to be tracked and reported in accordance with
           the provision of services under the terms and conditions of this
           Agreement. The results of these Performance Measures shall be used to
           indicate the level of quality of service GTE provides to ELI. The
           service quality standards included in Appendix 37A reflect the
           standards that GTE currently makes available to all CLECs. By
           agreeing to include those standards in Appendix 37A, ELI does not
           agree that GTE's compliance with those standards necessarily
           satisfies GTE's obligations under the Act or state law, and ELI
           reserves the right to dispute whether the service quality GTE
           provides to ELI complies with the Act or state law, regardless of
           whether that service quality complies with the standards in Appendix
           37A. GTE will make available to ELI, upon request to its GTE Account
           Manager, the CLEC Aggregate report and the monthly ELI Profile report
           with comparisons in performance compiled on a monthly, rolling three-
           month and year-to-date basis. The monthly ELI Profile report will
           provide ELI specific performance data.

     37.2  Each Party may provide input to the Commission, the FCC, and various
           telecommunications industry forums defining or establishing national
           or state-specific standards for methods of quality measurement,
           reporting, and remedies. The Parties agree that the Performance
           Measures identified in Section 37.1 of this Article are provisional,
           subject to expansion by GTE and evolution within the industry. The
           Parties further agree that such Performance Measures are subject to
           further modification by final and binding orders, rules, and
           decisions of the Commission and/or FCC thereby defining or
           establishing national or state-specific standards for methods of
           quality measurement, reporting, and remedies.

     37.3  Subsequent to GTE's adoption and system implementation of applicable
           industry, Commission, or FCC standards, measurements, reporting, and
           remedies, the Parties shall implement those new and/or modified
           requirements as they continue to evolve. In doing so, the Parties
           agree that the Performance Measures identified in Section 37.1 of
           this Article shall be replaced in their entirety.

     37.4  The Parties shall notify each other of any network events that can
           result or have resulted in service interruption, blocked calls,
           and/or changes in network performance. Such notification, however,
           shall not relieve either Party of its obligations or responsibilities
           under this Agreement or applicable law.

                                    III-14
<PAGE>

38.  Severability.  If any provision of this Agreement is held by a court or
     ------------
     regulatory agency of competent jurisdiction to be unenforceable, the rest
     of the Agreement shall remain in full force and effect and shall not be
     affected unless removal of that provision results in a material change to
     this Agreement.  If a material change as described in this paragraph occurs
     as a result of final and effective action by a court or regulatory agency,
     the Parties shall negotiate in good faith for replacement language.  If
     replacement language cannot be agreed upon within a reasonable period,
     either Party may terminate this Agreement without penalty or liability for
     such termination upon written notice to the other Party.  To the extent not
     inconsistent with this section 38, the Parties' existing service
     arrangements may continue without interruption under (a) a new agreement
     voluntarily executed by the Parties; (b) standard terms and conditions
     approved and made generally effective by the Commission, if any; (c) tariff
     terms and conditions made generally available to all CLECs; or (d) any
     rights under Section 252(i) of the Act.

39.  Subcontractors.  Provider may enter into subcontracts with third parties or
     --------------
     affiliates for the performance of any of Provider's duties or obligations
     under this Agreement.

40.  Subsequent Law.  The terms and conditions of this Agreement shall be
     --------------
     subject to any and all applicable laws, rules, or regulations that
     subsequently may be prescribed by final and effective action of any
     federal, state or local governmental authority.  To the extent required by
     any such subsequently prescribed law, rule, or regulation, the Parties
     agree to modify, in writing, the affected term(s) and condition(s) of this
     Agreement to bring them into compliance with such law, rule, or regulation.

41.  Taxes.  Any federal, state or local taxes (excluding any taxes levied on
     -----
     income), fee, surcharge, or other tax-like charge imposed, or sought to be
     imposed, on or with respect to the services provided under this Agreement
     shall be borne by the Party upon which the obligation for payment is
     imposed under applicable law, even if the obligation to collect and remit
     such taxes is placed upon the other Party.  The collecting Party shall
     charge and collect from the obligated Party, and the obligated Party agrees
     to pay to the collecting Party, all applicable taxes, except to the extent
     that the obligated Party notifies the collecting Party and provides to the
     collecting Party appropriate documentation that qualifies the obligated
     Party for a full or partial exemption.  Any such taxes shall be shown as
     separate items on applicable billing documents between the Parties.  The
     obligated Party may contest the same in good faith, at its own expense, and
     shall be entitled to the benefit of any refund or recovery, provided that
     such Party shall not permit any lien to exist on any asset of the other
     Party by reason of the contest.  The collecting Party shall cooperate in
     any such contest by the other Party.  The other Party will indemnify the
     collecting Party from any sales or use taxes that may be subsequently
     levied on payments by the other Party by the collecting Party.

     41.1  Tax - A charge which is statutorily imposed by the state or local
           jurisdiction and is either (a) imposed on the seller with the seller
           having the right or responsibility to pass the charge(s) on to the
           purchaser and the seller is responsible for remitting

                                    III-15
<PAGE>

           the charge(s) to the state or local jurisdiction or (b) imposed on
           the purchaser with the seller having an obligation to collect the
           charge(s) from the purchaser and remit the charge(s) to the state or
           local jurisdiction.

           Taxes shall include but not be limited to: federal excise tax,
           state/local sales and use tax, state/local utility user tax,
           state/local telecommunication excise tax, state/local gross receipts
           tax, and local school taxes. Taxes shall not include income, income-
           like, gross receipts on the revenue of a provider, or property taxes.
           Taxes shall not include payroll withholding taxes unless specifically
           required by statute or ordinance.

     41.2  Fees/Regulatory Surcharges - A charge imposed by a regulatory
           authority, other agency, or resulting from a contractual obligation,
           in which the seller is responsible or required to collect the
           fee/surcharge from the purchaser and the seller is responsible for
           remitting the charge to the regulatory authority, other agency, or
           contracting party.

           Fees/Regulatory Surcharges shall include but not be limited to
           E911/911, E311/311, franchise fees, Lifeline, universal service,
           Telecommunications Relay Service, and Commission surcharges.

42.  Trademarks and Trade Names.  Except as specifically set out in this
     --------------------------
     Agreement, nothing in this Agreement shall grant, suggest, or imply any
     authority for one Party to use the name, trademarks, service marks, or
     trade names of the other for any purpose whatsoever.

43.  Waiver.  The failure of either Party to insist upon the performance of any
     ------
     provision of this Agreement, or to exercise any right or privilege granted
     to it under this Agreement, shall not be construed as a waiver of such
     provision or any provisions of this Agreement, and the same shall continue
     in full force and effect.

44.  Environmental Responsibility.
     ----------------------------

     44.1  GTE and ELI agree to comply with applicable federal, state and local
           environmental and safety laws and regulations including U.S.
           Environmental Protection Agency (EPA) regulations issued under the
           Clean Air Act, Clean Water Act, Resource Conservation and Recovery
           Act, Comprehensive Environmental Response, Compensation and Liability
           Act, Superfund Amendments and Reauthorization Act and the Toxic
           Substances Control Act and OSHA regulations issued under the
           Occupational Safety and Health Act of 1970 ("EH&S Laws"). Each Party
           has the responsibility to notify the other if Compliance inspections
           occur and/or citations are issued that impact any aspect of this
           Agreement such as occurring on a LEC Facility or involving ELI
           potential employee exposure.

                                    III-16
<PAGE>

     44.2  GTE and ELI shall provide notice of known and recognized physical
           hazards or hazardous chemicals that must include providing Material
           Safety Data Sheets (MSDSs) for materials existing on site or brought
           on site to the Facility. Each Party is required to provide specific
           notice for potential imminent danger conditions which could include,
           but is not limited to, a defective utility pole or significant
           petroleum contamination in a manhole.

     44.3  GTE will make available additional environmental control or safety
           procedures for ELI to review and follow when working at a GTE
           Facility. Providing these procedures, beyond government regulatory
           Compliance requirements, is the decision of GTE. These
           practices/procedures will represent the regular work practices
           required to be followed by the employees and contractors of GTE for
           safety and environmental protection.

     44.4  Any materials brought, used or remaining at the Facility by ELI are
           owned by ELI. ELI will indemnify GTE for these materials. No
           substantial new safety or environmental hazards can be created or new
           hazardous materials can be used at a GTE Facility. ELI must
           demonstrate adequate emergency response capabilities for its
           materials used or remaining at the GTE Facility.

     44.5  If Third Party contamination is discovered at a GTE Facility, the
           Party uncovering the condition must notify the proper safety or
           environmental authorities, to the extent required under EH&S laws.
           ELI will consult with GTE prior to making the notification, unless
           the time required for prior consultation would preclude ELI from
           complying with the applicable reporting requirement. ELI must also
           notify GTE of Third Party contamination it discovers at GTE
           facilities.

     44.6  ELI should obtain and use its own environmental permits, approvals,
           or identification numbers, to the extent such permits, approvals, or
           identification numbers are required under applicable EH&S Laws. If
           the relevant regulatory authority refuses to issue a separate permit,
           approval, or identification number to ELI, then GTE's permit,
           approval, or identification number may be used, and ELI must comply
           with all of GTE's environmental practices/procedures relating to the
           activity in question, including use of environmental "best management
           practices (BMP)" and/or selection of disposition vendors and disposal
           sites in accordance with GTE's selection criteria.

     44.7  ELI visitors must comply with GTE security, fire safety, safety,
           environmental and building practices/codes including equivalent
           employee training when working in GTE facilities.

     44.8  GTE and ELI shall coordinate plans or information required to be
           submitted to government agencies, such as emergency response plans
           and community reporting. If fees are associated with filing, GTE and
           ELI must develop a cost sharing procedure.

                                    III-17
<PAGE>

     44.9  Notwithstanding Section 23, with respect to environmental
           responsibility under this Section 44, GTE and ELI shall indemnify,
           defend and hold harmless the other party from and against any claims
           (including, without limitation, Third Party claims for personal
           injury or real or personal property damage), judgments, damages
           (including direct and indirect damage, and punitive damages),
           penalties, fines, forfeitures, cost, liabilities, interest and losses
           proximately caused by the indemnifying Party's negligent or willful
           misconduct regardless of form, or in connection with the violation or
           alleged violation of any applicable requirement with respect to the
           presence or alleged presence of contamination arising out of the
           indemnifying party's acts or omissions concerning its operations at
           the Facility.

     44.10 Activities impacting safety or the environment of a Right of Way must
           be harmonized with the specific agreement and the relationship
           between GTE and the private land owner. This could include
           limitations on equipment access due to environmental conditions
           (e.g., wetland area with equipment restrictions).

45.  TBD Prices.  Numerous provisions in this Agreement and its Attachments
     ----------
     refer to pricing principles.  If a provision references prices in an
     Attachment and there are no corresponding prices in such Attachment, such
     price shall be considered "To Be Determined" ("TBD").  With respect to all
     TBD prices, prior to ELI ordering any such TBD item, the Parties shall meet
     and confer to establish a price.  If the Parties are unable to reach
     agreement on a price for such item, an interim price shall be set for such
     item that is equal to the price for the nearest analogous item for which a
     price has been established (for example, if there is not an established
     price for  a non recurring charge ("NRC") for a specific network element,
     the Parties would use the NRC for the most analogous retail service for
     which there is an established price).  Any interim prices so set shall be
     subject to modification by any subsequent decision of the Commission.  If
     an interim price is different from the rate subsequently established by the
     Commission, any underpayment shall be paid by ELI to GTE, and any
     overpayment shall be refunded by GTE to ELI, within 45 Business Days after
     the establishment of the price by the Commission.

46.  Amendment of Certain Rates, Terms, and Conditions.  The rates, terms, and
     -------------------------------------------------
     conditions in this Agreement that are specified in Attachment 46A (the
     "AT&T Terms") were taken from the GTE/ AT&T Interconnection, Resale and
     Unbundling Agreement (the AT&T Agreement) approved by the Commission in
     Order No. 99-028 in Docket No. ARB 5.  The rates, terms, and conditions not
     included in this Agreement but referenced in Attachment 46B (the "GTE
     Terms") were excluded from the AT&T Agreement by the Commission in Docket
     No. ARB 5.  GTE and ELI agree that if the "AT&T Terms" are deemed to be
     unlawful, or are stayed, enjoined or otherwise modified, in whole or in
     part, by a court or commission of competent jurisdiction, then this
     Agreement shall be deemed to have been amended accordingly, by modification
     of the "AT&T Terms" or, as appropriate, the substitution of "GTE Terms" for
     all stayed and enjoined "AT&T Terms",

                                    III-18
<PAGE>

     and such amendments shall be effective retroactive to the Effective Date of
     this Agreement.

     GTE and ELI further agree that the terms and conditions of this Agreement
     reflect certain requirements of the FCC's First Report and Order in CC
     Docket No. 96-98. The terms and conditions of this Agreement shall be
     subject to any and all actions by any court or other governmental authority
     that invalidate, stay, vacate or otherwise modify or reinstate the FCC's
     First Report and Order, in whole or in part ("Action"). To the extent
     warranted by any such Action, the Parties agree that this Agreement shall
     be deemed to have been modified accordingly as in the first paragraph of
     this Section 46. The Parties agree to immediately apply any affected terms
     and conditions, including any in other sections and articles of this
     Agreement, consistent with such Action, and within a reasonable time
     incorporate such modified terms and conditions in writing into the
     Agreement. If the "AT&T Terms" are affected by such Action and they cannot
     be applied in a manner consistent with that Action, the "GTE Terms" shall
     apply. ELI acknowledges that GTE may seek to enforce such Action before a
     commission or court of competent jurisdiction. GTE does not waive any
     position regarding the illegality or inappropriateness of the FCC's First
     Report and Order.

     The rates, terms and conditions (including rates which may be applicable
     under true-up) specified in both the "GTE Terms" and the "AT&T Terms" are
     further subject to amendment to provide for charges or rate adjustments
     resulting from future Commission or other proceedings, including but not
     limited to any generic proceeding to determine GTE's unrecovered costs
     (e.g., historic costs, contribution, undepreciated reserve deficiency, or
     similar unrecovered GTE costs (including GTE's end user surcharge), the
     establishment of a competitively neutral universal service system, or any
     appeal or other litigation.  Any amendment to the "AT&T Terms" required as
     a result of any final Commission and/or court order resolving the appeal
     of, or other litigation over, the interconnection agreement from which the
     "AT&T Terms" are derived, shall be incorporated into this Agreement
     according to the terms of that final order, including any retroactive
     application of that amendment.  The results of any future Commission or
     other proceedings shall be incorporated into this Agreement according to
     the terms of the final Commission and/or court order resolving that
     proceeding, including any retroactive application of those results.

     If the Commission (or any other commission or federal or state court) in
     reviewing this Agreement pursuant to applicable state and federal laws,
     including Section 252(e) of the Telecommunications Act of 1996, deletes or
     modifies in any way this Section 46, this entire Agreement is void and will
     not become effective, and the Parties agree to withdraw this Agreement from
     consideration by the Commission (or any other commission or federal or
     state court).  If this Agreement is voided by operation of this provision,
     the Parties agree to immediately begin negotiations for a new agreement,
     and to treat the date that this Agreement became void as the one hundredth
     (100th) calendar day from GTE's receipt of a renewed request for
     negotiations by ELI for negotiations under Section 252 of the Act.

                                    III-19
<PAGE>

                                  ARTICLE IV
                    GENERAL RULES GOVERNING RESOLD SERVICES
                            AND UNBUNDLED ELEMENTS


1.   General.  General regulations, terms and conditions governing rate
     -------
     applications, technical parameters, service availability, definitions and
     feature interactions, as described in the appropriate GTE intrastate local,
     toll and access tariffs, apply to retail services made available by GTE to
     ELI for resale and unbundled network elements provided by GTE to ELI, when
     appropriate, unless otherwise specified in this Agreement.  As applied to
     services or network elements offered under this Agreement, the term
     "Customer" contained in the GTE Retail Tariff shall be deemed to mean "ELI"
     as defined in this Agreement.

2.   Liability of GTE.
     ----------------

     2.1  Inapplicability of Tariff Liability.  GTE's general liability, as
          -----------------------------------
          described in the GTE Retail Tariff, does not extend to ELI's customers
          or any other Third Party.  Liability of GTE to ELI resulting from any
          and all causes arising out of services, facilities, network elements
          or any other items relating to this Agreement shall be governed by the
          liability provisions contained in this Agreement and no other
          liability whatsoever shall attach to GTE.  GTE shall be liable for the
          individual services, facilities or elements that it separately
          provides to ELI and shall not be liable for the integration of
          components combined by ELI.

     2.2  ELI Tariffs or Contracts.  GTE shall not be liable to ELI's end users
          ------------------------
          or any third parties for any indirect, special or consequential
          damages, including, but not limited to, economic loss or lost business
          or profits, whether foreseeable or not, and regardless of notification
          by ELI of the possibility of such damages and ELI shall indemnify and
          hold GTE harmless from any and all claims, demands, causes of action
          and liabilities based on any reason whatsoever from its customers as
          provided in this Agreement.  Nothing in this Agreement shall be deemed
          to create a Third Party beneficiary relationship with ELI's end users.
          To the extent practicable, ELI will include a provision in its
          tariffs, price lists, or contracts for services provided to end-users
          so limiting the liability of other LECs, like GTE, that provide
          underlying services, facilities, or network elements.

     2.3  No Liability for Errors.  GTE is liable for mistakes that appear in
          -----------------------
          GTE's listings, 911 and other information databases, or for incorrect
          referrals of end users to ELI for any ongoing ELI service, sales, or
          repair inquiries only to the extent that GTE would be liable to its
          own end-user or other carrier customers under similar circumstances.
          With respect to mistakes or incorrect referrals for which GTE would
          not otherwise be liable, ELI shall indemnify and hold GTE harmless
          from any and all claims, demands, causes of action and liabilities
          whatsoever, including costs, expenses and reasonable attorney's fees
          incurred on account thereof, by

                                     IV-1
<PAGE>

          third parties, including ELI's end users or employees. For purposes of
          the indemnity provided in this Section 2.3, mistakes and incorrect
          referrals for which GTE would not otherwise be liable shall not
          include matters arising out of the willful misconduct of GTE or its
          employees or agents.

3.   Unauthorized Changes.
     --------------------

     3.1  Procedures.  If ELI submits an order for resold services or unbundled
          ----------
          elements under this Agreement in order to provide service to an end
          user that at the time the order is submitted is obtaining its local
          services from GTE or another LEC using GTE resold services or
          unbundled elements, and the end user notifies GTE that the end user
          did not authorize ELI to provide local exchange services to the end
          user, ELI must provide GTE with confirmation in an industry-acceptable
          format of authorization from that end user within thirty (30) Business
          Days of notification  by GTE.  If ELI cannot provide such confirmation
          of authorization within such time frame, ELI must within three (3)
          Business Days thereafter:

          (a)  notify GTE to change the end user back to the LEC providing
          service to the end user before the change to ELI was made; and

          (b)  provide any end user information and billing records ELI has
          obtained relating to the end user to the LEC previously serving the
          end user; and

          (c)  notify the end user and GTE that the change back to the previous
          LEC has been made.

     Furthermore, GTE will bill ELI fifty dollars ($50.00) per affected line to
compensate GTE for switching the end user back to the original LEC.

4.   Impact of Payment of Charges on Service. ELI is solely responsible for
     ---------------------------------------
     the payment of all charges for all services, facilities and elements
     furnished under this Agreement, including, but not limited to, calls
     originated or accepted at its or its end users' service locations. If ELI
     fails to pay when due any and all charges billed to ELI under this
     Agreement, including any late payment charges (collectively, "Unpaid
     Charges"), and any or all such charges remain unpaid more than forty-five
     (45) Business Days after the due date of such Unpaid Charges excepting
     previously disputed charges for which ELI may withhold payment, GTE shall
     notify ELI in writing that it must pay all Unpaid Charges to GTE within
     seven (7) Business Days. If ELI disputes the billed charges, it shall,
     within said seven (7) day period, inform GTE in writing of which portion of
     the Unpaid Charges it disputes, including the specific details and reasons
     for the dispute, unless such reasons have been previously provided, and
     shall immediately pay to GTE all undisputed charges. If ELI and GTE are
     unable, within thirty (30) Business Days thereafter, to resolve issues
     related to the disputed charges, then either ELI or GTE may file a request
     for arbitration under Article III of this Agreement to resolve those
     issues. Upon resolution of any dispute hereunder, if ELI owes payment it
     shall make such

                                     IV-2
<PAGE>

     payment to GTE with any late payment charge under Article III, Section 7.2,
     from the original payment due date. If ELI owes no payment, but has
     previously paid GTE such disputed payment, then GTE shall credit such
     payment including any late payment charges. GTE may discontinue service to
     ELI upon failure to pay undisputed charges as provided in this Section 4,
     and shall have no liability to ELI or ELI's end users in the event of such
     disconnection.

5.   Unlawful Use of Service.  Services, facilities or unbundled elements
     -----------------------
     provided by GTE pursuant to this Agreement shall not be used by ELI or its
     end users for any purpose in violation of law.  ELI, and not GTE, shall be
     responsible to ensure that ELI and its end users' use of services,
     facilities or unbundled elements provided hereunder comply at all times
     with all applicable laws.  GTE may refuse to furnish service to ELI or may
     disconnect particular services, facilities or unbundled elements provided
     under this Agreement to ELI or, as appropriate, ELI's end user when (i) an
     order is issued by a court of competent jurisdiction finding that probable
     cause exists to believe that the use made or to be made of the service,
     facilities or unbundled elements is prohibited by law or (ii) GTE is
     notified in writing by a law enforcement agency acting within its
     jurisdiction that any facility furnished by GTE is being used or will be
     used for the purpose of transmitting or receiving gambling information in
     interstate or foreign commerce in violation of law.  Termination of service
     shall take place after reasonable notice is provided to ELI, or as ordered
     by the court.  If facilities have been physically disconnected by law
     enforcement officials at the premises where located, and if there is not
     presented to GTE the written finding of a court, then upon request of ELI
     and agreement to pay restoral of service charges and other applicable
     service charges, GTE shall promptly restore such service.

6.   Timing of Messages.  With respect to GTE resold measured rate local
     ------------------
     service(s), chargeable time begins when a connection is established between
     the calling station and the called station.  Chargeable time ends when the
     network connection is released by the switch.  Timing of messages
     applicable to GTE's Port and Local Switching element (usage sensitive
     services) will be recorded based on originating and terminating access.

7.   Procedures For Preordering, Ordering, Provisioning, Etc.  Certain
     --------------------------------------------------------
     procedures for preordering, ordering, provisioning, maintenance and billing
     and electronic interfaces to access operational support systems for many of
     these functions are described in Appendix H.
                                      ----------

8.  Letter of Authorization.
    -----------------------

     8.1  Customer Proprietary Network Information.  GTE will not release the
          ----------------------------------------
          Customer Service Record ("CSR") containing Customer Proprietary
          Network Information ("CPNI") to ELI on GTE end user customer accounts
          unless ELI first provides to GTE a written Letter of Authorization
          ("LOA"), signed by the end user customer, authorizing the release of
          such information to ELI, or if state or federal law provides
          otherwise, in accordance with such law.

                                     IV-3
<PAGE>

     8.2  Order Processing.  An LOA will be required before GTE will process an
          ----------------
          order for Services provided in cases in which the subscriber currently
          receives Exchange Service from GTE or from a local service provider
          other than ELI.  Such LOA may be a blanket LOA or such other form as
          agreed upon between GTE and ELI.

9.   Customer Contacts.  Except as otherwise provided in this Agreement or as
     -----------------
     agreed to in a separate writing by ELI, ELI shall provide the exclusive
     interface with ELI's end user customers in connection with the marketing or
     offering of ELI services.  Except as otherwise provided in this Agreement,
     in those instances in which GTE personnel are required pursuant to this
     Agreement to interface directly with ELI's end users, such personnel shall
     not identify themselves as representing GTE.  All forms, business cards or
     other business materials furnished by GTE to ELI end users shall bear no
     corporate name, logo, trademark or trade name other than ELI's.  In no
     event shall GTE personnel acting on behalf of ELI pursuant to this
     Agreement provide information to ELI end users about GTE products or
     services.

                                     IV-4
<PAGE>

                                   ARTICLE V
           INTERCONNECTION AND TRANSPORT AND TERMINATION OF TRAFFIC


1.   Services Covered by This Article.
     --------------------------------

     1.1  Types of Services.  This Article governs the provision of
          -----------------
          interconnection services and facilities, meet point billing by GTE to
          ELI or by ELI to GTE and the transport and termination and billing of
          Local, IntraLATA Toll, optional EAS traffic and jointly provided
          Interexchange Carrier Access between GTE and ELI.  The services and
          facilities described in this Article shall be referred to in this
          Article V as the "Services."

2.   Billing and Rates.
     -----------------

     2.1  Rates and Charges.  Customer agrees to pay to Provider the rates and
          -----------------
          charges for the Services set forth in the applicable appendices to
          this Agreement.  GTE's rates and charges are set forth in Appendix C
                                                                    ----------
          attached to this Agreement and made a part hereof.  ELI's separate
          rates and charges are also set forth in Appendix C attached hereto and
                                                  ----------
          made a part hereof.

     2.2  Billing.  Provider shall render to Customer a bill for interconnection
          -------
          services on a current basis.  Charges for physical facilities and
          other nonusage sensitive charges shall be billed in advance, except
          for charges and credits associated with the initial or final bills.
          Usage sensitive charges, such as charges for termination of Local
          Traffic, shall be billed in arrears.  Charges for traffic that has
          been routed over a jurisdictionally inappropriate trunk group (e.g.,
          local traffic carried over trunks used for Switched Access Traffic)
          may be adjusted to reflect the appropriate compensation arrangement
          and may be handled as a post-billing adjustment to bills rendered.
          Additional matters relating to ordering, provisioning, and billing are
          included in Appendix H attached to this Agreement and made a part
                      ----------
          hereof.

     2.3  Billing Specifications.  The Parties agree that billing requirements
          ----------------------
          and outputs will be consistent with the Bellcore Output Specifications
          ("BOS").

          2.3.1  Usage Measurement.  Usage measurement for calls shall begin
                 -----------------
                 when answer supervision or equivalent SS7 message is received
                 from the terminating office and shall end at the time of call
                 disconnect by the calling or called subscriber, including time
                 released call disconnect.

          2.3.2  Minutes of Use.  Minutes of use ("MOU"), or fractions thereof,
                 --------------
                 shall not be rounded upward on a per-call basis, but will be
                 accumulated over the billing period. At the end of the billing
                 period, any remaining fraction shall be rounded up to the
                 nearest whole minute to arrive at total billable

                                      V-1
<PAGE>

                 minutes for each interconnection. MOU shall be collected and
                 measured in minutes, seconds, and tenths of seconds.

     2.4  Billing Disputes.  Disputes arising out of services and facilities
          ----------------
          provided pursuant to this Article shall be resolved according to the
          procedures established in Section 7.1 of Article III of this
          Agreement.

3.   Transport and Termination of Traffic.
     ------------------------------------

     3.1  Traffic to be Exchanged.  The Parties shall reciprocally terminate
          -----------------------
          Local, IntraLATA Toll, optional EAS, and jointly provided
          Interexchange Carrier Traffic originating on each other's networks
          utilizing either Direct or Indirect Network Interconnections as
          provided in Section 4 or Section 5 of this Article.  To this end, the
          Parties agree that there will be interoperability between their
          networks.  The Parties agree to exchange traffic associated with third
          party LECs, CLECs and Wireless Service Providers pursuant to the
          compensation arrangement specified in Section 3.3 of this Article.
          Only traffic originated by and/or terminated to a Party's or the
          Parties' end user customer(s) is to be exchanged.  In addition, the
          Parties will notify each other of any anticipated change in traffic to
          be exchanged (e.g., traffic type, volume).

     3.2  Compensation For Exchange Of Traffic.
          ------------------------------------

          3.2.1  Mutual Compensation.  The Parties shall compensate each other
                 -------------------
                 for the exchange of Local Traffic at the reciprocal rates
                 established in Appendix C. For purposes of this Agreement, GTE
                 shall compensate ELI at the tandem rate for terminating all
                 Local Traffic GTE delivers to ELI for termination; provided,
                 however, that GTE shall compensate ELI at the end office rate
                 until such time as 47 C.F.R (S) 51.711(a)(3) is reinstated. ELI
                 shall compensate GTE at the tandem rate for terminating Local
                 Traffic ELI delivers to GTE at a GTE tandem, and at the end
                 office rate for Local Traffic ELI delivers to GTE at a GTE end
                 office. Charges for the transport and termination of non-Local
                 Traffic, including optional EAS, intraLATA toll, and
                 interexchange traffic, shall be in accordance with the Parties'
                 respective intrastate or interstate access tariffs or price
                 lists, as appropriate.

          3.2.2  Bill-and-Keep.  Either Party may request that a joint traffic
                 -------------
                 study be performed no more frequently than once a quarter.
                 Should such traffic study indicate, in the aggregate, that
                 neither Party is terminating more than 60 percent of the
                 Parties' total terminated minutes for Local Traffic (referred
                 to as "Traffic Balance"), the Parties shall use a Bill-and-Keep
                 Arrangement with respect to termination of Local Traffic only,
                 which shall be implemented on the next billing cycle at least
                 ten (10) business days following notification by either Party
                 that Traffic Balance exists. Either Party may request a
                 subsequent traffic study no more frequently than once

                                      V-2
<PAGE>

                 every six months, and if such a study indicates, in the
                 aggregate, that either Party is terminating more than 60
                 percent of the Parties' total terminated minutes for Local
                 Traffic, either Party may notify the other that mutual
                 compensation as described in Section 3.2.1 shall resume on the
                 next billing cycle at least ten (10) business days following
                 that notification. Nothing in this Section 3.2.2 shall be
                 interpreted to (i) change compensation set forth in this
                 Agreement for traffic or services other than Local Traffic,
                 including but not limited to interconnection facilities, access
                 traffic or wireless traffic, or (ii) allow either Party to
                 aggregate traffic other than Local Traffic for the purpose of
                 compensation under the Bill-and-Keep Arrangement described in
                 this Section 3.2.2, except as set forth in Section 3.1 above.

     3.3  Tandem and Transit Switching Traffic.  GTE shall provide tandem
          ------------------------------------
          switching for traffic between GTE end offices subtending its tandems
          ("tandem switching"), as well as for traffic between ELI's end users
          and any Third Party that is interconnected to GTE's tandems ("transit
          tandem switching"), and ELI shall provide switching between GTE's end
          users and any Third Party that is directly interconnected with ELI's
          switch(es) ("transit switching"), as follows:

          3.3.1  The originating Party will compensate the tandem/transit
                 switching Party for each minute of originated tandem/transit
                 switched traffic that terminates to a Third Party (e.g., other
                 CLEC, ILEC, or wireless service provider). The applicable rate
                 for this charge is identified in Appendix C.
                                                  ----------

          3.3.2  The originating Party also assumes responsibility for
                 compensation to the company that terminates the call.

          3.3.3  The Parties agree to enter into their own agreements with Third
                 Parties. In the event that either Party sends traffic through
                 the other Party's network to a Third Party with whom the
                 originating Party does not have a traffic interexchange
                 agreement, the originating Party agrees to indemnify the
                 transiting Party for any termination charges rendered by the
                 Third Party for such traffic.

     3.4  Inter-Tandem Switching.  The Parties will only use inter-tandem
          ----------------------
          switching for the transport and termination of intraLATA toll traffic
          (including optional EAS) originating on each other's network at and
          after such time as ELI has agreed to and fully implemented an existing
          intraLATA toll compensation mechanism such as IntraLATA Terminating
          Access Compensation (ITAC) or a functional equivalent thereof.  The
          Parties will only use inter-tandem switching for the transport and
          termination of Local Traffic originating on each other's network at
          and after such time as the Parties have agreed to and fully
          implemented generally accepted industry signaling standards and AMA
          record standards which shall support the recognition of multiple
          tandem switching events.

                                      V-3
<PAGE>

     3.5  IntraLATA Toll Compensation Plan.  If ELI becomes an active
          --------------------------------
          participant in an existing industry intraLATA toll compensation plan,
          and GTE is also a participant in that plan, the Parties agree to use
          that compensation plan, instead of other processes that may be
          specified in this Article V, as the billing processes for switched
          access charges for intraLATA toll traffic.  This includes intraLATA
          toll traffic exchanged between the Parties, as well as intraLATA toll
          traffic originated by one Party that transits the other Party's
          network to terminate to a third party.  Until such time as the Parties
          have the capability to indentify, measure, and adjust billing records
          for this traffic when it is routed over a combined trunk group, the
          Parties agree to use a separate dedicated trunk group for this
          traffic.

4.   Direct Network Interconnection.
     ------------------------------

     4.1  Network Interconnection Architecture.  ELI may interconnect with GTE
          ------------------------------------
          at any of the Currently Available points required by the FCC or the
          Commission.  ELI may request, and GTE shall consider, interconnection
          at additional points on an individual case basis.  Interconnection
          will be as specified in the following subsections.  The installation
          timeline may vary based on the configuration, but GTE will work with
          ELI in all circumstances to install "IPs" within 120 calendar days
          absent extenuating circumstances.  Network interconnection and
          protocol must be based on industry standards developed consistent with
          the Act and applicable FCC or State requirements.

          4.1.1  Subject to mutual agreement, the Parties may use the following
                 types of network facility interconnection, using such interface
                 media as are appropriate to support the type of interconnection
                 requested.

                 (a)   A Mid-Span Fiber Meet within an existing GTE exchange
                 area whereby the Parties mutually agree to jointly plan and
                 engineer their facility "IP" at a designated manhole or
                 junction location. The "IP" is the demarcation between
                 ownership of the fiber transmission facility. Each party is
                 individually responsible for its incurred costs in establishing
                 this arrangement.

                 (b)   A Virtual or Physical EIS arrangement at a GTE wire
                 center subject to the rates, terms, and conditions contained in
                 Article IX of this Agreement and GTE's applicable tariffs.

                 (c)   A Special Access arrangement and/or CLEC Dedicated
                 Transport arrangement terminating at a GTE wire center subject
                 to the rates, terms, and conditions contained in GTE's
                 applicable tariffs. These facilities will meet the standards
                 set forth in such tariffs.

                                      V-4
<PAGE>

          4.1.2  Virtual and Physical EIS arrangements are governed by
                 appropriate GTE tariffs, except as provided in Article IX,
                 Section 1.3.

     4.2  Compensation.  Unless the Parties otherwise mutually agree, the
          ------------
          Parties agree to the following compensation for interconnection
          facilities, depending on facility type.

          4.2.1  Mid-Span Fiber Meet: GTE will charge special access (flat
                 rated) transport from the applicable intrastate access tariff
                 and will rate charges between the "IP" and GTE's
                 interconnection switch. Charges will be reduced to reflect the
                 proportionate share of the facility that is used for transport
                 of traffic originated by GTE. The initial proportionate share
                 factor for facilities shall be negotiated by the Parties and
                 updated quarterly in like manner or as the Parties otherwise
                 agree. ELI will charge flat rated transport to GTE for ELI
                 facilities used by GTE at the rates in ELI's tariff or price
                 list, or as mutually agreed. ELI will apply charges based on
                 the lesser of: (i) the airline mileage from the "IP" to the ELI
                 switch; or (ii) the airline mileage from the GTE switch to the
                 serving area boundary.

          4.2.2  Collocation: GTE will charge Virtual or Physical EIS rates from
                 the applicable GTE tariff. Charges for EIS cross-connect
                 facilities used to connect ELI's collocated equipment with
                 GTE's switch will be reduced to reflect the proportionate share
                 of the facility that is used for transport of traffic
                 originated by GTE. ELI will charge GTE flat rated transport at
                 the rates in ELI's tariff or price list, or as mutually agreed,
                 to reflect the proportionate share of the facility that is used
                 for transport of traffic originated by GTE. ELI will apply
                 charges based on the lesser of: (i) the airline mileage from
                 the "IP" to the ELI switch; or (ii) two (2) times the airline
                 mileage from the GTE switch to the serving area boundary.

          4.2.3  Special Access and/or CLEC Dedicated Transport: GTE will charge
                 special access and/or switched access rates from the applicable
                 GTE intrastate access tariff. Charges will be reduced to
                 reflect the proportionate share of the facility that is used
                 for transport of traffic originated by GTE. The Parties will
                 negotiate an initial factor representative of the proportionate
                 share of the facilities. This factor will be updated quarterly
                 in like manner or as the Parties otherwise agree.

     4.3  Trunking Requirements.
          ---------------------

          4.3.1  The Parties shall establish and maintain trunks over which each
                 Party shall terminate to its end users the Exchange Services,
                 Local Traffic and intraLATA toll or optional EAS traffic
                 originated by the end users of the other Party.

                                      V-5
<PAGE>

          4.3.2  The Parties agree to establish trunk groups of sufficient
                 capacity from the interconnecting facilities such that trunking
                 is available to any switching center designated by either
                 Party, including end offices, tandems, 911 routing switches,
                 and directory assistance/operator service switches. The Parties
                 will mutually agree where one-way or two-way trunking will be
                 available. The Parties may use two-way trunks for delivery of
                 local traffic or either Party may elect to provision its own
                 one-way trunks for delivery of local traffic to the other
                 Party. If a Party elects to provision its own one-way trunks,
                 that Party will be responsible for its own expenses associated
                 with the trunks.

          4.3.3  ELI and GTE shall, where applicable, make reciprocally
                 available, by mutual agreement, the required trunk groups to
                 handle different traffic types. ELI and GTE will support the
                 provisioning of trunk groups that carry combined or separate
                 Local Traffic and intraLATA toll and optional EAS traffic. The
                 Parties shall establish and maintain separate trunk groups for
                 the following: (1) to originate and terminate interLATA calls
                 when either Party is acting as an IXC and ordering switched
                 access service from the other Party; (2) to provide joint
                 Switched Access Service to IXCs; and (3) for other types of
                 traffic as the Parties mutually agree. To the extent ELI
                 desires to have any IXC originate or terminate traffic to ELI
                 using jointly provided switched access facilities routed
                 through a GTE tandem, it is the responsibility of ELI to
                 arrange for such IXC to issue an ASR to GTE to direct GTE to
                 route the traffic. If GTE does not receive an ASR from the IXC,
                 GTE will initially route the switched access traffic between
                 the IXC and ELI. If the IXC subsequently indicates that it does
                 not want the traffic routed to or from ELI, GTE will not route
                 the traffic to or from ELI.

                 4.3.3.1  Each Party agrees to route traffic only over the
                          proper jurisdictional trunk group.

                 4.3.3.2  Each Party shall only deliver traffic over the local
                          interconnection trunk groups to the other Party's
                          tandem or switch performing a tandem function for
                          those publicly-dialable NXX Codes served by end
                          offices that directly subtend the tandem or switch or
                          to those LECs or wireless service providers that
                          directly subtend the tandem or switch.

                 4.3.3.3  Neither Party shall route Switched Access Service
                          traffic over local interconnection trunks. Neither
                          Party shall route local traffic over Switched Access
                          Service trunks, except, and only to the extent
                          necessary, to remedy, avoid, or relieve significant
                          traffic blockage occurring on the proper
                          jurisdictional trunk group.

                                      V-6
<PAGE>

          4.3.4  ELI and GTE will reciprocally provide Percent Local Usage
                 ("PLU") factors to each other on a quarterly basis to identify
                 the proper jurisdiction of each call type that is carried over
                 the required trunks. If either Party does not provide to the
                 other Party an updated PLU, the previous PLU will be utilized.
                 The Parties agree to the initial PLU factor as set forth in
                 Appendix C.

          4.3.5  Reciprocal traffic exchange arrangement trunk connections shall
                 be made at a DS-1 or multiple DS-1 level, DS-3, (SONET where
                 technically available) and shall be jointly-engineered and
                 maintained to an objective P.01 grade of service.

          4.3.6  ELI and GTE agree to use diligent efforts to develop and agree
                 on a Joint Interconnection Grooming Plan prescribing standards
                 to ensure that the reciprocal traffic exchange arrangement
                 trunk groups are maintained at consistent P.01 or better grades
                 of service. Such plan shall also include mutually-agreed upon
                 default standards for the configuration of all segregated trunk
                 groups.

          4.3.7  Signaling System 7 ("SS7") Common Channel Signaling will be
                 used to the extent that such technology is available. If SS7 is
                 not available, Multi-Frequency Signaling ("MF") will be used as
                 specified.

          4.3.8  The Parties agree to offer and provide to each other B8ZS
                 Extended Superframe Format ("ESF") facilities, where available,
                 capable of voice and data traffic transmission.

          4.3.9  The Parties will support intercompany 64kbps clear channel
                 where available.

          4.3.10 Orders between the Parties to establish, add, change, or
                 disconnect trunks shall be processed by use of an Access
                 Service Request ("ASR"), or another industry standard
                 eventually adopted to replace the ASR for local service
                 ordering as referenced in Appendix H.

          4.3.11 The Parties will work together to establish high usage end-
                 office trunk groups sufficient to handle the greater of the
                 actual or reasonably forecasted traffic volumes between ELI and
                 a GTE end office.

     4.4  Network Redesigns Initiated by GTE.  GTE will not charge ELI when GTE
          ----------------------------------
          initiates its own network redesigns/reconfigurations, but GTE shall
          make best efforts to notify ELI of any GTE network
          redesigns/reconfigurations that will affect ELI's facilities
          sufficiently in advance to enable ELI to accommodate such network
          redesign/reconfiguration. The Parties shall coordinate deployment and

                                      V-7
<PAGE>

          accommodation of any such network redesigns/reconfigurations to avoid
          or minimize disruption in services provided to their end users.

     4.5  Calling Scopes for Tandem and End Office Interconnection.
          --------------------------------------------------------

          4.5.1  GTE Tandem Interconnection calling scope (originating and
                 terminating) is to those GTE end offices which subtend the GTE
                 tandem to which the connection is made except as provided for
                 in Section 3.3 of this Article.

          4.5.2  GTE End Office Interconnection calling scope (originating and
                 terminating) is only to the end office to which the connection
                 is made and its remotes.

     4.6  Trunk Forecasting.
          -----------------

          4.6.1  The Parties will work towards the development of joint
                 forecasting of trunk groups. GTE shall share with ELI the
                 applicable information necessary to facilitate the Parties'
                 joint planning and forecasing efforts. Intercompany forecast
                 information must be provided by the Parties to each other twice
                 a year. The semi-annual forecasts will include:

                 (1)  yearly forecasted trunk quantities for no less than a two-
                 year period (current year, plus one year); and

                 (2) the use of (i) CLCI-MSG codes, which are described in
                 Bellcore document BR 795-100-100; (ii) circuit identifier codes
                 as described in BR 795-400-100; and (iii) Trunk Group Serial
                 Number (TGSN) as described in BR 751-100-195.

          4.6.2  Description of major network projects that affect the other
                 Party will be provided with the semi-annual forecasts provided
                 pursuant to Section 4.6.1. Major network projects include but
                 are not limited to trunking or network rearrangements, shifts
                 in anticipated traffic patterns, or other activities by either
                 Party that are reflected by a significant increase or decrease
                 in trunking demand for the following forecasting period.

          4.6.3  GTE and ELI will work together to begin providing these
                 forecasts within thirty (30) days after the effective date of
                 this Agreement. New trunk groups will be implemented as
                 dictated by engineering requirements for either Party.

          4.6.4  The Parties will meet to review and reconcile their forecasts
                 if their respective forecasts differ significantly from one
                 another.

                                      V-8
<PAGE>

     4.7  Trunk Facility Underutilization.  At least once a year the Parties
          -------------------------------
          shall exchange trunk group measurement reports for trunk groups
          terminating to the other Party's network.  In addition and from time
          to time, each Party will determine the required trunks for each of the
          other Party's trunk groups from the previous 12 months servicing data.
          Required trunks will be based on an objective P.01 grade of service or
          the Joint Interconnection Grooming Plan referenced in Section 4.3.6
          above.  Likewise, from time to time trunk groups with excess capacity
          will be identified to the other Party as eligible for downsizing.  The
          Party with excess trunking capacity will assess the trunk capacity
          based on forecasted requirements for the next 12 months.  If after 12
          months the trunk group continues to have excess capacity, the Party
          agrees to take steps to disconnect all excess capacity.

5.   Indirect Network Interconnection.  The Parties agree to use their best
     --------------------------------
     efforts to establish direct interconnections for the exchange of traffic
     and to use indirect interconnection only if traffic volumes do not justify
     direct connection and both Parties subtend another LEC's tandem.  Until
     such time as compensation arrangements have been established in accordance
     with Sections 3.1 and 3.4 of this Article or the Parties mutually agree
     otherwise, ELI shall not deliver traffic destined to terminate at a GTE end
     office via another LEC's end office, and ELI shall not deliver traffic
     destined to terminate at an end office subtending a GTE tandem via another
     LEC's access tandem or switch, nor shall GTE deliver traffic destined to
     terminate at ELI's switch via another LEC's access tandem or switch.

6.   Number Resources.
     ----------------

     6.1  Number Assignment.  Nothing in this Agreement shall be construed to,
          -----------------
          in any manner, limit or otherwise adversely impact ELI's right to
          employ or to request and be assigned any NANP number resources
          including, but not limited to, Central Office (NXX) Codes pursuant to
          the Central Office Code Assignment Guidelines.  Any request for
          numbering resources by ELI shall be made directly to the NANP Number
          Plan Administrator.  Except with respect to those areas in which GTE
          is the NANP Number Plan Administrator, GTE shall not be responsible
          for the requesting or assignment of number resources to ELI.  The
          Parties agree that disputes arising from numbering assignment shall be
          arbitrated by the NANP Number Plan Administrator.  ELI shall not
          request number resources to be assigned to any GTE switching entity.

          6.1.1  Each Party shall be responsible for notifying its customers of
                 any changes in numbering or dialing arrangements to include
                 changes such as the introduction of new NPAs or new NXX codes.
                 Each Party is responsible for administering NXX codes assigned
                 to it.

     6.2  Rate Centers.  For purposes of compensation between the Parties and
          ------------
          the ability of the Parties to appropriately apply their respective
          toll rates to their end user customers, ELI shall adopt the Rate
          Center areas and Rate Center points that the

                                      V-9
<PAGE>

          Commission has approved for the incumbent LECs and shall assign whole
          NPA-NXX codes to each Rate Center. This adoption is for the sole
          purpose of compensation between the Parties and shall not limit ELI's
          ability to define local calling areas for its end user customers.

     6.3  Routing Points.  ELI will also designate a Routing Point for each
          --------------
          assigned NXX code.  ELI may designate one location within each Rate
          Center as a Routing Point for the NPA-NXX associated with that Rate
          Center; alternatively ELI may designate a single location within one
          Rate Center to serve as the Routing Point for all the NPA-NXXs
          associated with that Rate Center and with one or more other Rate
          Centers served by ELI within an existing GTE exchange area and LATA.

     6.4  Code and Numbers Administration.  The Parties will comply with code
          -------------------------------
          administration requirements as prescribed by the FCC, the Commission,
          and accepted industry guidelines.  Where GTE is the NANP Number Plan
          Administrator, GTE will administer number resources, and charge for
          such administration in accord with applicable rules and regulations.
          GTE will administer numbering resources in a nondiscriminatory and
          competitively neutral manner, and process requests for NXX codes in a
          timely manner and in accord with industry standards.  The Parties
          shall protect ELI proprietary information that may be submitted to GTE
          in connection with GTE's responsibilities as NANP Number Plan
          Administrator in accordance with Article III, Section 11 of this
          Agreement.

     6.5  Programming Switches.  It shall be the responsibility of each Party to
          --------------------
          program and update its own switches and network systems pursuant to
          the Local Exchange Routing Guide ("LERG") guidelines to recognize and
          route traffic to the other Party's assigned NXX codes at all times.
          Neither Party shall impose any fees or charges whatsoever on the other
          Party for such activities.

7.  Number Portability.
    ------------------

    7.1   General.  The Parties shall develop and deploy number portability in
          -------
          accordance with the Act and all applicable FCC, State, and Commission
          requirements and industry standards.  Upon implementation of permanent
          local number portability ("LNP"), the Parties shall transition all
          interim local number portability ("INP") customers and their services
          to LNP methods within a mutually agreeable time frame and discontinue
          further use of interim methods of number portability.

     7.2  Interim Number Portability.  Each Party shall provide the other Party
          --------------------------
          with service provider number portability as an INP option for the
          purpose of allowing end user customers to change service-providing
          Parties within the same wire center without changing their telephone
          number.  The Parties shall provide service provider number portability
          to each other using remote call forwarding ("RCF").  Either

                                     V-10
<PAGE>

          Party may request another form of INP on an individual case basis and
          subject to terms and conditions negotiated between the Parties.

     7.3  Remote Call Forwarding.  Until permanent number portability is
          ----------------------
          implemented, the Parties agree to provide service provider number
          portability using RCF to each other on a Bill-and-Keep basis.  Neither
          Party shall bill the other for nonrecurring or recurring charges for
          ported numbers, and Provider shall retain all access charge revenues
          for interexchange calls terminated to ported numbers.  After permanent
          number portability is implemented, the Parties agree to renegotiate
          compensation for number portability, if necessary, in accordance with
          the FCC's permanent number portability requirements.  Subject to the
          technical capabilities of each switch type, the Party ordering RCF may
          order a reasonable number of additional talk paths associated with the
          ported number as necessary to provide for existing service levels and
          projected growth.

8.  Meet-Point Billing for Switched Access Service.
    ----------------------------------------------

    8.1   Meet-Point Arrangements.
          -----------------------

          8.1.1  The Parties may mutually establish Meet-Point Billing ("MPB")
                 arrangements in order to provide Switched Access Services to
                 Access Service customers via a GTE tandem in accordance with
                 the MPB guidelines adopted by and contained in the Ordering and
                 Billing Forum's MECAB and MECOD documents, except as modified
                 in this Article and Section 7 of Article III.

          8.1.2  Except in instances of capacity limitations, GTE shall permit
                 and enable ELI to sub-tend the GTE access tandem(s) nearest to
                 the ELI Rating Point(s) associated with the NPA-NXX(s) to/from
                 which the Switched Access Services are homed. In instances of
                 capacity limitation at a given access tandem, ELI shall be
                 allowed to subtend the next-nearest GTE access tandem in which
                 sufficient capacity is available.

          8.1.3  Interconnection for the MPB arrangement shall occur at the
                 "IP".

          8.1.4  Common Channel Signaling shall be utilized in conjunction with
                 MPB arrangements to the extent such signaling is resident in
                 the GTE access tandem switch.

          8.1.5  ELI and GTE will use diligent efforts, individually and
                 collectively, to maintain provisions in their respective
                 federal and state access tariffs, and/or provisions within the
                 National Exchange Carrier Association ("NECA") Tariff No. 4, or
                 any successor tariff, sufficient to reflect this MPB
                 arrangement, including MPB percentages.

                                     V-11
<PAGE>

          8.1.6  As detailed in the MECAB document or other applicable
                 requirements, ELI and GTE will, in a timely fashion, exchange
                 all information necessary to accurately, reliably and promptly
                 bill Access Service customers for Switched Access Services
                 traffic jointly handled by ELI and GTE via the meet-point
                 arrangement. Information shall be exchanged in Electronic
                 Message Record ("EMR") format, on magnetic tape or via a
                 mutually acceptable electronic file transfer protocol.

          8.1.7  ELI and GTE shall work cooperatively to coordinate rendering of
                 Meet-Point bills to customers, and shall reciprocally provide
                 each other usage data and related information at the
                 appropriate charge.

     8.2  Access Compensation.
          -------------------

          8.2.1  Initially, billing to Access Service customers for the Switched
                 Access Services jointly provided by ELI and GTE via the MPB
                 arrangement shall be according to the multiple-bill method as
                 described in the MECAB guidelines. This means each Party will
                 bill the portion of service they provided at their appropriate
                 tariff, or price list.

          8.2.2  Subsequently, ELI and GTE may mutually agree to implement one
                 of the following options for billing to third parties for the
                 Switched Access Services jointly provided by ELI and GTE via
                 the MPB arrangement: single-bill/single tariff method, single-
                 bill/multiple tariff method, or to continue the multiple-bill
                 method. Should either Party prefer to change among these
                 billing methods, that Party shall notify the other Party of
                 such a request in writing, ninety (90) Business Days in advance
                 of the date on which such change is desired to be implemented.
                 Such changes then may be made in accordance with MECAB
                 guidelines and if the Parties mutually agree, the change will
                 be made.

9.  Common Channel Signaling.
    ------------------------

     9.1  Service Description.  The Parties will provide Common Channel
          -------------------
          Signaling ("CCS") to one another via Signaling System 7 ("SS7")
          network interconnection, where and as available, in the manner
          specified in FCC Order 95-187, in conjunction with all traffic
          exchange trunk groups.  SS7 signaling and transport services shall be
          provided by GTE in accordance with the terms and conditions of this
          Section 9 of this Article and Appendix I attached to this Agreement
                                        ----------
          and made a part hereof.  The Parties will cooperate on the exchange of
          all appropriate SS7 messages for local and intraLATA call set-up
          signaling, including ISUP and Transaction Capabilities Application
          Part ("TCAP") messages to facilitate full interoperability of all
          CLASS Features and functions between their respective networks.  Any
          other SS7 message services to be provided using TCAP messages (such as
          data base queries) will be jointly negotiated and agreed upon.

                                     V-12
<PAGE>

     9.2  Signaling Parameters.  All SS7 signaling parameters will be provided
          --------------------
          in conjunction with traffic exchange trunk groups, where and as
          available.  These parameters include Automatic Number Identification
          ("ANI"), Calling Party Number ("CPN"), Privacy Indicator, calling
          party category information, originating line information, charge
          number, etc.  Also included are all parameters relating to network
          signaling information, such as Carrier Information Parameter ("CIP"),
          wherever such information is needed for call routing or billing.  GTE
          will provide SS7 via GR-394-SS7 and/or GR-317-SS7 format(s).

     9.3  Privacy Indicators.  Each Party will honor all privacy indicators as
          ------------------
          required under applicable law.

     9.4  Connection Through STP.  ELI must interconnect with the GTE STP(s)
          ----------------------
          serving the LATA in which the traffic exchange trunk groups are
          interconnected.  Additionally, all interconnection to GTE's 800/888
          database and GTE's LIDB shall, consistent with this section and
          Appendix I attached hereto, take place only through appropriate STP
          ----------
          pairs.  ELI may choose a third-party SS7 signaling provider to
          transport messages to and from the GTE SS7 network.  In that event,
          that third-party provider must present a letter of agency to GTE,
          prior to the testing of the interconnection, authorizing the Third
          Party to act on behalf of ELI in transporting SS7 messages to and from
          GTE.  The third-party provider must interconnect with the GTE STP(s)
          serving the LATA in which the traffic exchange trunk groups are
          interconnected.

     9.5  Multi-Frequency Signaling.  In the case where CCS is not available, in
          -------------------------
          band Multi-Frequency ("MF"), wink start, E & M channel associated
          signaling with ANI will be provided by the Parties.  Network signaling
          information, such as CIC/OZZ, will be provided wherever such
          information is needed for call routing or billing.

10.  Service Quality and Performance.  Each Party shall provide Services under
     -------------------------------
     this Article to the other Party that are equal in quality to the Services
     that the Party provides to itself, its Affiliates or any other entity.
     "Equal in quality" shall mean that the Service will meet the same technical
     criteria and performance standards that the providing Party uses within its
     own network for the same Service at the same location under the same terms
     and conditions.

11.  Network Outages.  GTE shall work with ELI to establish reciprocal
     ---------------
     responsibilities for managing network outages and reporting.  Each Party
     shall be responsible for network outage on its network.  Each Party shall
     be responsible for notifying the other Party of significant outages which
     could impact or degrade the other Party's equipment or services.

                                     V-13
<PAGE>

                                  ARTICLE VI
                              RESALE OF SERVICES


1.   General.  The purpose of this Article VI is to define the services that may
     -------
     be purchased from GTE and resold by ELI and the terms and conditions
     applicable to such resold services ("Services").  Except as specifically
     provided otherwise in this Agreement, the Act, and FCC or Commission
     requirements, provisioning of Services for resale will be governed by the
     GTE Guide.  GTE will make available to ELI for resale any
     Telecommunications Service that GTE currently offers, or may offer
     hereafter, on a retail basis to subscribers that are not telecommunications
     carriers, except as qualified by Section 2.2 below.  If GTE provides resale
     services pursuant to a tariff that is generally available to all CLECs, ELI
     may elect to purchase resale services from such tariff in lieu of Article
     VI and Appendix E of this Agreement.  In the event ELI elects to purchase
     resale services from GTE's tariff, ELI may not purchase resale services
     pursuant to this Agreement.  During any period in which ELI is ordering
     resale services from GTE's tariff, the terms and conditions of this Article
     VI and Appendix E will not apply.

2.   Terms and Conditions.
     --------------------

     2.1  Quality and Performance.  GTE shall provide Services to ELI that are
          -----------------------
          at least equal in quality and performance standards to the same
          Services provided by GTE to its own end user customers, its
          affiliates, and to other providers using GTE Services on a resold
          basis.

     2.2  Restrictions on Resale.  This section is intentionally left blank.  At
          ----------------------
          such time as ELI desires to resell GTE services, the Parties agree to
          negotiate the terms and conditions of this section and to amend this
          Agreement accordingly.  Except as provided in Section 1 of this
          Article, ELI shall not resell GTE services until such amendment is
          effective.  This section may be superceded by the provisions in
          Article III, Section 46, and Appendices 46A and 46B.

     2.3  Restrictions on Discount of Retail Services.  This section is
          -------------------------------------------
          intentionally left blank.  At such time as ELI desires to resell GTE
          services, the Parties agree to negotiate the terms and conditions of
          this section and to amend this Agreement accordingly.  Except as
          provided in Section 1 of this Article, ELI shall not resell GTE
          services until such amendment is effective.  This section may be
          superceded by the provisions in Article III, Section 46, and
          Appendices 46A and 46B.

     2.4  Resale to Other Carriers.  Services available for resale may not be
          ------------------------
          used by ELI to provide access to the local network as an alternative
          to tariffed switched and special access by other carriers, including,
          but not limited to; interexchange carriers, wireless carriers,
          competitive access providers, or other retail telecommunications
          providers.

                                     VI-1
<PAGE>

     2.5  Interim Universal Service Fund Charge for Wholesale Services.  This
          ------------------------------------------------------------
          section is intentionally left blank.  At such time as ELI desires to
          resell GTE services, the Parties agree to negotiate the terms and
          conditions of this section and to amend this Agreement accordingly.
          Except as provided in Section 1 of this Article, ELI shall not resell
          GTE services until such amendment is effective.  This section may be
          superceded by the provisions in Article III, Section 46, and
          Appendices 46A and 46B.

3.   Ordering and Billing.
     --------------------

     3.1  Local Service Request.  Orders for resale of Services will be placed
          ---------------------
          utilizing a standard Local Service Request ("LSR") form.  GTE will
          continue to participate in industry forums for developing service
          order/disconnect order formats and will incorporate appropriate
          industry standards.  A complete and accurate LSR (containing the
          requisite end user information as described in the Guide) must be
          provided by ELI before a request can be processed.

     3.2  Certificate of Operating Authority.  Prior to placing its first order
          ----------------------------------
          for resold service, ELI must represent and warrant to GTE that it is
          a certified provider of local exchange service.  ELI will provide a
          copy of its Certificate of Operating Authority or other evidence of
          its status to GTE upon request.

     3.3  Directory Assistance Listings.  GTE shall include an ELI customer
          -----------------------------
          listing in its Directory Assistance database as part of the Local
          Service Request ("LSR") process.  GTE will honor ELI's customers'
          preferences for listing status, including non-published and unlisted,
          as noted on the LSR and will enter the listing in the GTE database
          which is used to perform Directory Assistance functions as it appears
          on the LSR.

     3.4  Nonrecurring Charges.  This section is intentionally left blank.  At
          --------------------
          such time as ELI desires to resell GTE services, the Parties agree to
          negotiate the terms and conditions of this section and to amend this
          Agreement accordingly.  Except as provided in Section 1 of this
          Article, ELI shall not resell GTE services until such amendment is
          effective.  This section may be superceded by the provisions in
          Article III, Section 46, and Appendices 46A and 46B.

     3.5  Transfers Between ELI and Another Reseller of GTE Services.  When ELI
          ----------------------------------------------------------
          has obtained an end user customer from another reseller of GTE
          services that ELI intends to serve by reselling GTE services, ELI will
          inform  GTE of the transfer by submitting a standard LSR to GTE.  When
          GTE or another reseller of GTE services has obtained an end user
          customer that ELI served by reselling GTE services, GTE shall inform
          ELI of the transfer via standard reporting processes and confirm the
          date on which the transfer takes place.

                                     VI-2
<PAGE>

     3.6  Local Calling Detail.  Except for those Services and in those areas
          --------------------
          where measured rate local service is available to end users, monthly
          billing to ELI does not include local calling detail.  However, ELI
          may request and GTE shall consider developing the capabilities to
          provide local calling detail in those areas where measured local
          service is not available for a mutually agreeable charge.

     3.7  Procedures.  An overview of the procedures for preordering, ordering,
          ----------
          provisioning and billing for resold services are outlined in Appendix
                                                                       --------
          H, attached hereto and made a part hereof.
          -

     3.8  LIDB.  For resale services, GTE's service order will generate updates
          ----
          to the  LIDB for validation of calling card, collect, and third number
          billed calls.

     3.9  "OLN". Upon request, GTE will update the database to provide
          -----
          Originating Line Number ("OLN") Screening which indicates to an
          operator the acceptable billing methods for calls originating from the
          calling number (e.g., penal institutions, COCOTS).

4.   Maintenance.
     -----------

     4.1  Maintenance, Testing and Repair.  GTE will provide repair and
          -------------------------------
          maintenance services to ELI and its end user customers for resold
          Services in accordance with the same standards and charges used for
          such services provided to GTE end user customers, affiliates, and
          other carriers reselling GTE services.  GTE will not initiate a
          maintenance call or take action in response to a trouble report from
          an ELI end user until such time as trouble is reported to GTE by ELI,
          and GTE shall refer all ELI end-users who call GTE with trouble
          reports to ELI.  ELI must provide to GTE all end user information
          necessary for the installation, repair and servicing of any facilities
          used for resold Services according to the procedures described in the
          Guide.

     4.2  Specifics and Procedures for Maintenance.  An overview of the
          ----------------------------------------
          procedures for maintenance of resold services and additional matters
          agreed to by the Parties concerning maintenance are set forth in
          Appendix H.
          ----------

5.   Services Available for Resale.
     -----------------------------

     5.1  Description of Local Exchange Services Available for Resale.  Resold
          -----------------------------------------------------------
          basic Exchange Service includes, but is not limited to, the following
          elements:

          (a) Voice Grade Local Exchange Access Line - includes a telephone
          number and dial tone.

                                     VI-3
<PAGE>

          (b) Local Calling - at local usage measured rates if applicable to the
          end user customer.

          (c) Access to long distance carriers

          (d) E-911 Emergency Dialing

          (e) Access to Service Access Codes - e.g., 800, 888, 900

          (f) Use of AIN Services (those currently available to end users)

          (g) End User Private Line Services

          (h) Listing of telephone number in appropriate "white pages"
          directory; and

          (i) Copy of "White Pages" and "Yellow Pages" directories for the
              appropriate GTE service area

          (j) IntraLATA Toll

     5.2  Other Services Available for Resale.  GTE will provide resold services
          -----------------------------------
          at retail less the avoided cost discount as defined in Section 5.3
          herein. Subject to the limitations on resale enumerated in this
          Article, the type of resold services made available to ELI are those
          telecommunication services GTE's offers to customers who are not
          telecommunications customers. Any new services that GTE offers to
          customers who are not telecommunications carriers shall also be
          available to ELI for resale under the same terms and conditions
          contained in this Agreement.

     5.3  Rates.  This section is intentionally left blank.  At such time as ELI
          -----
          desires to resell GTE services, the Parties agree to negotiate the
          terms and conditions of this section and to amend this Agreement
          accordingly.  Except as provided in Section 1 of this Article, ELI
          shall not resell GTE services until such amendment is effective.  This
          section may be superceded by the provisions in Article III, Section
          46, and Appendices 46A and 46B.

     5.4  Grandfathered Services.  Services identified in GTE Tariffs as
          ----------------------
          grandfathered in any manner are available for resale only to end user
          customers that already have such grandfathered service.  An existing
          end user customer may not move a grandfathered service to a new
          service location.

     5.5  Access.  GTE retains all switched access revenue due from other
          ------
          carriers for access to GTE facilities.

     5.6  Operator Services ("OS") and Directory Assistance ("DA").  Operator
          --------------------------------------------------------
          Services for local and toll assistance (for example, call completion,
          busy line verification

                                     VI-4
<PAGE>

          and emergency interruption) and Directory Assistance (e.g., 411 calls
          routed to GTE's DA operator centers) are provided as an element of
          Exchange Services offered for resale. GTE may brand this service as
          GTE. ELI will be billed in accordance with Appendix C.

          5.6.1  If ELI requests branding or unbranding, GTE will provide such
                 unbranding or rebranding with ELI's name pursuant to Article
                 VII, Section 12.

          5.6.2  ELI will be billed a charge for unbranding or rebranding and
                 customized routing as set forth in Article VII, Section 10.4
                 and additional charges specified in Article VII, Section 11.4.

          5.6.3  For those offices that ELI has requested GTE to rebrand and/or
                 unbrand OS and DA, GTE will provide it where GTE performs its
                 own OS and DA service subject to capability and capacity
                 limitations where customized routing is Currently Available. If
                 GTE uses a Third Party contractor to provide OS or DA, GTE will
                 not provide branding nor will GTE negotiate it with a Third
                 Party on behalf of ELI. ELI must negotiate with the Third
                 Party. In these instances ELI will need to purchase customized
                 routing and dedicated trunking to differentiate its OS/DA
                 traffic from GTE's traffic.

                                     VI-5
<PAGE>

                                  ARTICLE VII
                           UNBUNDLED NETWORK ELEMENTS

On January 25, 1999, the Supreme Court of the United States issued its decision
on the appeals of the Eighth Circuit's decision in Iowa Utilities Board.
Specifically, the Supreme Court vacated Rule 51.319 of the FCC's First Report
and Order, FCC 96-325, 61 Fed. Reg. 45476 (1996) and modified several of the
FCC's and the Eighth Circuit's rulings regarding unbundled network elements and
pricing requirements under the Act.  AT&T Corp. v. Iowa Utilities Board, No. 97-
826, 1999 U.S. LEXIS 903 (1999).  Under Section 251 (d)(2), the FCC was required
to determine what UNEs should be made available, and it listed them in the now-
vacated FCC Rule 51.319.  Thus, there is currently no determination of what, if
any, UNEs should be made available under the law, and until this determination
is made there is no legal obligation to provide any particular UNEs. Without
waiving any rights and only on an interim basis, GTE agrees to provide the UNEs
listed herein ("Old 319 UNEs") in accordance with the associated provisions in
the agreement and only upon the following interdependent terms and conditions:

Until the FCC issues new and final rules with regard to vacated Rule 51. 319
that comply with the Act ("New Rules"), GTE will provide the Old 319 UNEs listed
below even though it is not legally obligated to do so; provided, however, that
ELI agrees not to seek UNE "platforms," or "already bundled" combinations of
UNEs.

ELI agrees that after the final FCC Rules are issued, the Parties will determine
what UNEs should be included in the Agreement as required by the Act, and they
will incorporate them into the Agreement.  If the Parties cannot agree on what
UNEs are then required under the Act, either Party at any time may seek to
incorporate the appropriate UNEs under the Act into the agreement in accord
with Sections 32 and 40 of Article III, the change of law provision(s) of the
Agreement, notwithstanding anything to the contrary or the expiration of any
time periods outlined in such provision(s) or any other provision of the
Agreement.

By providing Old 319 UNEs, GTE does not waive any of its rights, including its
rights to seek recovery of its actual costs and a sufficient, explicit universal
service fund.  Nor does GTE waive its position that, under the Court's decision,
it is not required to provide Old 319 UNEs unconditionally.  Moreover, GTE does
not agree that the Old 319 UNE rates set forth below are just and reasonable and
in accordance with the requirements of sections 251 and 252 of Title 47 of the
United States Code.

The above "status quo" arrangement applies only to UNEs, UNE pricing, unbundling
and UNE platform issues.  The Parties have not determined if other provisions of
the Agreement are inconsistent with the law.  To the extent there are other
provisions in the Agreement that are inconsistent with, or impacted by the law,
including the Supreme Court's decision in Iowa Utilities Board, it is the intent
of the Parties that the Agreement should conform thereto and that the "change of
law" provisions therein may be invoked to accomplish that end.

1.   General.  The purpose of this Article VII is to define the unbundled
     -------
     network elements that may be leased by ELI from GTE.  Unless otherwise
     specified in this Agreement and to the extent not inconsistent with this
     Agreement, the Act, or state or federal law, provisioning of unbundled
     network arrangements will be governed with the GTE Customer Guide for CLEC
     Establishment of Services -- Resale and Unbundling (the

                                     VII-1
<PAGE>

     "Guide"). Additional procedures for preordering, ordering, provisioning and
     billing of unbundled network elements are outlined in Appendix H.
                                                           ----------

2.   Unbundled Network Elements.
     --------------------------

     2.1  Categories.  There are several separate categories of Network
          ----------
          Components that shall be provided as unbundled network elements by
          GTE:

          (a)  Network Interface Device or NID

          (b)  Loop Elements

          (c)  Port and Local Switching Elements

          (d)  Transport Elements

          (e)  Signaling Elements

     2.2  Prices.  The recurring and nonrecurring rates GTE shall charge ELI for
          ------
          individual unbundled network elements are set forth in Appendix F
                                                                 ----------
          attached to, and made a part of, this Agreement, or in the appropriate
          GTE tariff as referenced in this Article.

          2.2.1  Compensation for Exchange of Traffic Using Unbundled Network
                 ------------------------------------------------------------
                 Elements.  Compensation arrangements between GTE and ELI
                 --------
                 exchanging traffic when ELI uses GTE provided unbundled network
                 elements, i.e., port, local switching, and shared transport,
                 shall be as provided in Appendix L. The Parties have not
                 negotiated terms and conditions for Appendix L. At such time as
                 ELI desires to obtain unbundled ports, local switching, and
                 transport from GTE, the Parties agree to negotiate the terms
                 and conditions of Appendix L and to amend this Agreement
                 accordingly. ELI shall not obtain unbundled ports, local
                 switching and shared transport from GTE until such amendment
                 becomes effective.

     2.3  Interconnection to Unbundled Elements.  ELI may lease and interconnect
          -------------------------------------
          to any of these unbundled network elements, and subject to technical
          feasibility, may combine these unbundled elements with each other,
          with other GTE services and facilities, and/or with any facilities or
          services that ELI may itself provide subject to the provisions of this
          Article.

          2.3.1  Connection of ELI facilities to unbundled elements shall be
                 achieved via physical collocation arrangements ELI shall
                 maintain at the wire center at which the unbundled services are
                 resident. When physical collocation cannot be accommodated at
                 the wire center where the unbundled elements are resident,
                 alternative arrangements shall be negotiated between GTE

                                     VII-2
<PAGE>

                and ELI. Such arrangements may include virtual collocation. All
                reasonable incremental costs associated with the alternative
                arrangements shall be borne by ELI.

          2.3.2 GTE shall connect unbundled network elements to ELI's facilities
                at a collocation arrangement via an EIS cross connect element
                ("EISCC") as provided in GTE's federal collocation tariff. As
                part of the EISCC, GTE will provide a designated terminal block,
                or equivalent termination point, and terminate ELI's collocation
                cable facilities on the designated terminal block. The EISCC
                also provides for the cross connection to connect the unbundled
                network element to ELI's cable facilities on the designated
                terminal block. GTE has no obligation to combine any unbundled
                network elements for ELI; Provided, however, that to the extent
                that GTE may be specifically required to combine unbundled
                network elements and/or provide unbundled network elements in
                existing combinations pursuant to a final and effective decision
                that is binding on GTE, GTE will negotiate with ELI regarding
                the provisioning of such elements in accordance with that
                decision. Once GTE's unbundled network elements have been
                connected to ELI's facilities, as described in this Agreement,
                ELI is not precluded from combining the unbundled elements using
                its own facilities, except that ELI may not combine unbundled
                GTE network elements to provide solely interexchange service or
                solely access service to an interexchange carrier.

     2.4  Service Quality.  To the degree reasonably possible, all service
          ---------------
          attributes, grades-of-service and installation, maintenance and repair
          intervals which apply to the bundled service will apply to unbundled
          network elements.  GTE shall provide unbundled network elements to ELI
          that are equal in quality and performance standards to the same
          unbundled network elements GTE provides to its affiliates and other
          carriers.  Except as required by the express terms of this Agreement
          and by federal or State law, GTE shall not be responsible for impacts
          on service attributes, grades of service, etc., resulting from ELI's
          specific use of or modification to any unbundled network element.

     2.5  Nondiscrimination Provision and Support.  GTE shall provide unbundled
          ---------------------------------------
          network elements in as timely a manner as the volume of requests
          reasonably allows and consistent with the service provisioning terms
          and conditions in this Agreement and state or federal requirements.
          GTE shall provision unbundled network elements in a non-discriminatory
          manner and shall provide power to such elements on the same basis as
          GTE provides to itself, its affiliates and other carriers to whom GTE
          provides unbundled network elements.

3.  Network Interface Device.
    ------------------------

                                     VII-3
<PAGE>

     3.1  Direct Connection.  ELI must terminate any unbundled loop leased from
          -----------------
          GTE to a GTE Network Interface Device ("NID"), and GTE shall provide
          the NID in its existing combination with the unbundled loop.  ELI
          shall be permitted to connect its own loop directly to GTE's NID as
          long as such direct connection does not adversely affect GTE's
          network.  In order to minimize any such adverse effects, ELI shall
          follow the procedures in Sections 3.1.1 and 3.1.2 below.

          3.1.1  When connecting its own loop facility directly to GTE's NID for
                 a residence or business customer, ELI must make a clean cut on
                 the GTE drop wire at the NID so that no bare wire is exposed.
                 ELI shall not remove or disconnect GTE's drop wire from the NID
                 or take any other action that might cause GTE's drop wire to be
                 left lying on the ground.

          3.1.2  At multi-tenant customer locations, ELI must remove the jumper
                 wire from the distribution block (i.e. the NID) to the GTE
                 cable termination block. If ELI cannot gain access to the cable
                 termination block, ELI must make a clean cut at the closest
                 point to the cable termination block. At ELI's request and
                 discretion, GTE will determine the cable pair to be removed at
                 the NID in multi-tenant locations. ELI will compensate GTE for
                 locating the cable pair to be removed at the nonrecurring Loop
                 Facility Charge specified in Appendix F.

          3.1.3  GTE agrees to offer NIDs for lease to ELI but not for sale. ELI
                 may remove GTE identification from any NID which it connects to
                 a ELI loop, but ELI may not place its own identification on
                 such NID.

     3.2  NID to NID Connection.  ELI may install its own NID and effect a NID
          ---------------------
          to NID connection between its NID and the GTE NID to gain access to
          the end user's inside wiring.

          3.2.1  If ELI provides its own loop facilities, it may elect to move
                 all inside wire terminated on a GTE NID to an ELI NID. In this
                 instance, a NID to NID connection will not be required. ELI, or
                 the end user premise owner, can elect to leave the GTE
                 disconnected NID in place, or to remove the GTE NID from the
                 premise and dispose of it entirely.

     3.3  Removal of Cable Pairs.  Removal of existing cable pairs required for
          ----------------------
          ELI to terminate service is the responsibility of ELI.

     3.4  Maintenance.  When ELI provides its own loop and connects directly to
          -----------
          GTE's NID, GTE does not have the capability to perform remote
          maintenance.  ELI can perform routine maintenance via its loop and
          inform GTE once the trouble has been isolated to the NID and GTE will
          repair (or replace) the NID, or, at ELI's option, ELI can make a NID
          to NID connection, using the GTE NID only to gain access to the inside
          wire at the customer location.

                                     VII-4
<PAGE>

     3.5  Collocation Requirement.  When ELI purchases a GTE NID as a stand-
          -----------------------
          alone unbundled element, the collocation arrangement described in
          Section 2.3.1 of this Article is not required.

4.  Loop Elements.
    -------------

     4.1  Service Description.  A "loop" is the transmission facility (or
          -------------------
          channel or group of channels on such facility) which extends from a
          Main Distribution Frame ("MDF") or functionally comparable piece of
          equipment in a GTE end office or wire center to a demarcation or
          connector block in/at a subscriber's premises.  Traditionally, loops
          were provisioned as 2-wire or 4-wire copper pairs running from the end
          office MDF to the customer premises.  However, a loop may be provided
          via other media, including radio frequencies, as a channel on a high
          capacity feeder/distribution facility which may, in turn, be
          distributed from a node location to the subscriber premises via a
          copper or coaxial drop facility, etc.

     4.2  Categories of Loops.  GTE shall provide the following general
          -------------------
          categories of loops according to their technical configuration and
          capabilities:

          4.2.1  "2-wire analog voice grade" loops will support analog
                 transmission of 300-3000 Hz, repeat loop start or ground start
                 seizure and disconnect in one direction (toward the end office
                 switch), and repeat ringing in the other direction (toward the
                 end user). This loop is commonly used for local dial tone
                 service. Rates are as reflected in Appendix F, including non-
                 recurring charges.

          4.2.2  "4-wire analog voice grade" loops conform to the
                 characteristics of a 2-wire voice grade loop and, in addition,
                 can support the simultaneous independent transmission of
                 information in both directions. Rates are as reflected in
                 Appendix F, including non-recurring charges.

          4.2.3  "2-wire digital" loops will support industry standard
                 specifications for digital transmission. Special provisioning
                 (removal of bridge taps and/or load coils) may be required to
                 conform to these industry standards. Rates are as reflected in
                 Appendix F, including non-recurring charges.

          4.2.4  "4-wire digital" loops will support industry standard
                 specifications for digital transmission. Special provisioning
                 (removal of bridge taps and/or load coils) may be required to
                 conform to these industry standards. Rates are as reflected in
                 Appendix F, including non-recurring charges.

          4.2.5  "DS-1" loops will support a digital transmission rate of 1.544
                 Mbps. The DS-1 loop will have no bridge taps or load coils and
                 will employ special line treatment. DS-1 loops will include
                 span line repeaters where required,

                                     VII-5
<PAGE>

                 office terminating repeaters, and DSX cross connects. Prices
                 and specifications for DS-1 grade loops are the prices set
                 forth in the appropriate GTE special access tariff.

          4.2.6  "DS-3" loops will support the transmission of isochronous
                 bipolar serial data at a rate of 44.736 Mbps. This DS-3 type of
                 loop provides the equivalent of 28 DS-1 channels and shall
                 include the electronics at either end. Prices and
                 specifications for DS-3 grade loops are the prices set forth in
                 the appropriate GTE special access tariff.

     4.3  Conditioned Loops.
          -----------------

          4.3.1  ELI may also require that analog loops ordered above be
                 conditioned in order for them to provide the end-user service.
                 Examples of this type of conditioning are: Type C, Type DA,
                 Improved C, etc. The price for such conditioned loops shall be
                 the applicable charge as provided in the appropriate GTE
                 intrastate special access tariff.

          4.3.2  Digital loops ordered above shall be provisioned to meet
                 industry standard service levels for generally available
                 digital services, such as ISDN or xDSL, without the requirement
                 for ordering additional conditioning. ELI must indicate on the
                 order, via industry standard ordering codes, the service
                 capability requested. Additional charges may apply for services
                 such as deloading the cable pair or providing midspan
                 repeaters.

     4.4  Loop Testing.
          ------------

          4.4.1  GTE will not perform routine testing of the unbundled loop for
                 maintenance purposes. ELI will be required to provision a loop
                 testing device either in its central office (switch location),
                 Network Control Center or in its collocation arrangement to
                 test the unbundled loop. GTE will perform repair and
                 maintenance once trouble is identified by ELI.

          4.4.2  All loop facilities furnished by GTE on the premises of ELI's
                 end users and up to the network interface or functional
                 equivalent are the property of GTE. GTE must have access to all
                 such facilities for network management purposes. GTE employees
                 and agents may enter said premises at any reasonable hour to
                 test and inspect such facilities in connection with such
                 purposes or, upon termination or cancellation of the loop
                 facility, to remove such facility.

          4.4.3  If ELI leases digital loops to transmit specified digital
                 signals, GTE will test the loop and provide recorded test
                 results to ELI as a part of provisioning that loop. If loop
                 tests are conducted in maintenance and repair cases, GTE will
                 provide any recorded readings to ELI at the time

                                     VII-6
<PAGE>

                 the trouble ticket is closed in the same manner as GTE provides
                 to itself and its end users, affiliates, and carriers to whom
                 GTE provides loops.

     4.5  Pair Gain Technologies.  GTE cannot provide an unbundled loop that
          ----------------------
          currently is being provisioned using integrated digital loop carrier
          ("IDLC") technology or analog carrier technology.  Where GTE utilizes
          other types of pair gain technology to provision the loop element, GTE
          may be able to provide an unbundled loop, depending on the technology
          involved, but the capabilities of the loop may be limited.  If ELI
          orders an unbundled loop to a location that is normally served by pair
          gain technology and GTE cannot meet the requirements of the ordered
          loop using the pair gain technology, GTE will use alternate
          facilities, if available, to provision the loop.  If alternate
          facilities are not available, GTE will advise ELI that facilities are
          not available to provision the loop.  GTE will not construct
          additional facilities at GTE's expense to provide the loop for ELI,
          but ELI may use the bona fide request process in Article VIII of this
          Agreement to request that GTE construct additional facilities at ELI's
          expense.

          4.5.1  GTE will work with ELI to develop a joint planning process to
                 allow ELI to assess the impact of GTE's use of pair gain
                 technology in marketing ELI services that are dependent on
                 unbundled loops provided by GTE. Such a process will provide
                 general information as to the type and relative use of pair
                 gain technology in a market, as well as the capability to
                 determine on a customer specific/route specific basis if pair
                 gain technology is used to provision the loop.

          4.5.2  GTE will permit ELI to collocate digital loop carriers and
                 associated equipment in conjunction with collocation
                 arrangements ELI maintains at a GTE wire center for the purpose
                 of interconnecting to unbundled loop elements.

     4.6  Unbundled Loop Facility Certification.
          -------------------------------------

          4.6.1  Before deploying any service enhancing copper cable technology
                 (e.g., HDSL, ISDN, etc.) over unbundled analog voice grade
                 loops leased from GTE, ELI shall notify GTE of such intentions
                 to enable GTE to assess the loop transport facilities to
                 determine whether there are any existing copper cable loop
                 transport technologies (e.g., analog carrier, etc.) deployed
                 within the same cable sheath that would be interfered with if
                 ELI deployed the proposed service enhancing copper cable
                 technology. If there are existing copper cable loop transport
                 technologies already deployed within the same cable sheath, or
                 if GTE already has existing near term (within 18

______________________
/1/  See Bellcore TR-TSY-000008, Digital Interface Between the SLC-96 Digital
Loop Carrier System and Local Digital Switch and TR-TSY-000303, Integrated
Digital Loop Carrier (IDLC) Requirements, Objectives and Interface.

                                     VII-7
<PAGE>

                 months of the date of facility certification) plans to deploy
                 copper cable loop transport technologies that would be
                 interfered with as described above, GTE will so inform ELI and
                 ELI shall not be permitted to deploy such service enhancing
                 copper cable technologies. GTE, however, will work with ELI to
                 provide alternate facilities that will enable ELI to deploy
                 ELI's proposed service enhancing copper cable technology. GTE
                 will charge ELI the applicable engineering time and labor costs
                 to perform the certification.

          4.6.2  If ELI fails to notify GTE of its plans to deploy service
                 enhancing copper cable technology over unbundled analog voice
                 grade loops and obtain prior certification from GTE of the
                 facilities, if ELI's deployment of such technology is
                 determined to have caused interference with existing or planned
                 copper cable loop transport technologies deployed by GTE in the
                 same cable sheath, ELI will immediately remove such service
                 enhancing copper cable technology and shall reimburse GTE for
                 all reasonably incurred expense related to this interference.

          4.6.3  If ELI orders digital loops as specified above and provides the
                 industry standard codes on the order indicating the type of
                 service to be deployed on the loop, no notification is
                 required. GTE will determine if compatibility issues exist and,
                 if facilities are available, will provide a loop capable of
                 meeting the requested service capabilities.

     4.7  Compatibility.  Provided ELI has notified GTE, pursuant to section 4.6
          -------------
          above, of the service enhancing copper cable technology deployed on an
          unbundled loop, GTE will not deploy service enhancing copper cable
          technology within the same cable sheath that will be incompatible with
          ELI's technology.

     4.8  Subloops.
          --------

          4.8.1  GTE will provide as separate items the loop distribution, loop
                 concentrator and loop feeder on a case-by-case basis pursuant
                 to a Bona Fide Request ("BFR").

          4.8.2  GTE will design and construct loop access facilities (including
                 loop feeders and loop concentration/multiplexing systems) in
                 accordance with standard industry practices as reflected in
                 applicable tariffs and/or as agreed to by GTE and ELI.

          4.8.3  Transport for loop concentrators/multiplexers services not
                 supported by embedded technologies will be provided pursuant to
                 applicable tariffs or as individually agreed upon by GTE and
                 ELI. The Parties understand that embedded loop
                 concentrators/multiplexers are not necessarily capable of
                 providing advanced and/or digital services.

                                     VII-8
<PAGE>

          4.8.4  GTE will provide loop transmission characteristics as specified
                 in Section 4.4.3 of this Article.

     4.9  Loop Identification.  At a multi-tenant location, GTE will identify
          -------------------
          the cable pair, at the cable termination block or at the distribution
          block (NID), used to provide the unbundled loop.  If the cable pair is
          not properly marked, GTE will take the necessary steps to identify the
          cable pair at no additional charge to ELI.

5.   Port and Local Switching Elements.
     ---------------------------------

     5.1  Port.  A "port" provides for the interconnection of individual loops
          ----
          or trunks to the switching components of GTE's network.  In general,
          it is a line card or trunk card and associated peripheral equipment on
          GTE end office switch that serves as the hardware termination for the
          end user's Exchange Service on that switch and generates dial tone and
          provides the end user access to the public switched telecommunications
          network.  The port does not include such features and functions which
          are provided as part of Local Switching.  Each line-side port is
          typically associated with one (or more) telephone number(s), which
          serve as the end user's network address.

     5.2  Ports Available as Unbundled Network Elements.  There are four types
          ---------------------------------------------
          of ports available as unbundled network elements;

          5.2.1  "2-wire analog line" port is a line side switch connection
                 employed to provide basic residential and business type
                 Exchange Service.

          5.2.2  "2-wire ISDN digital line" port is a Basic Rate Interface
                 ("BRI") line side switch connection employed to provide ISDN
                 Exchange Services.

          5.2.3  "DS-1 digital trunk" port is a trunk side switch connection
                 employed to provide the equivalent of 24 analog incoming trunk
                 type Exchange Services, such as direct inward dialing ("DID").

          5.2.4  "4-wire ISDN digital DS-1 trunk" port is a Primary Rate
                 Interface ("PRI") trunk side switch connection employed to
                 provide the ISDN Exchange Services.

     5.3  Port Prices.  Prices for ports are listed in Appendix F.
          -----------                                  ----------

     5.4  Local Switching.  "Local switching" provides the basic switching
          ---------------
          functions to originate, route and terminate traffic and any signaling
          deployed in the switch.  Vertical features are optional services
          provided through software programming in the switch which can be added
          on a per-feature basis with applicable rate.  GTE will offer only
          those features and functions currently available to the particular
          platform used (e.g., DMS, 5ESS, GTD5).  Any feature or function which
          is not

                                     VII-9
<PAGE>

          available, but the switch is capable of providing, may be requested
          via the BFR process. ELI will be responsible for bearing any costs
          incurred by GTE in making such feature/function available, including
          Right-to-Use ("RTU") fees. The rates for local switching and vertical
          features are listed in Appendix F.
                                 ----------

          5.4.1  ELI must purchase local switching with the line-side port or
                 trunk-side port, if applicable, and GTE shall provide the local
                 switching in its existing combination with the applicable port.

     5.5  Compliance with Section 2.3.  ELI shall only order unbundled elements
          ---------------------------
          in accordance with Section 2.3 herein and it will be the
          responsibility of ELI to make arrangements for the delivery of
          interexchange traffic and routing of traffic over interoffice
          transmission facilities, if applicable.

     5.6  Shared Transport.  "Shared transport" is the physical interoffice
          ----------------
          facility medium that is used to transport a call between switching
          offices.  A central office switch translates the end user dialed
          digits and routes the call over a Common Transport Trunk Group that
          rides interoffice transmission facilities.  These trunk groups and the
          associated interoffice transmission facilities are accessible by any
          end user (GTE end user or CLEC end user when the CLEC has purchased
          unbundled local switching) and are referred to as "shared transport
          facilities."

          5.6.1  Many calls riding shared transport facilities will also be
                 switched by GTE's access tandem. This tandem switching function
                 is included as a rate component of shared transport, as set
                 forth in Appendix D. GTE will provide shared transport from a
                 call originating from an unbundled switch port to the point
                 where the call leaves GTE's network (the IP).

          5.6.2  When ELI purchases unbundled local switching, ELI is obligated
                 to purchase unbundled shared transport. All of the billing
                 elements associated with shared transport are billed upon call
                 origination, unless the call involves an IXC.

          5.6.3  The rating of shared transport is based on the duration of a
                 voice grade (or DS-0) call on GTE's network. Shared transport
                 is comprised of three billing components: (1) Shared Transport
                 - Facility Miles (usage and distance sensitive); (2) Shared
                 Transport - Termination (per end, usage sensitive); and (3)
                 Tandem Switching (usage sensitive). Until an industry standard
                 solution is implemented for generating AMA recordings that
                 indentify tandem routed calls, the parties will use a shared
                 transport composite rate using the tandem switching rate, two
                 (2) terminations, and an assumed facility miles length of ten
                 (10) miles. This interim methodology will be used in lieu of
                 actual detailed AMA recordings and bill generation.

                                    VII-10
<PAGE>

          5.6.4  GTE is responsible for the sizing of the shared transport
                 network. All analysis, engineering, and trunk augmentations to
                 Common Transport Trunk Groups will be the sole responsibility
                 of GTE. To ensure that the network is appropriately sized, GTE
                 may request traffic forecasts from ELI if ELI requests
                 unbundled local switching. These forecasts must be provided to
                 GTE on a quarterly basis, with a twelve (12) month outlook.

          5.6.5  GTE provides shared transport between GTE switching offices
                 (e.g., between GTE end offices, a GTE end office and a GTE
                 tandem switch, between a GTE end office and the IP of a
                 connecting telecommunications company, or between a tandem
                 switch and the IP of a connecting telecommunications company).
                 However, the transport between a GTE switching office and the
                 ELI switching office must be purchased as dedicated transport
                 and is not provided as shared transport.

6.   Dedicated Transport.
     -------------------

     6.1  Dedicated transport is purchased for the purpose of transporting
          Telecommunications Services between designated serving wire centers
          ("SWCs") within the same LATA.  Dedicated transport may extend between
          two GTE SWCs ("Interoffice Dedicated Transport" or "IDT") or may
          extend from the GTE SWC to the ELI premise ("CLEC Dedicated Transport"
          or "CDT").  CDT remains within the exchange boundaries of the SWC,
          while IDT traverses exchange boundaries.  IDT and CDT are further
          defined in Sections 6.2 and 6.3 below.

     6.2  CDT is the dedicated transport facility connecting the GTE SWC to
          ELI's Customer Designated Location ("CDL").  The CDL will be
          designated where the CLEC's physical network begins (the CDL cannot be
          designated at an end user customer location).

     6.3  CDT includes the equipment required to terminate the interoffice
          facility within ELI's CDLs and within the GTE SWC.  This element also
          includes the transport facility between the two locations but extends
          no farther into GTE's network than the CDL's SWC.  CDT has no
          switching components and is available in bandwidth increments of DS0,
          DS1, or DS3 at rates outlined in Appendix F.

     6.4  CDT consists of monthly recurring (non-usage sensitive) billable
          elements that are dependent on bandwidth, but may vary depending on
          the termination arrangement at the CDL (Office Terminating Repeater
          vs. SONET terminal, first system vs. additional system, etc.).

     6.5  IDT is the dedicated transport facility connecting two GTE SWCs and
          excludes the facilities between the SWC and the CDL.  IDT has no
          switching components and is available in bandwidth increments of DS0,
          DS1, and DS3 at rates outlined in Appendix F.

                                    VII-11

<PAGE>

     6.6  The price of IDT varies with the bandwidth and consists of monthly
          recurring (non-usage sensitive) billable elements.  The components are
          Transport Facility Miles (monthly recurring) and Transport Termination
          (per end, monthly recurring).

7.   SS7 Transport and Signaling.  SS7 signaling and transport services in
     ---------------------------
     support of ELI's local exchange services shall be provided in accordance
     with the terms and conditions of Appendix I attached to, and made a part
     of, this Agreement.

     7.1  GTE will provide interconnection with its SS7 at the STPs but not at
          other points.

8.   LIDB Services.  Access to GTE's LIDB shall be provided in accordance with
     -------------
     the rates, terms and conditions of GTE's switched access tariff, GTOC
     Tariff FCC No. 1, Section 8.

9.   Database 800-Type Services.  Access to GTE's 800-Type database (i.e., 888,
     --------------------------
     877) shall be provided in accordance with the rates, terms and conditions
     of GTE's switched access tariff, GTOC Tariff FCC No. 1, Section 8.

10.  Operator Services ("OS") and Directory Assistance ("DA").  GTE will provide
     --------------------------------------------------------
     OS and DA to ELI in accordance with the terms set forth as follows:

     10.1  When OS and/or DA is to be provided for calls that originate from
           ELI's switch, GTE will provide branded or unbranded OS and/or DA
           pursuant to separate contracts to be negotiated in good faith between
           the Parties after execution and approval of this Agreement by the
           Commission.

     10.2  When OS and/or DA is to be provided for calls that originate from an
           unbundled port with local switching under this Article and neither
           branding nor unbranding is requested, ELI's calls will access GTE's
           OS and/or DA platform and will be processed in the same manner as GTE
           calls.

     10.3  When OS and/or DA is to be provided for calls that originate from an
           unbundled port and local switching under this Article and either
           branding or unbranding is requested, GTE will provide such unbranding
           or rebranding on a switch-by-switch basis, subject to capability and
           capacity limitations. When technically capable of doing so, GTE shall
           implement an order for unbranding or rebranding within 90 Business
           Days of receipt of that order.

     10.4  To the extent authorized by the FCC and the Commission, ELI will be
           billed charges for OS and DA and a charge for unbranding or
           rebranding and Customized Routing as set forth in Section 11.2. In
           addition, charges specified in Section 11.4 will apply.

                                    VII-12
<PAGE>

     10.5  For those offices that ELI has requested GTE to rebrand and/or
           unbrand OS and DA, GTE will provide it where GTE provides its own OS
           and DA service subject to capability and capacity limitations where
           Customized Routing is currently available. If GTE uses a Third Party
           contractor to provide OS or DA, GTE will not provide branding nor
           will GTE negotiate it with a Third Party on behalf of ELI. ELI must
           negotiate with the Third Party. In these instances, ELI will need to
           purchase customized routing to differentiate its OS/DA traffic from
           GTE's traffic.

11.  Customized Routing.  Where technically feasible and upon receipt of written
     ------------------
     request from ELI, GTE agrees to provide customized routing for the
     following types of calls:

                          0-
                          0+Local
                          0+411
                          1+411
                          0+HNPA-555-1212 (intraLATA, only when intraLATA
                          presubscription is not available)
                          1+HNPA-555-1212 (intraLATA, only when intraLATA
                          presubscription is not available)

          11.1.1  GTE will provide ELI a list of switches that can provide
                  customized routing using line class codes or similar method
                  (regardless of current capacity limitations). ELI will return
                  a list of these switches ranked in priority order. GTE will
                  return to ELI a schedule for customized routing in the
                  switches with existing capabilities and capacity.

          11.1.2  Upon written request from ELI, GTE will provide ELI with
                  applicable charges, and terms and conditions, for providing OS
                  and DA, branding, and Customized Routing.

          11.1.3  Subject to the above provisions, GTE will choose the method of
                  implementing customized routing of OS and DA calls.

          11.1.4  The use of customized routing will require the purchase of a
                  trunk side port and dedicated facilities between the GTE end
                  office and the designated OS/DA platform. The rates for these
                  elements will be billed in accordance with Appendix F.
                                                             ----------


12.  Advanced Intelligent Network Access ("AIN").  GTE will provide ELI access
     -------------------------------------------
     to GTE AIN functionality from GTE's AIN SCP via GTE's local switch or ELI's
     local switch.

13.  Directory Assistance Listing.  When ELI orders an unbundled port, ELI has
     ----------------------------
     the option to submit a Directory Service Request ("DSR") to have the
     listing included in GTE's

                                    VII-13
<PAGE>

     Directory Assistance database. The applicable ordering charge will be
     applied for processing the DSR.

14.  Operational Support Systems ("OSS").  GTE shall provide OSS functions to
     -----------------------------------
     ELI for preordering, ordering, provisioning, and billing that are generally
     available as described in Appendix H.

                                    VII-14
<PAGE>

                                  ARTICLE VIII
            ADDITIONAL SERVICES AND COORDINATED SERVICE ARRANGEMENTS


1.   Bona Fide Request Process.
     -------------------------

     1.1  Intent.  The Bona Fide Request process is intended to be used when ELI
          ------
          requests customized Service Orders for certain services, features,
          capabilities or functionality defined and agreed upon by the Parties
          as services to be ordered as Bona Fide Requests.

     1.2  Process.
          -------

          1.2.1  A Bona Fide Request shall be submitted in writing by ELI and
                 shall specifically identify the need to include technical
                 requirements, space requirements and/or other such
                 specifications that clearly define the request such that GTE
                 has sufficient information to analyze and prepare a response.

          1.2.2  Although not expected to do so, ELI may cancel a Bona Fide
                 Request in writing at any time prior to ELI and GTE agreeing to
                 price and availability. GTE will then cease analysis of the
                 request.

          1.2.3  Within two (2) Business Days of its receipt, GTE shall
                 acknowledge in writing the receipt of the Bona Fide Request and
                 identify a single point of contact and any additional
                 information needed to process the request.

          1.2.4  Except under extraordinary circumstances, within ten (10)
                 Business Days of its receipt of a Bona Fide Request, GTE shall
                 provide a proposed price and availability date, or it will
                 provide an explanation as to why GTE elects not to meet ELI's
                 request. If extraordinary circumstances prevail, GTE will
                 inform ELI as soon as it realizes that it cannot meet the ten
                 (10) Business Day response due date. ELI and GTE will then
                 determine a mutually agreeable date for receipt of the request.

          1.2.5  Unless ELI agrees otherwise, all proposed prices shall be
                 consistent with the pricing principles of the Act, FCC and/or
                 the Commission. Payments for services purchased under a Bona
                 Fide Request will be made upon delivery, unless otherwise
                 agreed to by ELI, in accordance with the applicable provisions
                 of the Agreement.

          1.2.6  Upon affirmative response from GTE, ELI will submit in writing
                 its acceptance or rejection of GTE's proposal. If at any time
                 an agreement cannot be reached as to the terms and conditions
                 or price of the request

                                    VIII-1
<PAGE>

               GTE agrees to meet, the Dispute resolution procedures described
               in Article III hereunder may be used by a Party to reach a
               resolution.

2.   Transfer of Service Announcements.  For services other than GTE resold and
     ---------------------------------
     ported number services, when an end user customer transfers service from
     one Party to the other Party, and does not retain its original telephone
     number, the Party formerly providing service to the end user will provide,
     upon request and if such service is provided to its own customers, a
     referral announcement on the original telephone number.  This announcement
     will provide the new number of the customer and will remain in effect for
     the same time period this service is provided to GTE's own end users.  For
     GTE resold and ported number services, GTE shall provide an intercept
     referral on behalf of ELI.

3.   Misdirected Calls.  The Parties will employ the following procedures for
     -----------------
     handling any misdirected calls (e.g., Business office, repair bureau,
     etc.).

     3.1  To the extent the correct provider can be determined, each Party will
          refer misdirected calls to the proper provider of local exchange
          service.  When referring such calls, both Parties agree to do so in a
          courteous manner, at no charge.

     3.2  For misdirected repair calls, the Parties will provide their
          respective repair bureau contact number to each other on a reciprocal
          basis and provide the end user the correct contact number.

     3.3  In responding to misdirected calls, neither Party shall make
          disparaging remarks about each other, nor shall they use these calls
          as a basis for internal referrals or to solicit end users or to market
          services.

4.   911/E911 Arrangements.
     ---------------------

     4.1  Description of Service.  ELI will install a minimum of two (2)
          ----------------------
          dedicated trunks to GTE's 911/E911 selective routers (i.e., 911 tandem
          offices) that serve the areas in which ELI provides Exchange Services,
          for the provision of 911/E911 services and for access to all
          subtending PSAPs.  The dedicated trunks shall be, at a minimum, DS-0
          level trunks configured as a 2-wire analog interface or as part of a
          digital (1.544 Mbps) interface in which all circuits are dedicated to
          9-1-1 traffic.  Either configuration shall use CAMA type signaling
          with multifrequency ("MF") tones that will deliver ANI with the voice
          portion of the call.  GTE will provide ELI with the appropriate CLLI
          codes and specifications of the tandem office serving area or the
          location of the primary PSAP when there is no 911 routing in that 911
          district.  If an ELI central office serves end users in an area served
          by more than one (1) GTE 911/E911 selective router, ELI will install a
          minimum of two (2) dedicated trunks in accordance with this Section to
          each of such 911/E911 selective routers or primary PSAP.

                                    VIII-2
<PAGE>

     4.2  Transport.  If ELI desires to obtain transport from GTE to the GTE 911
          ---------
          selective routers, ELI may purchase such transport from GTE at the
          rates set forth in Appendix G.

     4.3  Cooperation and Level of Performance.  The Parties agree to provide
          ------------------------------------
          access to 911 /E911 in a manner that is transparent to the end user.
          The Parties will work together to facilitate the prompt, reliable and
          efficient interconnection of ELI's systems to the 911/E911 platforms,
          with a level of performance that will provide the same grade of
          service as that which GTE provides to its own end users.  To this end,
          GTE will provide documentation to ELI showing the correlation of its
          rate centers to its E911 tandems at rates set forth in Appendix G.

     4.4  Basic 911 and E911 General Requirements:
          ---------------------------------------

          4.4.1  Basic 911 and E911 provides a caller access to the appropriate
                 emergency service bureau by dialing a 3-digit universal
                 telephone number (911).

          4.4.2  Where GTE has a 911 selective router installed in the network
                 serving the 911 district, GTE shall use subscriber data derived
                 from the Automatic Location Identification/Database Management
                 System (ALI/DMS) to selectively route the 911 call to the
                 Public Safety Answering Point (PSAP) responsible for the
                 caller's location.

          4.4.3  All requirements for E911 also apply to the use of SS7 as a
                 type of signaling used on the interconnection trunks from the
                 local switch to an end office or a selective router.

          4.4.4  Basic 911 and E911 functions provided to ELI shall be at least
                 at parity with the support and services that GTE provides to
                 its subscribers for such similar functionality.

          4.4.5  Basic 911 and E911 access from Local Switching shall be
                 provided to ELI in accordance with the following:

                 4.4.5.1  GTE and ELI shall conform to all state regulations
                          concerning emergency services.

               4.4.5.2    For E911, both ELI and GTE shall use their respective
                          service order processes to update access line
                          subscriber data for transmission to the database
                          management systems. Validation will be done via MSAG
                          comparison listed in Section 4.4.5.5.

               4.4.5.3    If legally required by the appropriate jurisdiction,
                          GTE shall provide or overflow 911 traffic to be routed
                          to GTE Operator

                                     VIII-3
<PAGE>

                     Services or, at ELI's discretion, directly to ELI Operator
                     Services.

          4.4.5.4    Basic 911 and E911 access from the ELI local switch shall
                     be provided from GTE to ELI in accordance with the
                     following:

                     4.4.5.4.1  If required by ELI and technically feasible, GTE
                                shall interconnect direct trunks from the ELI
                                network to the E911 PSAP, or to the E911
                                selective routers as designated by ELI. Such
                                trunks may alternatively be provided by ELI.

                     4.4.5.4.2  In government jurisdictions where GTE has
                                obligations under existing Agreements as the
                                primary provider of the 911 System to the county
                                (i.e., "lead telco"), ELI shall participate in
                                the provision of the 911 System as follows:

                                4.4.5.4.2.1  Each Party shall be responsible for
                                             those portions of the 911 System
                                             for which it has control, including
                                             any necessary maintenance to each
                                             Party's portion of the 911 System.

                                4.4.5.4.2.2  ELI and GTE recognize that the lead
                                             telco in a 911 district has the
                                             responsibility of maintaining the
                                             ALI database for that district.
                                             Each company will provide its
                                             access line subscriber records to
                                             the database organization of that
                                             lead telco. ELI and GTE will be
                                             responsible for correcting errors
                                             when notified by either the 911
                                             district or its customer, and then
                                             submitting the corrections to the
                                             lead telco. Lead telco database
                                             responsibilities are covered in
                                             Section 4.4.5.5 of this Article.

                                4.4.5.4.2.3  ELI shall have the right to verify
                                             the accuracy of information
                                             regarding ELI customers in the ALI
                                             database using methods and
                                             procedures mutually agreed to by
                                             the Parties. The fee for this
                                             service shall be determined based
                                             upon the agreed upon solution.

                                    VIII-4
<PAGE>

                     4.4.5.4.3  If a Third Party is the primary service provider
                                to a 911 district, ELI shall negotiate
                                separately with such Third Party with regard to
                                the provision of 911 service to the agency. All
                                relations between such Third Party and ELI are
                                totally separate from this Agreement and GTE
                                makes no representations on behalf of the Third
                                Party.

                     4.4.5.4.4  If ELI or Affiliate is the primary service
                                provider to a 911 district, ELI and GTE shall
                                negotiate the specific provisions necessary for
                                providing 911 service to the agency and shall
                                include such provisions in an amendment to this
                                Agreement.

                     4.4.5.4.5  Interconnection and database access shall be at
                                rates as set forth in Appendix G.

                     4.4.5.4.6  GTE shall comply with established, competitively
                                neutral intervals for installation of
                                facilities, including any collocation
                                facilities, diversity requirements, etc.

                     4.4.5.4.7  In a resale situation, where it may be
                                appropriate for GTE to update the ALI database,
                                GTE shall update such database with ELI data in
                                an interval no less than is experienced by GTE
                                subscribers, or than for other carriers,
                                whichever is faster, at no additional cost.

            4.4.5.5  The following are Basic 911 and E911 Database Requirements:

                     4.4.5.5.1  The ALI database shall be managed by GTE, but is
                                the property of GTE and any participating LEC or
                                CLEC which provides their records to GTE.

                     4.4.5.5.2  Copies of the MSAG shall be provided within five
                                (5) business days after the date the request is
                                received and provided on diskette or paper copy
                                at the rates set forth in Appendix G.

                     4.4.5.5.3  ELI shall be solely responsible for providing
                                ELI database records to GTE for inclusion in
                                GTE's ALI database on a timely basis.

                     4.4.5.5.4  GTE and ELI shall arrange for the automated
                                input and periodic updating of the E911 database
                                information

                                    VIII-5
<PAGE>

                                related to ELI end users. GTE shall work
                                cooperatively with ELI to ensure the accuracy of
                                the data transfer by verifying it against the
                                Master Street Address Guide ("MSAG"). GTE shall
                                accept electronically transmitted files or
                                magnetic tape that conform to National Emergency
                                Number Association ("NENA") Version #2 format.

                     4.4.5.5.5  ELI shall assign an E911 database coordinator
                                charged with the responsibility of forwarding
                                ELI end user ALI record information to GTE or
                                via a third-party entity, charged with the
                                responsibility of ALI record transfer. ELI
                                assumes all responsibility for the accuracy of
                                the data that ELI provides to GTE.

                     4.4.5.5.6  GTE shall update the database within one (1)
                                business day of receiving the data from ELI. If
                                GTE detects an error in the ELI provided data,
                                the data shall be returned to ELI within one day
                                from when it was provided to GTE. ELI shall
                                respond to requests from GTE to make corrections
                                to database record errors by uploading corrected
                                records within one day. Manual entry shall be
                                allowed only in the event that the system is not
                                functioning properly.

                     4.4.5.5.7  GTE agrees to treat all data on ELI subscribers
                                provided under this Agreement as strictly
                                confidential and to use data on ELI subscribers
                                only for the purpose of providing E911 services.

                     4.4.5.5.8  GTE shall adopt use of a Carrier Code (NENA
                                standard five-character field) on all ALI
                                records received from ELI. The Carrier Code will
                                be used to identify the carrier of record in NP
                                configurations. The NENA Carrier Code for ELI is
                                "ELI"; the NENA Carrier Code for GTE is "GTE."

         4.4.5.6  GTE and ELI will comply with the following requirements for
                  network performance, maintenance and trouble notification.

                     4.4.5.6.1  Equipment and circuits used for 911 shall be
                                monitored at all times. Monitoring of circuits
                                shall be done to the individual trunk level.
                                Monitoring shall be conducted by GTE for trunks
                                between the selective router and all associated
                                PSAPs.

                                    VIII-6
<PAGE>

                     4.4.5.6.2  Repair service shall begin immediately upon
                                report of a malfunction. Repair service includes
                                testing and diagnostic service from a remote
                                location, dispatch of or in-person visit(s) of
                                personnel. Where an on-site technician is
                                determined to be required, a technician will be
                                dispatched without delay.

                     4.4.5.6.3  GTE shall notify ELI forty-eight (48) hours in
                                advance of any scheduled testing or maintenance
                                affecting ELI 911 service. GTE shall provide
                                notification as soon as possible of any
                                unscheduled outage affecting ELI 911 service.

                     4.4.5.6.4  All 911 trunks must be capable of transporting
                                Baudot Code necessary to support the use of
                                Telecommunications Devices for the Deaf
                                ("TTY/TDDs").

            4.4.5.7  Basic 911 and E911 Additional Requirements

                     4.4.5.7.1  All ELI lines that have been ported via INP
                                shall reach the correct PSAP when 911 is dialed.
                                Where GTE is the lead telco and provides the
                                ALI, the ALI record will contain both the ELI
                                number and GTE ported number. The PSAP attendant
                                shall see both numbers where the PSAP is using a
                                standard ALI display screen and the PSAP
                                extracts both numbers from the data that is
                                sent. GTE shall cooperate with ELI to ensure
                                that 911 service is fully available to all ELI
                                end users whose telephone numbers have been
                                ported from GTE, consistent with State
                                provisions.

                     4.4.5.7.2  ELI and GTE shall be responsible for reporting
                                all errors, defects and malfunctions to one
                                another. GTE and ELI shall provide each other
                                with a point of contact for reporting errors,
                                defects, and malfunctions in the service and
                                shall also provide escalation contacts.

                     4.4.5.7.3  ELI may enter into subcontracts with third
                                parties, including ELI Affiliates, for the
                                performance of any of ELI's duties and
                                obligations stated herein.

                                    VIII-7
<PAGE>

                     4.4.5.7.4  Where GTE is the lead telco, GTE shall provide
                                ELI with notification of any pending selective
                                router moves within at least ninety (90) days in
                                advance.

                     4.4.5.7.5  Where GTE is the lead telco, GTE shall establish
                                a process for the management of NPA splits by
                                populating the ALI database with the appropriate
                                new NPA codes.

                     4.4.5.7.6  Where GTE is the lead telco, GTE shall provide
                                the ability for ELI to update 911 database with
                                end user information for lines that have been
                                ported via INP or LNP.

     4.4.6  Basic 911 and E911 Information Exchanges and interfaces. Where GTE
            is the lead telco:

            4.4.6.1  GTE shall provide ELI access to the ALI Gateway which
                     interfaces to the ALI/DMS database.  GTE shall provide
                     error reports from the ALI/DMS database to ELI within one
                     (1) day after ELI inputs information into the ALI/DMS
                     database.  Alternately, ELI may utilize GTE or a Third
                     Party entity to enter subscriber information into the
                     database on a demand basis, and validate subscriber
                     information on a demand basis.  The rates are set forth in
                     Appendix G.

            4.4.6.2  GTE and ELI shall arrange for the automated input and
                     periodic updating of the E911 database information related
                     to ELI end users. GTE shall work cooperatively with ELI to
                     ensure the accuracy of the data transfer by verifying it
                     against the Master Street Address Guide ("MSAG"). GTE shall
                     accept electronically transmitted files or magnetic tape
                     that conform to National Emergency Number Association
                     ("NENA") Version #2 format.

            4.4.6.3  Updates to MSAG. Upon receipt of an error recording an ELI
                     subscriber's address from GTE, and where GTE is the lead
                     telco, it shall be the responsibility of ELI to ensure that
                     the address of each of its end users is included in the
                     Master Street Address Guide ("MSAG") via information
                     provided on ELI's Local Service Request ("LSR") or via a
                     separate feed established by ELI pursuant to Section
                     4.4.5.7 of this Article.

            4.4.6.4  The ALI database shall be managed by GTE, but is the
                     property of GTE and all participating telephone companies.
                     The interface

                                    VIII-8
<PAGE>

                         between the E911 Switch or Tandem and the ALI/DMS
                         database for ELI subscriber shall meet industry
                         standards.

     4.5  Compensation.  In situations in which GTE is responsible for
          ------------
          maintenance of the 911 /E911 database and can be compensated for
          maintaining ELI's information by the municipality, GTE will seek such
          compensation from the municipality.  GTE will seek compensation from
          ELI only if and to the extent that GTE is unable to obtain such
          compensation from the municipality.  GTE shall charge ELI a portion of
          the cost of the shared 911 /E911 selective router as set forth in
          Appendix G.

5.   Information Services Traffic.
     ----------------------------

     5.1  Billing and Collection and Information Service Traffic Remuneration.
          -------------------------------------------------------------------

          5.1.1  In the event GTE performs switching of Information Service
                 Traffic (i.e., 900-976, Internet, weather lines, sports
                 providers, etc.) associated with resale or unbundled network
                 elements for ELI, GTE shall provide to ELI the same call detail
                 records that GTE records for its own end users so as to allow
                 ELI to bill its end users. GTE shall not be responsible or
                 liable to ELI or any Information Service Provider for Billing
                 and Collection and/or any receivables of Information Service
                 Providers.

          5.1.2  Notwithstanding and in addition to Article III, Section 24, GTE
                 shall be indemnified and held harmless by ELI from and against
                 any and all suits, actions, losses, damages, claims, or
                 liability of any character, type, or description, including all
                 expenses of litigation and court cost which may arise as a
                 result of the provisions contained in Section 5.1.1 supra. The
                 indemnity contained in this section shall survive the
                 termination of this Agreement, for whatever reason.

          5.1.3  GTE agrees to notify ELI in writing within ten (10) working
                 days, by registered or certified mail, of any claim made
                 against GTE on the obligations indemnified against pursuant to
                 this Section 5.

          5.1.4  It is understood and agreed that the indemnity provided for in
                 this Section 5 is to be interpreted and enforced so as to
                 provide indemnification of liability to GTE to the fullest
                 extent now or hereafter permitted by law.

     5.2  900-976 Call Blocking.  GTE shall not unilaterally block 900-976
          ---------------------
          traffic in which GTE performs switching associated with resale or
          unbundled network elements.  GTE will block 900-976 traffic when
          requested to do so, in writing, by ELI.  ELI shall be responsible for
          all cost associated with the 900-976 call blocking request.  GTE
          reserves the right to block any and all calls which may harm or damage
          its network.

                                    VIII-9
<PAGE>

     5.3  Miscellaneous.  GTE reserves the right to provide to any Information
          -------------
               Service Provider a list of any and all Telecommunications
               Providers doing business with GTE.

6.   Telephone Relay Service.  Local and intraLATA Telephone Relay Service
     -----------------------
     ("TRS") enables deaf, hearing-impaired, or speech-impaired TRS users to
     reach other telephone users.  With respect to resold services, ELI's end
     users will have access to the state authorized TRS provider to the extent
     required by the Commission, including any applicable compensation
     surcharges.

7.   Directory Assistance (DA) and Operator Services (OS).  Where ELI is
     ----------------------------------------------------
     providing local service with its own switch, upon ELI's request GTE will
     provide to ELI rebranded or unbranded directory assistance services and/or
     operator services pursuant to separate contracts to be negotiated in good
     faith between the Parties.  If ELI so requests directory assistance
     services and/or operator services, such contracts shall provide for the
     following:

     7.1  Directory Assistance Calls. GTE directory assistance centers shall
          --------------------------
          provide number and addresses to ELI end users in the same manner that
          number and addresses are provided to GTE end users.  If information is
          provided by an automated response unit ("ARU"), such information shall
          be repeated twice in the same manner in which it is provided to GTE
          end users.  Where available, GTE will provide call completion to ELI
          end users in the same manner that call completion is provided to GTE
          end users.  GTE will provide its existing services to ELI end users
          consistent with the service provided to GTE end users.

     7.2  Operator Services Calls.  GTE operator services provided to ELI end
          -----------------------
          users shall be provided in the same manner GTE operator services are
          provided to GTE end users.  In accordance with GTE practices and at
          GTE rates, GTE will offer to ELI end users collect, person-to-person,
          station-to-station calling, Third Party billing, emergency call
          assistance, calling card services, credit for calls, time and charges,
          notification of the length of call, and real time rating.  GTE
          operators shall also have the ability to quote ELI rates upon request
          but only if there is appropriate cost recovery to GTE and to the
          extent it can be provided within the technical limitations of GTE's
          switches.  GTE will provide its existing services to ELI end users
          consistent with the service GTE provides to its own end users.

8.   Directory Assistance Listings Information.  GTE will include listings in
     -----------------------------------------
     its directory assistance database for ELI end users in the same geographic
     area as GTE provides directory assistance for GTE end users as specified in
     Article VI, Section 3.4.

     8.1  GTE shall provide to ELI, at ELI's request, for purposes of ELI
          providing ELI-branded directory assistance services to its local
          customers, within sixty (60) Business Days after an order for such
          tape is received, all published DA listings for that specific state
          via magnetic tape.  Such listings will be Confidential

                                    VIII-10
<PAGE>

          Information under this Agreement and ELI will use the listings only
          for its directory assistance services to its end users. If ELI uses a
          Third Party directory assistance service to its end users, ELI will
          ensure that such Third Party likewise treats the listings as
          Confidential Information under this Agreement, and uses them only for
          such directory assistance. Changes to the DA Listing Information shall
          be updated on a daily basis through the same means used to transmit
          the initial list. DA Listing Information provided shall indicate
          whether the customer is a residence or business customer. The rate to
          be paid by ELI to GTE will be reasonable and mutually agreed.

     8.2  The Parties will not release DA Listing Information that includes the
          other Party's end user information to Third Parties without the other
          Party's written approval.  The other Party will inform the Releasing
          Party if it desires to have the Releasing Party provide the other
          Party's DA Listing Information to the Third Party, in which case, the
          Releasing Party shall provide the other Party's DA Listing Information
          at the same time as the Releasing Party provides the Releasing Party's
          DA Listing Information to the Third Party.  The rate to be paid by the
          Releasing Party to the other Party shall be no more than the direct
          costs of compiling such information.  The other Party shall be
          responsible for billing the Third Party.

     8.3  The Parties will work together to identify and develop procedures for
          database error corrections.

9.   Directory Listings and Directory Distribution.  ELI will be required to
     ---------------------------------------------
     negotiate a separate agreement for directory listings and directory
     distribution, except as set forth below, with GTE's directory publication
     company.

     Listings. ELI agrees to supply GTE on a regularly scheduled basis, at no
     --------
     charge, and in a mutually agreed upon format (e.g. Ordering and Billing
     Forum developed), all listing information for ELI's subscribers who wish to
     be listed in any GTE published directory for the relevant operating area.
     Listing information will consist of names, addresses (including city, state
     and zip code) and telephone numbers. Nothing in this Agreement shall
     require GTE to publish a directory where it would not otherwise do so.

     Listing inclusion in a given directory will be in accordance with GTE's
     solely determined directory configuration, scope, and schedules, and
     listings will be treated in the same manner as GTE's listings.

     Distribution.  Upon directory publication, GTE will arrange for the
     ------------
     initial distribution of the directory to service subscribers in the
     directory coverage area at no charge.

     ELI will supply GTE in a timely manner with all required subscriber mailing
     information including non-listed and non-published subscriber mailing
     information, to enable GTE to perform its distribution responsibilities.

                                    VIII-11
<PAGE>

10.  Busy Line Verification and Busy Line Verification Interrupt.  Each Party
     -----------------------------------------------------------
     shall establish procedures whereby its operator assistance bureau will
     coordinate with the operator assistance bureau of the other Party to
     provide Busy Line Verification ("BLV") and Busy Line Verification and
     Interrupt ("BLVI") services on calls between their respective end users.
     Each Party shall route BLV and BLVI inquiries over separate inward operator
     services trunks.  Each Party's operator assistance bureau will only verify
     and/or interrupt the call and will not complete the call of the end user
     initiating the BLV or BLVI.  Each Party shall charge the other for the BLV
     and BLVI services at the rates contained in Appendix E, or if there is no
                                                 ----------
     applicable rate listed in Appendix E, at the rates in their respective
                               ----------
     tariffs.

11.  SAG.  GTE will provide to ELI upon request the Street Address Guide at a
     ---
     reasonable charge.  Two companion files will be provided with the SAG which
     lists all services and features at all LSOs, and lists services and
     features that are available in a specific LSO.

12.  Dialing Format Changes.  GTE will provide reasonable notification to ELI of
     ----------------------
     changes to local dialing format, i.e., 7 to 10 digit, by end office.

13.  Operational Support Systems (OSS).  GTE shall provide OSS functions to ELI
     ---------------------------------
     for ordering, provisioning and billing that are generally available as
     described in Appendix H attached to this Agreement.  ELI shall pay GTE for
                  ----------
     access to GTE's OSS functions consistent with processes defined in Appendix
                                                                        --------
     H
     -

                                    VIII-12
<PAGE>

                                  ARTICLE IX
                                  COLLOCATION


1.   Physical Collocation.  GTE shall provide to ELI physical collocation of
     --------------------
     equipment pursuant to 47 CFR (S) 51.323 necessary for interconnection or
     for access to unbundled network elements, provided that GTE may provide
     virtual collocation in place of physical collocation, or in some cases deny
     a particular collocation request entirely, if GTE demonstrates to the
     Commission that physical collocation, or perhaps even virtual collocation,
     is not practical because of technical reasons or space limitations, as
     provided in Section 251(c)(6) of the Act.  GTE will provide such
     collocation for purposes of interconnection or access to unbundled network
     elements pursuant to the terms and conditions in the applicable federal and
     state EIS tariffs.  GTE will work with ELI to install collocation
     arrangements within the following schedule:

     (1)  GTE will respond to ELI within 10 days of receipt of a collocation
     application as to space availability and if only the tariff rates are
     applicable.

     (2)  If space is available but additional work beyond the tariff is
     required, GTE will respond to ELI within 30 days of receipt of a
     collocation application with any additional charges (e.g., environmental
     conditioning charges).

     (3)  GTE will begin construction of the collocation space once GTE receives
     50% of the nonrecurring charges from ELI.

     (4)  GTE will complete preparation of the collocation space for ELI within
     90 days after GTE receives 50% of the nonrecurring charges from ELI, absent
     extenuating circumstances beyond GTE's control (e.g., inability to obtain
     necessary equipment from a vendor). ELI shall provide GTE with the
     remaining 50% of the nonrecurring charges upon ELI's acceptance of the
     prepared collocation space.

     (5)  If extenuating circumstances occur, GTE will immediately notify ELI of
     those circumstances, and the Parties will negotiate a mutually acceptable
     in-service date.


     1.1  Space Planning.  In addition to such provisions for space planning and
          --------------
          reservation as may be set forth in the applicable GTE federal and
          state EIS tariffs, the parties agree to the following terms and
          conditions.

          1.1.1  GTE has the right to reasonably reserve space within its
                 central offices for its own use. In order to retain reserved
                 space GTE must provide sufficient documentation and
                 justification for its future use. If GTE denies ELI's
                 application for initial or growth collocation space based on
                 reserving space for GTE's future needs, GTE must demonstrate to
                 the Commission proper justification for GTE's reservation of
                 space.

                                     IX-1
<PAGE>

          1.1.2  GTE will notify ELI if it plans to build an addition to a
                 central office where ELI has collocated facilities, if such
                 addition would result in a material increase of space available
                 for collocation.

          1.1.3  Should ELI submit to GTE a two-year forecast for space planning
                 for collocated facilities in a central office, GTE will, in
                 good faith, consider and discuss such forecast with ELI when
                 considering space planning or utilization decisions for such
                 central office; provided, however that any final space planning
                 or utilization decision shall be made by GTE in its sole
                 discretion in light of GTE requirements.

          1.1.4  Subject to technical feasibility and space limitations, GTE
                 will make available at applicable federal and state EIS tariffs
                 such intraoffice facilities as may be necessary to accommodate
                 projected volumes of ELI traffic, or if GTE cannot provide such
                 facilities in a timely manner, ELI may arrange to have a third-
                 party contractor that is mutually acceptable to ELI and GTE
                 (including ELI if it is an approved GTE contractor) provision
                 the necessary facilities, as long as they meet or exceed GTE
                 standard technical specifications and requirements.

          1.1.5  GTE shall not deny physical or virtual collocation to ELI on
                 the basis of insufficient space to accommodate a collocation
                 request if space could be made available for collocation in the
                 specific central office by removing obsolete and inactive or
                 substantially underutilized GTE transmission or other
                 equipment. If no currently vacant space is available and the
                 removal of such equipment is technically feasible, GTE and ELI
                 shall negotiate in good faith the terms and conditions of
                 removal of such equipment to make space available for
                 collocation, subject to any applicable requirements adopted by
                 the Commission or the FCC.

          1.1.6  In the event that GTE demonstrates to the Commission that
                 insufficient space exists to accommodate ELI's request for
                 physical or virtual collocation in a particular GTE central
                 office, GTE will work with ELI to enable ELI to obtain
                 technically feasible and efficient interconnection or access
                 unbundled network elements. Alternatives include, but shall not
                 be limited to, mounting termination banks on GTE's Main
                 Distribution Frame to which ELI may establish connections with
                 its nearby facilities.

     1.2  Connection to Customer Loops and Ports.  Facilities for cross-
          --------------------------------------
          connection to unbundled loops and ports shall be provided under the
          applicable GTE federal tariff for Special Access Cross Connect, until
          such time as a local tariff applicable to the facilities used for such
          cross-connection is filed.

                                     IX-2
<PAGE>

     1.3  Connection to Other Collocated Carriers.  Subject to technical
          ---------------------------------------
          feasibility and space limitations, ELI may interconnect with other
          carriers collocated at a GTE central office at which ELI has
          collocated facilities; provided, however, that ELI and such other
          carriers must be collocated at the GTE central office for the primary
          purpose of interconnecting with GTE or accessing GTE's unbundled
          network elements.  ELI may interconnect with other carriers collocated
          at a GTE central office.  ELI must provide GTE with written notice of
          such interconnection and shall allow GTE ten (10) Business Days in
          which to elect to provide the facilities necessary to accomplish such
          interconnection.  ELI and the other collocated carriers may provide
          the necessary interconnection facilities only if GTE elects not to
          provide such facilities, or if GTE cannot provision the
          interconnection facilities within thirty (30) calendar days of ELI's
          written notice, or if GTE fails to so elect within the ten (10)
          Business Days after receipt of ELI's written notice.  If GTE elects
          and is able to provide interconnection facilities under this section,
          GTE will provide this cross connection under the GTE federal tariff
          for Special Access Cross Connect, until such time as a local tariff
          applicable to the facilities used for such interconnection facilities
          is filed, or pursuant to rates, terms, and conditions that the Parties
          may negotiate.

     1.4  Choice of Vendor.  ELI may use the vendor of its choice to install,
          ----------------
          maintain and repair equipment within ELI's collocated space.  Access
          by the employees, agents or contractors of such vendor shall be
          subject to the same restrictions on access by employees, agents or
          contractors of ELI imposed under the applicable GTE federal and state
          EIS tariffs, including but not limited to certification and approval
          by GTE.

     1.5  Monitoring.  Subject to technical feasibility and space limitations,
          ----------
          ELI may extend its own facilities for remote monitoring of its
          collocated equipment to its collocated space.  ELI may request that
          GTE provide the facilities necessary for such remote monitoring, at
          which time GTE and ELI will negotiate in good faith the price, terms
          and conditions of remote monitoring by GTE.

     1.6  Phone Service.  Upon ordering collocated space, ELI may order that its
          -------------
          collocation cage be provided with plain old telephone service (POTS)
          commencing at such time as GTE has completed construction of the
          collocated space.  ELI shall pay separately for any ordered POTS
          service.

     1.7  Intraoffice Diversity.  At ELI's request, GTE will provide diversity
          ---------------------
          for ingress/egress fiber and power cables where such diversity is
          available and subject to technical feasibility and space limitations.

     1.8  Proprietary Information.  The Parties shall protect all proprietary
          -----------------------
          information disclosed by ELI in any request for collocation or by GTE
          in response to such request, to the extent required under this
          Agreement and any other non-disclosure

                                     IX-3
<PAGE>

          agreements existing as of the date ELI submits its request for
          collocation space to GTE.

     1.9  Notification of Modifications.  GTE will notify ELI of modifications
          -----------------------------
          to collocation space in accord with the terms of applicable GTE state
          and federal EIS tariffs.  Upon completion of construction of ELI's
          collocation space, GTE may not require ELI to modify its collocation
          space or to pay any of the costs associated with modifications to
          other collocation space.  Additionally, GTE shall notify ELI when
          major upgrades are made to the power plants supporting ELI's
          collocation space or when any central office modification would impact
          any service the Parties provide to each other or to their respective
          end users.  The following shall constitute such major upgrades:

          (a) replacement of a rectifier;

          (b) addition or replacement of a new fusing module;

          (c) addition or replacement of a power distribution unit frame; or

          (d) addition or replacement of modular rectifiers.

     1.10 Drawings.  When ELI orders collocation space, GTE and ELI will hold a
          --------
          GTE/Customer meeting in accord with applicable GTE state and federal
          EIS tariffs.  At such meeting, GTE will provide such drawings of GTE's
          central office facility as may be necessary to adequately depict ELI's
          proposed collocation space.

     1.11 Construction of Space.  GTE will construct ELI's collocation space in
          ---------------------
          accord with the terms and conditions set forth in the applicable GTE
          state and federal EIS tariff.  In the alternative, ELI may arrange for
          a third party contractor that is acceptable to GTE to construct the
          collocation cage enclosure.  Additionally, GTE agrees to the following
          terms and conditions regarding construction of collocated space:

          1.11.1  Space will be constructed in 100 square foot increments, but
                  GTE shall work with ELI to construct space in less than a 100
                  square foot increment if insufficient space exists. The
                  constructed space shall be designed so as to prevent
                  unauthorized access.

          1.11.2  A standard 100 square foot cage shall have the following
                  standard features:

                  (a) eight-foot high, nine gauge chain link panels;

                                     IX-4
<PAGE>

                  (b)  three of the panels listed at (a) above shall measure
                  eight by ten feet, the fourth panel shall measure eight by
                  seven feet;

                  (c)  the door to the cage shall measure eight by three feet
                  and shall also consist of nine gauge chain link;

                  (d)  the cage shall be provided with one padlock set, with GTE
                  retaining one master key;

                  (e)  one ac electrical outlet;

                  (f)  one charger circuit system;

                  (g)  one electrical sub-panel;

                  (h)  such additional lighting as may be necessary;

                  (i)  one fire detection requirement evaluation;

                  (j)  grounding for the cage consistent with COEI.

          1.11.3  Modifications to the standard configuration set forth in
                  Section 1.11.2 can be made on an individual case basis. If
                  modifications are agreed upon and made by the Parties, GTE
                  will work with ELI to implement such additional modifications
                  as may be necessary to ensure that ELI's collocated space is
                  protected from unauthorized access.

          1.11.4  At such time as construction of ELI's collocation space is
                  approximately 50 percent completed, GTE will give ELI
                  notification, and such notification shall include scheduled
                  completion and turnover dates. GTE shall provide ELI with
                  sufficient information to enable the Parties to establish firm
                  CLLI codes and to order cross connections for the equipment
                  ELI intends to locate in the space 30 days prior to the
                  scheduled implementation date. The cross-connect circuits
                  shall be provisioned in conjunction with the installation of
                  the collocation equipment.

          1.11.5  GTE will conduct a walk through of the collocated space with
                  ELI within three (3) business days of completion of
                  construction of collocated space. Should ELI note any
                  deviations from the plan agreed upon by GTE and ELI at the
                  customer meeting, and if such deviations were not requested by
                  ELI or not required by law, GTE shall correct such deviations
                  at its own expense within 5 Business Days.

                                     IX-5
<PAGE>

     1.12 Connection Equipment.  ELI may provision equipment for the connection
          --------------------
          of ELI termination equipment, including but not limited to digital
          loop carriers and associated equipment, to GTE equipment using either
          of the following methods:

          1.12.1  ELI may extend an electrical or optical cable from the
                  terminal within ELI's collocation cage and terminate that
                  cable at GTE's network.

          1.12.2  ELI may install a patch panel within its collocation cage and
                  then hand the cabling to GTE to extend to and have GTE
                  terminate that cable at GTE's network.

     1.13 Access to ELI Collocation Space.  The terms and conditions of access
          -------------------------------
          to CLEC's collocation space shall be as set forth in applicable GTE
          state and federal EIS tariffs.  Additionally, GTE agrees that the
          following terms and conditions shall apply to access:

          1.13.1  GTE shall implement adequate measures to control access to
                  collocation cages.

          1.13.2  Collocation space shall comply with all applicable fire and
                  safety codes.

          1.13.3  Doors with removable hinges or inadequate strength shall be
                  monitored by an alarm connected to a manned site. All other
                  alarms monitoring ELI collocation space provided by GTE shall
                  also be connected to a manned site. ELI may, at its option,
                  provide its own intrusion alarms for its collocated space.

          1.13.4  GTE shall control janitorial access to collocation cages, and
                  restrict such access to approved and certified employees,
                  agents or contractors.

          1.13.5  GTE shall establish procedures for access to collocation cages
                  by GTE and non-GTE emergency personnel, and shall not allow
                  access by security guards unless such access comports with
                  this section and is otherwise allowed under applicable GTE
                  state and federal EIS tariffs.

          1.13.6  GTE shall retain a master key to ELI's collocation space for
                  use only in event of emergency as detailed in applicable GTE
                  state and federal tariffs. At ELI's option, the Parties shall
                  review key control procedures no more frequently than once in
                  any twelve month period. At any time, ELI may elect to change
                  keys if it suspects key control has been lost, provided,
                  however, that GTE will be provided with a master key in accord
                  with this section.

          1.13.7  Not more frequently than once a year, ELI may audit the
                  security and access procedures and equipment applicable to its
                  collocated space and the

                                     IX-6
<PAGE>

               central office housing the collocation space. Access by personnel
               necessary to conduct such an audit shall be limited as set forth
               in applicable GTE state and federal EIS tariffs. Should ELI
               identify deficiencies in security and access procedures and
               equipment as a result of such audit, the cost, terms and
               conditions of the correction of such deficiencies shall be
               negotiated in good faith between the parties.

     1.14 Common Collocation Space.  Where sufficient space exists and upon
          ------------------------
          request, GTE will provide for collocation on a shared or common space
          basis, with each collocator's area defined within the common space.
          Access to the common collocation space will be via a common entry
          point, and each collocator shall be responsible to provide any
          additional security measures to protect its equipment.  To the extent
          not inconsistent with these requirements, the remaining rates, terms,
          and conditions for physical collocation in this Article shall apply to
          common collocation arrangements.

2.   Virtual Collocation.  Subject to Section 1 of this Article, GTE will
     -------------------
     provide virtual collocation for purposes of interconnection or access to
     unbundled network elements pursuant to the terms and conditions in the
     applicable GTE federal and state EIS tariffs.  In addition, the terms and
     conditions set forth in this Section 2 shall apply to virtual collocation
     provided to ELI.

     2.1  Conversion from Virtual to Physical Collocation.  Unless it is not
          -----------------------------------------------
          practical for technical reasons or because of space limitations, ELI
          may convert a virtual collocation arrangement to a physical
          collocation arrangement.  ELI's request to do so shall be treated as a
          new physical collocation request and ELI shall pay GTE at the
          applicable tariff rates for construction and rearrangement of ELI's
          equipment as well as all applicable tariffed physical collocation
          recurring charges.  To the extent technically feasible and efficient,
          GTE shall retain the existing connections between its network and
          ELI's collocated equipment as part of the conversion.

     2.2  Conversion from Physical to Virtual Collocation.  Unless it is not
          -----------------------------------------------
          practical for technical reasons or because of space limitations, ELI
          may convert a physical collocation arrangement to a virtual
          collocation arrangement.  ELI's request to do so shall be treated as a
          new virtual collocation request and ELI shall pay GTE at the
          applicable tariff rates for construction and rearrangement of ELI's
          equipment as well as all applicable tariffed virtual collocation
          recurring charges.  To the extent technically feasible and efficient,
          GTE shall retain the existing connections between its network and
          ELI's collocated equipment as part of the conversion.  If ELI elects
          to change to a virtual collocation arrangement pursuant to this
          section, GTE will not refund previous payments for physical
          collocation received from ELI.  If another carrier occupies the
          physical collocation space vacated by ELI, however, GTE shall remit to
          ELI the net salvage value of the cage enclosure,

                                     IX-7
<PAGE>

          ladder racking, and power cabling that was constructed in and up to
          the space ELI vacated.

     2.3  Vendors.  Choice of vendors for equipment used for virtual collocation
          -------
          shall be under the terms and conditions set forth in the applicable
          GTE federal and state EIS tariff.  Upon request by ELI, GTE shall
          provide a list of locally qualified vendors approved for the type of
          equipment to be collocated.  ELI shall not be precluded from
          submitting a request to become an approved contractor with Regional
          Contract Administrators, and GTE shall not deny that request solely on
          the grounds that ELI is a CLEC.

     2.4  Inspection.  Upon provision of virtual collocation by GTE, the Parties
          ----------
          shall agree on a mutually acceptable schedule whereby ELI may inspect
          the equipment in its virtual collocation space.

3.   Fixed Wireless Collocation.  Where technically feasible and upon request,
     --------------------------
     GTE will provide to ELI physical collocation on the roof(s) of GTE central
     office or wire center for fixed wireless equipment necessary for access to
     unbundled network elements or interconnection of ELI's network facilities
     to GTE's network.  GTE shall provide such collocation in accordance with
     its applicable federal and state EIS tariffs.

                                     IX-8
<PAGE>

                                   ARTICLE X
              ACCESS TO POLES, DUCTS, CONDUITS AND RIGHTS-OF-WAY

To the extent required by the Act, GTE and ELI shall each afford to the other
access to the poles, ducts, conduits and rights of way it owns or controls on
terms, conditions and prices comparable to those offered to any other entity
pursuant to each Party's tariffs and/or standard agreements.  Accordingly, GTE
and ELI shall execute pole attachment and conduit occupancy agreements in the
form set forth in Appendices I and J.
                  ------------------

                                      X-1
<PAGE>

IN WITNESS WHEREOF, each Party has executed this Agreement to be upon approval
by the Commission in accordance with Section 252 of the Act. The "effective
date" of this Agreement for such purposes will be as established by the
Commission approval order.


GTE NORTHWEST INCORPORATED                 ELECTRIC LIGHTWAVE, INC.


By _____________________________________   By /s/ Timothy H. Peters
                                             ----------------------------------

Name  Connie Nicholas                      Name   Timothy H. Peters
                                                -------------------------------

Title  Assistant Vice President            Title  Director, Regulatory &
       Wholesale Markets-Interconnection         ------------------------------
                                                  Industry Affairs

Date ___________________________________   Date   April 15, 1999
                                                -------------------------------

** GTE Northwest Incorporated does not consent to this purported agreement
(which does not comply with the Federal Telecommunications Act of 1996) and does
not authorize any of its representatives to consent to it. The signature of a
GTE representative has been placed on this document only under the duress of an
order of the Oregon Public Utility Commission requiring such signature.

The filing of this arbitrated Agreement with the Oregon Public Utility
Commission is pursuant to Order No. 99-218, entered March 17, 1999, in Docket
No. ARB 91 and does not in any way constitute a waiver by either Electric
Lightwave, Incorporated or GTE Northwest Incorporated, of any right which any
such Party may have to seek review by a competent court, or to petition the
Oregon Public Utility Commission for reconsideration of, any determination
contained in the Order, or any provision included in this Agreement pursuant to
the Order.

In this document the Parties attempt to comply with the Order and reduce the
contractual language the substantive provisions and directives of the Order.
Nothing contained herein shall be construed or is intended to be a concession or
admission by either Party that any such provision of the Order or the language
herein complies with the duties imposed by the Telecommunications Act of 1996,
the decisions of the FCC and the Oregon Public Utility Commission, or other law,
and each Party thus expressly reserves its full right to assert and pursue
claims that the Order does not comport with applicable law.
<PAGE>

                                   APPENDIX A


This Appendix is intentionally blank for numbering consistency.

                                      A-1
<PAGE>

                                   APPENDIX B


This Appendix is intentionally blank for numbering consistency.

                                      B-1
<PAGE>

                                   APPENDIX C
                             RATES AND CHARGES FOR
                      TRANSPORT AND TERMINATION OF TRAFFIC


General.  The rates contained in this Appendix C are the rates as defined in
-------                               ----------
Article V and are subject to change resulting from future Commission or other
proceedings, including but not limited to any generic proceeding to determine
GTE's unrecovered costs (e.g., historic costs, contribution, undepreciated
reserve deficiency, or similar unrecovered GTE costs (including GTE's interim
Universal Service Support Surcharge)), the establishment of a competitively
neutral universal service system, or any appeal or other litigation.  Any
amendment to this Appendix required as a result of any future Commission or
other proceedings shall be made according to the terms of the final Commission
and/or court order resolving that proceeding.


Each Party  will bill the other Party as appropriate:

A.   The Local Interconnection rate element that applies to Local Traffic on a
     minute of use basis that each Party switches for termination purposes at
     its wire centers.  The local interconnection rate is $0.0058242.

B.   The Tandem Switching rate element that applies to tandem routed Local
     Traffic on a minute of use basis.  The tandem switching rate is $0.0018106.

C.   The Common Transport Facility rate element that applies to tandem routed
     Local Traffic on a per minute/per mile basis.  The Common Transport
     Facility rate is $0.0000044.

D.   The Common Transport Termination element that applies to tandem routed
     Local Traffic on a per minute/per termination basis.  The Common Transport
     Termination rate is $0.0001519.

E.  The Tandem Transiting Charge is comprised of the following rate elements:

     Tandem Switching:                                         =    $0.0018106

     Tandem Transport (10 mile average): 10 x $0.0000044       =    $0.0000440

     Transport Termination (2 Terminations): 2 x $0.0001519    =    $0.0003038

          Transiting Charge:                                        $0.0021584

                                     C-1
<PAGE>

F.   Initial Factors:

(1)  PLU                                               TBD

(2)  Initial Proportionate Share Factor                TBD

(3)  Exempt Factor                                     TBD

                                      C-2
<PAGE>

                                  APPENDIX D


This Appendix is intentionally blank for numbering consistency.

                                      D-1
<PAGE>

                                  APPENDIX E
                         SERVICES AVAILABLE FOR RESALE

This Appendix is intentionally left blank. At such time as ELI desires to resell
GTE services, the Parties agree to negotiate the rates and to amend this
Agreement accordingly, as specified in Article VI.

                                      E-1
<PAGE>

                                  APPENDIX F
                         PRICES FOR UNBUNDLED ELEMENTS


General. The rates contained in this Appendix F are the rates as defined in
-------                              ----------
Article VII and are subject to change resulting from future Commission or other
proceedings, including but not limited to any generic proceeding to determine
GTE's unrecovered costs (e.g., historic costs, contribution, undepreciated
reserve deficiency, or similar unrecovered GTE costs (including GTE's interim
Universal Service Support Surcharge)), the establishment of a competitively
neutral universal service system, or any appeal or other litigation. Any
amendment to this Appendix required as a result of any future Commission or
other proceedings shall be made according to the terms of the final Commission
and/or court order resolving that proceeding. This Appendix may be superseded by
the provisions in Article III, Section 46, and Appendices 46A and 46B. At such
time as ELI desires to obtain unbundled ports, local switching, and transport
from GTE, the Parties agree to negotiate the terms and conditions specified in
Article VII, Section 2.2.1 and to amend this Agreement accordingly. ELI shall
not obtain unbundled ports, local switching, and shared transport from GTE until
such amendment becomes effective.

GTE assesses a separate interim universal service fund surcharge for loops and
ports to provide continued universal service support that is implicit in GTE's
current retail services prices; and to respect the careful distinctions Congress
has drawn between access to UNEs, on the one hand, and the purchase at wholesale
rates of GTE services on the other. This surcharge is being addressed (or will
be addressed) by the Commission or a court of competent jurisdiction. The
parties agree that GTE will offer the port and loop UNEs at the rates set forth
below in Appendix F without the interim surcharge, but subject to the following
terms and conditions:

A.   ELI agrees that within thirty (30) days after the effective date of a
     Commission or court order affirming GTE's interim surcharge, ELI will (i)
     begin paying the monthly interim surcharge in accord with Appendix F, and
     (ii) make a lump sum payment to GTE of the total interim surcharges
     retroactive to the effective date of this Agreement.

B.   Notwithstanding any provision in this Agreement, GTE may, at its sole
     discretion and at any time, seek injunctive or other relief (i) requiring
     ELI to pay GTE's interim surcharge or (ii) requiring the Commission to
     immediately impose the interim surcharge.

C.   Nothing in this Agreement shall restrict or impair GTE from seeking
     injunctive relief or any other remedy at any time and in any court
     regarding GTE's interim surcharge or the Commission's rejection or
     modification of GTE's interim surcharge.

     Local Loops

          2 Wire Analog Voice Grade Loop                   $    32.00
          4 Wire Analog Voice Grade Loop                   $    50.00

                                      F-1
<PAGE>

          2 Wire Digital Loop                              $      TBD
          4 Wire Digital Loop                              $      TBD
          DS-1 Loop                                        $      TBD
          DS-3 Loop                                        $      TBD

     Network Interface Device
          Basic NID                                        $     1.90
          12 x NID                                               2.00

     Local Switching (must purchase port)
       Ports
          2 Wire Analog Line Port                          $     5.30
          2 Wire ISDN Digital Line Port                    $      TBD
          DS-1 Digital Trunk Port                          $    97.00
          4 Wire ISDN Digital DS-1 Port                    $      TBD

       Local Switching                                     $0.0058242

       Shared Transport
          Transport Termination MOU/Term                   $0.0001519
          Transport Facility MOU/Mile                      $0.0000044
          Tandem Switching MOU                             $0.0018106

     Vertical Features                                     See Attached

     Dedicated Transport
       CLEC Dedicated Transport
          2 Wire Voice                                     $    32.00
          4 Wire Voice                                     $    50.00
          DS1 Standard 1st System                          $   200.00
          DS1 Standard Add'l System                        $   130.00
          DS3 Optical Interface                            $ 1,000.00

       Multiplexing
          DS1 to Voice Multiplexing                        $   212.76
          DS3 to DS1 Multiplexing                          $   400.00

       Interoffice Dedicated Transport
          Voice Facility Per ALM                           $     4.28
          Voice Facility Termination                       $      TBD
          DS1 Facility Per ALM                             $     5.00
          DS1 Per Termination                              $    37.94
          DS3 Facility Per ALM                             $    30.00
          DS3 Per Termination                              $   300.00

                                      F-2
<PAGE>

Databases and Signaling Systems
       Signaling Links and STP
          56 Kbps Links                                    GTOC FCC-1 Tariff
          DS-1 Link                                        GTOC FCC-1 Tariff
          Signal Transfer Point (STP) Port Term            GTOC FCC-1 Tariff

       Call Related Databases
          Line Information Database (ABS-Queries)          GTOC FCC-1 Tariff
          Toll Free Calling Database (DB800 Queries)       GTOC FCC-1 Tariff

     Universal Service Fund (USF) Support Surcharge
          Per Loop                                         $      TBD
          Per Port                                         $      TBD

     Non-Recurring Charges for Unbundled Services*
       Service Ordering (loop or port)
          Initial Service Order, per order                 $    47.13
          Transfer of Service Charges, per order           $    16.00
          Subsequent Service Order, per order              $    23.97
          Customer Service Record Research, per request    $     5.25
       Installation
          Unbundled Loop, per loop                         $    11.40
          Unbundled Port, per port                         $    11.40

       Loop Facility Charge, per order                     $    69.58

     This charge will apply when field work is required for establishment of new
     unbundled loop service.

     Monthly Recurring Charge for EIS
          DS0 Level Connection                                 Tariff
          DS1 Level Connection                                 Tariff

*These non-recurring charges are subject to updating in accordance with any
orders issued by the Oregon Public Utility Commission in Docket Nos. UT 138/139,
UM 874, or any successor dockets relating to GTE unbundled network element
prices.

                                      F-3
<PAGE>

OREGON UNBUNDLED VERTICAL FEATURES

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
          VERTICAL FEATURES                                              (Subject to Availability)
--------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>
Three Way Calling                                     $/line/month                           $1.13
--------------------------------------------------------------------------------------------------
Call Forwarding Variable                              $/line/month                           $1.23
--------------------------------------------------------------------------------------------------
Cut. Changeable Speed Calling 1-Digit                 $/line/month                           $0.90
--------------------------------------------------------------------------------------------------
Cut. Changeable Speed Calling 2-Digit                 $/line/month                           $0.92
--------------------------------------------------------------------------------------------------
Call Waiting                                          $/line/month                           $0.73
--------------------------------------------------------------------------------------------------
Cancel Call Waiting                                   $/line/month                           $0.25
--------------------------------------------------------------------------------------------------
Automatic Callback                                    $/line/month                           $0.41
--------------------------------------------------------------------------------------------------
Automatic Recall                                      $/line/month                           $0.32
--------------------------------------------------------------------------------------------------
Calling Number Delivery                               $/line/month                           $4.01
--------------------------------------------------------------------------------------------------
Calling Number Delivery Blocking                      $/line/month                           $0.62
--------------------------------------------------------------------------------------------------
Distinctive Ringing / Call Waiting                    $/line/month                           $1.96
--------------------------------------------------------------------------------------------------
Customer Originated Trace                             $/line/month                           $0.47
--------------------------------------------------------------------------------------------------
Selective Call Rejection                              $/line/month                           $2.53
--------------------------------------------------------------------------------------------------
Selective Call Forwarding                             $/line/month                           $2.94
--------------------------------------------------------------------------------------------------
Selective Call Acceptance                             $/line/month                           $7.43
--------------------------------------------------------------------------------------------------
Call Forwarding Variable CTX                          $/line/month                           $0.92
--------------------------------------------------------------------------------------------------
Call Forwarding Incoming Only                         $/line/month                           $0.26
--------------------------------------------------------------------------------------------------
Call Forwarding Within Group Only                     $/line/month                           $0.25
--------------------------------------------------------------------------------------------------
Call Forwarding Busy Line                             $/line/month                           $0.26
--------------------------------------------------------------------------------------------------
Call Forwarding Don't Answer All Calls                $/line/month                           $0.48
--------------------------------------------------------------------------------------------------
Remote Call Forward                                   $/line/month                           $1.11
--------------------------------------------------------------------------------------------------
Call Waiting Originating                              $/line/month                           $0.33
--------------------------------------------------------------------------------------------------
Call Waiting Terminating                              $/line/month                           $0.71
--------------------------------------------------------------------------------------------------
Cancel Call Waiting CTX                               $/line/month                           $0.25
--------------------------------------------------------------------------------------------------
Three Way Calling CTX                                 $/line/month                           $1.38
--------------------------------------------------------------------------------------------------
Call Transfer Individual All Calls                    $/line/month                           $0.31
--------------------------------------------------------------------------------------------------
Add-on Consultation Hold Incoming Only                $/line/month                           $0.25
--------------------------------------------------------------------------------------------------
Speed Calling Individual 1-Digit                      $/line/month                           $0.63
--------------------------------------------------------------------------------------------------
Speed Calling Individual 2-Digit                      $/line/month                           $0.64
--------------------------------------------------------------------------------------------------
Direct Connect                                        $/line/month                           $0.42
--------------------------------------------------------------------------------------------------
Distinctive Alerting / Call Waiting Indicator         $/line/month                           $1.46
--------------------------------------------------------------------------------------------------
Call Hold                                             $/line/month                           $0.59
--------------------------------------------------------------------------------------------------
Semi-Restricted (Orig/Term)                           $/line/month                           $1.85
--------------------------------------------------------------------------------------------------
Fully-Restricted (Orig/Term)                          $/line/month                           $1.85
--------------------------------------------------------------------------------------------------
Toll Restricted Service                               $/line/month                           $0.26
--------------------------------------------------------------------------------------------------
Call Pick-up                                          $/line/month                           $0.34
--------------------------------------------------------------------------------------------------
Directed Call Pick-up w/Barge-In                      $/line/month                           $0.40
--------------------------------------------------------------------------------------------------
</TABLE>

                                      F-4
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                 VERTICAL FEATURES                                  (Subject to Availability)
---------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>
Directed Call Pick-up w/o Barge-In                   $/line/month                      $ 0.39
---------------------------------------------------------------------------------------------
Special Intercept Announcements                      $/line/month                      $ 8.49
---------------------------------------------------------------------------------------------
Conference Calling - 6-Way Station Cont.             $/line/month                      $ 4.24
---------------------------------------------------------------------------------------------
Station Message Detail Recording                     $/line/month                      $ 1.61
---------------------------------------------------------------------------------------------
Station Message Detail Recording to Premises         $/line/month                      $ 3.12
---------------------------------------------------------------------------------------------
Fixed Night Service - Key                            $/line/month                      $ 3.05
---------------------------------------------------------------------------------------------
Attendant Camp-on (Non-DI Console)                   $/line/month                      $ 1.36
---------------------------------------------------------------------------------------------
Attendant Busy Line Verification                     $/line/month                      $ 4.45
---------------------------------------------------------------------------------------------
Control of Facilities                                $/line/month                      $ 0.25
---------------------------------------------------------------------------------------------
Fixed Night Service - Call Forwarding                $/line/month                      $ 0.32
---------------------------------------------------------------------------------------------
Attendant Conference                                 $/line/month                      $12.88
---------------------------------------------------------------------------------------------
Circular Hunting                                     $/line/month                      $ 2.95
---------------------------------------------------------------------------------------------
Preferential Multiline Hunting                       $/line/month                      $ 0.45
---------------------------------------------------------------------------------------------
Uniform Call Distribution                            $/line/month                      $ 3.42
---------------------------------------------------------------------------------------------
Stop Hunt Key                                        $/line/month                      $ 0.25
---------------------------------------------------------------------------------------------
Make Busy Key                                        $/line/month                      $ 0.60
---------------------------------------------------------------------------------------------
Queuing                                              $/line/month                      $ 1.10
---------------------------------------------------------------------------------------------
Automatic Route Selection                            $/line/month                      $ 0.35
---------------------------------------------------------------------------------------------
Facility Restriction Level                           $/line/month                      $ 0.25
---------------------------------------------------------------------------------------------
Expansive Route Warning Tone                         $/line/month                      $ 0.25
---------------------------------------------------------------------------------------------
Time-of-Day Routing Control                          $/line/month                      $ 0.31
---------------------------------------------------------------------------------------------
Foreign Exchange Facilities                          $/line/month                      $13.40
---------------------------------------------------------------------------------------------
Anonymous Call Rejection                             $/line/month                      $ 5.31
---------------------------------------------------------------------------------------------
Basic Business Group Sta-Sta ICM                     $/line/month                      $10.23
---------------------------------------------------------------------------------------------
Basic Business Group CTX                             $/line/month                      $ 1.76
---------------------------------------------------------------------------------------------
Basic Business Group DOD                             $/line/month                      $ 0.71
---------------------------------------------------------------------------------------------
Basic Business Auto ID Outward Dialing               $/line/month                      $ 0.25
---------------------------------------------------------------------------------------------
Basic Business Group DID                             $/line/month                      $ 0.25
---------------------------------------------------------------------------------------------
Business Set Group Intercom All Calls                $/line/month                      $ 7.55
---------------------------------------------------------------------------------------------
Dial Call Waiting                                    $/line/month                      $ 0.57
---------------------------------------------------------------------------------------------
Loudspeaker Paging                                   $/line/month                      $12.38
---------------------------------------------------------------------------------------------
Recorded Telephone Dictation                         $/line/month                      $13.28
---------------------------------------------------------------------------------------------
On-Hook Queuing for Outgoing Trunks                  $/line/month                      $ 4.46
---------------------------------------------------------------------------------------------
Off-Hook Queuing for Outgoing Trunks                 $/line/month                      $ 1.54
---------------------------------------------------------------------------------------------
Teen Service                                         $/line/month                      $ 0.82
---------------------------------------------------------------------------------------------
Bg - Automatic Call Back                             $/line/month                      $ 0.83
---------------------------------------------------------------------------------------------
</TABLE>

                                      F-5
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
              VERTICAL FEATURES                                    (Subject to Availability)
--------------------------------------------------------------------------------------------
<S>                                                 <C>            <C>
Voice/Data Protection                                $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Authorization Codes for Afr                          $/line/month                     $ 0.36
--------------------------------------------------------------------------------------------
Account Codes for Afr                                $/line/month                     $ 0.59
--------------------------------------------------------------------------------------------
Code Restriction Diversion                           $/line/month                     $ 0.37
--------------------------------------------------------------------------------------------
Code Calling                                         $/line/month                     $14.60
--------------------------------------------------------------------------------------------
Meet-Me Conference                                   $/line/month                     $ 5.93
--------------------------------------------------------------------------------------------
Call Park                                            $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Executive Busy Override                              $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Last Number Redial                                   $/line/month                     $ 0.50
--------------------------------------------------------------------------------------------
Direct Inward System Access                          $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Authorization Code Immediate Dialing                 $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Bg - Speed Calling Shared                            $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Attendant Recall from Satellite                      $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Bg - Speed Calling 2-Shared                          $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Business Set - Call Pick-up                          $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Authorization Code for Mdr                           $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Locked Loop Operation                                $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Attendant Position Busy                              $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Two-Way Splitting                                    $/line/month                     $ 0.84
--------------------------------------------------------------------------------------------
Call Forwarding - All (Fixed)                        $/line/month                     $ 1.75
--------------------------------------------------------------------------------------------
Business Group Call Waiting                          $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Music on Hold                                        $/line/month                     $ 6.41
--------------------------------------------------------------------------------------------
Automatic Alternate Routing                          $/line/month                     $ 4.95
--------------------------------------------------------------------------------------------
DTMF Dialing                                         $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
BG DTMF Dialing                                      $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Business Set Access to Paging                        $/line/month                     $ 3.97
--------------------------------------------------------------------------------------------
Call Flip-Flop (Ctx-A)                               $/line/month                     $ 3.52
--------------------------------------------------------------------------------------------
Selective Calling Waiting (Class)                    $/line/month                     $ 2.80
--------------------------------------------------------------------------------------------
Direct Inward Dialing                                $/line/month                     $11.85
--------------------------------------------------------------------------------------------
Customer Dialed Account Recording                    $/line/month                     $ 3.37
--------------------------------------------------------------------------------------------
Deluxe Automatic Route Selection                     $/line/month                     $ 0.68
--------------------------------------------------------------------------------------------
MDC Attendant Console                                $/line/month                     $63.74
--------------------------------------------------------------------------------------------
Warm Line                                            $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
Calling Name Delivery                                $/line/month                     $ 0.25
--------------------------------------------------------------------------------------------
</TABLE>

                                      F-6
<PAGE>

                                  APPENDIX G
                  RATES AND CHARGES FOR 911/E911 ARRANGEMENTS


     The following services are offered by GTE for purchase by ELI, where an
individual item is not superseded by a tariffed offering.

                                                            NRC       MRC
                                                            ---       ---

1.   9-1-1 Selective Router Map                             $125.00   n/a
     Provided is a color map showing a selective
     router's location and the GTE central offices
     that send their 9-1-1 call to it.  The selective
     router and central office information will
     include CLLI codes and NPA/NXXs served.  The
     map will include boundaries of each central office
     and show major streets and the county boundary.
     Permission to reproduce within ELI for its
     internal use is granted without further fee.

2.   9-1-1 Selective Router Pro-Rata Fee/trunk              $0        $100.77
     This fee covers the cost of selective routing
     switch capacity per trunk to cover investment to
     handle the additional capacity without going to the
     9-1-1 districts for additional funding.

3.   PS ALI Software                                                  $790.80
     A personal computer software program running on
     Windows 3.1 for formatting subscriber records
     into NENA Verison #2 format to create files for
     uploading to GTE's ALI Gateway.  Fee includes
     software, warranty and 1 800 872-3356 support
     at no additional cost.

                                      G-1
<PAGE>

                                                            NRC       MRC
                                                            ---       ---

4.   ALI Gateway Service                                    $135.00   $36.12
     Interface for delivery of ALI records to GTE's
     Data Base Management System. This provides a
     computer access port for ELI to transmit
     daily subscriber record updates to GTE for
     loading into ALI databases.  It includes
     support at 1 800 872-3356 at no additional cost.

5.   9-1-1 Interoffice Trunk                                Tariff    Tariff
     This is a tariffed offering, to be found in each
     state's Emergency Number Service Tariff.

6.   ALI Database                                           Tariff    Tariff
     This is a tariffed offering, to be found in each
     state's Emergency Number Service Tariff.

7.   Selective Router Database per Record Charge            Tariff    Tariff
     Fee for each ALI record used in a GTE selective
     router.  This is a tariffed offering, to be found
     in each state's Emergency Number Service Tariff.

8.   MSAG Copy
     Production of one copy of a 9-1-1 Customer's
     Master Street Address Guide, postage paid.

     a.   Copy provided in paper format                     $238.50   $54.00

     b.   Copy provided in flat ASCII file
          on a 3 1/2" diskette                              $276.00   $36.00

9.   The following services are offered by GTE when
     ELI Resells GTE's local exchange services, where an
     Item is not superceded by a tariffed offering:

     a.   911 Selective Router Map                          $125.00   N/A

          Provided is a color map showing a Selective
          router's location and the GTE Central offices
          that send their 911 call to it.

                                      G-2
<PAGE>

          The selective router and central office
          Information will include CLLl codes and NPA/NXXs
          Served. The map will include boundaries of each
          central Office and show major streets and the
          county Boundary. Permission to reproduce by ELI
          for its Internal use is granted without further
          fee. Non-tariffed price.

     b.   MSAG Copy

          Production of one copy of a 911 Customer's
          Master Street Address Guide, postage paid

          1.   Copy provided in proper format               $238.50   $ 54.00
          2.   Copy provided in flat ASC11 file
               On 3-1/2" diskette                           $276.00   $ 36.00

                                      G-3
<PAGE>

                                  APPENDIX H
            SERVICE ORDERING, PROVISIONING, BILLING AND MAINTENANCE


1.   Service Ordering, Service Provisioning, and Billing Systems Generally. The
     ----------------------------------------------------------------------
     following describes generally the operations support systems that GTE will
     use and the related functions that are available for ordering, provisioning
     and billing for resold services, interconnection facilities and services
     and unbundled network elements.  Except as specifically provided otherwise
     in this Agreement, service ordering, provisioning, billing and maintenance
     shall be governed by the GTE Guide.  Before orders can be taken, ELI will
     provide GTE with its Operating Company Number ("OCN") and Company Code
     ("CC") as follows:

     (a)  ELI must provide its OCN (four-digit alpha-numeric assigned by
     Bellcore or number administrator) on the ALEC Profile. The GTE Guide
     provides the necessary information for ELI to contact Bellcore to obtain
     the OCN. There are no optional fields on the Profile.

     (b)  Before the Local Service Request ("LSR") and Directory Service Request
     ("DSR") order forms can be processed ELI must provide the OCN and Customer
     Carrier Name Abbreviation ("CCNA").

     1.1  Operations Support Systems for Trunk-Side Interconnection
          ---------------------------------------------------------

          1.1.1  ELI will be able to order trunk-side interconnection services
                 and facilities from GTE through a direct electronic interface
                 over the GTE Network Data Mover ("NDM") in a nondiscriminatory
                 manner. Orders for trunk-side interconnection will be initiated
                 by an Access Service Request ("ASR") sent electronically by ELI
                 over the NDM. ASRs for trunk-side interconnection will be
                 entered electronically into GTE's Carrier Access Management
                 System ("CAMS") to validate the request, identify any errors,
                 and resolve any errors back to ELI. CAMS is a family of GTE
                 systems comprised primarily of EXACT/TUF, SOG/SOP, and CABS.

          1.1.2  The use of CAMS to support ELI's requests for trunk-side
                 interconnection will operate in the following manner: GTE will
                 route the ASR through its data center to one of two National
                 Access Ordering Centers ("NACC"). The ASR will be entered
                 electronically into the EXACT/TUF system for validation and
                 correction of errors. Errors will be referred back to ELI. ELI
                 then will correct any errors that GTE has identified and
                 resubmit the request to GTE electronically through a
                 supplemental ASR, without

                                      H-1
<PAGE>

                 penalty or charge (e.g., order modification charge) to ELI.
                 Similarly, errors committed by GTE subsequent to the receipt of
                 a valid ASR from ELI will be expeditiously identified and
                 corrected by GTE without the need for ELI's submission of a
                 supplemental ASR. GTE then will translate the ASR into a
                 service order for provisioning and billing.

          1.1.3  At the next system level, translated service orders will be
                 distributed electronically through the SOG/SOP systems to
                 several destinations. The SOG/SOP system will begin the actual
                 provisioning of the service for ELI. Other GTE provisioning
                 systems are CNAS and ACES. The GTE Database Administrative
                 Group ("DBA") and the Special Services Control Center ("SSCC")
                 will be the two most important destinations at this level. The
                 DBA location will identify codes for the appropriate GTE switch
                 in order to provide the functions required by the ASR. The SSCC
                 will provide the engineering for the facilities over which the
                 services will be handled. Information from these two groups
                 (and others) then will be transmitted electronically to GTE's
                 field service personnel (Customer Zone Technicians or "CZTs")
                 who will establish the trunks and facilities, thus connecting
                 the GTE facilities to a connecting company, if one is required,
                 and to ELI. GTE's CZTs also will contact ELI directly to
                 perform testing, and upon acceptance by ELI, will make the
                 necessary entries into the GTE system to complete the order.
                 The completed orders then will pass to GTE's Carrier Access
                 Billing System ("CABS") which will generate the bill to ELI.
                 The billing process under CABS requires coordination with
                 several other systems.

          1.1.4  Billing for transport and termination services cannot be
                 accomplished without call records from GTE's central office
                 switches. Records of usage will be generated at GTE's end
                 office switches or the access tandems. Call usage records will
                 be transmitted electronically from GTE's switches through GTE's
                 Billing Intermediate Processor ("BIP"). This system will
                 collect the call records, perform limited manipulations to the
                 record and transfer them to a centralized data center where
                 they will be processed through the Universal Measurement System
                 ("UMS") to determine the validity and accuracy of the records.
                 UMS also will sort the records and send them to the CABS
                 billing system, from which GTE will produce a bill and send it
                 to ELI.

     1.2  Operations Support Systems for Resold Services and Unbundled Elements
          ---------------------------------------------------------------------

                                      H-2
<PAGE>

          1.2.1  ELI will also be able to order services for resale and
                 unbundled network elements, as well as interim number
                 portability, directly from GTE through an electronic interface.
                 To initiate an order for these services or elements, ELI will
                 submit a Local Service Request ("LSR") from its data center to
                 GTE's Data Center using the same electronic NDM interface used
                 for trunk-side interconnection. If no NDM interface exists or
                 if ELI chooses to establish a separate NDM interface, ELI must
                 request an NDM facility. For new entrants that elect not to
                 interface electronically, GTE will accommodate submission of
                 LSR orders by facsimile, E-mail, Internet or a dial NDM
                 arrangement. An LSR is very similar to an ASR, except that it
                 will be used exclusively for line-side interconnection
                 requests. GTE will transfer LSRs to GTE's NOMC centralized
                 service order processing center electronically.

          1.2.2  Most LSRs will be used either to transfer an existing GTE
                 customer to ELI or to request service for a new customer who is
                 not an existing GTE customer. Depending on the situation,
                 different information will be required on the LSR. LSRs for a
                 conversion of a GTE local customer to ELI must include
                 information relating to all existing, new and disconnected
                 services for that customer, including the customer's name, type
                 of service desired, location of service and features or options
                 the customer desires. ELI will be able to obtain this customer
                 information after GTE has received the customer's written
                 consent as specified in Article VI.3.3. For service to a new
                 customer who is not an existing GTE customer, the LSR must
                 contain the customer's name, service address, service type,
                 services, options, features and ELI data. If known, the LSR
                 should include the telephone number and due date/desired due
                 date.


          1.2.3  While ELI would have its own customer information and may have
                 the SAG/GTE products on tape from GTE, ELI would not have the
                 due date or new telephone number for new customers since that
                 information is contained in GTE's systems. Therefore, a process
                 is required to provide this information to ELI. GTE itself does
                 not have uniform access to this information electronically.
                 Until GTE and ELI have agreed and established electronic
                 interfaces, ELI agrees that a toll free number is the method
                 that will be used. The toll free telephone number will connect
                 ELI directly to GTE's NOMC service representatives. When ELI
                 receives a request for basic services from a new local service
                 customer, ELI will call GTE's NOMC through the toll free
                 number, and, while the new customer is on hold, GTE will
                 provide the due date for service and the new

                                      H-3
<PAGE>

                 telephone number for that customer. At the same time, ELI will
                 give GTE the new customer's name, service address and type of
                 requested service (i.e., R1, B1). GTE will enter that
                 information into its SORCES or SOLAR service ordering systems
                 to be held in suspense until ELI sends the confirming LSR. ELI
                 will then return to its customer holding on the line and
                 provide the due date and new telephone number.

          1.2.4  After concluding the telephone call with the new customer, ELI
                 will complete a confirming LSR for the new service and send it
                 electronically to GTE's data center for processing. Upon
                 receipt, GTE will match the LSR with the service order
                 suspended in GTE's system, and if there is a match, GTE will
                 process the LSR. After the LSR is processed, GTE will transmit
                 confirmation electronically to ELI through the NDM that the LSR
                 has been processed, providing a record of the telephone number
                 and due date. ELI will be required to submit the confirming LSR
                 by 12:00 p.m. each day local time, as defined by the location
                 of the service address. If ELI fails to submit the LSR in a
                 timely manner, the suspended LSR will be considered in
                 jeopardy, at which time GTE will assign a new due date upon
                 receipt of the delayed LSR for such customer requests and
                 notify ELI of the change.

          1.2.5  Number assignments and due date schedules for services other
                 than single line service and hunt groups up to 12 lines will be
                 assigned within approximately twenty-four (24) hours after
                 GTE's receipt of the LSR using the standard Local Service
                 Confirmation ("LSC") report sent electronically to ELI over the
                 NDM, thereby providing a record of the newly established due
                 date. An exception would be a multi-line hunt group for 12
                 lines or fewer. The other numbers then will be provided through
                 the normal electronic confirmation process.

          1.2.6  The processing of specifically requested telephone numbers
                 (called "vanity numbers") is as follows. GTE will work with ELI
                 on a real time interface to process vanity numbers while ELI's
                 customer is still on the line. If a number solution can be
                 established expeditiously, it will be done while the customer
                 is still on the line. If extensive time will be required to
                 find a solution, GTE service representatives will work with ELI
                 representatives off line as GTE would for its own customers.
                 For all of this, the basic tariff guidelines for providing
                 telephone numbers will be followed.

                                      H-4
<PAGE>

          1.2.7  Once the order for line-side interconnection service is
                 established, it is moved for provisioning to the next system
                 level. Here, GTE will validate and process the LSR to establish
                 an account for ELI and, if GTE continues to provide some
                 residual services to the customer, GTE will maintain a GTE
                 account. In GTE's system, GTE's account is called the Residual
                 Account and ELI's account is referred to as the ELI Account. If
                 any engineering for the service is necessary, the account would
                 be distributed to the SSCC. Otherwise, it will be distributed
                 for facility assignment.

          1.2.8  With the account established and any engineering and facility
                 assignment complete, GTE then will transmit electronically a
                 record to GTE's CZT field personnel if physical interconnection
                 or similar activity is required. The CZTs will provision the
                 service and then electronically confirm such provision in the
                 SOLAR/SORCES system when completed. The accounts then will be
                 transmitted to GTE's Customer Billing Services System ("CBSS").
                 GTE shall provide to ELI a service completion report. Call
                 records for actual service provided to ELI's customers on GTE
                 facilities will be transmitted from GTE's switches through some
                 usage rating systems (BIP, UMS), screened and eventually
                 delivered to CBSS for the generation of bills.

          1.2.9  CBSS is a different system than CABS, and it is the one that
                 GTE will utilize to produce the required bills for resold
                 services, unbundled elements and local number portability. CBSS
                 will create a bill to ELI for resold services and unbundled
                 elements along with a summary bill master. Daily unrated
                 records for intraLATA toll usage and local usage (incollect
                 usage data will be provided on rated basis) on ELI's accounts
                 will be generated and transmitted electronically to ELI.

          1.2.10 On resold accounts, GTE will provide usage in EMR format per
                 existing file exchange schedules. The usage billing will be in
                 agreed upon level of detail for ELI to issue a bill to its end
                 users.

          1.2.11 GTE will provide ELI with detailed monthly billing information
                 in a paper format until an agreed upon Electronic Data
                 Interchange 811 electronic bill format is operational.

          1.2.12 State or sub-state level billing will include up to ten (10)
                 summary bill accounts.

                                      H-5
<PAGE>

          1.2.13  GTE accepts ELI's control reports and agrees to utilize
                  industry standard return codes for unbillable messages.
                  Transmission will occur via the NDM. Tape data will conform to
                  Attachment "A" of the LRDTR. Data will be delivered Monday
                  through Friday except for Holidays as agreed. Data packages
                  will be tracked by invoice sequencing criteria. GTE contacts
                  will be provided for sending/receiving usage files.

          1.2.14  GTE will retain data backup for 45 Business Days.

          1.2.15  In addition to the LSR delivery process, ELI will distribute
                  directory assistance and directory listing information
                  (together sometimes referred to hereafter as "DA/DL
                  information") to GTE via the LSR ordering process over the
                  NDM. GTE will provide listings service via its "listing
                  continuity" offering.

          1.2.16  Charges and credits for PIC changes ordered via an LSR will
                  appear on the wholesale bill. As ELI places a request for a
                  PIC change via LSR, the billing will be made on ELI account
                  associated with each individual end user. GTE will process all
                  PIC changes from IXCs that are received for ELI end users by
                  rejecting back to the IXC with the ELI OCN. Detail is provided
                  so that ELI can identify the specific charges for rebilling to
                  their end user.

          1.2.17  CMDS.  The parties will provide for the distribution of
                  -----
                  intraLATA CMDS incollect messages and/or selected local
                  measured service messages as follows:

                  1.2.17.1  Messages to be Screened. GTE receives CMDS I
                            -----------------------
                            transmissions containing intraLATA incollect
                            messages from the state RBOC CMDS host each business
                            day. Per ELI's request, GTE will screen the
                            incollects by NPA and line number and accumulate the
                            Collect, Third Number Billed and Credit Card
                            (collectively called incollects) messages in a data
                            file. The screening will be for end users who have
                            chosen ELI as their local service provider through a
                            Resale or Unbundled Network arrangement. The
                            screened incollect messages and any Local Measured
                            Service (LMS) usage will be accumulated and
                            forwarded to ELI. The Parties will mutually agree on
                            the frequency of the data exchange and the method of
                            transmission (i.e., magnetic tape or direct
                            electronic transmission). GTE will forward the
                            screened messages in the industry standard EMR
                            format. GTE intraLATA

                                      H-6
<PAGE>

                            toll messages that are recorded by GTE and dialed on
                            a one plus or zero plus basis are not part of this
                            section and will not be screened.

                  1.2.17.2  Compensation.  GTE will bill ELI monthly for all
                            ------------
                            services related to the screening, accumulating,
                            processing and transmitting of incollect messages
                            and LMS usage, if applicable, at a reasonable and
                            mutually agreeable charge. In addition, any message
                            processing fee associated with ELI's incollect
                            messages that are charged to GTE by the CMDS Host
                            will be passed on to ELI on the monthly statement.
                            All revenue, surcharges, taxes and any other amounts
                            due to the CMDS Host for ELI's incollect messages
                            will be billed on the monthly statement. It is ELI's
                            responsibility to bill and collect all incollect and
                            LMS amounts due from its end users. The incollect
                            and LMS revenue amounts that are listed on the
                            monthly invoice are payable to GTE in total. The
                            Parties agree that the arrangement for invoicing the
                            incollect and LMS revenue amounts due GTE is not a
                            settlement process with ELI.

                  1.2.17.3  Administration. The Parties agree to develop a
                            --------------
                            process whereby ELI's end user information is
                            available in a timely manner to allow GTE to build
                            tables to screen the CMDS incollect files and LMS
                            files on behalf of ELI.

          1.2.18  Backbilling.  GTE shall bill ELI on a timely basis.  In no
                  -----------
                  case shall GTE bill ELI for previously unbilled charges that
                  are for more than six months prior to the current bill date.

     1.3  Order Processing.
          ----------------

          1.3.1  Order Expectations.  ELI agrees to warrant to GTE that it is a
                 -------------------
                 certified provider of telecommunications service. ELI will
                 document its Certificate of Operating Authority on the CLEC
                 Profile and agrees to update this CLEC Profile as required to
                 reflect its current certification. The Parties agree to
                 exchange and to update end user contact and referral numbers
                 for order inquiry, trouble reporting, billing inquiries, and
                 information required to comply with law enforcement and other
                 security agencies of the government. The Parties also agree to
                 exchange and to update internal order, repair and billing point
                 of contacts. Prior to submitting an order

                                      H-7
<PAGE>

                 under this Agreement, ELI shall obtain such documentation as
                 may be required by state and federal laws and regulations.

          1.3.2  GTE shall provide ELI with a specified customer contact center
                 for purposes of placing service orders and coordinating the
                 installation of services. These activities shall be
                 accomplished by telephone call or facsimile until electronic
                 interface capability has been established. The Parties adopt
                 the OBF LSR and DSR forms for the ordering, confirmation and
                 billing of resale and unbundled services. The Parties adopt the
                 OBF ASR forms for the ordering, confirmation and billing of
                 trunk-side interconnection.

          1.3.3  GTE will process such service orders during normal operating
                 hours, at a minimum on each Business Day between the hours of 8
                 a.m. to 8 p.m. Eastern Time and shall implement service orders
                 within the same time intervals used to implement service orders
                 for similar services for its own users.

          1.3.4  GTE will provide current GTE customer proprietary network
                 information (name, address, telephone number and description of
                 services provided by GTE including PIC and white page directory
                 listing information) as provided in Article VI, Section 3. The
                 return of customer information will be via facsimile or via
                 electronic transmission.

          1.3.5  Transfer Between Local Service Providers - GTE will provide a
                 displacement/out service report to a Local Service Provider
                 (LSP) whenever an end user leaves that LSP and procures service
                 from another LSP. When an ELI end user changes to another LSP,
                 GTE will notify ELI when such activity occurs.

2.   Maintenance Systems.

     2.1  General Overview

          2.1.1  If ELI requires maintenance for its local service customers,
                 ELI will initiate a request for repair (sometimes referred to
                 as a "trouble report") by calling GTE's Customer Care Repair
                 Center. During this call, GTE service representatives will
                 verify that the end-user is an ELI customer and will then
                 obtain the necessary information from ELI to process the
                 trouble report. While the ELI representatives are still on the
                 line, GTE personnel will perform an initial analysis of the
                 problem and remote line testing for

                                      H-8
<PAGE>

                 resale services. If engineered services are involved, the call
                 will be made to the GTE SSCC for handling. If no engineering is
                 required and the line testing reveals that the trouble can be
                 repaired remotely, GTE personnel will correct the problem and
                 close the trouble report while ELI representatives are still on
                 the line. If on-line resolution is not possible, GTE personnel
                 will provide ELI representatives a commitment time for repair,
                 and the GTE personnel then will enter the trouble ticket into
                 the GTE service dispatch queue. ELI's repair service commitment
                 times will be within the same intervals as GTE provides to its
                 own end users. Maintenance and repair of GTE facilities is the
                 responsibility of GTE and will be performed at no incremental
                 charge to ELI. If, as a result of an ELI-initiated trouble
                 report, trouble is found to be the responsibility of ELI (e.g.,
                 non-network cause) GTE will charge ELI for trouble isolation.
                 ELI will have the ability to report trouble for its end users
                 to appropriate trouble reporting centers 24 hours a day, 7 days
                 a week. ELI will be assigned a customer contact center when
                 initial service agreements are made.

          2.1.2  Repair calls to the SSCC for engineered services will be
                 processed in essentially the same manner as those by the GTE
                 Customer Care Center. GTE personnel will analyze the problem,
                 provide the ELI representative with a commitment time while
                 they are still on the line, and then place the trouble ticket
                 in the dispatch queue.

          2.1.3  GTE then will process all ELI trouble reports in the dispatch
                 queue along with GTE trouble reports in the order they were
                 filed (first in, first out), with priority given to out-of-
                 service conditions. If, at any time, GTE would determine that a
                 commitment time given to ELI becomes in jeopardy, GTE service
                 representatives will contact ELI by telephone to advise of the
                 jeopardy condition and provide a new commitment time.

          2.1.4  Trouble reports in the dispatch queue will be transmitted
                 electronically to GTE CZT service technicians who will repair
                 the service problems and clear the trouble reports. For cleared
                 ELI trouble reports, GTE service technicians will make a
                 telephone call to ELI directly to clear the trouble ticket. GTE
                 service technicians will make the confirmation call to the
                 telephone number provided by ELI. If ELI is unable to process
                 the call or places the GTE technician on hold, the call will be
                 terminated. To avoid disconnect, ELI may develop an answering
                 system, such as voice mail, to handle the confirmation calls
                 expeditiously.

                                      H-9
<PAGE>

          2.1.5  GTE will provide electronic interface access to operation
                 support systems functions which provide the capability to
                 initiate, status and close a repair trouble ticket. GTE will
                 not provide to ELI real time testing capability on ELI end user
                 services. GTE will not provide to ELI an interface for network
                 surveillance (performance monitoring).

          2.1.6  GTE will resolve repair requests by or for ELI local service
                 customers using GTE's existing repair system in parity with
                 repair requests by GTE end users. GTE will respond to service
                 requests for ELI using the same time parameters and procedures
                 that GTE uses. ELI then would call GTE's Customer Care Center
                 or SSCC while the customers were on hold.

     2.2  Network Management Controls.

          2.2.1  Network Maintenance and Management.  The Parties will work
                 ----------------------------------
                 cooperatively to install and maintain a reliable network.

          2.2.2  Neither Party shall be responsible to the other if necessary
                 changes in network configurations render any facilities of the
                 other obsolete or necessitate equipment changes.

          2.2.3  Network Management Controls.  Each Party shall provide a 24-
                 ---------------------------
                 hour contact number for Network Traffic Management issues to
                 the other's network surveillance management center. A fax
                 number must also be provided to facilitate event notifications
                 for planned mass calling events. Additionally, both Parties
                 agree that they shall work cooperatively that all such events
                 shall attempt to be conducted in such a manner as to avoid
                 degradation or loss of service to other end users. Each Party
                 shall maintain the capability of respectively implementing
                 basic protective controls such as "Cancel To" and "Call Gap."

3.   Electronic Interface.  The Parties shall work cooperatively in the
     --------------------
     implementation of electronic gateway access to GTE operational support
     systems functions in the long-term in accordance with established industry
     standards and any FCC and Commission requirements.

     3.1  ELI shall have immediate access to the following OSS electronic
          interfaces that will provide functionality to enable ELI to service
          customers in an equal and non-discriminatory manner:

                                     H-10
<PAGE>

          3.1.1  Pre-Order functions, e.g., TN Assignment, DD Reservation,
                 Address Validation, Product Availability, that are available on
                 a dial-up or dedicated basis using the Secure Integrated
                 Gateway System (SIGS).

          3.1.2  Order functions that are available on a dial-up or dedicated
                 basis using CONNECT:  Mail file transfer.

          3.1.3  Repair functions, e.g., trouble report repair functions, to
                 allow ELI to determine status and close trouble reports.

          3.1.4  Electronic transfer of the ELI bill in electronic data 811
                 format.

     3.2  ELI may migrate to fully interactive system to system
          interconnectivity. GTE, with input from ELI and other carriers, shall
          provide general interface specifications for electronic access to this
          functionality. These specifications will be provided to enable ELI to
          design system interface capabilities. Development will be in
          accordance with applicable national standards committee guidelines.
          Such interfaces will be available as expeditiously as possible.

     3.3  ELI shall pay the costs and expenses for any new or modified
          electronic interfaces ELI requests that are unique to ELI and that GTE
          determines are technically feasible and GTE agrees to develop to the
          extent authorized by the FCC or the Commission; Provided, however, in
          the event that other LECs subsequently request any specific and unique
          interface for which GTE has previously been paid by ELI, for the first
          ten such LECs, GTE shall reimburse ELI for a pro rata portion of the
          amount previously paid by ELI, to the extent GTE is reimbursed by the
          LEC(s) for such interface.  Costs for development of systems intended
          for common use by competing carriers will be assessed pursuant to the
          method of cost recovery authorized or established by the FCC or the
          Commission or based on a mutually agreed method of cost recovery.

     3.4  ELI shall be responsible for modifying and connecting any of its pre-
          ordering and ordering systems with GTE-provided interfaces as
          described in this Appendix.

4.   GTE Initiated Electronic System Redesigns.  GTE will not charge ELI when
     -----------------------------------------
     GTE initiates its own electronic system redesigns/reconfigurations.

                                     H-11
<PAGE>

                                  APPENDIX I
                                 SS7 SERVICES

                                  ARTICLE 1.
                                  DEFINITIONS

In addition to the definitions contained elsewhere in the Agreement to which
this Appendix I is attached and made a part, for purposes of this Appendix I the
     ----------                                                   ----------
following terms shall have the following meanings.

1.1  "A" Link:  An access signaling link that connects SPs and/or SSPs to STPs.
     --------

1.2  "B" Link:  A bridge signaling link that connects two (2) sets or pairs of
     --------
     STPs, not the STPs within a mated pair, but on the same hierarchical level.

1.3  Compatibility Testing:  Certification testing performed by representatives
     ---------------------
     of GTE and ELI to ensure proper interconnection of CCS network facilities
     for accurate transmission of system signals and messages.  This
     certification testing shall be performed in accordance with the following
     ANSI documents:

     T1.234 Telecommunications - Signaling System Number 7 (SS7) - MTP Levels 2
     and 3 Compatibility Testing (ATIS)
     T1.235 Telecommunications - Signaling System Number 7 (SS7) - SCCP Class 0
     Compatibility Testing (ATIS)
     T1.236 Telecommunications - Signaling System Number 7 (SS7) - ISDN User
     Part Compatibility Testing (ATIS)

1.4  Service:  The service described in Article 2 of this Appendix.
     -------

1.5  Signaling Link:  An end-to-end high-capacity data link (56 kbps) that
     --------------
     transmits supervision and control signals from one network SS7 node to
     another in a CCS network.  The link type identifies the functionality of
     the signaling link sets.  The two link types associated with the Service
     are "A" Links and "B" Links.

1.6  Signaling Point Code (SPC):  A code that identifies the Signaling Point
     --------------------------
     address in the CCS network.  Signaling Point Codes consist of three (3)
     segments of three (3) digits each, identifying the network ID, network
     cluster, and cluster member, respectively.

1.7  Signaling Point of Interface (SPOI):  The point at which GTE hands off
     -----------------------------------
     signaling information to ELI.

                                      I-1
<PAGE>

                                  ARTICLE 2.
                              SERVICE DESCRIPTION

2.1  Provision.  Subject to the terms and conditions of this Appendix, GTE
     ---------
     agrees to provide the Service to ELI.

2.2  Interconnection.  This Agreement is for ELI's interconnection with GTE at
     ---------------
     GTE's __________ STPs to support local exchange services.  ELI shall not
     submit signaling messages in support of interexchange services.

2.3  Service.  The "Service" consists of the following:
     -------

     (a)  Interconnection of GTE's CCS/SS7 network to ELI's CCS/SS7 network is
          via an "A" Link connection between ELI's SP or SSP and GTE's STP.  The
          "A" Link connection is made by a dedicated 56 kbps channel between the
          SP or SSP and the STP.  Any connection from an SSP or an SP to an STP
          pair will have a link to each individual STP (i.e., two (2) links).
          ELI and GTE shall mutually agree upon the location of the SPOI.

     (b)  Interconnection of GTE's CCS/SS7 network to ELI's CCS/SS7 network via
          a "B" Link connection between ELI's STPs and GTE's STPs.  The "B" Link
          connection is a dedicated 56 kbps channel.  Connections between two
          (2) pairs of STPs will have four (4) connections; i.e., one (1) link
          from each individual STP to each individual STP.  ELI and GTE shall
          mutually agree upon the location of the SPOI.

     (c)  Local and IntraLATA call set-up signaling, allowing ELI to use the
          out-of-band trunk signaling provided by GTE's CCS/SS7 network to carry
          its calls on the intraLATA toll network.

     (d)  The Service shall include access to:  (1) all switching systems served
          by a given STP which have been converted to SS7 signaling, including
          switching systems owned by other local service providers; (2)
          databases directly connected to a given STP, with the exception of
          800/888 databases which can be accessed through any STP; (3) other
          local service provider STPs on an intraLATA basis; and (4) other Third
          Party local service provider STPs on an intraLATA basis.

     (e)  It is the responsibility of ELI to populate the "privacy indicator"
          portion of all SS7 signaling messages forwarded to GTE's network.  GTE
          agrees to deliver the information forwarded by ELI in the SS7
          signaling message.  ELI, by entering

                                      I-2
<PAGE>

          into this Agreement, agrees to deliver "privacy indicator" information
          forwarded by GTE in its signaling message.

     (f)  ELI acknowledges that call set-up times may be greater when ELI
          employs intermediate access tandems (IATs) in its network.

     (g)  If selected on the order form attached to this Appendix, the Service
          shall also include IXC call set-up signaling service (ISUP) as
          described in Article 2.4 of this Appendix.  Additional charges as set
          forth in Exhibit A shall apply.

2.4  ISUP Service Charge.  This is an optional service that allows ELI to
     -------------------
     utilize SS7 signaling to an SS7 capable interexchange carrier (IXC) for
     Feature Group D access service and other intraLATA interexchange services.
     The ISUP service is a monthly charge.

     (a)  The rate for ISUP signaling is per connection in situations when GTE
          does not provide any underlying call messages for ELI on GTE's network
          trunks.  The rate for ISUP signaling is shown in Exhibit A.

     (b)  Where GTE has a mated pair of STPs and has CCS/SS7 interconnection
          facilities to an IXC within the same LATA, for interexchange
          telecommunications services, GTE shall provide call set-up signaling
          between ELI and the IXC.

     (c)  ELI agrees to provide to GTE such information as deemed necessary by
          GTE for network planning in connection with this offering and as may
          be requested by GTE from time to time.

     (d)  ELI must provide the Signaling Point Codes of the IXCs for which it is
          providing call setup via GTE's SS7 signaling network, so that GTE
          screening and translation tables can be updated.

2.5  Technical Specifications.  The technical specifications for the Services
     ------------------------
     described above are defined in Bellcore TR-TSV-000905.  GTE will provide
     SS7 via OR-394-SS7 and/or OR-317-SS7 format(s).

2.6  Other Services.  If ELI desires to order SS7-related services other than
     --------------
     the Service, such services will be governed by separate agreements.

2.7  Applicable Traffic.  The Service applies to the traffic of ELI and its
     ------------------
     subtending LECs only.  ELI must provide GTE with thirty (30) calendar days'
     written notice and a letter of agency before the traffic of any party other
     than ELI or its subtending LECs may be transmitted through ELI's facilities
     on to GTE's SS7 network.

                                      I-3
<PAGE>

                                  ARTICLE 3.
                            MANNER OF PROVISIONING

3.1  Link Facilities.  The link facilities to GTE STPs in the same LATA can be
     ---------------
     either:

     (a)  "A" Link sets from ELI's SP or SSP.  A minimum of two (2) links is
          required, one (1) from the SP or SSP to each STP; or,

     (b)  "B" Link sets from ELI's STPs that are connected to GTE's mated pairs
          of STPs.  A minimum of four (4) links is required between the two (2)
          pairs of STPs.

3.2  Port Termination.  An STP port termination is required for each 56 kbps
     ----------------
     access link utilized for the Service.  STP locations are set forth in the
     National Exchange Carrier Association, Inc. (NECA) Tariff, F.C.C. No. 4.

3.3  Signaling Point Codes.  GTE shall install all applicable Signaling Point
     ---------------------
     codes for each signaling link at each of GTE's interconnecting STPs.

3.4  Protocol.  GTE shall provision the Service in accordance with ANSI T1.226
     --------
     Telecommunications - Operations, Administration, Maintenance, and
     Provisioning (OAM&P) -Management of functions for Signaling System No. 7
     (SS7) Network Interconnections (ATIS) with the exception of references to
     OMAP protocol elements.  The Service cannot be established until
     Compatibility Testing has been successfully completed between ELI and GTE.

3.5  56 kbps Channel.  Unless ELI elects to provide such links, GTE shall
     ---------------
     provide two (2) or four (4) 56 kbps circuits as link facilities at rates
     set forth in Article 4 herein.  If approved by GTE, ELI may utilize a 56
     kbps channel of an intraLATA DS1 (1.544 mbps) facility, which is in place
     at the time of ordering, as an "A" Link or a "B" Link, for the STP access
     connection between the SPOI and GTE's STP.  WHEN THIS OPTION IS CHOSEN, ELI
     UNDERSTANDS AND ACCEPTS THAT THE SERVICE PERFORMANCE STANDARDS AS OUTLINED
     IN BELLCORE DOCUMENT TR-TSV-000905 MAY NOT BE MET IN THE PROVISION OF THE
     TOTAL SERVICE.  If such a channel is not utilized, ELI must order DS1
     (1.544 Mbps) service.

3.6  Multiplexing.  Where technically required, GTE shall provide multiplexing
     ------------
     arrangements to ELI at no charge.

3.7  Diversity.  Where technically feasible and not unreasonably economically
     ---------
     burdensome, GTE agrees to allow interoffice and intraoffice diversity.

                                      I-4
<PAGE>

                                  ARTICLE 4.
                               RATES AND CHARGES

4.1  Payment.  ELI agrees to pay to GTE for the Service at the rates and charges
     -------
     set forth in Exhibit A attached to this Appendix and made a part hereof.

4.2  Period.  Subject to Article 4.3 below, the rates and charges shall remain
     ------
     in effect and are firm for a period of twelve (12) months from the
     effective date of this Appendix.  Thereafter, GTE shall give ELI sixty (60)
     calendar days' notice of any price change.  If the new prices are not
     acceptable to ELI, ELI may terminate this Appendix upon thirty (30)
     calendar days' advance written notice without penalties for either Party.

4.3  Rate Basis.  The rates are based upon rates and charges reflected in GTE's
     ----------
     approved CCS/SS7 interconnection tariffs.  To the extent that tariff rates
     are adjusted, rates and charges for similar rate elements in this Appendix
     will be adjusted accordingly on the date the new tariff rates become
     effective.  If a state or federal regulatory agency requires, or GTE
     elects, to offer the Service by tariff, the tariff shall supersede this
     Appendix.  If the Service becomes tariffed, ELI has the right to terminate
     this Appendix upon sixty (60) calendar days' advance written notice
     effective on the effective date of such tariff, without penalty to either
     Party.

4.4  Mileage.  Mileage is calculated on the airline distance between the
     -------
     locations involved, using the V&H coordinates method, as set forth in the
     National Exchange Carrier Association, Inc. Tariff, F.C.C. No. 4.

4.5  Rates and Charges.  Rates and charges for each component of the Service are
     -----------------
     described as follows:

     (a)  "A" Link connection - Charges for the "A" Link connection to GTE's
          CCS/SS7 network consist of the STP port termination charges.

          (1)  The STP port termination charges are for the termination of a 56
               kbps channel at each STP from ELI's SSP or SP.

          (2)  ELI will lease facilities between its SSPs/SPs and GTE's STPs.

     (b)  "B" Link connection - Charges for the "B" Link connection to GTE's
          CCS/SS7 network consist of the STP port termination charges.

                                      I-5
<PAGE>

          (1)  The STP port termination charges are for the termination of a 56
               kbps channel at each STP from ELI's STPs.

          (2)  ELI and GTE shall mutually agree upon the rates for "B" Link
               interconnections within thirty (30) calendar days of the
               execution of this Agreement.

     (c)  STP Interconnection nonrecurring charge - STP interconnection
          nonrecurring charge shall apply for each "A" Link and "B" Link
          interconnection to GTE's SS7 network.

4.6  Rearrangement.  Charges for rearrangement of the Service that are not
     -------------
     specifically addressed will be determined by GTE on an individual case
     basis.

4.7  Applicable Traffic.  The rates apply only to the traffic of ELI and its
     ------------------
     subtending LECs.  Any traffic from any other party will be subject to
     additional charges.

                                  ARTICLE 5.
                             ORDERING THE SERVICE

5.1  Order.  To order the Service, ELI shall submit a completed CCS/SS7 Order
     -----
     Form to GTE.  ELI may change its Service order by submitting a new Order
     Form which shall be effective when executed by both Parties.  Service shall
     be implemented for ELI thirty (30) calendar days after the execution of
     this Agreement by both Parties.

5.2  Port Terminations.  GTE shall reserve STP port terminations only upon
     -----------------
     receipt of a fully executed copy of this Agreement and the Order Form
     referred to in this Appendix.  GTE shall reserve ports on a first come,
     first served basis.  Should ELI fail to use a port within sixty (60)
     Business Days of availability, GTE may reassign the port and, ELI must
     resubmit an Order Form for interconnection.

                                  ARTICLE 6.
                            RESPONSIBILITIES OF GTE

6.1  Managing the Network.  GTE is responsible for managing the network provided
     --------------------
     by GTE as part of the Service and applying protective controls which it can
     invoke as a result of occurrences including, but not limited to, failure or
     overload of GTE or ELI facilities due to natural disasters, mass calling or
     national security demands.

6.2  Performance Standards.  GTE is responsible for meeting service performance
     ---------------------
     standards as outlined in Bellcore TR-TSV-000905 except as otherwise
     provided herein.

                                      I-6
<PAGE>

6.3  Invoice.  GTE shall include with the monthly invoice such data GTE and ELI
     -------
     mutually agree is necessary for ELI to verify the accuracy of the billing
     it receives from GTE for the Service.

                                  ARTICLE 7.
                            RESPONSIBILITIES OF ELI

7.1  Signaling Link.  ELI shall provision the signaling links from its premises
     --------------
     to the SPOIs in a manner technically compatible to the GTE network.

7.2  Privacy Indicator.  ELI shall populate the "privacy indicator" portion of
     -----------------
     the CCS/SS7 initial address message forwarded to GTE's network for call
     processing.

7.3  Accuracy of Information.  ELI shall verify the accuracy of information
     -----------------------
     provided by ELI concerning the Service ordered by ELI.

7.4  Forecast.  ELI shall furnish to GTE, at the time the Service is ordered and
     --------
     annually thereafter, an updated three year forecast of usage for the 56
     kbps channel and the STP port termination for each STP pair.  The forecast
     shall include total annual volume and busy hour busy month volume.  GTE
     shall utilize the forecast in its own efforts to project further facility
     requirements.

7.5  Changes.  ELI agrees to inform GTE in writing at least thirty (30) Business
     -------
     Days in advance of any change in its use of the Service that alters by ten
     percent (10%) or more for any thirty (30) day period the volume of
     signaling transactions to be forwarded to GTE's CCS/SS7 network.  ELI will
     provide the reason for the change in volume by individual SS7 service.

                                  ARTICLE 8.
                             SIGNALING POINT CODES

8.1  Interconnection.  ELI may utilize either the GTE CCS/SS7 network SPC or its
     ---------------
     own SPC for interconnection purposes when interconnecting its SPs or SSPs
     at the "A" Link level.  ELI shall utilize its own SPC when interconnecting
     its STP at the "B" Link level.  ELI agrees to obtain its own initial SPC if
     it has short or long range plans to provide its own STPs.

8.2  SPC.  When the SPC is utilized, GTE shall be responsible for ELI code
     ---
     assignment.  When ELI obtains its own SPC, ELI shall be responsible for
     code assignments and shall

                                      I-7
<PAGE>

     be responsible for notifying GTE and other CCS/SS7 network providers of
     such assignments.

8.3  SPC Change.  Due to the complexities and potential ELI signaling network
     ----------
     downtime required for changing working SPCs, ELI agrees to give GTE a
     written notice of an SPC change as soon as possible but no later than
     thirty (30) Business Days prior to the effective date of the SPC change.

                                  ARTICLE 9.
                                MONTHLY BILLING

Billing statements shall be rendered monthly by GTE to ELI.  The monthly charge
shall be the total of all monthly rate element charges associated with the
Service.  Payment to GTE for bills rendered to ELI shall be due thirty (30)
calendar days after receipt of the invoice and ELI agrees to pay all billed
amounts.  Beginning the day after the due date of the bill, interest charges of
twelve per cent (12%) per annum or the maximum allowed by law, whichever is
less, shall be added to ELI's bill.  Payments shall be applied to the oldest
outstanding amounts first.

                                  ARTICLE 10.
                         LIABILITY AND INDEMNIFICATION

10.1  Release from Liability.  Each Party releases the other from any liability
      ----------------------
      for loss or damage arising out of errors, interruptions, defects,
      failures, delays, or malfunctions of the Service, including any and all
      associated equipment and data processing systems, not caused by gross
      negligence or willful misconduct. Any losses or damages for which either
      Party is held liable under this Agreement shall in no event exceed the
      amount of the charges for the Service during the period beginning at the
      time notice of the error, interruption, defect, failure, or malfunction is
      received, to the time Service is restored.

10.2  Limitation of Liability.  IN ADDITION TO THE LIMITATION OF LIABILITY SET
      -----------------------
      FORTH AT SECTION 24.4 OF ARTICLE III OF THE AGREEMENT, NEITHER PARTY SHALL
      BE LIABLE FOR ANY LOSS OF REVENUE OR PROFIT OR FOR ANY LOSS OR DAMAGE
      ARISING OUT OF THIS AGREEMENT OR OUT OF THE USE OF THE CCS OR ANY OF THE
      SERVICES PROVIDED UNDER THIS AGREEMENT THAT IS SUFFERED BY THE OTHER
      PARTY, WHETHER ARISING IN CONTRACT, TORT (INCLUDING WITHOUT LIMITATION
      NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE AND WHETHER OR NOT INFORMED
      OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE. NEITHER PARTY SHALL BE
      LIABLE FOR ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES.

                                      I-8
<PAGE>

10.3  Third Parties.  Each Party agrees to release, defend, indemnify, and hold
      -------------
      harmless the other Party from and against any and all losses, damages, or
      other liability, including reasonable attorneys' fees, that it may incur
      as a result of claims, demands, wrongful death actions, or other suits
      brought by third parties, arising out of the use of the Service and
      resulting from the gross negligence or willful misconduct by the
      indemnifying Party, its employees, agents, or contractors in the
      performance of this Agreement. In addition, to the extent that the
      Parties' interests do not conflict, ELI shall defend GTE against all end
      users' claims just as if ELI had provided such service to its end users
      with its own employees. In any event, ELI shall assert its tariff
      limitation of liability for the benefit of both GTE and ELI.

10.4  Infringement.  Each Party agrees to release, defend, indemnify, and hold
      ------------
      harmless the other Party from and against any claim, demands or suit that
      asserts any infringement or invasion of privacy or confidentiality of any
      person(s), caused or claimed to be caused, directly or indirectly, by the
      indemnifying Party's employees or equipment associated with provision of
      the Service. This includes, but is not limited to, suits arising from
      disclosure of any customer-specific information associated with either the
      originating or terminating numbers used to provision the Service.

10.5  No Warranties.  IN ADDITION TO THE DISCLAIMER SET FORTH AT SECTION 24.3 OF
      -------------
      ARTICLE III OF THE AGREEMENT, NEITHER GTE NOR ELI MAKES ANY
      REPRESENTATIONS OR WARRANTIES TO THE OTHER OR TO ANY Third Party
      CONCERNING THE SPECIFIC QUALITY OF ANY SERVICES PROVIDED UNDER OR IN
      CONNECTION WITH THIS APPENDIX, THAT THE SERVICES PROVIDED UNDER THIS
      APPENDIX WILL BE ERROR FREE OR THAT THE FACILITIES WILL OPERATE WITHOUT
      INTERRUPTION. GTE AND ELI DISCLAIM, WITHOUT LIMITATION, ANY WARRANTY OR
      GUARANTEE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARISING
      FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR FROM USAGES OF TRADE.

                                  ARTICLE 11.
                             RESERVATION OF RIGHTS

11.1  Rights Reserved.  By entering into this Appendix to the Agreement, neither
      ---------------
      Party waives, releases or compromises any rights it may have to argue, in
      any federal or state regulatory proceeding (or in any judicial appeal
      following such a proceeding), in support of, or in opposition to any
      position, including but not limited to: (a) Accounting for deregulated (or
      detariffed) data base services; (b) removal from regulated accounts of
      expenses and investment associated with deregulated (or detariffed) data
      base services; and (c) any other issue pertinent to regulation or
      deregulation of costs which were, are now, or may in

                                      I-9
<PAGE>

      the future be, associated with the provisions of data base services. Each
      Party expressly reserves all its rights in connection with such matters.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement through
their authorized representatives.

For GTE:                                     For ELI:

GTE NORTHWEST INCORPORATED                   ELECTRIC LIGHTWAVE, Inc.



______________________________________       ___________________________________
(Signature of Authorized Agent)              (Signature of Authorized Agent)


______________________________________       ___________________________________
(Printed Name of Authorized Agent)           (Printed Name of Authorized Agent)
Connie Nicholas
      Assistant Vice President
      Wholesale Markets-Interconnection

______________________________________       ___________________________________
(Title)                                      (Title)


______________________________________       ___________________________________
(Date)                                       (Date)

                                     I-10
<PAGE>

                                   EXHIBIT A

                               RATES AND CHARGES
                            for Interconnection at

GTE's _____________ STP's

                                                                 Rates & Charges
                      Rate Element                     Nonrecurring      Monthly
--------------------------------------------------------------------------------

1.   STP Port Termination for an "A" Link
     Per Port                                               See Tariffed Rates

2.   STP Port Termination for a "B" Link
     Per Port                                               See Tariffed Rates

3.   56 Kbps Digital Facility
     Dedicated Switched Access Transport
     Per Airline Mile                                       See Tariffed Rates

4.   56 Kbps Dedicated Switched Access Line                 See Tariffed Rates

5.   1.544 Mbps (DS1) High Capacity Digital Facility        See Tariffed Rates
     Dedicated Switched Access Transport
     Per Airline Mile                                       See Tariffed Rates

6.   1.544 Mbps (DS1) Dedicated Switched
     Access Line                                            See Tariffed Rates

7.   Facility Charge for "B" Links                          See Tariffed Rates

8.   ISUP Charge per Interconnection                        See Tariffed Rates

8.1  For ISUP Service an additional SCP charge shall apply per interconnection.

                                     I-11
<PAGE>

                                  APPENDIX J
                           POLE ATTACHMENT AGREEMENT


This Appendix is intentionally left blank. The Parties agree to negotiate the
terms and conditions of this Appendix and to amend this Agreement accordingly.

                                      J-1
<PAGE>

                                  APPENDIX K
                          CONDUIT OCCUPANCY AGREEMENT


This Appendix is intentionally left blank.  The Parties agree to negotiate the
terms and conditions of this Appendix and to amend this Agreement accordingly.

                                      K-1
<PAGE>

                                  APPENDIX L
                 RECIPROCAL COMPENSATION FOR CALL TERMINATION
                      WHEN ELI USES GTE UNBUNDLED PORTS,
                      LOCAL SWITCHING & SHARED TRANSPORT

This Appendix is intentionally left blank.  At such time as ELI desires to
obtain unbundled ports, local switching, and shared transport from GTE, the
Parties agree to negotiate the terms and conditions of this Appendix and to
amend this Agreement accordingly.  ELI shall not obtain unbundled ports, local
switching, and shared transport from GTE until such amendment is effective.

                                      L-1
<PAGE>

                                 APPENDIX 37A
                             PERFORMANCE MEASURES

                           GTE PERFORMANCE MEASURES

PRE-ORDERING/ORDERING/PROVISIONING

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Measure No.        Obligation       Data Level       Measurement           Quality Standard
--------------------------------------------------------------------------------------------------------
<S>                <C>              <C>              <C>                   <C>
1                  GTE              National         Prompt                85% of CSR's sent to CLEC by
                                                     transmission          the close of business on
                                                     of Customer           business day following
                                                     Service Record        receipt of request
                                                     (CSR)
                                                     Information
--------------------------------------------------------------------------------------------------------

2                  GTE              National         Prompt                85% of LSC's sent to CLEC by
                                                     transmission          the close of business on
                                                     of Local              business day following
                                                     Service               receipt of request
                                                     Confirmation
                                                     (LSC)
--------------------------------------------------------------------------------------------------------

3                  GTE              State            Due Date              Percent of CLEC customers
                                                     commitments met       install, transfer, and change
                                                                           service orders for which
                                                                           service is installed by close
                                                                           of business on the committed
                                                                           due date is not more than
                                                                           2.5% below the percent of GTE
                                                                           customers install, transfer,
                                                                           and change service orders
--------------------------------------------------------------------------------------------------------

4                  GTE              State            % reporting           Percent of CLEC customers
                                                     trouble within        install, transfer, and change
                                                     30 days of the        Designed service orders which
                                                     date installed        are followed by a customer
                                                                           trouble report
</TABLE>

                                     37A-1
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Measure No.        Obligation       Data Level       Measurement           Quality Standard
--------------------------------------------------------------------------------------------------------
<S>                <C>              <C>              <C>                   <C>
                                                      - Designed           within 30 days of service
                                                                           order completion date is
                                                                           not more than 2.5% worse than
                                                                           the percent GTE customers
                                                                           install, transfer, and change
                                                                           Designed service orders which
                                                                           are followed by a customer
                                                                           trouble report within 30 days
                                                                           of service order completion
--------------------------------------------------------------------------------------------------------

5                  CLEC             National         Service Order         80% of LSR's initiated by
                                                     discrepancy:          CLEC do not contain an order
                                                     LSR's issued          discrepancy or error: 90% in
                                                     without               12 months. Final target - 95%
                                                     material errors
--------------------------------------------------------------------------------------------------------

6                  GTE              National         Average speed         80% of the time GTE will
                                                     of answer per         answer within 20 seconds
                                                     inquiry by
                                                     GTE's call
                                                     center within
                                                     20 seconds
--------------------------------------------------------------------------------------------------------
<CAPTION>
INTERCONNECTION
--------------------------------------------------------------------------------------------------------
Measure No.        Obligation       Data Level       Measurement           Quality Standard
--------------------------------------------------------------------------------------------------------
<S>                <C>              <C>              <C>                   <C>
1                  GTE              State            Trunk orders          Percent of CLEC trunk orders
                                                     completed on          completed by GTE on or before
                                                     or before the         the commitment date is not
                                                     Committed Due         more than 10% below the
                                                     Date                  percent of FG B/D Switched
</TABLE>

                                     37A-2
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Measure No.      Obligation       Data Level       Measurement      Quality Standard
--------------------------------------------------------------------------------------------------------
<S>              <C>              <C>              <C>              <C>
                                                                    access orders by all ordering
                                                                    companies completed by GTE on
                                                                    or before the com mitment date
--------------------------------------------------------------------------------------------------------

2                GTE              National         Firm Order       Percent of CLEC trunk orders
                                                   Confirmation     completed by GTE on or before
                                                   (FOC) on time    the commitment date is not
                                                   delivery         more than 5% below the
                                                                    percent of FG B/D Switched
                                                                    access by all ordering
                                                                    companies for which GTE sends
                                                                    FOC (within 5 days, or longer,
                                                                    as requested by CLEC)
--------------------------------------------------------------------------------------------------------
3* Note: Can     CLEC             National         Service Order    80% of ASR's initiated by
 not report on                                     discrepancy:     CLEC do not contain material
 this measure                                      ASR's issued     error or result in
 until end of                                      without          discrepancy; 90% in 12
 2nd QTR 1998.                                     material errors  months. Final target 95%
--------------------------------------------------------------------------------------------------------
</TABLE>

                                     37A-3
<PAGE>

                              MAINTENANCE/REPAIR

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Measure No.        Obligation       Data Level       Measurement           Quality Standard
--------------------------------------------------------------------------------------------------------
<S>                <C>              <C>              <C>                   <C>
1                  GTE              State            Percent               Percent of CLEC customers
                                                     Commitments Met       Network trouble reports where
                                                                           commitment was met more than
                                                                           2.5% worse than the percent of
                                                                           GTE's customer Network trouble
                                                                           reports where commitment was
                                                                           met (excluding reports which
                                                                           are cleared CPE, CLEC
                                                                           customers error)
--------------------------------------------------------------------------------------------------------

2                  GTE              State            Average               Average repair time (total
                                                     clearing time         number of elapsed hours/
                                                     - Out of              minutes for OOS CLEC customers
                                                     Service (OOS)         Network trouble reports
                                                     - Designed            divided by  total number OOS
                                                                           customer Network trouble
                                                                           reports) for CLEC customers is
                                                                           more than 10% of the average
                                                                           repair time for GTE customers
                                                                           (includes only "Designed"
                                                                           services)
--------------------------------------------------------------------------------------------------------

3                  GTE              State            Average               Average repair time (total
                                                     clearing time         number of elapsed
                                                     - Out Of              hours/minutes for OOS CLEC
                                                     Service (OOS)         customers Network trouble
                                                     - Non-Designed        reports divided by total
                                                                           number OOS customer Network
                                                                           trouble reports) for CLEC
                                                                           customers is more than 10% of
                                                                           the average repair time for
                                                                           GTE customers (includes only
</TABLE>

                                     37A-4
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Measure No.        Obligation       Data Level       Measurement           Quality Standard
--------------------------------------------------------------------------------------------------------
<S>                <C>              <C>              <C>                   <C>
                                                                           POTS and circuits which do not
                                                                           require a design)
--------------------------------------------------------------------------------------------------------

4                  GTE              State            Percent               Percent of CLEC customers
                                                     reports per           making trouble reports (total
                                                     100 (Failure          number of CLEC customers
                                                     Frequency)            Network trouble reports
                                                                           divided by the total access
                                                                           lines multiplied by 100) is
                                                                           not worse than .5 percent
                                                                           points of the percentage of
                                                                           GTE customers making trouble
                                                                           reports
--------------------------------------------------------------------------------------------------------

5                  GTE              National         Average speed         80% of the time GTE will
                                                     of answer per         answer within 20 seconds
                                                     inquiry by
                                                     GTE's call
                                                     center within
                                                     20 seconds
 --------------------------------------------------------------------------------------------------------

6                  GTE              State            Percent repeat        Percent of CLEC customers
                                                     reports in 30         repeat trouble reports (total
                                                     days                  number of CLEC customers
                                                                           Network trouble reports  which
                                                                           had a previous Network trouble
                                                                           report within the last 30 days
                                                                           divided by the total of
                                                                           customer Network trouble
                                                                           reports multiplied by 100) is
                                                                           not more than 2.5% worse than
                                                                           the percent of GTE customers
                                                                           repeat trouble reports
--------------------------------------------------------------------------------------------------------
</TABLE>

                                     37A-5
<PAGE>

Note: Outage Credits: Local Service and Unbundled Network Elements: Outage
Credits apply to interruptions of Local Services and Unbundled Network Elements
in accordance with applicable Commission requirements. If a Local Service or
Unbundled Network Element is interrupted, ELI will be entitled to outage
credits. An interruption period begins when ELI reports to GTE that a Local
Service or Unbundled Network Element is interrupted (or GTE has knowledge that
an interruption has occurred through service monitoring or other means). An
interruption period ends when the Local Service is repaired and returned to ELI.
A Local Service or Unbundled Network Element is considered to be interrupted
when there has been a loss of continuity, the Local Service or Unbundled Network
Element does not operate in accordance with the applicable service standards, or
it is otherwise unavailable for use by ELI. This definition is not intended to
conflict with Commission requirements.

                                     37A-6
<PAGE>

                                    BILLING

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Measure No.    Obligation     Data Level      Measurement        Quality Standard
----------------------------------------------------------------------------------------------------
<S>            <C>            <C>             <C>                <C>
1              GTE            National        Timeliness:        GTE agrees to make an initial
                                              Percentage of      assessment of it's capability to
                                              Service Order      measure the percent of dollar
                                              related Monthly    amount due for service orders
                                              recurring and      billed in the current billing
                                              Non recurring      period in which the service order
                                              charges billed     was completed. Quality Standard to
                                              within 30 days     be determined.
                                              from the LSR
                                              effective date.
----------------------------------------------------------------------------------------------------

2              GTE            National        Timeliness:        GTE agrees to make an initial
                                              Percentage of      assessment of it's capability to
                                              IntraLata toll     measure the percent of dollar
                                              charges billed     amount due for Usage charges
                                              within 90 days     billed within 90 days from the
                                              from the date      date the service was rendered.
                                              the call was       Quality Standard to be determined.
                                              recorded.
----------------------------------------------------------------------------------------------------

3              GTE            National        Accuracy:          GTE agrees to make an initial
                                              Percent of         assessment of it's capability to
                                              wholesale          measure the percent of total Net
                                              charges billed     dollars accurately billed,
                                              accurately.        excluding bill correcting
                                                                 adjustments resulting from CLEC's
                                                                 inaccurate LSR's. Quality Standard
                                                                 to be determined.
----------------------------------------------------------------------------------------------------

4              GTE            National        Timeliness:        GTE agrees to make an initial
                                              Percentage of      assessment of it's capability to
                                              adjustments        measure the percent of all
                                              posted to the      corrections and adjustments made
</TABLE>

                                     37A-7
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Measure No.    Obligation     Data Level      Measurement        Quality Standard
----------------------------------------------------------------------------------------------------
<S>            <C>            <C>             <C>                <C>
                                              customers          within agreed time frames. Quality
                                              wholesale bill     Standard to be determined.
                                              within 60 days
                                              from receipt of
                                              a Billing
                                              Inquiry form.
----------------------------------------------------------------------------------------------------

5              GTE            National        Customer Usage     GTE's initial service performance
                                              Data:              threshold will be 94% of all
                                              Timeliness:        messages delivered within 6 days
                                              Delivery of all    from when the message was recorded
                                              messages           by GTE.
                                              delivered within
                                              5 days of when
                                              the message was
                                              recorded
----------------------------------------------------------------------------------------------------

6              GTE            National        Customer Usage     GTE's service delivery threshold
                                              Data: Accuracy     will be established at 99% of
                                              of transmitted     recorded Usage data correctly
                                              customer Usage     transmitted to CLEC.
                                              data
----------------------------------------------------------------------------------------------------
<CAPTION>
                                  FORECASTING
----------------------------------------------------------------------------------------------------
Measure No.    Obligation     Data Level      Measurement        Quality Standard
----------------------------------------------------------------------------------------------------
<S>            <C>            <C>             <C>                <C>
1              CLEC           State           Service Units      Volume of CLEC's Service Units
                                              requirements       requirements in a month is not
                                              accurately         greater than 10% below the amount
                                              forecast all       forecast by CLEC in it's most
                                              volumes for each   recent quarterly forecast (which
                                              month contained    shall have been made not later
                                              in the quarterly   than 30 days prior to the quarter
                                              report.            in question)
----------------------------------------------------------------------------------------------------
</TABLE>

                                     37A-8
<PAGE>

                                 APPENDIX 46A
                                  AT&T TERMS

The rates, terms, and conditions referred to in this Appendix 46A are effective
and replace or supplement the correlative rates, terms, and conditions set forth
in the "GTE Terms" listed in Appendix 46B, as and when provided by Article III,
Section 46, of this Agreement, and only until, as long as, and under the
conditions prescribed by Article III, Section 46.

The following rates in Appendix 9 to Attachment 14 of the AT&T Agreement will
apply instead of the rates in Appendix F of this Agreement:

1.   Local Loops
          2 Wire Analog Voice Grade Loop                               $   15.00
          4 Wire Analog Voice Grade Loop                               $   30.00
          2 Wire Digital Loop                                          $   15.00
          4 Wire Digital Loop                                          $   30.00
          DS-1 Loop                                                    $   87.37
          DS-3 Loop                                                    $  363.42

2.   Local Switching (must purchase port)
       Ports
          2 Wire Analog Line Port                                      $    1.14
          2 Wire ISDN Digital Line Port                                $    6.09
          DS-1 Digital Trunk Port                                      $   78.24

       Local Switching                                                 $0.001463

     Vertical Features                      See Attached

3.   Dedicated Transport
       CLEC Dedicated Transport
          2 Wire Voice                                                 $   15.00
          4 Wire Voice                                                 $   30.00
          DS1 Standard 1st System                                      $   87.37
          DS1 Standard Add'l System                                    $   87.37
          DS3 Optical Interface                                        $  363.42
       Multiplexing
          DS1 to Voice Multiplexing                                    $  212.76
          DS3 to DS1 Multiplexing                                      $  203.54

       Interoffice Dedicated Transport
          Voice Facility Per ALM                                       $     .08
          Voice Facility Termination                                   $   19.74
          DS1 Facility Per ALM                                         $     .85
          DS1 Per Termination                                          $   37.94
          DS3 Facility Per ALM                                         $   10.19
          DS3 Per Termination                                          $  253.13

                                     46A-1
<PAGE>

                      OREGON UNBUNDLED VERTICAL FEATURES

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
               VERTICAL FEATURES                                    (Subject to Availability)
---------------------------------------------------------------------------------------------
<S>                                                 <C>             <C>
Three Way Calling                                    $/line/month                       $0.12
---------------------------------------------------------------------------------------------
Call Forwarding Variable                             $/line/month                       $0.12
---------------------------------------------------------------------------------------------
Call Waiting                                         $/line/month                       $0.11
---------------------------------------------------------------------------------------------
Automatic Callback                                   $/line/month                       $0.24
---------------------------------------------------------------------------------------------
Calling Number Delivery                              $/line/month                       $0.08
---------------------------------------------------------------------------------------------
Calling Number Delivery Blocking                     $/line/month                       $0.00
---------------------------------------------------------------------------------------------
Distinctive Ringing / Call Waiting                   $/line/month                       $0.08
---------------------------------------------------------------------------------------------
Customer Originated Trace                            $/line/month                       $0.91
---------------------------------------------------------------------------------------------
Selective Call Rejection                             $/line/month                       $1.28
---------------------------------------------------------------------------------------------
Selective Call Forwarding                            $/line/month                       $0.62
---------------------------------------------------------------------------------------------
Call Forwarding Variable CTX                         $/line/month                       $0.12
---------------------------------------------------------------------------------------------
Call Forwarding Busy Line                            $/line/month                       $0.25
---------------------------------------------------------------------------------------------
Call Forwarding Don't Answer All Calls               $/line/month                       $0.18
---------------------------------------------------------------------------------------------
Call Waiting Originating                             $/line/month                       $0.11
---------------------------------------------------------------------------------------------
Call Waiting Terminating                             $/line/month                       $0.11
---------------------------------------------------------------------------------------------
Three Way Calling CTX                                $/line/month                       $0.12
---------------------------------------------------------------------------------------------
Call Transfer Individual All Calls                   $/line/month                       $0.31
---------------------------------------------------------------------------------------------
Speed Calling Individual 1-Digit                     $/line/month                       $0.06
---------------------------------------------------------------------------------------------
Speed Calling Individual 2-Digit                     $/line/month                       $0.06
---------------------------------------------------------------------------------------------
Call Hold                                            $/line/month                       $0.05
---------------------------------------------------------------------------------------------
Call Pick-up                                         $/line/month                       $0.06
---------------------------------------------------------------------------------------------
Preferential Multiline Hunting                       $/line/month                       $0.05
---------------------------------------------------------------------------------------------
Teen Service                                         $/line/month                       $0.08
---------------------------------------------------------------------------------------------
Last Number Redial                                   $/line/month                       $0.24
---------------------------------------------------------------------------------------------
Warm Line                                            $/line/month                       $0.07
---------------------------------------------------------------------------------------------
Calling Name Delivery                                $/line/month                       $0.17
---------------------------------------------------------------------------------------------
</TABLE>

                                     46A-2