UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended September 30, 2000
                                       OR

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


                         Commission File No. 000-31359


                                CORECOMM LIMITED
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                    23-3032245
            --------                                    ----------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)




110 East 59th Street, New York, New York                                  10022
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)


                                 (212) 906-8440
                                 --------------
              (Registrant's telephone number, including area code)

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

                             Yes   X    No
                                 -----     -----

The number of shares  outstanding  of the issuer's  common stock as of September
30, 2000 was 72,024,560.



<PAGE>




                                      Index


PART I.  FINANCIAL INFORMATION                                              Page

Item 1.      Financial Statements

             Condensed Consolidated Balance Sheets -
             September 30, 2000 and December 31, 1999 .......................  2

             Condensed Consolidated Statements of Operations -
             Three and nine months ended September 30, 2000 and 1999  .......  3

             Condensed Consolidated Statement of Shareholders' Equity -
             Nine months ended September 30, 2000  ..........................  4

             Condensed Consolidated Statements of Cash Flows -
             Nine months ended September 30, 2000 and 1999  .................  5

             Notes to Condensed Consolidated Financial Statements ...........  6

Item 2.      Management's Discussion and Analysis of Results of
             Operations and Financial Condition ............................  14

Item 3.      Quantitative and Qualitative Disclosures about Market Risk ....  22


PART II.     OTHER INFORMATION

Item 4.      Submission of Matters to a Vote of Security Holders  ..........  24

Item 6.      Exhibits and Reports on Form 8-K ..............................  24

SIGNATURES   ...............................................................  26

<PAGE>

                        CoreComm Limited and Subsidiaries


PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                        CoreComm Limited and Subsidiaries
                      Condensed Consolidated Balance Sheets


<TABLE>
<CAPTION>

                                                                   September 30,        December 31,
                                                                        2000                1999
                                                                  ---------------     --------------
                                                                    (Unaudited)         (See Note)
<S>                                                               <C>                 <C>
Assets
Current assets:
   Cash and cash equivalents                                      $    34,961,000     $   86,685,000
   Marketable securities                                               15,587,000         92,041,000
   Accounts  receivable-trade,  less allowance for
     doubtful  accounts of $9,174,000 (2000)
     and $3,949,000 (1999)                                             39,924,000          7,875,000
   Due from NTL Incorporated                                            1,814,000            195,000
   Other                                                               16,244,000          5,791,000
                                                                  ---------------     --------------
Total current assets                                                  108,530,000        192,587,000

Fixed assets, net                                                     171,174,000         90,619,000
Goodwill, net of accumulated amortization of
  $14,568,000 (2000) and $7,262,000 (1999)                            370,261,000         57,888,000
LMDS license costs                                                     25,366,000         25,366,000
Other, net of accumulated amortization
  of $5,363,000 (2000) and $2,202,000 (1999)                          438,924,000         25,643,000
                                                                  ---------------     --------------
                                                                  $ 1,114,255,000       $392,103,000
                                                                  ===============     ==============
Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                                                $    52,694,000     $   13,851,000
  Accrued expenses                                                     75,702,000         32,215,000
  Equipment payable                                                             -          4,702,000
  Current portion of long-term debt and capital
    lease obligations                                                  24,346,000         19,127,000
  Deferred revenue                                                     13,941,000          1,400,000
                                                                  ---------------     --------------
Total current liabilities                                             166,683,000         71,295,000

Long-term debt                                                        356,759,000        179,318,000
Capital lease obligations                                               5,984,000         14,564,000

Commitments and contingent liabilities

Shareholders' equity:
  Series preferred stock - $.01 par value,
   authorized 5,000,000 shares:
     Series A, liquidation  preference  $50,024,000;
       issued and outstanding  50,000 (2000)
       and none (1999) shares                                                   -                  -
     Series B, liquidation preference  $250,074,000;
       issued and outstanding 250,000 (2000) and
       none (1999) shares                                                   3,000                  -
     Series C,  none issued or outstanding                                      -                  -
  Common stock - $.01 par value, authorized
    200,000,000 shares; issued and outstanding
    72,025,000 (2000) and 38,556,000 (1999) shares                        720,000            386,000
Additional paid-in capital                                            912,539,000        246,319,000
Deferred non-cash compensation                                        (24,870,000)                 -
(Deficit)                                                            (292,989,000)      (119,779,000)
                                                                  ---------------     --------------
                                                                      595,403,000        126,926,000
Treasury stock at cost, 1,329,000 shares                              (10,574,000)                 -
                                                                  ---------------     --------------
                                                                      584,829,000        126,926,000
                                                                  ---------------     --------------
                                                                  $ 1,114,255,000     $  392,103,000
                                                                  ===============     ==============
</TABLE>

Note:  The balance  sheet at December 31, 1999 has been derived from the audited
balance sheet at that date. See accompanying notes.

<PAGE>


                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended September 30,           Nine Months Ended September 30,
                                                         2000             1999                       2000             1999
                                                    -------------    -------------             --------------    -------------
<S>                                                 <C>              <C>                       <C>               <C>

Revenues                                            $  18,263,000    $  21,107,000             $   56,619,000    $  37,139,000

Costs and expenses
Operating                                              25,746,000       23,374,000                 77,446,000       37,524,000
Selling, general and administrative                    23,123,000       24,205,000                 72,044,000       43,725,000
Corporate                                               3,363,000        2,346,000                  8,559,000        6,489,000
Non-cash compensation                                   3,234,000        1,056,000                 35,420,000        1,056,000
Nonrecurring charges                                     (243,000)               -                    775,000                -
Depreciation                                            7,389,000        4,964,000                 19,494,000        6,674,000
Amortization                                            3,477,000        3,833,000                  9,812,000        5,005,000
                                                    -------------    -------------             --------------    -------------
                                                       66,089,000       59,778,000                223,550,000      100,473,000
                                                    -------------    -------------             --------------    -------------
Operating (loss)                                      (47,826,000)     (38,671,000)              (166,931,000)     (63,334,000)

Other income (expense)
Interest income and other, net                          1,626,000          546,000                  5,476,000        3,416,000
Interest expense                                       (3,900,000)      (1,351,000)               (11,434,000)      (1,569,000)
                                                    -------------    -------------             --------------    -------------
(Loss) before income tax provision                    (50,100,000)     (39,476,000)              (172,889,000)     (61,487,000)
Income tax provision                                      (49,000)        (274,000)                  (321,000)        (839,000)
                                                    -------------    -------------             --------------    -------------
Net (loss)                                          $ (50,149,000)   $ (39,750,000)            $ (173,210,000)   $ (62,326,000)
                                                    =============    =============             ==============    =============

Basic and diluted net (loss) per share                     $(1.24)          $(1.08)                    $(4.35)          $(1.90)
                                                    =============    =============             ==============    =============


See accompanying notes.
</TABLE>
<PAGE>


            Condensed Consolidated Statement of Shareholders' Equity
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                   Series A        Series B Preferred
                                                Preferred Stock          Stock                 Common Stock          Additional
                                                ---------------    ------------------    ----------------------       Paid-In
                                                Shares     Par      Shares     Par          Shares        Par         Capital
                                                ---------------    ------------------    ----------------------    ------------
<S>                                             <C>       <C>      <C>        <C>        <C>           <C>
Balance, December 31, 1999                                                               38,556,000    $386,000    $246,319,000
Exercise of stock options                                                                 1,605,000      16,000      12,170,000
Exercise of warrants                                                                         35,000           -         276,000
Common stock issued for acquisitions                                                     31,829,000     318,000     333,011,000
Preferred stock issued for an acquisition                          250,000    $ 3,000                               199,997,000
Preferred stock issued for cash                 50,000    $   -                                                      50,000,000
Accreted dividends on preferred stock                                                                                   (98,000)
Deferred non-cash compensation                                                                                       60,290,000
Non-cash compensation expense
Common stock issued for acquisition and
   returned to treasury, at cost                                                                                     10,574,000
Net (loss) for the nine months ended
   September 30, 2000
                                                ---------------    ------------------    ----------------------    ------------
Balance, September 30, 2000                     50,000    $   -    250,000    $ 3,000    72,025,000    $720,000    $912,539,000
                                                ======    =====    =======    =======    ==========    ========    ============

</TABLE>

<TABLE>
<CAPTION>


                                                 Deferred                              Treasury Stock
                                                 Non-Cash                        --------------------------
                                                Compensation       (Deficit)       Shares         Amount
                                                ------------    -------------    --------------------------
<S>                                             <C>             <C>              <C>           <C>
Balance, December 31, 1999                                      $(119,779,000)
Exercise of stock options
Exercise of warrants
Common stock issued for acquisitions
Preferred stock issued for an acquisition
Preferred stock issued for cash
Accreted dividends on preferred stock
Deferred non-cash compensation                  $(31,338,000)
Non-cash compensation expense                      6,468,000
Common stock issued for acquisition and
   returned to treasury, at cost                                                 (1,329,000)   $(10,574,000)
Net (loss) for the nine months ended
   September 30, 2000                                            (173,210,000)
                                                ------------    -------------    --------------------------
Balance, September 30, 2000                     $(24,870,000)   $(292,989,000)   (1,329,000)   $(10,574,000)
                                                ============    =============    ==========    ============

</TABLE>

The  Condensed  Consolidated  Statement of  Shareholders'  Equity  reflects on a
retroactive  basis the 3-for-2  stock split by way of a stock  dividend  paid on
February 2, 2000.


See accompanying notes.
<PAGE>

                        CoreComm Limited and Subsidiaries


                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                               Nine Months Ended September 30,
                                                                             ---------------------------------
                                                                                   2000               1999
                                                                             ---------------------------------
<S>                                                                          <C>                 <C>

Net cash (used in) operating activities                                      $ (112,320,000)     $ (47,973,000)

Investing activities
Purchase of fixed assets                                                        (43,573,000)       (14,906,000)
Acquisitions, net of cash acquired                                              (92,320,000)       (47,056,000)
Purchase of marketable securities                                               (36,021,000)       (65,299,000)
Proceeds from sales of marketable securities                                    114,870,000        154,544,000
                                                                             ---------------------------------
Net cash provided by (used in) investing activities                             (57,044,000)        27,283,000

Financing activities
Proceeds from borrowing, net of financing costs                                  71,161,000                  -
Proceeds from issuance of preferred stock                                        50,000,000                  -
Proceeds from exercise of stock options and warrants                             12,462,000         13,101,000
Principal payments                                                               (4,217,000)        (2,214,000)
Principal payments of capital lease obligations                                 (11,766,000)        (1,534,000)
                                                                             ---------------------------------
Net cash provided by financing activities                                       117,640,000          9,353,000
                                                                             ---------------------------------
Decrease in cash and cash equivalents                                           (51,724,000)       (11,337,000)
Cash and cash equivalents at beginning of period                                 86,685,000         26,161,000
                                                                             ---------------------------------
Cash and cash equivalents at end of period                                   $   34,961,000      $  14,824,000
                                                                             =================================

Supplemental disclosure of cash flow information
 Cash paid for interest                                                        $ 13,752,000      $     735,000
 Income taxes paid                                                                  364,000          1,209,000

Supplemental schedule of non-cash investing activities
 Liabilities incurred to acquire fixed assets                                  $ 37,529,000       $  6,335,000
 Common stock, preferred stock and warrants issued for acquisitions             533,329,000         43,203,000
 Notes issued for acquisitions                                                  108,669,000                  -


See accompanying notes.
</TABLE>
<PAGE>

                        CoreComm Limited and Subsidiaries


              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


NOTE 1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Rule 10-01 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating  results for the three and nine months ended September
30, 2000 are not necessarily  indicative of the results that may be expected for
the year  ending  December  31,  2000.  For  further  information,  refer to the
consolidated   financial  statements  and  footnotes  thereto  included  in  the
Company's annual report on Form 10-K for the year ended December 31, 1999.

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments  and  Hedging  Activities,"  which is  required to be adopted by the
Company  effective  January 1, 2001.  Management  does not  anticipate  that the
adoption  of  this  standard  will  have a  significant  effect  on  results  of
operations, financial condition or cash flows of the Company.

In January  2000,  the Company  declared a 3-for-2 stock split by way of a stock
dividend,  which  was paid on  February  2,  2000.  The  condensed  consolidated
financial  statements and the notes thereto give retroactive effect to the stock
split.

NOTE 2.  DOMESTICATION MERGER

In September 2000, CoreComm Limited, a Bermuda corporation, merged with and into
its  newly-formed,  wholly-owned  Delaware  corporate  subsidiary.  The Delaware
corporation then merged into ATX Telecommunications  Services, Inc. ("ATX") with
ATX being the surviving  corporation and changing its name to CoreComm  Limited.
For accounting  purposes,  the Company's  predecessor is CoreComm  Limited,  the
Bermuda corporation.

NOTE 3.  ACQUISITIONS

On  September  29,  2000,  the  Company  completed  two  significant   strategic
acquisitions.  The  Company  acquired  Voyager.net,  Inc.  ("Voyager"),  a large
independent  Internet  communications  company focused on the Midwestern  United
States.  Voyager  was  acquired  for  approximately  $36.1  million  in cash and
19,431,000  shares of the Company's common stock. The common stock was valued at
$154.6 million, the fair value at the time of the closing of the transaction. In
addition,  the Company incurred  acquisition related costs of approximately $8.5
million and repaid approximately $24.0 million of Voyager debt including accrued
interest.
<PAGE>



        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)


NOTE 3.  ACQUISITIONS (CONTINUED)

The Company also acquired ATX, a competitive  local  exchange  carrier  ("CLEC")
providing  integrated  voice  and  high-speed  data  services,   including  long
distance,  local,  wireless  and network  services  through the use of telephone
switching  equipment  and other  physical  facilities in the New York - Virginia
corridor.   ATX  was  acquired  for   approximately   $39.4   million  in  cash,
approximately  $108.7 million of the Company's  senior unsecured notes due 2003,
12,398,000  shares of the Company's common stock and $250.0 million  liquidation
preference  of the  Company's  Series B preferred  stock.  The common  stock was
valued at $178.7  million,  the fair value at the time of the third amendment to
the ATX merger  agreement  on July 31,  2000.  The Series B preferred  stock was
valued at $200.0 million,  the fair value on the date of issuance.  In addition,
the Company incurred acquisition related costs of approximately $11.0 million.

These  acquisitions have been accounted for as purchases,  and,  accordingly the
net assets of the  acquired  business  have been  included  in the  consolidated
financial  statements at September 30, 2000. The results of operations  from the
date  of  acquisition  to  September  30,  2000 of  Voyager  and  ATX  were  not
significant and have not been included in the Company's  consolidated results of
operations.  The aggregate  purchase price of $761.0 exceeded the estimated fair
value of net tangible assets acquired by $721.2 million,  which was allocated as
follows:  $401.5 million to other intangibles and $319.7 to goodwill.  Under the
purchase  method of  accounting,  the purchase  price is allocated to the assets
acquired  and  liabilities  assumed  based  on  the  estimated  fair  values  at
acquisition.  Changes  to the  allocation  of  purchase  price are  expected  as
valuations or appraisals of assets and liabilities are completed.

In May 1999,  the Company  acquired  100% of the stock of MegsINet  Inc. and the
CLEC assets of USN Communications, Inc. These acquisitions were accounted for as
purchases,  and,  accordingly,  the net assets and results of  operations of the
acquired businesses were included in the consolidated  financial statements from
the dates of acquisition.

The pro forma unaudited  consolidated  results of operations for the nine months
ended September 30, 2000 and 1999 assuming  consummation of the  acquisitions as
of January 1, 1999 are as follows:

                                                 Nine Months Ended September 30,
                                                2000                   1999
                                            ------------------------------------
  Total                                       $226,437,000        $208,056,000
  Net (loss)                                  (275,155,000)       (183,591,000)
   Basic and diluted net (loss) per share            (4.13)              (3.00)

A component of the 1999 pro forma results is associated  with the acquisition of
certain assets of USN.  Although USN quickly developed a large customer list and
revenue base in 1997 and 1998, it had difficulties under its previous management
providing  services,  including  billing,  customer  care and other  operational
areas, and filed for bankruptcy in February 1999. Since the acquisition, we have
been focusing on improving  these  operations,  and have been successful in many
areas. However,  because of quality deficiencies in the operations acquired from
USN,  and the need to improve  quality in order to continue to sell lines in the
former USN markets, and consistent with our due diligence, transaction structure
and  purchase   price,   revenues   associated  with  the  USN  assets  declined
significantly since our acquisition.
<PAGE>


        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

NOTE 4.  FIXED ASSETS
<TABLE>
<CAPTION>

Fixed assets consist of:
                                                                           September 30,          December 31,
                                                                                2000                    1999
                                                                      ---------------------------------------------
<S>                                                                   <C>                      <C>

                                                                            (Unaudited)

  Operating equipment                                                        $100,326,000           $ 50,290,000
  Computer hardware and software                                               34,548,000             17,455,000
  Other equipment                                                              27,081,000              9,300,000
  Construction-in-progress                                                     39,595,000             24,681,000
                                                                      ---------------------------------------------
                                                                              201,550,000            101,726,000
  Accumulated depreciation                                                    (30,376,000)           (11,107,000)
                                                                      ---------------------------------------------
                                                                             $171,174,000           $ 90,619,000
                                                                      =============================================

NOTE 5. ACCRUED EXPENSES

Accrued expenses consist of:
                                                                           September 30,          December 31,
                                                                                2000                    1999
                                                                      ---------------------------------------------
                                                                            (Unaudited)

  Payroll and related                                                        $  5,274,000           $  2,903,000
  Taxes, including income taxes                                                 9,528,000              6,089,000
  Accrued equipment purchases                                                  16,986,000             13,455,000
  Toll and interconnect                                                        15,480,000                637,000
  Acquisition costs                                                            17,035,000                      -
  Other                                                                        11,399,000              9,131,000
                                                                      ---------------------------------------------
                                                                              $75,702,000            $32,215,000
                                                                      =============================================

NOTE 6. LONG-TERM DEBT

Long-term debt consists of:
                                                                         September 30, 2000     December 31, 1999
                                                                       ----------------------- --------------------
                                                                            (Unaudited)

  6% Convertible Subordinated Notes                                           $175,000,000          $175,000,000
  Working capital promissory note, interest at 8.5%                              2,071,000             3,077,000
  Note payable for equipment, interest at 12.75%                                 4,441,000             6,238,000
  Senior secured credit facility                                                75,000,000               -
  Senior unsecured notes                                                       108,669,000               -
  Other                                                                            192,000               283,000
                                                                       ----------------------- --------------------
                                                                               365,373,000           184,598,000
  Less current portion                                                           8,614,000             5,280,000
                                                                       ----------------------- --------------------
                                                                              $356,759,000          $179,318,000
                                                                       ======================= ====================
</TABLE>
<PAGE>


        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)


NOTE 6. LONG-TERM DEBT (CONTINUED)

In September  2000,  subsidiaries  of the Company  entered into a senior secured
credit  facility with The Chase Manhattan Bank as lender,  administrative  agent
and collateral  agent.  The senior secured credit  facility  provides for both a
term loan facility and a revolving  credit  facility.  The term loan facility is
for an initial aggregate amount of $100.0 million and will amortize in quarterly
installments of principal  commencing on December 31, 2003 with a final maturity
on September  22, 2008.  At September  30, 2000,  the Company had $50.0  million
outstanding under the term loan facility. The revolving credit facility is for a
total of $50.0 million. The revolving credit facility shall be automatically and
permanently reduced in increasing quarterly installments of principal commencing
on December 31, 2003 with a termination date of September 22, 2008. At September
30, 2000, the Company had $25.0 million  outstanding  under the revolving credit
facility.  In the event the 6%  Convertible  Notes  have not been  converted  or
refinanced on or prior to April 1, 2006,  then the facilities  become payable in
full on April 1, 2006.

The  interest  rate on both the term  loan  facility  and the  revolving  credit
facility is initially,  at the Company's option, either 3.25% per annum plus the
base rate,  which is the higher of the prime rate or the federal funds effective
rate plus 0.50% per annum; or the reserve-adjusted London Interbank Offered Rate
(Adjusted LIBOR) plus 4.25% per annum. The applicable  margin for the facilities
will be subject to reductions  based on the ratio of the Company's  consolidated
total debt to annualized  EBITDA. At September 30, 2000, the effective  interest
rate on the  amounts  outstanding  was  11.04%.  Interest  is  payable  at least
quarterly.  The unused  portion of the facility is subject to a  commitment  fee
equal to 1.25% per annum  payable  quarterly,  subject to reduction to 1.00% per
annum based upon the amount borrowed under the facility. The availability of the
remaining $75 million under the senior secured credit facility is subject to the
satisfaction of certain conditions.

In September  2000,  the Company  issued  approximately  $108,669,000  aggregate
principal  amount of the senior  unsecured  notes to the former  stockholders of
ATX. The senior  unsecured  notes mature on September 29, 2003.  Interest on the
notes is at an annual rate of 6.47% payable in either cash or common  stock,  at
the Company's election, on October 1 and April 1 of each year beginning on April
1, 2001. The notes require principal  payments of approximately  $2.1 million on
January 1, 2001,  approximately  $640,000 on March 29, 2001,  approximately $2.7
million on January 1, 2002 and approximately $2.7 million on January 1, 2003.
<PAGE>



        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)




NOTE 7. PREFERRED STOCK

In September  2000, the Company issued 50,000 shares of Series A preferred stock
in  exchange  for  cash of $50  million.  The  Series  A  preferred  stock  pays
cumulative  dividends at 8.5% per annum of the  liquidation  value of $1,000 per
share,  payable quarterly in arrears. At the Company's option,  dividends may be
paid either in cash,  shares of common  stock or  additional  shares of Series A
preferred stock. The 50,000 shares of Series A preferred stock originally issued
are  convertible  at any time at the option of the holder  into shares of common
stock at the stated  liquidation value of $1,000 divided by the conversion price
of $14.36. Any additional shares of Series A preferred stock issued will have an
initial conversion price equal to 120% of the volume weighted average sale price
of the Company's common stock for a specified period. On September 29, 2010, the
Company  will be  required  to redeem  any  shares of Series A  preferred  stock
outstanding  for $1,000  per share plus  accrued  and unpaid  dividends.  At the
Company's  discretion,  the  redemption  price may be paid  either in cash or in
shares of common stock. The Company may redeem the Series A preferred stock at a
redemption  price  of  $1,000  per  share,  together  with  accrued  and  unpaid
dividends,  payable  either,  at the  Company's  option  in cash or in shares of
common stock,  or a combination of both,  beginning on September 29, 2002 if the
25-day volume weighted  average sale price of the Company's common stock exceeds
certain  targets.  In addition,  the Series A preferred stock may be redeemed by
the Company at any time  following  September 29, 2005 at a redemption  price of
$1,010 per share, together with accrued and unpaid dividends,  payable either in
cash or in shares of common stock, or a combination of both.

In September 2000, the Company issued 250,000 shares of Series B preferred stock
in  connection  with the ATX  acquisition.  The  Series B  preferred  stock pays
cumulative  dividends  at an  initial  annual  rate  of $30 per  share,  payable
quarterly in arrears,  commencing on December 31, 2000, when, if and as declared
by the Board of Directors.  At the Company's  discretion,  dividends may be paid
either in cash or in shares of common stock.  The annual  dividend will increase
to $50 per share on  September  29,  2001 if, by that  date,  any of the  senior
unsecured notes remain unpaid and to $70 per share on March 29, 2002 if, by that
date, any of the senior  unsecured  notes remain unpaid.  The Series B preferred
stock has a liquidation  preference of $1,000 per share,  plus  accumulated  and
unpaid dividends. The Series B preferred stock is convertible at any time at the
option of the  holder  into  shares of common  stock at the  stated  liquidation
preference of $1,000  divided by the  conversion  price in effect at the time of
conversion.  The initial  conversion  price is $32.11.  On March 29,  2001,  the
conversion  price will be reset to reflect any reduction in the principal amount
outstanding of the senior  unsecured  notes.  On September 29, 2020, the Company
will be required to redeem any shares of Series B  preferred  stock  outstanding
for  $1,000 per share  plus  accrued  and  unpaid  dividends.  At the  Company's
discretion,  the  redemption  price  may be paid  either in cash or in shares of
common stock.
<PAGE>



        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)



NOTE 8. SHAREHOLDER RIGHTS PLAN

The Company  adopted a shareholder  rights plan in September 2000. In connection
with the  shareholder  rights plan,  the Board of Directors  declared and paid a
dividend of one preferred  share  purchase  right for each share of common stock
outstanding on October 16, 2000.  Each right entitles the holder,  under certain
potential  takeover events,  to purchase from the Company one one-hundredth of a
share of Series C Junior  Participating  Preferred  Stock  ("Series C  Preferred
Stock") at an exercise price of $50.00, subject to adjustment. The rights expire
in  October  2010.  There  are  1,000,000  shares of  Series C  Preferred  Stock
authorized  for issuance  under the plan. No shares of Series C Preferred  Stock
are issued or outstanding.

The  Series  C  Preferred  Stock  will be  entitled  to a  minimum  preferential
quarterly  dividend  payment of an amount equal to the greater of $.01 per share
or an aggregate  dividend of 100 times the dividend,  if any, declared per share
of common stock. In the event of liquidation,  the holders of Series C Preferred
Stock will be entitled to a minimum  preferential  liquidation payment of $1 per
share plus  accrued and unpaid  dividends  and will be entitled to an  aggregate
payment of 100 times the payment made per share of common  stock.  Each share of
Series C  Preferred  Stock will have 100 votes and will vote  together  with the
common stock. In the event of any merger,  consolidation or other transaction in
which  shares of common stock are changed or  exchanged,  each share of Series C
Preferred  Stock will be entitled to receive 100 times the amount  received  per
share of common  stock.  The  rights are  protected  by  customary  antidilution
provisions.

NOTE 9. RELATED PARTY TRANSACTIONS

Some of the officers and directors of the Company are also officers or directors
of  NTL  Incorporated   ("NTL").  NTL  provides  the  Company  with  management,
financial,  legal and technical  services,  access to office space and equipment
and use of supplies.  Amounts  charged to the Company by NTL consist of salaries
and direct costs allocated to the Company where  identifiable,  and a percentage
of the  portion  of  NTL's  corporate  overhead  which  cannot  be  specifically
allocated  to NTL (which is agreed upon by the Board of Directors of NTL and the
Company).  It is not practicable to determine the amounts of these expenses that
would have been incurred had the Company operated as an unaffiliated  entity. In
the opinion of management,  this allocation  method is reasonable.  For the nine
months ended  September 30, 2000 and 1999, NTL charged the Company  $907,000 and
$1,418,000, respectively, which is included in corporate expenses.

The Company  provides NTL with access to office space and  equipment and the use
of supplies.  In the fourth  quarter of 1999,  the Company began  charging NTL a
percentage  of  the  Company's  office  rent  and  supplies  expense.  It is not
practicable  to  determine  the amounts of these  expenses  that would have been
incurred had the Company operated as an unaffiliated  entity.  In the opinion of
management,  this  allocation  method is  reasonable.  For the nine months ended
September 30, 2000, the Company  charged NTL $204,000,  which reduced  corporate
expenses.


<PAGE>

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)


NOTE 9. RELATED PARTY TRANSACTIONS (CONTINUED)

A subsidiary of the Company provides billing and software  development  services
to  subsidiaries of NTL. The Company charges an amount in excess of its costs to
provide  these  services.  General and  administrative  expenses were reduced by
$709,000 and $619,000  for the nine months  ended  September  30, 2000 and 1999,
respectively, as a result of these charges.

NOTE 10. NONRECURRING CHARGES

Nonrecurring charges of $775,000 in the nine months ended September 30, 2000 are
for restructuring costs relating to the Company's  announcement in March 2000 of
a reorganization of certain of its operations.  The original charge consisted of
employee  severance and related costs of $580,000 for approximately 70 employees
to be terminated,  primarily from the sales and customer operations  departments
and lease exit costs of  $846,000.  As of September  30,  2000,  $597,000 of the
provision had been used,  including  $370,000 for employee severance and related
costs and $227,000 for lease exit costs.  As of September 30, 2000,  $651,000 of
the provision had been  reversed,  including  $210,000 due to a reduction in the
number of employees  who will receive  severance  payments and $441,000 due to a
reduction in the number of  facilities  to be closed.  As of September 30, 2000,
none of the  employees to be terminated  remain with the Company.  The remaining
provision for leases will be used through 2003.

NOTE 11. NON-CASH COMPENSATION

In April 2000, the  Compensation  and Option Committee of the Board of Directors
approved the issuance of options to purchase approximately 2.7 million shares of
the Company's common stock to various  employees at an exercise price of $14.55,
which was less than the fair market value of the  Company's  common stock on the
date of the grant. In accordance with APB Opinion No. 25,  "Accounting for Stock
Issued to Employees," in April 2000 the Company recorded a non-cash compensation
expense  of  approximately  $29.0  million  and a non-cash  deferred  expense of
approximately $31.3 million. From April 2000 to September 30, 2000, $6.4 million
of the deferred non-cash  compensation was charged to expense.  The Company will
charge the deferred  expense to non-cash  compensation  expense over the vesting
period of the stock options as follows:  $3.3 million in 2000,  $12.9 million in
2001, $7.5 million in 2002 and $1.2 million in 2003.
<PAGE>


        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)



NOTE 12. NET LOSS PER COMMON SHARE

The following table sets forth the computation of basic and diluted net loss per
common share:

<TABLE>
<CAPTION>

                                                              Three Months Ended                      Nine Months Ended
                                                                September 30,                            September 30,
                                                       --------------------------------        ---------------------------------
                                                             2000              1999                2000                 1999
                                                       --------------------------------        ---------------------------------
<S>                                                    <C>                <C>                  <C>                 <C>
Numerator:
Net loss                                               $ (50,149,000)     $ (39,750,000)       $ (173,210,000)     $ (62,326,000)
Preferred stock dividend                                     (98,000)                 -               (98,000)                 -
Preferred stock accretion to redemption value                 (6,000)                 -                (6,000)                 -
                                                       --------------------------------        ---------------------------------
Loss available to common shareholders                  $ (50,253,000)     $ (39,750,000)       $ (173,314,000)     $ (62,326,000)
                                                       --------------------------------        ---------------------------------

Denominator for basic net loss per common share            40,502,000        36,952,000            39,837,000         32,810,000
Effect of dilutive securities                                       -                 -                     -                  -
                                                       --------------------------------        ---------------------------------
Denominator for diluted net loss per common share          40,502,000        36,952,000            39,837,000         32,810,000
                                                       --------------------------------        ---------------------------------

Basic and diluted net loss per common share                   $(1.24)            $(1.08)               $(4.35)            $(1.90)
                                                       ================================        =================================
</TABLE>

The shares issuable upon the exercise of stock options and warrants and upon the
conversion of convertible  securities  are excluded from the  calculation of net
loss per common share as their effect would be antidilutive.

Note 13. COMMITMENTS AND CONTINGENT LIABILITIES

As of September 30, 2000, the Company had purchase  commitments of approximately
$62,000,000 outstanding.

The Company is involved in various  disputes  arising in the ordinary  course of
its  business,  which may result in pending or  threatened  litigation.  None of
these  matters are expected to have a material  adverse  effect on the Company's
financial position, results of operations or cash flows.
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION.


                              RESULTS OF OPERATIONS



On September 29, 2000, we acquired ATX Telecommunications Services, Inc. ("ATX")
and Voyager.net,  Inc.  ("Voyager").  The results of operations from the date of
acquisition  to September 30, 2000 of ATX and Voyager were not  significant  and
have not been included in our consolidated results of operations.

As a  result  of the  completion  of the  acquisitions  of 100% of the  stock of
MegsINet  Inc. and the CLEC assets of USN  Communications,  Inc. in May 1999, we
consolidated  the results of  operations of these  businesses  from the dates of
acquisition.

A significant  component of the results  since May 1999 is  associated  with the
acquisition  of certain  assets of USN.  Although USN quickly  developed a large
customer list and revenue base in 1997 and 1998, it had  difficulties  under its
previous  management  providing services,  including billing,  customer care and
other  operational  areas,  and filed for bankruptcy in February 1999. Since the
acquisition,  we have been focusing on improving these operations, and have been
successful  in many  areas.  However,  because  of quality  deficiencies  in the
operations  acquired  from  USN,  and the need to  improve  quality  in order to
continue to sell lines in the former USN markets,  and  consistent  with our due
diligence,  transaction  structure and purchase price,  revenues associated with
the USN assets declined significantly since our acquisition.

On  November  2,  2000,  based on our  ongoing  review of the  combined  company
following the recent  acquisitions of ATX and Voyager,  we announced that we had
identified  various  synergies  and cost savings  opportunities,  including  the
elimination of a number of employment  redundancies  within the combined groups.
We identified  approximately 200 employee  positions which will be eliminated in
conjunction  with  the  integration  of the  operations.  The vast  majority  of
employees in revenue  generating  roles will not be affected by this change.  We
anticipate that we will realize significant cost savings from this effort in the
latter half of fiscal 2001. We expect to incur a restructuring  charge in fiscal
2000 as a result of this review, although to date we are still in the process of
finalizing this charge.


THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
----------------------------------------------

The decrease in revenues to $18,263,000 from $21,107,000 is primarily due to the
decline in the customer base associated  with the USN assets.  The revenues from
the USN customer base peaked in the third quarter of 1999 after our  acquisition
in May 1999 and declined  thereafter.  These customers are now fully  integrated
into our overall  customer base.  Additionally,  prepaid cellular debit card and
cellular long distance revenues declined as a result of our termination of these
services in the third  quarter of 1999. We had revenues of $511,000 in the three
months ended September 30, 1999 from the provision of these services.
<PAGE>



Operating  costs  increased to  $25,746,000  from  $23,374,000 as a result of an
increase in the fixed component of operating  expenses due to our migration to a
facilities-based infrastructure.  Operating costs as a percentage of revenues is
expected to remain  higher than 1999 levels until  customer  and revenue  growth
exceeds the  increase in  facilities-based  infrastructure  costs.  In the three
months ended September 30, 1999,  operating costs included  $427,000  related to
the prepaid cellular debit card and cellular long distance services.

Selling,  general and  administrative  expenses  decreased to  $23,123,000  from
$24,205,000  primarily due to the various synergies and cost savings  recognized
from the integration of MegsINet and USN.

Corporate expenses include the costs of our officers and headquarters staff, the
costs of operating the  headquarters  and costs incurred for strategic  planning
and evaluation of business opportunities.  Corporate expenses were $3,363,000 in
2000 and $2,346,000 in 1999.

In April 2000, the  Compensation  and Option Committee of the Board of Directors
approved the issuance of options to purchase approximately 2.7 million shares of
the Company's common stock to various  employees at an exercise price of $14.55,
which was less than the fair market value of the  Company's  common stock on the
date of the grant. In accordance with APB Opinion No. 25,  "Accounting for Stock
Issued to Employees," in April 2000 the Company recorded a non-cash compensation
expense  of  approximately  $29.0  million  and a non-cash  deferred  expense of
approximately  $31.3 million. In the three months ended September 30, 2000, $3.2
million of the  deferred  non-cash  compensation  was  charged to  expense.  The
Company will charge the deferred expense to non-cash  compensation  expense over
the vesting period of the stock options as follows:  $3.3 million in 2000, $12.9
million in 2001, $7.5 million in 2002 and $1.2 million in 2003. The compensation
charge  of  $1,056,000  in 1999 is a  non-cash  charge  related  to a change  in
employee stock option agreements.

Nonrecurring charges of $775,000 in the nine months ended September 30, 2000 are
for restructuring costs relating to the Company's  announcement in March 2000 of
a reorganization of certain of its operations.  The original charge consisted of
employee  severance and related costs of $580,000 for approximately 70 employees
to be terminated,  primarily from the sales and customer operations departments,
and lease exit costs of  $846,000.  As of September  30,  2000,  $597,000 of the
provision had been used,  including  $370,000 for employee severance and related
costs and $227,000 for lease exit costs.  As of September 30, 2000,  $651,000 of
the provision had been  reversed,  including  $210,000 due to a reduction in the
number of employees  who will receive  severance  payments and $441,000 due to a
reduction in the number of  facilities  to be closed.  Of the $651,000  that has
been reversed,  $408,000 was reversed in the second quarter of 2000 and $243,000
was  reversed  in the third  quarter.  As of  September  30,  2000,  none of the
employees to be terminated remain with the Company.  The remaining provision for
leases will be used through 2003.

Depreciation  expense  increased to $7,389,000 from $4,964,000 as a result of an
increase in fixed assets partially through acquisitions in 1999.

Amortization   expense  decreased  to  $3,477,000  from  $3,833,000  due  to  an
adjustment to the purchase price allocations  related to the acquisitions in May
1999.

<PAGE>




Interest income and other, net,  increased to $1,626,000 from $546,000 primarily
due to interest income on the Company's  cash,  cash  equivalents and marketable
securities.

Interest  expense  increased to  $3,900,000  from  $1,351,000  primarily  due to
interest on the 6% Convertible Subordinated Notes issued in October 1999.

The income tax provision of $49,000 and $274,000 in 2000 and 1999, respectively,
is for state and local income tax.

NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
---------------------------------------------

The increase in revenues to  $56,619,000  from  $37,139,000  is primarily due to
acquisitions  in 1999.  The  remainder  of the increase is due to an increase in
customers,  offset by the decline in prepaid  cellular  debit card and  cellular
long distance  revenues as a result of our  termination of these services in the
third  quarter of 1999.  We had revenues of  $2,409,000 in the nine months ended
September 30, 1999 from the provision of these services.

Operating  costs  increased to  $77,446,000  from  $37,524,000 as a result of an
increase in the fixed component of operating  expenses due to our migration to a
facilities-based infrastructure.  Operating costs as a percentage of revenues is
expected to remain  higher than 1999 levels until  customer  and revenue  growth
exceeds  the  increase in  facilities-based  infrastructure  costs.  In the nine
months ended September 30, 1999,  operating costs included $1,980,000 related to
the prepaid cellular debit card and cellular long distance services.

Selling,  general and  administrative  expenses  increased to  $72,044,000  from
$43,725,000  primarily  due to  increases  in selling  and  marketing  costs and
customer service costs.  These costs are expected to increase in the foreseeable
future  as we grow our  operations  and  customer  base,  although  we expect to
realize savings from further integration of acquired businesses.

Corporate expenses include the costs of our officers and headquarters staff, the
costs of operating the  headquarters  and costs incurred for strategic  planning
and evaluation of business opportunities.  Corporate expenses were $8,559,000 in
2000 and $6,489,000 in 1999.

In April 2000, the  Compensation  and Option Committee of the Board of Directors
approved the issuance of options to purchase approximately 2.7 million shares of
the Company's common stock to various  employees at an exercise price of $14.55,
which was less than the fair market value of the  Company's  common stock on the
date of the grant. In accordance with APB Opinion No. 25,  "Accounting for Stock
Issued to Employees," in April 2000 the Company recorded a non-cash compensation
expense  of  approximately  $29.0  million  and a non-cash  deferred  expense of
approximately $31.3 million. From April 2000 to September 30, 2000, $6.4 million
of the deferred non-cash  compensation was charged to expense.  The Company will
charge the deferred  expense to non-cash  compensation  expense over the vesting
period of the stock options as follows:  $3.3 million in 2000,  $12.9 million in
2001, $7.5 million in 2002 and $1.2 million in 2003. The compensation  charge of
$1,056,000 in 1999 is a non-cash  charge  related to a change in employee  stock
option agreements.

<PAGE>



Nonrecurring charges of $775,000 in the nine months ended September 30, 2000 are
for restructuring costs relating to the Company's  announcement in March 2000 of
a reorganization of certain of its operations.  The original charge consisted of
employee  severance and related costs of $580,000 for approximately 70 employees
to be terminated,  primarily from the sales and customer operations departments,
and lease exit costs of  $846,000.  As of September  30,  2000,  $597,000 of the
provision had been used,  including  $370,000 for employee severance and related
costs and $227,000 for lease exit costs.  As of September 30, 2000,  $651,000 of
the provision had been  reversed,  including  $210,000 due to a reduction in the
number of employees  who will receive  severance  payments and $441,000 due to a
reduction in the number of  facilities  to be closed.  As of September 30, 2000,
none of the  employees to be terminated  remain with the Company.  The remaining
provision for leases will be used through 2003.

Depreciation  expense increased to $19,494,000 from $6,674,000 as a result of an
increase in fixed assets partially through acquisitions in 1999.

Amortization  expense  increased  to  $9,812,000  from  $5,005,000  due  to  the
amortization of goodwill and other intangibles from the acquisitions in 1999 and
2000.

Interest  income  and  other,  net,  increased  to  $5,476,000  from  $3,416,000
primarily due to interest  income on the Company's  cash,  cash  equivalents and
marketable securities.

Interest  expense  increased to  $11,434,000  from  $1,569,000  primarily due to
interest on the 6%  Convertible  Subordinated  Notes  issued in October 1999 and
interest on notes payable and capital leases of acquired businesses.

The  income  tax   provision   of  $321,000  and  $839,000  in  2000  and  1999,
respectively, is for state and local income tax.


                         LIQUIDITY AND CAPITAL RESOURCES

We  will  require  significant   resources  to  fund  the  construction  of  our
facilities-based  network,  develop and expand our existing  businesses and fund
near term  operating  losses and debt service.  We expect to be able to meet our
cash requirements  through December 31, 2001 with cash and securities on hand of
approximately  $50.5 million as of September 30, 2000, the remaining $75 million
commitment under our $150 million senior secured credit facility provided by The
Chase  Manhattan Bank and the $50 million  available  under our commitment for a
senior  unsecured  credit  facility  from The  Chase  Manhattan  Bank and  Chase
Securities  Inc. The  availability of the remaining $75 million under the senior
secured  facility  is subject to the  satisfaction  of certain  conditions.  The
funding of the  senior  unsecured  facility  is  subject  to the  completion  of
definitive  documentation  for the  facility  and the full  availability  of the
remaining  $75 million of the senior  secured  facility.  In  addition,  the $50
million senior  unsecured  credit facility is available only on or after January
31, 2001. Thus, we have to manage our cash and securities on hand to ensure they
are adequate to meet our cash requirements until the amounts committed under the
two  facilities  are made  available.  In  addition,  as a result of the general
conditions of the capital markets in our industry,  we have eliminated  business
projects from our current plans,  including our entry into several  markets.  In
general,  we cannot give any assurance  that we will have  sufficient  resources
available to meet our expected cash requirements and obligations.
<PAGE>





We are currently  negotiating  with equipment  manufacturers  to provide us with
additional vendor financing.  In the aggregate,  such financings are anticipated
to be  significant.  We are  presently in the process of  negotiating  terms for
these transactions.  However,  until definitive agreements are reached with each
vendor,  we cannot be certain that the proposed  financings will occur, that the
terms will not change or that any alternative financing on terms satisfactory to
us will be available.


Our ability to raise  additional  capital in the future will be  dependent  on a
number of factors,  such as general  economic and market  conditions,  which are
beyond our control. If we are unable to obtain additional financing or to obtain
it on favorable  terms, we may be required to further delay the  construction of
our Smart LEC (Local  Exchange  Carrier)  network,  forego  attractive  business
opportunities,  or take other actions which could adversely affect our business,
results of operations and financial condition.

In October  1999,  we issued $175  million  principal  amount of 6%  Convertible
Subordinated  Notes due 2006,  and  received  net  proceeds  of $168.5  million.
Interest on the Convertible  Subordinated Notes is payable semiannually on April
1 and October 1 of each year, which commenced on April 1, 2000.

We are a  holding  company  with no  significant  assets  other  than  cash  and
securities and investments in and advances to our subsidiaries. We are therefore
likely to be dependent upon receipt of funds from our  subsidiaries  to meet our
own obligations.  However, our subsidiaries' debt agreements prevent the payment
of  dividends,  loans or other  distributions  to us (except in certain  limited
circumstances).

Acquisition and Related  Financings.  In May 1999, we acquired  MegsINet and the
CLEC  assets of USN  Communications.  The USN  acquisition  includes a potential
contingent  payment which is capped at $58.6 million.  The contingent payment is
payable only if the USN assets meet or exceed operating performance  thresholds.
We have  submitted a written  notice to the  regulatory  trustee for USN that no
contingent  payment is due to USN. A representative  of the trustee is currently
auditing the information contained in our written notice.

In September 2000, we acquired ATX and Voyager.  The total consideration for the
ATX  acquisition  consisted of $39.4 million in cash,  $108.7 million  principal
amount of senior  unsecured  notes due 2003, 12.4 million shares of newly issued
common stock,  and 250,000 shares of newly issued Series B preferred  stock. The
total  consideration for the Voyager  acquisition  consisted of $36.1 million in
cash,  19.4 million shares of newly issued common stock and the repayment of the
$24.0  million  principal  amount plus accrued  interest  outstanding  under the
Voyager credit agreement.  In addition, we incurred acquisition related costs of
$19.5 million.  The total purchase price,  including debt repayment,  was $761.0
million.

The senior  unsecured notes mature on September 29, 2003.  Interest on the notes
is at an annual  rate of 6.47%  payable in either cash or common  stock,  at our
election,  on October 1 and April 1 of each year beginning on April 1, 2001. The
notes require  principal  payments of  approximately  $2.1 million on January 1,
2001,  approximately  $640,000 on March 29, 2001,  approximately $2.7 million on
January 1, 2002 and approximately $2.7 million on January 1, 2003.

<PAGE>





The Series B preferred stock pays cumulative dividends at an initial annual rate
of $30 per share, payable quarterly in arrears, commencing on December 31, 2000,
when, if and as declared by our Board of Directors.  At our  discretion,  we may
pay  dividends  either in cash or in  shares of our  common  stock.  The  annual
dividend  will increase to $50 per share on September 29, 2001 if, by that date,
any of the senior  unsecured  notes remain  unpaid and to $70 per share on March
29, 2002 if, by that date, any of the senior unsecured notes remain unpaid.  The
Series B preferred stock has a liquidation  preference of $1,000 per share, plus
accumulated and unpaid dividends. The Series B preferred stock is convertible at
any time at the option of the holder into  shares of common  stock at the stated
liquidation  preference of $1,000 divided by the  conversion  price in effect at
the time of conversion.  The initial  conversion  price is $32.11.  On March 29,
2001,  the  conversion  price  will be reset to  reflect  any  reduction  in the
principal  amount  outstanding of the senior  unsecured  notes. On September 29,
2020,  we will be  required  to redeem  any shares of Series B  preferred  stock
outstanding  for $1,000  per share plus  accrued  and unpaid  dividends.  At our
discretion,  we may pay the redemption  price either in cash or in shares of our
common stock.

In order  to fund  the cash  portion  of the ATX and  Voyager  acquisitions,  we
obtained  through our subsidiaries a $150 million senior secured credit facility
from The Chase  Manhattan Bank, of which $100 million is in a term loan facility
and $50 million is in a revolving  credit facility.  In addition,  we raised $50
million from the issuance of Series A preferred stock.

To date, there is $50 million  outstanding  under the term loan facility and $25
million outstanding under the revolving credit facility.  The term loan facility
will amortize in quarterly  installments of principal commencing on December 31,
2003 with a final  maturity in September  2008.  The revolving  credit  facility
shall  be  automatically  and  permanently   reduced  in  increasing   quarterly
installments  of principal  commencing  on December 31, 2003 with a  termination
date in September 2008. In the event our 6% Convertible  Notes due 2006 have not
been  converted or refinanced on or prior to April 1, 2006,  then the facilities
mature and become  payable in full on April 1, 2006.  The interest  rate on both
our term loan facility and our revolving  credit  facility is initially,  at our
option,  either  3.25% per annum plus the base rate,  which is the higher of the
prime rate or the  federal  funds  effective  rate plus 0.5% per  annum,  or the
reserve-adjusted  London  Interbank  Offered  Rate plus 4.25% per  annum.  As of
September 30, 2000,  the effective rate on the amounts  outstanding  was 11.04%.
The applicable  margin for our facilities will be subject to reductions based on
the ratio of our  consolidated  total debt to  annualized  EBITDA.  Interest  is
payable at least  quarterly.  The  commitment  fee on the unused  portion of the
commitments is 1.25% per annum payable quarterly, subject to reduction to 1% per
annum based upon the amount borrowed under the facilities.
<PAGE>





The Series A preferred stock pays cumulative  dividends at 8.5% per annum of the
liquidation  value of $1,000 per share,  payable  quarterly  in arrears.  At our
option,  we may pay  dividends  either in cash,  shares of our  common  stock or
additional  shares of Series A preferred  stock.  The 50,000  shares of Series A
preferred stock  originally  issued are convertible at any time at the option of
the holder into shares of common stock at the stated liquidation value of $1,000
divided by the conversion  price of $14.36.  Any  additional  shares of Series A
preferred  stock issued will have an initial  conversion  price equal to 120% of
the volume  weighted  average  sale price of our  common  stock for a  specified
period.  On  September  29,  2010,  we will be  required to redeem any shares of
Series A  preferred  stock  outstanding  for $1,000 per share plus  accrued  and
unpaid dividends.  At our discretion,  we may pay the redemption price either in
cash or in shares of our common  stock.  We may  redeem  the Series A  preferred
stock at a  redemption  price of $1,000 per share,  together  with  accrued  and
unpaid  dividends,  payable either, at our option in cash or in shares of common
stock,  or a combination of both,  beginning on September 29, 2002 if the 25-day
volume weighted  average sale price of our common stock exceeds certain targets.
In  addition,  the Series A  preferred  stock may be  redeemed by us at any time
following September 29, 2005 at a redemption price of $1,010 per share, together
with accrued and unpaid  dividends,  payable  either in cash or in shares of our
common stock, or a combination of both.

Historical Uses of Cash. For the nine months ended September 30, 2000, cash used
in operating  activities  increased to $112,320,000 from $47,973,000 in the nine
months ended September 30, 1999 primarily due to the increase in the net loss to
$173,210,000 from $62,326,000.

For the nine months ended September 30, 2000, cash used to purchase fixed assets
increased to $43,573,000 from $14,906,000 in the nine months ended September 30,
1999 which reflects our migration to a facilities-based infrastructure.

Acquisitions,  net of cash  acquired of  $92,320,000  in the nine  months  ended
September  30,  2000 is for  payments  in  connection  with the ATX and  Voyager
acquisitions.  Proceeds from borrowings,  net of financing costs, of $71,161,000
is primarily  from the  borrowings  under the senior  secured  credit  facility.
Proceeds from the issuance of preferred stock of $50,000,000 is from the sale of
the Series A preferred stock.

Network  Construction.  We have installed switches and other facilities,  and we
are   in   the   process   of   installing    additional   switches,    Internet
points-of-presence,  and other telecommunications  facilities in various states.
The amount of such expenditures in the next twelve months will be related to the
number of new markets entered,  the speed and location of equipment  deployment,
the timing and  integration  of  acquisitions,  as well as the mix of resold vs.
facilities-based services.

We have deployed our Smart LEC facilities in Columbus,  Ohio,  Cleveland,  Ohio,
Chicago,  Illinois  and  Detroit,  Michigan  and are  currently  developing  two
additional  markets:  New York, New York, and Boston,  Massachusetts.  These six
markets comprise approximately 18 million total access lines. In connection with
these markets, we are in the process of establishing  collocation  facilities in
131 Incumbent Local Exchange Carrier ("ILEC") central offices.
<PAGE>





Operations.  Our businesses  will also consume  capital to acquire new customers
and to finance the working capital required to support these new customers.  Our
businesses  will also require  additional  billing,  customer  service and other
back-office  infrastructure.  These capabilities can be expanded in-house or can
be outsourced to reduce up-front capital requirements. To date, our strategy has
been to utilize the expertise  developed by our  management to develop  in-house
billing and back-office capabilities.

LMDS.  Local  Multipoint  Distribution  Service  ("LMDS")  is a fixed  broadband
wireless service that may be used to provide high-speed data transfer, telephone
service,   telecommunications  network  transmission,   Internet  access,  video
broadcasting, video conferencing and other services. The spectrum is useable for
communications  services from a fixed antenna, but is not suitable for mobile or
portable  communications.  LMDS can be used to provide a wireless  high-capacity
broadband service for the "last mile" to a home or office.

The amount of  capital  required  to  construct  our LMDS  systems is not easily
quantifiable  at this time,  but is likely to be several  times the $25  million
cost of the licenses.  In addition to up-front  network  construction  costs,  a
significant  ongoing capital  requirement  will be the cost to acquire  customer
premise equipment to receive and transmit LMDS signals. We will deploy this LMDS
network  only if we  determine  that we can  achieve  sufficient  returns on our
capital  invested,  from reduced costs associated with providing our services or
from new services which we can offer through LMDS technology.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained herein constitute  "forward-looking  statements" as
that term is defined under the Private Securities Litigation Reform Act of 1995.
When used  herein,  the  words,  "believe,"  "anticipate,"  "should,"  "intend,"
"plan," "will," "expects," "estimates,"  "projects,"  "positioned,"  "strategy,"
and  similar  expressions   identify  such  forward-looking   statements.   Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the  Company,  or  industry  results,  to be  materially  different  from  those
contemplated, projected, forecasted, estimated or budgeted, whether expressed or
implied, by such forward-looking statements. Such factors include the following:
general  economic  and  business  conditions,   industry  trends,  technological
developments, the Company's ability to continue to design and build its network,
install  facilities,  obtain and maintain any  required  government  licenses or
approvals and finance  construction and development,  all in a timely manner, at
reasonable  costs  and  on  satisfactory  terms  and  conditions,   as  well  as
assumptions about customer  acceptance,  churn rates, overall market penetration
and  competition  from  providers  of  alternative  services,  the impact of new
business   opportunities   requiring   significant  up-front   investment,   and
availability, terms and deployment of capital.

<PAGE>



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Securities and Exchange Commission's, rule related to market risk disclosure
requires  that we describe and quantify  our  potential  losses from market risk
sensitive instruments attributable to reasonably possible market changes. Market
risk sensitive  instruments  include all financial or commodity  instruments and
other financial instruments (such as investments and debt) that are sensitive to
future changes in interest rates,  currency exchange rates,  commodity prices or
other market factors. We are not exposed to market risks from changes in foreign
currency exchange rates or commodity prices. We do not hold derivative financial
instruments nor do we hold securities for trading or speculative purposes. Under
our current  policies,  we do not use interest rate  derivative  instruments  to
manage our exposure to interest rate changes.

The  fair-market  value of  long-term  fixed  interest  rate debt is  subject to
interest rate risk.  Generally the fair market value of fixed interest rate debt
will increase as interest rates fall and decrease as interest rates rise. In the
following table, the fair value of our convertible notes was determined from the
quoted  market  price.  The fair value of our senior  secured  credit  facility,
senior  unsecured  notes  and  our  other  notes  payable  are  estimated  using
discounted cash flow analyses,  based on our current incremental borrowing rates
for similar types of borrowing arrangements.
<PAGE>


                            Interest Rate Sensitivity
                            As of September 30, 2000
                      Principal Amount by Expected Maturity
                              Average Interest Rate


<TABLE>
<CAPTION>

                           For the
                           Three
                           Months
                           Ending                      For the Years Ending December 31,                                     Fair
                         December 31,  ----------------------------------------------------------------------                Value
                            2000        2001        2002        2003        2004        2005       Thereafter     Total     9/30/00
                         -----------------------------------------------------------------------------------------------------------
                                                                            (in thousands)
<S>                      <C>           <C>         <C>         <C>         <C>         <C>         <C>           <C>        <C>
Long-term debt,
  including current
  portion

Fixed rate               $1,548        $7,798      $2,838      $103,189    $    -      $     -     $175,000      $290,373   $171,244
Average interest rate     11.48%         9.55%       6.51%         6.47%                                6.0%

Variable rate            $    -        $    -      $    -      $    938    $4,688      $12,188     $ 57,186      $ 75,000   $ 38,577
Average interest rate                                          libor +     libor +     libor +     libor +
                                                               4.25% or    4.25% or    4.25% or    4.25% or
                                                               base rate   base rate   base rate   base rate
                                                               + 3.25%     + 3.25%     + 3.25%     + 3.25%


</TABLE>
<PAGE>




PART II. OTHER INFORMATION


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On September 22, 2000, the Company held a special meeting of  stockholders.  The
following  management  proposals  were  adopted:  (1) a proposal to consider and
approve the  domestication  merger to make CoreComm a domestic U.S.  company and
adopt the related  domestication  merger agreement,  (2) a proposal to consider,
approve and adopt the merger  agreement  among CoreComm,  Voyager.net,  Inc. and
other  parties,  and (3) a proposal  to  consider,  approve and adopt the merger
agreement  among  CoreComm,  ATX  Telecommunications  Service,  Inc., all of the
current ATX Stockholders and other parties. The stockholders  approved the first
proposal by a vote of 26,576,980  shares in favor,  1,429,802 shares against and
267,351  shares  withheld  from  voting.  The  stockholders  approved the second
proposal by a vote of 26,543,942  shares in favor,  1,462,747 shares against and
267,444  shares  withheld  from  voting.  The  stockholders  approved  the third
proposal by a vote of  27,965,357  shares in favor,  41,332  shares  against and
267,444 shares withheld from voting.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.

          27. Financial Data Schedule

     (b)  Reports on Form 8-K.

          During the quarter  ended  September  30, 2000,  the Company filed the
          following reports on Form 8-K:

          (i)  Report dated July 31, 2000, reporting under Item 5, Other Events,
               that CoreComm Limited and ATX Telecommunications  Services,  Inc.
               entered into an amendment to the terms of their merger agreement.

          (ii) Report dated August 14, 2000, reporting under Item 2, Acquisition
               or Disposition  of Assets,  that CoreComm  Limited  announced its
               operating  results for the three months ended June 30, 2000,  and
               that it has obtained  significant  funding commitments toward the
               financing  of its  recently  announced  acquisitions  as  well as
               ongoing operations.
<PAGE>





ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (continued)

          (iii)Report dated  September 11, 2000,  reporting  under Item 5, Other
               Events,  that  CoreComm  Limited and  CoreComm  Merger Sub,  Inc.
               entered into an amendment to their Amalgamation Agreement,  dated
               April 10, 2000.

          (iv) Report  dated  September  21,  2000,   reporting  under  Item  2,
               Acquisition  or  Disposition  of Assets,  that  CoreComm  Limited
               announced that it had received banking  commitments which satisfy
               conditions  that will  allow the  Company  to close on a total of
               $360 million of financings.

          (v)  Report dated  September 22, 2000,  reporting  under Item 5, Other
               Events,   that  CoreComm's   shareholders   had  approved  merger
               agreements  with  ATX   Telecommunications   Services,   Inc  and
               Voyager.net.




  No financial statements were filed with these reports.


<PAGE>


                                   SIGNATURES



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



                                         CORECOMM LIMITED


Date:    November 13, 2000               By: /s/ Barclay Knapp
                                             ----------------------
                                         Barclay Knapp
                                         President, Chief Executive Officer
                                         and Chief Financial Officer




Date:    November 13, 2000               By: /s/ Gregg N. Gorelick
                                             ----------------------
                                         Gregg N. Gorelick
                                         Vice President-Controller and
                                         Treasurer(Principal Accounting Officer)