<PAGE>

                                                                  Exhibit 4.2


NUMBER

TAP


[SEAL TOUCH AMERICA HOLDINGS, INC.]

<TABLE>
<S>                                                         <C>
TOUCH AMERICA HOLDINGS, INC.
Incorporated under the laws of the State of Delaware

THIS CERTIFICATE IS TRANSFERABLE IN BUTTE, MONTANA

-----------------------------------------------------                  [LOGO TOUCHAMERICA]


PREFERRED STOCK, $6.875 SERIES                                          CUSIP 891539 20 7
    PAR VALUE $.01                                           SEE REVERSE FOR CERTAIN DEFINITIONS

------------------------------------------------------------------------------------------------
THIS IS TO
CERTIFY THAT




IS THE OWNER OF
------------------------------------------------------------------------------------------------
FULLY PAID AND NON-ASSESSABLE SHARES OF THE $6.875 PREFERRED STOCK, PAR VALUE $.01 PER SHARE, OF
</TABLE>

                               CERTIFICATE OF STOCK

TOUCH AMERICA HOLDINGS, INC., TRANSFERABLE ON THE BOOKS OF THE CORPORATION BY
THE HOLDER HEREOF IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON THE SURRENDER
OF THIS CERTIFICATE PROPERLY ENDORSED OR ASSIGNED. THIS CERTIFICATE AND THE
SHARES REPRESENTED HEREBY ARE SUBJECT TO THE LAWS OF THE STATE OF DELAWARE,
AND TO THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE CORPORATION AS NOW
OR HEREAFTER AMENDED. THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY
THE TRANSFER AGENT AND REGISTERED BY THE REGISTRAR.

        IN WITNESS WHEREOF, THE CORPORATION HAS CAUSED THIS CERTIFICATE TO BE
EXECUTED BY THE FACSIMILE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS AND HAS
CAUSED A FACSIMILE OF ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED.

                                                      DATED:


COUNTERSIGNED AND REGISTERED:
   TOUCH AMERICA HOLDINGS, INC.
Transfer Agent and Registrar

<TABLE>
<S>                                 <C>                                   <C>
By
    /s/ Rose Marie Ralph            /s/  Robert P. Gannon                  /s/ Patrick T. Fleming
        Senior Assistant Secretary       Chairman of the Board                 Vice President and Secretary
                                         and Chief Executive Officer
</TABLE>




SHARES



COMPOSITE

BANKNOTE CORP. OF AMERICA*WALL STREET (NYC) * BROWNS SUMMIT(NC) * TOUCH
AMERICA HOLDINGS INC.(PREFERRED) * 1-102031-942 * PROOF #4 * 10:38 AM *
4/10/01 * SMS/CH*

<PAGE>

                           TOUCH AMERICA HOLDINGS, INC.

        A FULL STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES,
AND LIMITATIONS, APPLICABLE TO EACH CLASS OF STOCK AUTHORIZED TO BE ISSUED,
AND THE VARIATIONS IN THE RIGHTS PREFERENCES AND LIMITATION DETERMINED FOR
EACH SERIES, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE
VARIATIONS FOR FUTURE SERIES WILL BE FURNISHED WITHOUT CHARGE TO ANY OWNER OF
SUCH STOCK UPON WRITTEN APPLICATION TO THE OFFICE OF THE COMPANY, 130 NORTH
MAIN, BUTTE, MONTANA 59701-9331

                           -----------------------------
                                   ABBREVIATIONS

        The following abbreviations, when used in the inscription on the fact
of this Certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:

<TABLE>
<S>                                          <C>
TEN COM - as tenants in common                UNIF GIFT MIN ACT -             Custodian
                                                                  ------------          ------------
                                                                      (Cust)               (Minor)
TEN ENT - as tenants by the entireties                             under Uniform Gifts to Minors

JT TEN - as joint tenants with right                               Act
         of survivorship and not as tenants                            ------------------------
         in common                                                             (State)

                                              UNIF TRANS MIN ACT -            Custodian
                                                                  ------------          ------------
                                                                      (Cust)               (Minor)
                                                                   Under Uniform Transfers to Minors

                                                                   Act
                                                                       ------------------------
                                                                               (State)
</TABLE>


        Additional abbreviations may also be used though not in the above list.
                       ---------------------------------

   FOR VALUE RECEIVED,                   HEREBY SELL, ASSIGN AND TRANSFER UNTO
                      ------------------

PLEASE INSERT SOCIAL SECURITY OR OTHER
  IDENTIFICATION NUMBER OF ASSIGNEE
---------------------------------------

---------------------------------------
                                       ---------------------------------------

------------------------------------------------------------------------------
         PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL
                            ZIP CODE, OF ASSIGNEE

------------------------------------------------------------------------------

------------------------------------------------------------------------------

-----------------------------------------------------------------------SHARES
OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT
                                  --------------------------------------------

------------------------------------------------------------------------------
ATTORNEY TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED
CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.

DATED:
      ---------------------------

                                 ---------------------------------------------

                                 ---------------------------------------------

                                 ---------------------------------------------
                                 NOTICE: The signature(s) to this assignment
                                 must correspond with the name(s) as written
                                 upon the face of the Certificate, in every
                                 particular, without alteration or
                                 enlargement or any change whatever.





Signature(s) Guaranteed:


By
  ---------------------------------------------------------------
  THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
  INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
  AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
  GUARANTEE MEDALLION PROGRAM) PURSUANT TO S.E.C. RULE 17 Ad-15.