<PAGE>
 
                                                                     EXHIBIT  12
 
              TELEPORT COMMUNICATIONS GROUP INC. AND SUBSIDIARIES
              COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
              (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                     Pro Forma     
                                                                                                      for the      
                                                                                                   Reorganization  
                                                                                                      for the      
                                                         FOR THE YEAR ENDED DECEMBER 31,             Year Ended    
                                                       ----------------------------------            December 31,   
                                              1996       1995        1994       1993       1992          1996
                                              ----       ----        ----       ----       ----          ----
<S>                                         <C>         <C>        <C>        <C>         <C>         <C>
Net Loss.................................   $(114,850) $(53,804)   $(29,989)  $(18,271)   $(4,428)    $ (126,600)
Add (Deduct):  Income Tax  Provision                                                              
    (Benefit)............................       2,193       401         433     (4,149)         -          2,193
                                            ---------  --------    --------   --------    -------     ----------
Less:  Minority Interest.................      (3,520)     (663)     (1,395)      (796)         -         (4,713)
                                            ---------  --------    --------   --------    -------     ----------
Pre Tax Income (Loss)....................    (116,177)  (54,066)    (30,951)   (23,216)    (4,428)     ( 129,120)
                                            ---------  --------    --------   --------    -------     ----------
Add: Fixed Charges                                                                                
         Interest........................      74,319    27,206       8,867      2,548      1,508         66,946
         Amortization of debt expense....         168       116           -          -          -            168
                                            ---------  --------    --------   --------    -------     ----------
              Total fixed charges........      74,487    27,322       8,867      2,548      1,508         67,114
                                            ---------  --------    --------   --------    -------     ----------
                                            $( 41,690) $(26,744)   $(22,084)  $(20,668)   $(2,920)    $  (62,006)
                                            =========  ========    ========   ========    =======     ==========
Fixed charges............................   $  74,487  $ 27,322    $  8,867   $  2,548    $ 1,508     $   67,114
                                            =========  ========    ========   ========    =======     ==========
Ratio of Earnings to Fixed Charges.......      NA          NA         NA         NA          NA           NA
Deficiency of Earnings to Fixed Charges..   $ 116,177  $ 54,066    $ 30,951   $ 23,216    $ 4,428     $  129,120
</TABLE>

                                       1