EMPLOYMENT AGREEMENT


     THIS  EMPLOYMENT  AGREEMENT  ("Agreement")  is made as of the  23rd  day of
September,  1998 by and between  ICG  TELECOM  GROUP,  INC.  ("Employer"  or the
"Company") and DOUGLAS I. FALK ("Employee").

                                    RECITALS

     WHEREAS,  Employer  desires to hire and employ  Employee  as  President  of
Employer, or in such other position with Employer or an affiliate corporation of
Employer as Employer may from time-to-time decide, as provided herein; and

     WHEREAS, Employee desires to be employed by Employer as provided herein.

     NOW,  THEREFORE,  in  consideration  of the mutual covenants and agreements
contained herein, the parties agree as follows:

     1.  Employment.  The Company agrees to employ  Employee and Employee hereby
agrees to be employed by the Company or by such of its affiliate corporations as
determined  by the Company,  on a full-time  basis,  for the period and upon the
terms and conditions hereinafter set forth.

     2. Capacity and Duties.  Employee will be employed as President of Employer
or such other position as Employer  shall decide.  Employee will also be elected
Executive Vice President of the Employer's  parent,  ICG  Communications,  Inc.,
subject to the approval of the Board of Directors of such entity.  Employee will
make himself available to provide to ICG  Communications,  Inc. such services as
such entity shall request of him. During his employment,  Employee shall perform
the duties and bear the  responsibilities  commensurate  with his  position  and
shall serve the Employer  faithfully  and to the best of his  ability.  Employee
shall devote 100% of his working time to carrying out his obligations hereunder.

     3. Compensation and Benefits.

          3.1 The Company will pay Employee during the Term of this Agreement an
     annual  base  salary,   payable  in  accordance   with  customary   Company
     procedures. The annual base salary will be Two Hundred Twenty-Five Thousand
     and 00/100 Dollars ($225,000.00).

          3.2 In addition to the base salary,  Employee shall be eligible for an
     annual  performance  bonus  in an  exact  amount  to be  determined  by the
     Company. The annual bonus will be based on objectives and goals set for the
     Company  (the  annual  bonus is  expected  to be  approximately  forty-five
     percent (45%) of annual base salary if all objectives and goals are met).
<PAGE>

          3.3 In addition to salary and bonus  payments as provided  above,  the
     Company will provide Employee,  during the Term of this Agreement, with the
     benefits of such  insurance  plans,  hospitalization  plans,  stock  plans,
     retirement  plans and other employee  fringe benefits as shall be generally
     provided to senior executive  officers of the Company (including sick leave
     and four (4) weeks  vacation  time) and for which  Employee may be eligible
     under the terms and conditions thereof.

          3.4 Throughout the Term of this  Agreement,  the Company shall provide
     Employee a monthly car  allowance in the amount of Seven Hundred and 00/100
     Dollars  ($700.00).  The Company will gross up Employee's  income to offset
     the tax impact of the car allowance.

          3.5 Throughout the Term of this Agreement,  the Company will reimburse
     Employee for all reasonable  out-of-pocket expenses incurred by Employee in
     connection  with the  business of the Company  and the  performance  of his
     duties under this Agreement,  upon  presentation to the Company by Employee
     of an itemized accounting of such expenses with reasonable supporting data.

          3.6 The  Company  will  provide  to  Employee  from time to time stock
     options  under ICG  Communications,  Inc.'s  Incentive  Stock  Option Plan.
     Employee  will receive a grant of Thirty  Thousand  (30,000)  stock options
     relating to the stock of the Company's ultimate parent, ICG Communications,
     Inc.,  upon employment with an exercise price equal to the closing price of
     ICG  Communications,  Inc.'s common stock on September 23, 1998 pursuant to
     and subject to the terms and conditions of (including vesting schedule) the
     1998 ICG Incentive Stock Option Plan.

          3.7  The  Company  will  pay  Employee  certain  relocation   expenses
     associated  with Employee's  relocation  from Dallas,  Texas to the Denver,
     Colorado metropolitan area. This reimbursement will be pursuant to the Tier
     One Relocation  Policy of the Company and such expenses shall be grossed up
     one time for taxes, if applicable.

     4. Term.  The  initial  term of this  Agreement  shall be for one (1) year,
commencing on September 23, 1998 ("Initial Term").  Upon completion of the first
(12) twelve months of the Term,  this  Agreement will  automatically  renew from
month to month such that there will always be twelve (12)  months  remaining  in
the Term,  unless and until  either  party  shall give at least (30) thirty days
notice to the other of his or its  intention to terminate  this  Agreement.  The
applicable  provisions  of Section 6, 7, 8, 9 and 10 shall  remain in full force
and effect as  provided  and for the time  periods  specified  in such  Sections
notwithstanding  the  termination of this  Agreement;  all other  obligations of
either party to the other under this Agreement shall terminate at the end of the
Term.

     5. Termination.

          5.1 If Employee  dies during the Term of this  Agreement,  the Company
     shall pay his estate the  compensation  that would  otherwise be payable to
     him for the remaining term of this Agreement.

          5.2 If, during the Term of this Agreement,  Employee is prevented from
     performing  his duties by reason of illness or  incapacity  for one hundred
     forty (140) days in any one hundred  eighty  (180) day period,  the Company
     may terminate this Agreement, upon thirty (30) days prior notice thereof to
     Employee or his duly appointed legal representative.

          5.3 The Company may  terminate  this  Agreement at any time during the
     Term upon the happening of any of the following events:

               5.3.1 The sale by the Company of substantially  all of its assets
          to a single  purchaser or associated  group of purchasers  who are not
          affiliates of the Company.

               5.3.2  The sale,  exchange  or other  disposition  in one or more
          related  transactions  resulting  in a change  of  ownership  of fifty
          percent (50%) or more of the  outstanding  voting stock of the Company
          to or with a person,  firm or corporation not then an affiliate of the
          Company.

               5.3.3 The merger or consolidation of the Company in a transaction
          not involving an affiliate of the Company in which the shareholders of
          the Company  receive less than fifty percent (50%) of the  outstanding
          voting stock of the new continuing corporation.

               5.3.4 A bona  fide  decision  by the  Company  to  terminate  its
          business and liquidate its assets (but only if such liquidation is not
          part  of a  plan  to  carry  on the  Company's  business  through  its
          shareholders).

For the purpose of this Agreement,  the term "affiliate" means a person, firm or
corporation  that directly or  indirectly,  through one or more  intermediaries,
controls, is controlled by, or is under common control with the Company.

          5.4 The Company may terminate  this  Agreement  immediately  for gross
     negligence or intentional misconduct by the Employee.

          5.5 The Company may  terminate  this  Agreement  immediately  upon the
     commission by Employee of theft, fraud, embezzlement or any other felony or
     upon a material breach by Employee of any obligation or covenant created by
     or under this Agreement.
<PAGE>

          5.6 Employee may terminate  this  Agreement  upon at least thirty (30)
     days prior  notice to the Company  upon the  happening of any of the events
     described in Section 5.3 above.

          5.7 If this  Agreement is terminated by the Company under Section 4 or
     Section 5.3 or by Employee  under  Section 5.6 during the Term hereof,  the
     Company  will pay  Employee  a  Termination  Fee equal to  Employee's  then
     current  monthly  base  salary  multiplied  by  twelve  (12) plus an amount
     equivalent to twelve (12) months of COBRA  premiums.  Such  Termination Fee
     will be paid in twelve (12) equal  installments  with the  exception of the
     COBRA equivalent payment which will be paid in a lump sum.

     6. Covenant Not to Compete.

          6.1 During the Term of this Agreement (or, if longer,  during the term
     of Employee's employment with the Company or any of its affiliates) and for
     a period of twelve (12) months after  termination of this Agreement (or, if
     later,  termination of Employee's employment with the Company or any of its
     affiliates),  Employee  shall not,  directly  or  indirectly,  own,  mange,
     operate,  control,  be  employed  by,  or  participate  in  the  ownership,
     management,  operation or control of a business that is engaged in the same
     business as the Company  within any area or at any  location  constituting,
     during  the term of  Employee's  employment  and/or at the time  Employee's
     employment is terminated, a Relevant Area. For the purposes of this Section
     6,  including all  subsections of this Section 6, the business in which the
     Company is engaged is providing  telecommunications  services and all other
     services  the Company  provides  during the term of  Employee's  employment
     ("Services"). The "Relevant Area" shall be defined for the purposes of this
     Agreement  as any area located  within,  or within fifty (50) miles of, the
     legal  boundaries  or limits of any city  within  which the  Company or any
     affiliate  thereof  is  providing  Services,  or in which the  Company  has
     publicly  announced  or privately  disclosed  to Employee  that it plans to
     provide Services.

          6.2 During the Term of this Agreement (or, if longer,  during the term
     of Employee's employment with the Company or any of its affiliates) and for
     a period of twelve (12) months after  termination of this Agreement (or, if
     later,  termination of Employee's employment with the Company or any of its
     affiliates), Employee shall not (i) directly or indirectly cause or attempt
     to cause any employee of the Company or any of its  affiliates to leave the
     employ of the Company or any affiliate,  (ii) in any way interfere with the
     relationship  between the Company and any  employee or between an affiliate
     and any  employee  of the  affiliate,  or (iii)  interfere  or  attempt  to
     interfere  with  any  transaction  in  which  the  Company  or  any  of its
     affiliates  was involved  during the Term of this  Agreement or  Employee's
     employment, whichever is longer.

          6.3 Employee agrees that, because of the nature and sensitivity of the
     information  to which he will be privy and  because of the nature and scope
     of the Company's business, the restrictions contained in this Section 6 are
     fair and reasonable.
<PAGE>

     7. Confidential Information:

          7.1 The  relationship  between the Company and the  Employee is one of
     confidence and trust.  This  relationship and the rights granted and duties
     imposed by this Section shall continue until a date ten (10) years from the
     date Employee's employment is terminated.

          7.2 As used in this  Agreement (i)  "Confidential  Information"  means
     information disclosed to or acquired by Employee about the Company's plans,
     products,  processes  and services  including the Services and any Relevant
     Area, including information relating to research, development,  inventions,
     manufacturing,     purchasing,    accounting,    engineering,    marketing,
     merchandising, selling, pricing and tariffed or contractual terms, customer
     lists and prospect lists or other market  information,  with respect to any
     of the Company's then current business  activities;  and (ii)  "Inventions"
     means any inventions,  discoveries,  concepts and ideas, whether patentable
     or not, including,  without limitation,  processes,  methods, formulas, and
     techniques (as well as related  improvements  and knowledge) that are based
     on or related to  Confidential  Information,  that pertain in any manner to
     the Company's  then currently  used  technology,  expertise or business and
     that are made or  conceived  by  Employee,  either  solely or jointly  with
     others,  and  while  employed  by the  Company  or  within  six (6)  months
     thereafter,  whether or not made or conceived  during working hours or with
     the use of the Company's facilities, materials or personnel.

          7.3  Employee  agrees  that he shall at no time during the Term of his
     employment or at any time thereafter disclose any Confidential  Information
     or component  thereof to any person,  firm or  corporation to any extent or
     for any reason or purpose or use any Confidential  Information or component
     thereof for any purpose other than the conduct of the Company's business.

          7.4 Any Confidential Information or component thereof that is directly
     or indirectly originated,  developed or perfected to any degree by Employee
     during the Term of this  employment  by the Company shall be and remain the
     sole  property  of the  Company  and shall be deemed  trade  secrets of the
     Company.

          7.5 Upon termination of Employee's  employment  pursuant to any of the
     provisions herein,  Employee or his legal  representative  shall deliver to
     the  Company  all  originals  and  all  duplicates  and/or  copies  of  all
     documents,  records,  notebooks,  and similar repositories of or containing
     Confidential Information then in his possession, whether prepared by him or
     not.

          7.6 Employee  agrees that the  covenants and  agreements  contained in
     this Section 7 are fair and reasonable  and that no waiver or  modification
     of this  Section or any  covenant or  condition  set forth  herein shall be
     valid unless set forth in writing and duly executed by the parties  hereto.
     Employee  agrees to  execute  such  separate  and  further  confidentiality
     agreements  embodying  the  provisions of this Section 7 as the Company may
     reasonably request.
<PAGE>

     8. Injunctive Relief.  Upon a material breach or threatened material breach
by Employee of any of the provisions of Sections 6 and 7 of this Agreement,  the
Company  shall be  entitled  to an  injunction  restraining  Employee  from such
breach.  Nothing  herein  shall be  construed  as  prohibiting  the Company from
pursuing any other  remedies  for such breach or  threatened  breach,  including
recovery of damages from Employee.

     9. No Waiver.  A waiver by the Company of a breach of any provision of this
Agreement  by  Employee  shall not  operate or be  construed  as a waiver of any
subsequent or other breach by Employee.

     10.  Severability.  It is the  desire and  intent of the  parties  that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under  the  laws and  public  policies  applied  in each  jurisdiction  in which
enforcement is sought.  Accordingly,  if any particular  provision or portion of
this  Agreement  shall be  adjudicated  to be  invalid  or  unenforceable,  this
Agreement  shall  be  deemed  amended  to  delete  therefrom  the  portion  thus
adjudicated  to be invalid or  unenforceable,  such  deletion to apply only with
respect to the operation of such Section in the particular jurisdiction in which
such adjudication is made.

     11.  Notices.  All  communications,  requests,  consents and other  notices
provided for in this Agreement  shall be in writing and shall be deemed given if
mailed by first  class  mail,  postage  prepaid,  certified  or  return  receipt
requested to the last known address of the recipient.

     12.  Governing Law. This  Agreement  shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado.

     13.  Assignment.  The Company may assign its rights and  obligations  under
this  Agreement to any affiliate of the Company or, subject to the provisions of
Section  5.3,  to any  acquirer  of  substantially  all of the  business  of the
Company,  and all covenants and agreements  hereunder shall inure to the benefit
of and be enforceable  by or against any such  assignee.  Neither this Agreement
nor any rights or duties hereunder may be assigned or delegated by Employee.

     14. Amendments.  No provision of this Agreement shall be altered,  amended,
revoked or waived except by an  instrument  in writing,  signed by each party to
this Agreement.

     15. Binding Effect.  Except as otherwise  provided  herein,  this Agreement
shall be binding  upon and shall inure to the benefit of the parties  hereto and
their respective legal representatives, heirs, successors and assigns.
<PAGE>

     16. Execution in Counterparts. This Agreement may be executed in any number
of  counterparts,  each of which shall be deemed an  original,  but all of which
together shall constitute one and the same instrument.

     17. Entire  Agreement.  This Agreement sets forth the entire  agreement and
understanding of the parties and supersedes all prior understandings, agreements
or  representations  by or between the parties,  whether written or oral,  which
relate in any way to the subject matter hereof,  including  without  limitation,
the Employment  Agreement dated August 14, 1996 between ICG Satellite  Services,
Inc. and Employee and the Employment Agreement dated May 15, 1998 between Netcom
On-Line Communication Services, Inc. and Employee.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.



/s/ Douglas I. Falk
------------------------------------
DOUGLAS I. FALK


ICG TELECOM GROUP, INC.



By: /s/ Marc E. Maassen
    --------------------------------
Name: Marc E. Maassen
Title: Executive Vice President



ICG COMMUNICATIONS, INC.



By: /s/ Marc E. Maassen
    --------------------------------
Name: Marc E. Maassen
Title: Executive Vice President