<PAGE>

                      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 June 30, 1999

[_]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 for the transition period from ______ to _____

                       Commission File Number 000-21091

                         ADVANCED RADIO TELECOM CORP.
            (Exact name of registrant as specified in its charter)


           DELAWARE                                   52-1869023
 (State or other jurisdiction of           (IRS Employer Identification No.)
 incorporation or organization)

                       500 108th Avenue, NE, Suite 2600
                          Bellevue, Washington 98004
                   (Address of principal executive offices)

                                (425) 688-8700
             (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 [_].

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date: 27,304,389 shares of common
stock, $.001 par value, at August 13, 1999.
<PAGE>

PART 1 - FINANCIAL INFORMATION

                 ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
 ASSETS                                                              June 30,      December 31,
                                                                       1999            1998
                                                                  --------------   -------------
                                                                   (unaudited)
<S>                                                               <C>             <C>
 Current assets:
   Cash and cash equivalents....................................  $  53,800,204   $  11,864,218
   Pledged securities...........................................     18,494,443      18,504,263
   Restricted cash..............................................         32,060          32,060
   Accounts receivable..........................................        273,567         125,976
   Other current assets.........................................         84,607         681,468
                                                                  -------------   -------------
      Total current assets......................................     72,684,881      31,207,985

   Pledged securities...........................................                      8,854,569
   Property and equipment, net..................................     25,074,442      33,202,310
   FCC licenses, net............................................    183,182,056     186,513,591
   Deferred financing costs, net................................     11,624,646       5,503,172
   Other assets.................................................        456,798         439,664
                                                                  -------------   -------------
     Total assets...............................................  $ 293,022,823   $ 265,721,291
                                                                  =============   =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Working Capital Facility.....................................  $  25,000,000   $  16,229,121
   Bridge Financing.............................................     50,000,000
   Trade accounts payable.......................................      3,925,258       2,533,612
   Accrued compensation and benefits............................      1,978,701       2,936,454
   Other accrued liabilities....................................     12,334,841       4,759,689
   Accrued interest payable.....................................      8,017,491       7,154,224
   Current portion of long-term debt............................        420,780         525,313
                                                                  -------------   -------------
     Total current liabilities..................................    101,677,071      34,138,413

Long-term debt, net of current portion..........................    118,495,754     117,845,932
Deferred income tax liability...................................     30,438,898      31,382,026
                                                                  -------------   -------------
     Total liabilities..........................................    250,611,723     183,366,371
                                                                  -------------   -------------

Commitments and contingencies

Stockholders' equity:
 Common stock, $.001 par value, 100,000,000 shares authorized,
   27,269,850 and 26,707,036 shares issued and outstanding......         27,270          26,707
 Additional paid-in capital.....................................    229,031,459     225,967,684
 Note receivable from stockholder...............................       (887,500)       (887,500)
 Accumulated deficit............................................   (185,760,129)   (142,751,971)
                                                                  -------------   -------------
    Total stockholders' equity..................................     42,411,100      82,354,920
                                                                  -------------   -------------
            Total liabilities and stockholders' equity..........  $ 293,022,823   $ 265,721,291
                                                                  =============   =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -2-
<PAGE>

                 ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES

          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 Three Months Ended                     Six Months Ended
                                                                      June 30,                               June 30,
                                                           -----------------------------         -------------------------------
                                                               1999             1998                 1999              1998
                                                           ------------      -----------         ------------       ------------
                                                                            (as restated)                          (as restated)
<S>                                                        <C>               <C>                 <C>                <C>
Service revenue.......................................     $    339,163      $   205,770         $    565,125       $    442,327
                                                           ------------      -----------         ------------       ------------

 Total revenue........................................          339,163          205,770              565,125            442,327

Costs and expenses:
 Technical and network operations.....................        4,315,658        1,573,663            7,855,966          3,184,915
 Sales and marketing..................................        1,452,984        1,380,791            2,918,543          2,892,869
 General and administrative...........................        3,446,961        2,802,001            6,092,996          5,200,089
 Equipment impairment and other.......................                            73,923            6,375,996            213,397
 Depreciation and amortization........................        3,654,076        1,539,953            6,784,060          2,968,921
                                                           ------------      -----------         ------------       ------------
   Total operating costs and expenses.................       12,869,679        7,370,331           30,027,561         14,460,191

Loss from operations..................................      (12,530,516)      (7,164,561)         (29,462,436)       (14,017,864)

Interest and other:
 Interest expense.....................................        8,093,850        5,100,148           14,773,515         10,221,849
 Financing commitment expense.........................          647,884                             1,304,766
 Other................................................         (544,695)         406,740             (550,454)           406,740
 Interest income......................................         (493,751)        (892,788)            (920,060)        (1,715,208)
                                                           ------------      -----------         ------------       ------------
   Loss before income taxes...........................      (20,233,804)     (11,778,661)         (44,070,203)       (22,931,245)

Deferred income tax benefits..........................          757,031        2,207,090            1,062,045          4,258,879
                                                           ------------      -----------         ------------       ------------

 Net loss.............................................     $(19,476,773)     $(9,571,571)        $(43,008,158)      $(18,672,366)
                                                           ============      ===========         ============       ============

Basic and diluted net loss per common share...........     $      (0.72)     $     (0.39)        $      (1.59)      $      (0.81)
Weighted average common shares........................       27,211,300       24,332,349           27,123,747         23,041,744
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -3-
<PAGE>

                 ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES

     CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)

                    For the six months ended June 30, 1999



<TABLE>
<CAPTION>
                                                                                     Note
                                                                   Additional     Receivable
                                               Common Stock          Paid-in         from         Accumulated
                                         -----------------------
                                            Shares     Par Value     Capital      Stockholder       Deficit          Total
                                         ------------  ---------  --------------  ------------  ---------------  --------------
<S>                                      <C>           <C>        <C>             <C>           <C>             <C>
Balance, December 31, 1998                26,707,036    $26,707   $225,967,684     $(887,500)   $(142,751,971)  $  82,354,920

Common stock issued in exchange
  for certain FCC licenses                   154,114        154        847,473                                        847,627

Value ascribed to warrants issued in
  connection with the Working
  Capital Facility                                                   1,241,710                                      1,241,710

Warrants exercised                           322,374        323          2,902                                          3,225

Stock options exercised                       82,378         82        515,881                                        515,963

Stock compensation expense                                             455,813                                        455,813

Common stock issued under
  employment agreements                        3,948          4             (4)

Net loss                                                                                          (43,008,158)   (43, 008,158)
                                          ----------    -------   ------------   -----------   --------------   -------------

Balance, June 30, 1999                    27,269,850    $27,270   $229,031,459     $(887,500)   $(185,760,129)  $  42,411,100
                                          ==========    =======   ============   ===========   ==============   =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -4-
<PAGE>

                 ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           Six Months Ended June 30,
                                                                         ----------------------------
                                                                             1999            1998
                                                                         ------------   -------------
                                                                                        (as restated)
<S>                                                                      <C>            <C>
Cash flows from operating activities:
 Net loss........................................................        $(43,008,158)  $(18,672,366)
  Adjustment to reconcile net loss to net cash used in operating
    activities:
  Gain on sale of FCC licenses...................................            (744,049)
  Non-cash compensation expense..................................             455,813        795,214
  Non-cash equipment impairment charges..........................           6,375,996
  Depreciation and amortization..................................           6,783,971      2,968,921
  Non-cash interest and financing commitment expense.............           4,658,039        777,209
  Deferred income tax benefit....................................          (1,062,045)    (4,258,879)
  Changes in operating assets and liabilities:
    Accrued interest payable.....................................             863,267        (77,672)
    Accounts receivable..........................................            (147,591)         5,302
    Accrued interest on pledged securities.......................            (585,611)    (1,308,390)
    Accounts payable and accrued liabilities.....................           7,934,045     (2,022,783)
    Prepaid expenses and other current assets....................             596,861         24,229
    Other assets.................................................             (17,134)        55,665
                                                                         ------------   ------------

    Net cash used in operating activities........................         (17,896,596)   (21,713,550)
                                                                         ------------   ------------

Cash flows from investing activities:
  Capital expenditures for property and equipment................          (2,970,623)    (2,760,412)
  Proceeds from sale of FCC licenses.............................           6,871,896
  Proceeds from sales of property and equipment..................             548,000
  Additions to FCC licenses......................................          (4,310,878)      (423,004)
  Purchases of short-term investments............................                         (5,127,663)
  Proceeds from sale of short-term investments...................                         20,562,000
  Proceeds from maturities of pledged securities.................           9,450,000      9,180,000
  Proceeds from restricted cash..................................                          1,000,000
                                                                         ------------   ------------

    Net cash provided by investing activities...................            9,588,395     22,430,921
                                                                         ------------   ------------

Cash flows from financing activities:
  Book overdraft.................................................                         (3,055,759)
  Proceeds from Bridge Financing.................................          50,000,000
  Proceeds from Working Capital Facility.........................           7,500,000
  Proceeds from stock option and warrant exercises...............             519,188        111,963
  Principal payments of long-term debt...........................            (228,924)    (1,167,711)
  Additions to deferred financing costs..........................          (7,546,077)
                                                                         ------------   ------------

    Net cash provided by (used in) financing activities..........          50,244,187     (4,111,507)
                                                                         ------------   ------------

Net increase (decrease) in cash and cash equivalents.............          41,935,986     (3,394,136)

Cash and cash equivalents, beginning of period...................          11,864,218      7,135,427
                                                                         ------------   ------------
Cash and cash equivalents, end of period.........................        $ 53,800,204   $  3,741,291
                                                                         ============   ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -5-
<PAGE>

                 ADVANCED RADIO TELECOM CORP. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)

The Company and Basis of Presentation

     Advanced Radio Telecom Corp. ("ART" or the "Company") provides wireless
broadband telecommunications services in the 38 GHz band of the radio spectrum.
During the year ended December 31, 1998, ART began offering internet data
services in the Seattle, Washington, Portland, Oregon and Phoenix, Arizona areas
and, as such, revenues to date have been limited.

     The unaudited condensed consolidated financial statements included herein
have been prepared by the Company.  The financial statements contain all
adjustments, consisting only of normal recurring adjustments which are, in the
opinion of the Company's management, necessary to present fairly the
consolidated financial position of the Company as of June 30, 1999, the
consolidated results of its operations for the six months ended June 30, 1999
and 1998 and its cash flows for the six months ended June 30, 1999 and 1998.

     The Company currently estimates that it will require in excess of $1
billion over the next several years to fund capital expenditures, working
capital and operations. In June 1999, the Company entered into a preferred stock
purchase agreement (the "Stock Purchase Agreement") with a group of investors
(the "Investors").  Subject to the terms of the Stock Purchase Agreement, the
Company agreed to sell the Investors preferred stock in exchange for an
aggregate of $251 million (the "Investment"). Closing of the Investment is
subject to the Company obtaining shareholder approval of the Investment and
other matters, as well as other customary conditions.  The Company's
shareholders will vote on the Investment at the Company's annual meeting, which
is scheduled to be held on September 8, 1999.  The Investors have provided the
Company with $50 million in bridge financing (the "Bridge Financing") through
11% short-term senior notes, which mature on the earliest of the closing of the
Investment, the date the ART shareholders fail to approve the Investment or
October 29, 1999.

     The Company and  Lucent Technologies Inc. ("Lucent") amended the working
capital facility under which Lucent agreed to provide the Company with $25
million in revolving loans (the "Working Capital Facility") in May 1999 to
provide that loans made pursuant to the Working Capital Facility will be due on
the earlier of the date of the Company's shareholders' final vote on the
Investment or October 29, 1999.  During 1998, the Company and Lucent also
entered into a purchase money credit facility (the "Purchase Money Facility"),
which the parties amended in May 1999,  setting forth the terms and conditions
under which Lucent has agreed to provide purchase money financing of up to $200
million, to be used to finance the purchase the Company's broadband data network
from Lucent.  Lucent has made available $10 million in initial purchase money
loans and the availability of the balance is subject to other conditions,
including the Company's ability to raise at least $50 million of certain debt or
equity capital. The closing of the Investment would make this additional funding
available to the Company.  However, there can be no assurance that the
Investment will close or that the funding will become available to the Company.

     The consolidated financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and liquidation of liabilities in the ordinary course of business. The
Company has limited financial resources, has incurred recurring losses from
operations since inception and does not expect to generate significant operating
revenues in the near term. The Company's ability to continue as a going concern
at least through December 31, 1999, which includes funding of its operations and
business plan, the repayment of the Working Capital Facility and Bridge
Financing, and funding of its contractual commitments, is dependent upon its
ability to consummate the Investment or raise additional financing.  There can
be no assurance that the Company will be able to consummate the Investment or
that it will be able to obtain additional financing, or, if available, that it
will be able to obtain such additional financing on acceptable terms. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern.  The consolidated financial statements do not include any
adjustments that might result from the outcome of this

                                      -6-
<PAGE>

uncertainty.

     Certain information and footnote disclosures normally included in financial
statements have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission.  The year-end condensed consolidated
balance sheet was derived from audited financial statements but does not include
all disclosures required by generally accepted accounting principles.  The
unaudited condensed consolidated financial statements should be read in
conjunction with the Company's December 31, 1998, audited consolidated financial
statements and notes thereto contained in the 1998 Form 10-K on file with the
Securities and Exchange Commission.

Restatement of 1998 Comparative Financial Information

     The Company has restated its interim financial results for the first,
second and third quarters of fiscal 1998 as a result of a change in Federal
income tax law that was not previously considered, which increased the net
operating loss carryforward period from 15 to 20 years. The effect of the
restatement on the six months ended June 30, 1998 comparative financial
information increased the deferred income tax benefit by approximately $2.5
million and decreased the net loss by approximately $2.5 million. The effect of
the restatement on the three months ended June 30, 1998 comparative financial
information increased the deferred income tax benefit by approximately $743,000
and decreased the net loss by approximately $743,000.

Property and Equipment

     As of June 30, 1999, substantially all of the Company's property and
equipment, excluding certain wireless equipment held for disposal, had been
placed in service.

     During the first quarter of 1999, the Company recorded a non-cash equipment
impairment charge of approximately $6.4 million to write down the carrying value
of certain equipment that management determined in March 1999 would be disposed
of and not used in its future broadband network buildout.  The amount of the
write-down was based on the estimated salvage value.

     During the six months ended June 30, 1999, the Company disposed of certain
wireless equipment resulting in cash proceeds of approximately $548,000, which
approximated its carrying value.  At June 30, 1999 the carrying value of certain
wireless equipment to be disposed of was approximately $1.5 million.

FCC Licenses

     In January 1999, the Company consummated acquisitions of certain 38 GHz
licenses for $4.3 million in cash and certain other licenses for 154,114 shares
of common stock valued at approximately $990,000, including related deferred
taxes and acquisition costs.

     In June 1997, a shareholder of Commco CCC exercised an option to purchase
from the Company certain 38 GHz FCC licenses in specified markets, in which the
Company has more than one license and certain wireless transmission equipment.
The sale was consummated in May 1999 with 11 licenses being purchased for
approximately $7 million.  The Company recorded a gain of approximately $700,000
related to this sale, which has been included in Other Income/Expense.

                                      -7-
<PAGE>

Working Capital Facility

     During the first quarter of 1999, the Company drew the remaining funds
available under the $25 million Working Capital Facility and, in conjunction,
issued warrants to purchase 191,988 shares of the Company's common stock.  The
aggregate value ascribed to the warrants was approximately $1,242,000.

     During the second quarter of 1999, the Working Capital Facility was amended
to extend the maturity date of loans made pursuant to the Working Capital
Facility to the earlier of October 29, 1999 or the date of the final vote of the
Company's stockholders on the transaction.  In addition, the Company has
obtained waivers from Lucent for certain debt covenants related to the Working
Capital Facility and the Purchase Money Facility, which are effective until
October 31, 1999.  At June 30, 1999, the Company would have been in violation of
such debt covenants if it had not obtained such waivers.  Also during the second
quarter, certain provisions of the Working Capital Facility and the Purchase
Money Facility agreements were amended to facilitate conditions of the Stock
Purchase Agreement.

Purchase Money Facility

     At December 31, 1998, the Company had utilized the entire $10 million of
initial purchase money loans made available by Lucent.  The amount has been
included in long-term debt.

Convertible Preferred Stock

     On June 1, 1999, the Company entered into the Stock Purchase Agreement with
the Investors.  Subject to terms of the Stock Purchase Agreement, the Company
has agreed to sell 2,635,908 chares of Series A convertible preferred stock and
501,592 shares of Series B non-voting convertible preferred stock, each at $80
per share, to the Investors in exchange for an aggregate of $251 million.  The
Series A shares vote on an as-converted basis with the common stock and
represent approximately 45% of the Company's outstanding common stock.
Consummation of the Investment is subject to shareholder approval, and other
customary closing conditions.

     Additionally, in connection with the Investment, the Company issued five
year warrants to the Investors to purchase an aggregate of 1,000,000 shares of
common stock at $.01 per share. The warrants are exercisable only if the Stock
Purchase Agreement is terminated for specified reasons.

     In July 1999, the holders of the Company's $135 million Senior Notes
consented to amendment of the Senior Note indenture, which is a condition to the
Investment.  Upon closing of the Investment, the Company would be required to
pay consent fees of approximately $4 million. The Company also incurred other
expenses of approximately $500,000.

Supplemental Cash Flow Information:

     Supplemental disclosure of cash flow information is summarized below for
the six months ended June 30:

<TABLE>
<CAPTION>
                                                                  1999                 1998
                                                               -----------          -----------
<S>                                                            <C>                  <C>
Non-cash financing and investing activities:
  Issuance of shares for FCC licenses................          $   847,627          $48,347,798
  Value ascribed to warrants.........................            1,241,710
  Additions to property & equipment..................              128,366

Interest paid........................................          $10,682,536          $ 9,526,224
</TABLE>

                                      -8-
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview

     Advanced Radio Telecom Corp. ("ART" or the "Company") provides wireless
broadband telecommunications services in the 38 GHz band of the radio spectrum.
The Company's initial business was selling connectivity to various
telecommunications companies as a wholesale carriers' carrier, which the Company
commenced in the fourth quarter of 1996.  Following the establishment of a new
core management team, the Company altered its strategy in the first quarter of
1998 and focused on selling a variety of broadband internet services to end-user
customers and deploying a broadband data network.  During the year ended
December 31, 1998, ART began offering internet data services in the Seattle,
Washington, Portland, Oregon and Phoenix, Arizona areas and, as such, revenues
to date have been limited.

Results of Operations

     Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998

     Revenue for the six months ended June 30, 1999, was approximately $565,000
compared to approximately $442,000 for the same period in 1998.  The Company's
revenue from the first six months of 1999 consisted of approximately $350,000 of
service revenue from its remaining carriers' carrier operations and $215,000 of
fees charged for the Company's internet services in Seattle, Portland and
Phoenix.  The Company's revenue from the first six months of 1998 consisted
primarily of revenue from the Company's carrier's carrier operations.

     Operating costs and expenses were approximately $30 million for the six
months ended June 30, 1999, compared to approximately $14.5 million in 1998.
In future periods the Company expects increases in cash expenses for network
operations and sales and marketing as the Company implements its business plan.
In the six months ended June 30, 1999, the Company recorded a charge of
approximately $6.4 million to write down the carrying value of certain equipment
that management determined in March 1999 would be disposed of and not used in
the future buildout of the Company's broadband data network.  Depreciation and
amortization was approximately $6.8 million for the six months ended June 30,
1999, compared to approximately $3 million in 1998.  The increase was primarily
due to increased depreciation resulting from the deployment of network equipment
and the acquisition of certain FCC licenses during 1998.  Excluding these non-
cash and non-recurring items, operating costs and expenses for the six months
ended June 30, 1999 were approximately $16.9 million compared to approximately
$11.5 million during the same period in 1998.  The increase was primarily due to
the increase in technical and network operating expenses, which were
attributable to the Company's buildout of its broadband data network, a trial
network in San Jose and the commencement of operations in Seattle, Portland, and
Phoenix in the third and fourth quarters of 1998.

     Net interest and other expenses were approximately $14.6 million for the
six months ended June 30, 1999 compared to approximately $8.9 million in 1998.
The increase was primarily due to amortization of the value ascribed to warrants
issued in conjunction with borrowings under the financings obtained during 1998,
described below, as well as cash interest due on the increased principal amounts
of these borrowings.

     Deferred income tax benefit was approximately $1.1 million for the six
months ending June 30, 1999 compared to approximately $4.3 million for the same
period in 1998 as a result of a change in tax law effective January 1, 1998,
which increased the net operating loss carryforward period from 15 to 20 years.

     Three Months Ended June 30, 1999 Compared to Three Months Ended June 30,
1998

     Revenue for the three months ended June 30, 1999, was approximately
$339,000 compared to $205,000 for

                                      -9-
<PAGE>

the same period in 1998. The Company's revenue from the three months ended June
30, 1999 consisted of approximately $173,000 of service revenue from its
remaining carriers' carrier operations and $166,000 of fees charged for the
Company's internet services in Seattle, Portland and Phoenix. The Company's
revenue from the three months ended June 30, 1998 consisted primarily of revenue
from the Company's carrier's carrier operations.

     Operating costs and expenses were approximately $12.9 million for the three
months ended June 30, 1999, compared to approximately $7.4 million for the same
period in 1998.   In future periods the Company expects increases in cash
expenses for network operations and sales and marketing as the Company
implements its business plan.  Depreciation and amortization was approximately
$3.7 million for the three months ended June 30, 1999, compared to approximately
$1.5 million in 1998.  The increase was primarily due to increased depreciation
resulting from the deployment of network equipment and the acquisition of
certain FCC licenses during 1998.  Excluding this non-cash item, operating costs
and expenses for the three months ended June 30, 1999 were approximately $9.2
million compared to approximately $5.8 million during the same period in 1998.
The increase was primarily due to the increase in technical and network
operating expenses, which were attributable to the Company's buildout of its
broadband data network, a trial network in San Jose and the commencement of
operations in Seattle, Portland, and Phoenix in the third and fourth quarters of
1998.

     Net interest and other expenses were approximately $7.7 million for the
three months ended June 30, 1999 compared to approximately $4.6 million in 1998.
The increase was primarily due to amortization of the value ascribed to warrants
issued in conjunction with borrowings under the financings obtained during 1998,
described below, as well as cash interest due on the increased principal amounts
of these borrowings.

     Deferred income tax benefit was approximately $757,000 for the three months
ending June 30, 1999 compared to approximately $2.2 million for the same period
in 1998 as a result of a change in tax law effective January 1, 1998, which
increased the net operating loss carryforward period from 15 to 20 years.

Liquidity and Capital Resources

     Through June 30, 1999, funding for the Company's acquisitions, capital
expenditures and net operating losses has been provided from private placements
of equity and bridge financings in 1994 through 1996, the Company's initial
public offering in November 1996, the Company's public offering of units
consisting of its senior notes and warrants in February 1997, the borrowings
from Lucent Technologies Inc. ("Lucent") and the Bridge Financing described
below.  Approximately $51 million of the approximately $130 million net proceeds
from the sale of the units of senior notes and warrants was used to purchase a
portfolio of U.S. Treasury securities that will provide for interest payments on
the senior notes through February 2000.  Because the senior notes have
"significant original issue discount" for tax purposes, the Company will not be
able to deduct the interest expense related to the accretion of this original
issue discount for tax purposes.

     In June 1999, the Company entered into a preferred stock purchase agreement
(the "Stock Purchase Agreement") with a group of investors (the "Investors").
Subject to the terms of the Stock Purchase Agreement, the Company agreed to sell
the Investors preferred stock in exchange for an aggregate of $251,000,000 (the
"Investment"). Closing of the Investment is subject to the Company obtaining
shareholder approval of the Investment and other matters, as well as other
customary conditions.  The Company's shareholders will vote on the Investment at
the Company's annual meeting, which is scheduled to be held on September 8,
1999.  The Investors have provided the Company with $50 million in bridge
financing (the "Bridge Financing"), which matures on the earliest of the closing
of the Investment, the date the ART shareholders fail to approve the Investment
and October 29, 1999.

     One of the Investors is a subsidiary of Qwest Communications International
Inc. Since execution of the Stock Purchase Agreement, Qwest has agreed to merge
with U S WEST, Inc. with Qwest as the surviving corporation. Upon consummation
of the merger expected by Qwest in mid-2000, Qwest and the Company will be
subject to some restrictions under the federal communications law imposed on
Bell Operating Companies and their affiliates including a prohibition on Qwest
providing long distance services to ART's customers in the U S WEST region. The
Company does not believe that these restrictions will have any material adverse
effect on the Company.

                                      -10-
<PAGE>

     During the six months ended June 30, 1999, the Company consummated the
acquisition of certain FCC licenses for approximately $4.3 million in cash, and
other FCC licenses for approximately 154,000 shares of common stock.  The
Company may continue to acquire additional licenses in exchange for common stock
or cash.

     In June 1997, an option was exercised to acquire from the Company certain
38 GHz licenses in specified markets in which the Company has more than one
license. The sale was consummated in May 1999 with 11 licenses being purchased
for approximately $7 million.

     As of June 30, 1999, the Company had drawn the entire $25 million of
unsecured revolving loans available under its credit facility with Lucent  (the
"Working Capital Facility"). The Company and Lucent amended the Working Capital
Facility in May 1999 to provide that loans made pursuant to the Working Capital
Facility will be due on the earlier of the date of the Company's shareholders'
final vote on the Investment or October 29, 1999.

     The Company has borrowed $10 million in initial purchase money loans (the
"Initial Purchase Money Loans") under its purchase money credit facility with
Lucent (the "Purchase Money Facility") under which Lucent has agreed to provide
an aggregate of up to $200 million in purchase money financing to the Company
for Lucent products and services.   No additional amounts are currently
available to the Company under the Purchase Money Facility.  Subject to certain
conditions, including the Company's ability to raise at least $50 million of
certain debt or equity capital, Lucent will make available purchase money loans
equal to 200% of the aggregate capital raised, not to exceed $200 million
(including the $10 million Initial Purchase Money Loans).  The closing of the
Investment would make this additional funding available to the Company for
Lucent products and services.  However, there can be no assurance that the
Investment will close or that the funding contemplated by the Purchase Money
Facility will become available to ART, or if available, will be utilized by the
Company.

     In May 1999, the Company and Lucent amended their definitive purchase
agreement under which Lucent agreed to design, engineer and construct the
Company's wireless broadband data network.  Under the amended purchase agreement
the Company has no minimum purchase obligations.

     In July 1999, the Company, with the consent of the holders of its senior
notes, amended certain covenants of the indenture relating to the senior notes
to provide the Company with greater flexibility to implement its business plan.
Obtaining these consents is a condition to the Investment.  The amendments to
the indenture will become operative upon the closing of the Investment.  When
the amendments become operative, ART will pay a consent fee of approximately $4
million.

     The Company will require significant additional capital to fully fund its
operations and its long-term broadband data network buildout and business plan.
The Company currently estimates that it will require in excess of $1 billion
over the next several years to fund capital expenditures, working capital and
operations.  The Company has limited financial resources, has incurred recurring
losses from operations since inception and does not expect to

                                      -11-
<PAGE>

generate significant operating revenues in the near term. The Company's ability
to continue as a going concern at least through December 31, 1999, which
includes funding of its operations and business plan, the repayment of the $25
million Working Capital Facility and the Bridge Financing and funding of its
contractual commitments, is dependent upon receiving shareholder approval for
and closing the Investment or receiving alternative financing. However, there
can be no assurance that the Investment will close or that alternative financing
will be available. These conditions raise substantial doubt about the Company's
ability to continue as a going concern or that such alternative financing can be
obtained.

Inflation

     Management does not believe that its business has been affected by
inflation to a significantly different extent than has the general economy.

Year 2000 Disclosure

     Many existing computer programs use only two digits, rather than four, to
represent a year.  Date-sensitive software or hardware written or developed in
this fashion may not be able to distinguish between 1900 and 2000, and programs
written in this manner that perform arithmetic operations, comparisons or
sorting of date fields may yield incorrect results when processing a Year 2000
date.  This Year 2000 problem could potentially cause system failures or
miscalculations that could disrupt operations.

The Company's State of Readiness

     The Company has implemented a survey to identify Year 2000 issues in three
areas: (i) financial and information technology systems (ii) non-IT network
equipment and (iii) third-party vendors and suppliers. The Company believes its
financial and information technology systems and its non-IT equipment will be
Year 2000 compliant by the end of 1999.

     The Company completed its survey of financial and information technology
systems in the first quarter of 1999.  As a result of the survey, the Company
does not believe there are any material noncompliant systems.  However, the
Company is conducting detailed verification testing for business critical
systems to confirm the results of its survey. If Year 2000 issues are
discovered, the Company will evaluate and prioritize the problems.  The Company
expects to coordinate any Year 2000 problems with the vendors that supplied the
noncompliant systems. The Company expects that any remediation efforts would
continue through the third quarter of 1999 to ensure that technology introduced
in mid-1999 is fully compliant across the network.  However, there can be no
assurance that the Company's survey will identify all Year 2000 problems in
these systems or that the necessary corrective actions will be completed in a
timely manner.

     The Company has received warranties from its network equipment suppliers
and integrators, that the Company's non-IT network equipment is Year 2000
compliant.  In addition, the tests conducted by the Company before accepting
delivery of such network equipment are designed to confirm whether the equipment
is Year 2000 compliant.  Based on these warranties and acceptance tests, the
Company does not plan to take further action to ascertain whether its network
equipment is Year 2000 compliant.  However, there can be no assurance that this
equipment will be Year 2000 compliant as warranted or that the acceptance tests
will identify all Year 2000 problems.  In addition, the Year 2000 warranties
that the Company has received limit the damages that the Company would be able
to recover if such systems were not Year 2000 compliant.  The Company is also
reviewing the Year 2000 compatibility of its network management software.  If
the Company discovers that this software is not Year 2000 compliant, it expects
to coordinate its remediation efforts with the software provider to remediate
the system. The Company expects that these remediation efforts, if any, will
continue through third quarter of 1999 to ensure that network management
software introduced in mid-1999 is fully compliant.

                                      -12-
<PAGE>

     The Company is also assessing its vulnerability to the Year 2000 problems
of third-party service suppliers and is communicating with suppliers regarding
the problem.  The Company relies on third-party suppliers to deliver fiber
telecommunications links, internet access, network equipment, banking services
and payroll services.  The Company also intends to develop new relationships
with several providers of fiber-optic telecommunications service, internet
service providers, telecommunications resellers and other companies in the
telecommunications industry.  The Company intends to continuously identify and
prioritize critical suppliers and communicate with them about their plans and
progress in addressing the Year 2000 problem.

The Company's Year 2000 Risk

     Based on the efforts described above, the Company currently believes that
its systems will be Year 2000 compliant in a timely manner. The Company
completed its survey of financial and information technology systems and non-IT
systems in the first quarter of 1999 and expects to complete any remediation
efforts by the end of the third quarter 1999.  However, there can be no
assurance that all Year 2000 problems will be successfully identified, or that
the necessary corrective actions will be completed in a timely manner.  Failure
to successfully identify and remediate such Year 2000 problems in a timely
manner could have a material adverse effect on the Company's results of
operations, financial position or cash flow.

     In addition, the Company believes that there is a risk relating to
significant service suppliers' failure to remediate their Year 2000 issues in a
timely manner.  Although the Company is communicating with its suppliers
regarding the Year 2000 problem, the Company does not know whether these
suppliers' systems will be Year 2000 compliant in a timely manner.  Like most
telecommunications providers, the Company's ability to provide service is
dependent on key suppliers and equipment vendors.  If one or more significant
suppliers are not Year 2000 compliant, this could have a material adverse effect
on the Company's results of operations, financial position or cash flow.

The Company's Contingency Plans

     The Company has not created a formal contingency plan for Year 2000
problems.  The Company intends to take appropriate actions to mitigate the
effects of third parties' failures to remediate their Year 2000 issues and for
unexpected failures in its own systems.  Such actions may include having
arrangements for alternate suppliers and using manual intervention where
necessary.  If it becomes necessary for the Company to take these corrective
actions, it is uncertain whether this would result in significant interruptions
in service or delays in business operations or whether it would have a material
adverse effect on the Company's results of operations, financial position or
cash flow.

Costs of Year 2000 Remediation

     As of June 30, 1999, the Company has not incurred material costs related to
the Year 2000 problem, and does not expect to in the future.  The Company has
not deferred other information technology projects due to Year 2000 expenses,
and does not expect to defer such projects in the future.  However, there can be
no assurance that the costs associated with the Year 2000 problem will not be
greater than anticipated.

     Readers are cautioned that forward-looking statements contained in the Year
2000 Disclosure should be read in conjunction with the Company's disclosures
under the heading: "Cautionary Statement" below.

                                      -13-
<PAGE>

Cautionary Statement

     This quarterly report includes "forward-looking" information, as that term
is defined in the Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission in its rules, regulations and releases,
regarding the Company's financial and business prospects, the deployment of the
Company's network and the future impact of regulatory restrictions. The Company
cautions investors that any such statements made by the Company are not
guarantees of future performance and that known and unknown risks, uncertainties
and other factors may cause actual results to differ materially from those in
the forward-looking statements. These risks include, without limitation, failure
to consummate the Investment, ability to achieve the benefits contemplated by
the Investment and the commercial agreements, effect of the Qwest-U S WEST
merger, and capital requirements and other financial risks, customer demand,
technological risks, the ability to meet financing conditions, management of
growth, ability to achieve Year 2000 compliance, competition and government
regulation, as described in Exhibit 99 to the Company's Report on Form 10-K for
the year ended December 31, 1998. The Company does not undertake to update or
revise its forward-looking statements publicly even if experience or future
changes make it clear that any projected results expressed or implied herein
will not be realized.

PART II -- OTHER INFORMATION

Item 4.   Submissions of Matters to a Vote of Securityholders.

          No matters were submitted for a vote of the stockholders in the
quarter ending June 30, 1999.

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits:

               10.1 Broadband Services Agreement dated June 1, 1999 between the
                    Company and Qwest.*

               10.2 Private Line Services Agreement dated June 1, 1999 between
                    the Company and Qwest.*

               27   Financial Data Schedule.

               *    Confidential treatment requested for certain portions. The
                    terms "confidential treatment" and the mark "*" as used
                    throughout this exhibit means that the material has been
                    omitted and separately filed with the Commission.

          (b)  Reports on Form 8-K:

          The Company filed a current report on Form 8-K on June 8, 1999
reporting the execution of the Stock Purchase Agreement dated June 1, 1999
between the Company and the Investors.

                                      -14-
<PAGE>

                                   SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) 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 on this 16th day of
August, 1999.

                              ADVANCED RADIO TELECOM CORP.

                              By: /s/ R. S. McCambridge
                              --------------------------------
                              R. S. McCambridge
                              Executive Vice President
                              and Chief Financial Officer

                               (Duly Authorized Officer and
                              Principal Financial and Accounting Officer)

                                      -15-
<PAGE>

                                 EXHIBIT INDEX


Exhibit
 Index                                Title
-------                               -----

10.1      Broadband Services Agreement dated June 1, 1999 between the Company
          and Qwest.*

10.2      Private Line Services Agreement dated June 1, 1999 between the Company
          and Qwest.*

27        Financial Data Schedule

     *    Confidential treatment requested for certain portions. The terms
          "confidential treatment" and the mark "*" as used throughout this
          exhibit means that the material has been omitted and separately filed
          with the Commission.