<Page>


================================================================================

                                  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 period ended September 30, 2001

                                       or

             [ ] 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 - 000-23269

                         METROMEDIA FIBER NETWORK, INC.
             (Exact name of registrant as specified in its charter)

                  DELAWARE                                  11-3168327
                  --------                                  ----------
            (State or other jurisdiction of             (I.R.S. Employer
            incorporation or organization)              Identification No.)

                   c/o Metromedia Fiber Network Services, Inc.
                               360 Hamilton Avenue
                             White Plains, NY 10601
                             -----------------------
               (Address of principal executive office) (Zip code)

                                 (914) 421-6700
                                 --------------
              (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 registrant's common stock as of October
31, 2001 was:
<Table>
<Caption>

                 Class         Number of Shares
                 -----         ----------------
<S>                             <C>
                   A            704,048,923
                   B             67,538,544
</Table>


================================================================================

<Page>

                  METROMEDIA FIBER NETWORK, INC. & SUBSIDIARIES
                          QUARTERLY REPORT ON FORM 10-Q
         FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001


                                TABLE OF CONTENTS

<Table>
<Caption>

    ITEM NO.      DESCRIPTION                                                                                PAGE
    --------      -----------                                                                                ----
                                          PART I - FINANCIAL INFORMATION
<S>                                                                                                            <C>

    Item 1.       Financial Statements

                  Consolidated Statements of Operations for the Three and Nine Month
                  Periods Ended September 30, 2001 and 2000.....................................               1

                  Consolidated Balance Sheets as of September 30, 2001 and December 31,
                  2000..........................................................................               2

                  Consolidated Statements of Cash Flows for the Nine Month Periods Ended
                  September 30, 2001 and 2000...................................................               3

                  Notes to Consolidated Financial Statements....................................               4

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

    Item 3.       Quantitative and Qualitative Disclosures about Market Risk....................              19

                                            PART II - OTHER INFORMATION

    Item 1.       Legal Proceedings.............................................................              20

    Item 2.       Changes in Securities and Use of Proceeds.....................................              22

    Item 3.       Defaults Upon Senior Securities...............................................              22

    Item 4.       Submission of Matters to a Vote of Security Holders...........................              22

    Item 5.       Other Information.............................................................              22

    Item 6.       Exhibits and Reports on Form 8-K..............................................              22
</Table>


<Page>

                         PART 1 - FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS

                  METROMEDIA FIBER NETWORK, INC. & SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                      (IN 000'S, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>

                                                                              THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                                 SEPTEMBER 30,                 SEPTEMBER 30,
                                                                           ---------      ---------      ---------      ---------
                                                                              2001           2000           2001           2000
                                                                           ---------      ---------      ---------      ---------
<S>                                                                        <C>            <C>            <C>            <C>
         Revenue .....................................................     $  91,528      $  51,882      $ 260,156      $ 127,118

         Expenses:
          Cost of sales (excluding non-cash compensation
              in 2001 of $4,813 and $12,918, respectively) ...........        63,372         50,742        205,466        133,466
          Selling, general and administrative, (excluding
             non-cash compensation in 2001 of $13,149 and
             $35,705, respectively, and $919 in 2000) .................       63,146         38,735        185,065         94,363
          Deferred compensation ......................................        17,962            919         48,623            919
          Depreciation and amortization ..............................       125,656         46,033        288,931        118,567
                                                                           ---------      ---------      ---------      ---------
         Loss from operations ........................................      (178,608)       (84,547)      (467,929)      (220,197)
         Other income (expenses):
          Other income and expense ...................................       (20,687)        31,306         (5,057)        93,194
          Interest expense ...........................................       (42,112)       (41,876)      (121,528)      (142,745)
          Loss from joint ventures ...................................          (709)          (198)        (1,138)        (2,739)
                                                                           ---------      ---------      ---------      ---------
         Net loss ....................................................     $(242,116)     $ (95,315)     $(595,652)     $(272,487)
                                                                           =========      =========      =========      =========

         Net loss per share, basic ...................................     $   (0.39)      $   (0.17)     $   (1.00)     $   (0.51)
                                                                           =========      =========      =========      =========

         Net loss per share, diluted .................................           N/A            N/A            N/A            N/A
                                                                           =========      =========      =========      =========

         Weighted average number of shares
          outstanding, basic .........................................       613,711        549,471        598,303        536,808
                                                                           =========      =========      =========      =========

         Weighted average number of shares
          outstanding, diluted .......................................           N/A            N/A            N/A            N/A
                                                                           =========      =========      =========      =========
</Table>

                             SEE ACCOMPANYING NOTES


                                       1
<Page>

           METROMEDIA FIBER NETWORK, INC. & SUBSIDIARIES

                    Consolidated Balance Sheets
                 (in 000's, except share amounts)

<Table>
<Caption>

                                                                                   September 30,    December 31,
                                                                                       2001            2000
                                                                                   -----------      -----------
                                                                                   (UNAUDITED)
<S>                                                                                <C>              <C>
                              ASSETS
Current assets:
      Cash and cash equivalents ..............................................     $    12,628      $ 1,148,888
      Marketable securities ..................................................              --          192,349
      Restricted cash, current ...............................................           1,919               --
      Accounts receivable ....................................................         169,438          111,157
      Prepaid expenses and other current assets ..............................          38,340           52,993
                                                                                   -----------      -----------
            Total current assets .............................................         222,325        1,505,387

Fiber optic transmission network and related equipment, net ..................       4,038,995        2,958,096
Property and equipment, net ..................................................          89,616           43,875
Restricted cash ..............................................................          12,535           61,204
Investment in/advances to joint ventures .....................................           9,436           10,270
Other assets .................................................................          88,162           94,749
Intangibles, net .............................................................       2,563,139        1,578,750
                                                                                   -----------      -----------
            Total assets .....................................................     $ 7,024,208      $ 6,252,331
                                                                                   ===========      ===========

               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable .......................................................     $   421,113      $   302,300
      Accrued expenses .......................................................         617,271          551,507
      Deferred revenue, current portion ......................................          52,243           43,664
      Capital lease obligations and notes payable, current portion ...........           2,709            8,981
                                                                                   -----------      -----------
            Total current liabilities ........................................       1,093,336          906,452
Senior notes payable .........................................................       1,627,400        1,635,400
Convertible subordinated notes payable .......................................         975,281          975,281
Capital lease obligations and notes payable ..................................          44,133           31,036
Deferred revenue .............................................................         462,765          439,988
Other long term liabilities ..................................................          59,171           18,949

Commitments and contingencies (see notes)

Stockholders' equity:
      Class A common stock, $.01 par value; 2,404,031,240
        shares authorized; 548,589,360 and 484,518,343
        shares issued and outstanding, respectively ..........................           5,485            4,845
      Class B common stock, $.01 par value; 522,254,782
        shares authorized; 67,538,544 shares
        issued and outstanding ...............................................             676              676
   Additional paid-in capital ................................................       4,177,747        2,814,480
   Unearned stock-based compensation .........................................        (241,637)              --
   Accumulated deficit .......................................................      (1,160,068)        (564,416)
   Cumulative comprehensive loss .............................................         (20,081)         (10,360)
                                                                                   -----------      -----------
            Total stockholders' equity .......................................       2,762,122        2,245,225
                                                                                   -----------      -----------
            Total liabilities and stockholders' equity .......................     $ 7,024,208      $ 6,252,331
                                                                                   ===========      ===========
</Table>

                             SEE ACCOMPANYING NOTES


                                        2
<Page>

                  METROMEDIA FIBER NETWORK, INC. & SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                   (IN 000'S)

<Table>
<Caption>

                                                                                           NINE MONTHS ENDED
                                                                                             SEPTEMBER 30,
                                                                                     ----------------------------
                                                                                        2001             2000
                                                                                     -----------      -----------
<S>                                                                                  <C>              <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net loss .......................................................................     $  (595,652)     $  (272,487)
Adjustments to reconcile net loss to net cash
   provided by operating activities:
      Depreciation .............................................................         153,239           54,123
      Amortization .............................................................         135,692           64,444
      Foreign currency gain ....................................................          (6,469)              --
      Amortization of deferred financing costs .................................           4,259            4,259
      Stocks, options and warrants issued for services .........................             715              108
      Non-cash compensation ....................................................          48,623              919
      Loss from joint ventures .................................................           1,138            2,739
      Loss on writedown of investments .........................................          28,790               --
CHANGE IN OPERATING ASSETS AND LIABILITIES:
      Accounts receivable ......................................................         (53,049)         (14,016)
      Accounts payable and accrued expenses ....................................          (9,428)          83,172
      Deferred revenue .........................................................          31,356           57,453
      Other ....................................................................          37,848           (5,164)
                                                                                     -----------      -----------
   Net cash used in operating activities .......................................        (222,938)         (24,450)
                                                                                     -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales and purchases of marketable securities ...................................         192,349         (158,805)
Capital expenditures on fiber optic transmission
   network and related equipment ...............................................      (1,057,190)      (1,309,320)
Investment in / advances to joint ventures .....................................          (2,561)          (7,236)
Capital expenditures on property and equipment .................................         (45,151)         (41,199)
Business acquisitions (net of cash acquired)  ..................................         (34,882)          (8,426)
                                                                                     -----------      -----------
   Net cash used in investing activities .......................................        (947,435)      (1,524,986)
                                                                                     -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock .........................................          10,368          757,341
Purchases and sales of pledged securities, net .................................              --           31,960
Restricted cash secured by letter of credit ....................................          48,131           29,588
Repayment of notes payable and capital lease obligations .......................         (13,544)          (3,319)
Proceeds from issuance of notes payable ........................................              --          975,281
                                                                                     -----------      -----------
   Net cash provided by financing activities ...................................          44,955        1,790,851
                                                                                     -----------      -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH ........................................         (10,842)         (11,293)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...........................      (1,136,260)         230,122
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD ..................................       1,148,888        1,262,391
                                                                                     -----------      -----------
CASH AND CASH EQUIVALENTS-END OF PERIOD ........................................     $    12,628      $ 1,492,513
                                                                                     ===========      ===========
Supplemental information:
   Interest paid ...............................................................     $   111,986      $    31,489
                                                                                     ===========      ===========
   Income taxes paid ...........................................................     $        --      $        --
                                                                                     ===========      ===========
   Accrued capital expenditures ................................................     $   797,014      $   105,954
                                                                                     ===========      ===========
</Table>

In connection with the acquisition of all of the common stock of SiteSmith in
February 2001, the Company issued shares of Class A common stock, options and
warrants with a total value of $1,019,162, net of a deferred compensation charge
of $331,158.

In connection with the acquisitions in 2000 of MIBH and of 100% of the shares
owned by the joint venture partners of AboveNet UK Ltd., shares of class A
common stock were issued with a total value of $49,280 and $10,000,
respectively.

                             SEE ACCOMPANYING NOTES


                                       3
<Page>

1.    BASIS OF PRESENTATION, DESCRIPTION OF THE BUSINESS AND SIGNIFICANT
      ACCOUNTING POLICIES

BASIS OF PRESENTATION

      The consolidated financial statements include the accounts of Metromedia
Fiber Network, Inc. and its wholly owned subsidiaries, (collectively, "MFN" or
the "Company"). All significant inter-company balances and transactions have
been eliminated in consolidation. Investments in joint ventures which are not
majority owned, or which the Company does not control but over which it
exercises significant influence, are accounted for using the equity method.
Certain reclassifications have been made to the consolidated financial
statements for prior periods to conform to the current presentation.

      The interim unaudited consolidated financial statements in this Report
have been prepared in accordance with the rules and regulations of the United
States Securities and Exchange Commission's Regulation S-X and consequently do
not include all disclosures required under accounting principles generally
accepted in the United States. The interim unaudited consolidated financial
statements should be read in conjunction with the audited Consolidated Financial
Statements of the Company and accompanying Notes for the year ended December 31,
2000, contained in the Company's Annual Report on Form 10-K. The Form 10-K
includes information with respect to the Company's significant accounting and
financial reporting policies and other pertinent information. The Company
believes that all adjustments of a normal recurring nature that are necessary
for a fair presentation of the results of the interim periods presented in this
report have been made.

DESCRIPTION OF BUSINESS

      The Company provides fiber optic infrastructure, high-bandwidth internet
connectivity and managed internet infrastructure services for its communications
intensive customers. The Company is a facilities-based provider of
technologically advanced, high-bandwidth, fiber optic communications
infrastructure to communications carriers and corporate and government customers
in the United States and Europe. The Company also provides high bandwidth
internet connectivity, co-location services and a comprehensive internet
infrastructure management solution that includes design and architecture,
hardware and software, installation, co-location and network connectivity and
ongoing management. The Company's subsidiary PAIX.net, Inc. ("PAIX"), serves as
a packet switching center for ISPs and also offers secure, fault-tolerant
co-location services to ISPs.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MANAGEMENT ESTIMATES

      The preparation of financial statements in conformity with accounting
principles generally accepted in the United States, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results may differ from those estimates.

FIBER OPTIC TRANSMISSION NETWORK AND RELATED EQUIPMENT

      The fiber optic transmission network and related equipment are stated at
cost. Costs incurred in connection with the installation and expansion of the
network are capitalized. Depreciation is generally computed using the
straight-line method through the life of either the franchise agreement or
right of way for the related network. For data centers, depreciation is
computed using the straight-line method through the shorter of the life of the
lease or ten years.


                                       4
<Page>

1.  BASIS OF PRESENTATION, DESCRIPTION OF THE BUSINESS AND SIGNIFICANT
    ACCOUNTING POLICIES (CONTINUED)

RECOGNITION OF REVENUE

      The Company recognizes the majority of revenue on telecommunications
services ratably over the term of the applicable lease agreements with
customers. Amounts billed in advance of the service provided are recorded as
deferred revenue. Revenue on managed services, bandwidth and space requirement
charges is recognized in the period in which the services are provided.

      The Company has adopted Staff Accounting Bulletin ("SAB") No. 101 as
amended. The adoption of SAB No. 101, as amended, has not and is not expected to
have a material impact on the Company's results of operations.

DEFERRED REVENUE

      Deferred revenue represents prepayments received from customers for future
use of the Company's fiber optic network and co-location facilities as well as
prepayment for installation services, which have not yet been provided. Lease
payments are structured as either prepayments or monthly recurring charges.
Prepayments are accounted for as deferred revenues and recognized over the term
of the respective customer lease agreement.

COMPREHENSIVE LOSS

      Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income (Loss)" establishes rules for the reporting of
comprehensive income and its components. Comprehensive income (loss) consists of
net income (loss), and foreign currency translation adjustments. The
comprehensive loss for the three and nine months ended September 30, 2001 was
approximately $223.4 million and $619.7 million respectively, compared to a loss
of approximately $100.7 million and $283.8 million respectively, for the three
and nine months ended September 30, 2000.

SEGMENT INFORMATION

      The Company discloses information regarding segments in accordance with
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 131 establishes standards for reporting of financial
information about operating segments in annual financial statements and requires
reporting selected information about operating segments in interim financial
reports. The disclosure of segment information is not required as the Company
operates in only one business segment.

      As of and for the three and nine months ended September 30, 2001 and 2000,
in excess of 90% of the Company's assets were located in the United States and
the Company derived substantially all of its revenue from businesses located in
the United States.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

      In September 2001, the FASB issued SFAS No. 141, "Business Combinations"
and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), effective for
fiscal years beginning after December 15, 2001. Under the new rules, goodwill
and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives.

      The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. The Company is
currently evaluating its intangible assets in relation to the provisions of SFAS
142 to determine the impact the adoption of SFAS 142 will have on its results of
operations and financial position. However, the Company believes that
application of the non-amortization provision of SFAS 142 will significantly
reduce its amortization expense from amounts currently recorded. During 2002,
the Company will perform the first of the required impairment tests of goodwill
and other intangible assets. Based on the Company's current market
capitalization, the amount of the goodwill impairment may be significant.


                                       5
<Page>

1.  BASIS OF PRESENTATION, DESCRIPTION OF THE BUSINESS AND SIGNIFICANT
    ACCOUNTING POLICIES (CONTINUED)

      In June 2001, the FASB issued SFAS No. 143, "Accounting for Assets
Retirement Obligations." The Statement is effective for the Company beginning
January 1, 2003. The Company is evaluating the effect the standard will have on
its financial statements.

      In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long Lived Assets" which supercedes SFAS No. 121. The
Company does not believe that the required adoption of SFAS No. 144 will have
any effect on its results of operations or financial position.


2.  FIBER OPTIC TRANSMISSION NETWORK AND RELATED EQUIPMENT

      Fiber optic transmission network and related equipment consist of the
following (in 000's):

<Table>
<Caption>

                                            SEPTEMBER 30,     DECEMBER 31,
                                                2001             2000
                                             -----------      -----------
<S>                                          <C>              <C>
     Fiber optic network                     $ 1,718,111      $ 1,062,982
     Data Centers                              1,005,983          337,146
     Telecommunication equipment & other         296,580          206,051
     Construction in progress                  1,267,932        1,464,190
                                             -----------      -----------
         Total Network                         4,288,606        3,070,369
     Less: accumulated depreciation             (249,611)        (112,273)
                                             -----------      -----------
                                             $ 4,038,995      $ 2,958,096
                                             ===========      ===========
     </Table>


      Construction in progress includes amounts incurred in the Company's
expansion of its network and data centers. These amounts include fiber optic
cable and other materials, engineering and other layout costs, fiber optic cable
installation costs and other network assets held under capital leases.
Construction in progress also includes payments for rights of way for the
underlying sections of the network build. During the nine months ended September
30, 2001 and 2000, $55.1 million and $25.8 million of interest expense was
capitalized, respectively. The Company's commitment to purchase materials and
contracts for the construction of fiber optic network systems was approximately
$66.0 million as of September 30, 2001.


3.  INVESTMENT IN/ADVANCES TO JOINT VENTURES

      The Company records its investments in other companies and joint ventures
which are less than majority-owned, or which the Company does not control, but
in which it exercises significant influence, under the equity method of
accounting.

      The Company's unconsolidated investments in joint ventures, at cost, net
of adjustments for its equity in earnings or losses, were as follows (in 000's):

<Table>
<Caption>

                                  SEPTEMBER 30,  DECEMBER 31,  OWNERSHIP
                                      2001          2000          %
                                  -------------  ------------  ---------

<S>                                 <C>          <C>                <C>
                AboveNet Japan            --        2,285           (1)
                AboveNet Taiwan        2,827        1,579           56%
                ION                    6,353        6,150           50%
                Other                    256          256           --
                                    --------     --------
                                    $  9,436     $ 10,270
                                    ========     ========
</Table>


                                       6
<Page>


3.  INVESTMENT IN/ADVANCES TO JOINT VENTURES (CONTINUED)

(1)   In February 2001, the Company purchased an additional 50% interest in
      AboveNet Japan, increasing its ownership to 90%, and now consolidates
      AboveNet Japan.


4.  ACQUISITIONS

      All acquisitions have been accounted for under the purchase method. The
results of operations of the acquired businesses are included in the
consolidated financial statements from the dates of acquisition.

      On February 8, 2001, the Company acquired all the outstanding common stock
of SiteSmith, Inc. ("SiteSmith") for a total purchase price, paid in Company
class A common stock, of approximately $1.0 billion. The holders of SiteSmith
common stock, stock options and warrants received, in exchange for those
securities, 1.3404 shares of the Company's class A common stock, stock options
and warrants, respectively, per share of SiteSmith common stock or per share
issuable upon exercise of SiteSmith stock options and warrants that remained
outstanding. The excess of purchase price over the fair value of the net assets
acquired was approximately $1.0 billion and has been recorded as goodwill,
which is being amortized over ten years. In addition, in connection
with the issuance of unvested stock options and restricted shares of class A
common stock, the Company recorded approximately $331.2 million of deferred
compensation expense, which is being amortized over the remaining vesting
periods of three to four years. As part of the Company's integration plan,
employees who were deemed to be redundant as a result of the merger were
terminated in May 2001. An adjustment was made to increase goodwill by
approximately $42.0 million for the amount of deferred compensation expense
related to those employees. An additional adjustment of approximately $31.5
million was made to increase goodwill for amounts associated with lease exit
costs and other costs to consolidate facilities.

      In February 2001, the Company purchased an additional 50% interest in its
40% owned joint venture in Japan, AboveNet Japan, for approximately $7.5
million.

      The following unaudited pro forma financial information presents the
combined results of operations of the Company and SiteSmith as if the
acquisition had occurred as of the beginning of 2000, after giving effect
to certain adjustments, including amortization of goodwill. The pro forma
financial information does not necessarily reflect the results of operations
that would have occurred had the entities constituted a single entity during
such periods. The amounts are presented in thousands, except per share amounts.
Pro forma results of operations for the AboveNet Japan acquisition noted above
have not been presented because the effects were not significant.

<Table>
<Caption>

                                             SEPTEMBER 30,
                                      --------------------------
                                          2001           2000
                                      -----------     ----------
<S>                                     <C>            <C>
              Revenue                   $ 263,070      $ 140,714
              Net Loss                   (631,129)      (475,007)
              Loss per share, basic         (0.95)         (0.81)
</Table>


5.  RELATED PARTY TRANSACTIONS

      The Company is a party to a management agreement under which the Company's
controlling shareholder, Metromedia Company, provides consultation and advisory
services relating to legal matters, insurance, personnel and other corporate
policies, cash management, internal audit and finance, taxes, benefit plans and
other services as are reasonably requested. The management agreement terminates
on December 31 of each year, and is automatically renewed for successive
one-year terms unless either party terminates upon 60 days prior written notice.
The 2001 and 2000 annual management fee under the agreement is $1.0 million,
payable monthly. The Company is also obligated to reimburse Metromedia Company
for all its out-of-pocket costs and expenses incurred and advances paid by
Metromedia Company in connection with the management agreement.


                                       7
<Page>

5.  RELATED PARTY TRANSACTIONS (CONTINUED)

      At September 30, 2001, the Company had notes receivable from two officers
for approximately $980,000 and $2.1 million, respectively.


6.  DEBT

      On March 6, 2000, the Company issued $975.3 million of 6.15% convertible
subordinated notes due March 15, 2010, to Verizon Communications ("Verizon").
The notes were convertible into shares of class A common stock at a conversion
price of $17.00 per share. Interest on the notes was payable semi-annually in
arrears on March 15 and September 15, commencing on September 15, 2000. Upon
the occurrence of a change of control, each holder of convertible subordinated
notes would have had the right to require the Company to purchase all or any
part of that holder's convertible subordinated notes at a price equal to 100%
of the outstanding principal amount. The payment of all amounts due on the
convertible subordinated notes was subordinated to the prior payment of the
senior notes.

      At December 31, 2000, AboveNet had $13.2 million outstanding under its
credit facility (the "Credit Facility"), with no additional borrowings
available. In February 2001, the Company paid the balance outstanding under the
Credit Facility.

      On October 1, 2001 the Company consummated the following financing
transactions:

      Pursuant to a Note and Guarantee Agreement, $150 million of the
Company's floating rate guaranteed term notes due September 29, 2006 were
issued to a group of holders led by Citicorp USA, Inc, as a holder and as
administrative agent. The notes have a five year term, bear interest at LIBOR
plus 5.5%, or the base rate plus 4.5% and are secured by substantially all of
the assets of the Company and its subsidiaries. The Company also issued
warrants to this group to purchase up to 203,468,436 shares of its class A
common stock at an exercise price per share of approximately $0.54. A trust
affiliated with John W. Kluge (the "Kluge trust") purchased $25 million of
these notes and received warrants to purchase 33,911,406 shares of the
Company's class A common stock out of the total of 203,468,436 shares
issuable upon exercise of the warrants issued pursuant to the terms of the
Note and Guarantee Agreement. Mr. Kluge and Stuart Subotnick, two of the
trustees of the Kluge trust, are directors of the Company. A different trust
affiliated with Mr. Kluge is a partner in Metromedia Company, a stockholder
of the Company.

      Pursuant to a Notes Purchase Agreement, the Company issued to Verizon $50
million of its 8.5% senior secured convertible promissory notes due 2011. These
notes are convertible into 92,807,425 shares of the Company's class A common
stock at a price per share of approximately $0.54.

      The Company exchanged $975.3 million of its 6.15% convertible subordinated
notes due 2010 held by Verizon for (1) $500.0 million of its 6.15% series A
convertible subordinated notes due 2010 that are convertible into 166,666,667
shares of its class A common stock at a price per share of $3.00 and (2) $475.3
million of its 6.15% series B convertible subordinated notes due 2010 that are
convertible into 27,957,706 shares of its class A common stock at a price per
share of $17.00.

      The Company, the Kluge trust, David Rockefeller and Stephen Garofalo
entered into a Note Purchase Agreement under which the Kluge trust and Messrs.
Rockefeller and Garofalo purchased $180 million of the Company's 8.5% senior
convertible notes. The notes bear interest at 8.5% per year, are due and payable
on November 1, 2011 and are convertible into 334,106,729 shares of its class A
common stock at a price of approximately $0.54 per share. As a condition to the
issuance and sale of the senior convertible notes, the Company entered into a
registration rights agreement giving the Kluge trust and Messrs. Rockefeller and
Garofalo registration rights with respect to the class A common stock that is
issuable upon conversion of the senior convertible notes. Mr. Rockefeller is a
director of the Company and Mr. Garofalo is the chairman of the board of
directors.


                                       8
<Page>

6.  DEBT (CONTINUED)

      In connection with the restructuring of amounts owed to Bechtel
Corporation ("Bechtel"), the Company paid Bechtel $9.0 million and issued its
8.5% senior subordinated convertible promissory notes due September 30, 2003.
The principal amount of these notes will be between $79.0 million and $99.0
million, depending on the outcome of a reconciliation process that is in
progress as of the date of this report. The notes are convertible into between
146,635,731 and 183,758,701 shares of the Company's class A common stock at a
price per share of approximately $0.54. The Company also issued Bechtel a
warrant to purchase up to 25 million shares of our class A common stock at a
price per share of approximately $0.54.

      In connection with certain amounts owed or to be paid to Nortel Networks,
Inc. ("Nortel") for previously purchased equipment, the Company entered into
a financing agreement with Nortel, under which the Company made an initial
payment of $15 million,issued $231.0 million of 14% term notes due 2007 and
issued Nortel a warrant topurchase up to 84,778,516 shares of the Company's
class A common stock at a price per share of approximately $0.54.

      The Note and Guarantee Agreement pursuant to which the $150.0 million
notes due in 2006 were issued, the Note Purchase Agreement pursuant to which the
$50.0 million notes due 2011 were issued, the 8.5% convertible promissory notes
issued to Bechtel and the Note and Guarantee Agreement pursuant to which the
$231.0 million notes due in 2007 were issued, contain a variety of
affirmative and negative covenants, including various financial covenants and
limitations on the incurrence of additional indebtedness, sale and leaseback
transactions, transactions with affiliates and capital expenditures.

      In connection with the above transactions and other transactions pursuant
to which the Company agreed to issue stock in satisfaction of certain
obligations, the Company restructured approximately an additional $338.4
million owed to certain vendors based on agreements consummated through
October 31, 2001. As part of this restructuring, the Company issued
155,436,962 shares of its class A common stock and warrants to purchase up to
22.3 million shares of its class A common stock at a price per share of
approximately $0.54. After giving effect to this restructuring, the Company
remains obligated to make aggregate payments of $209.5 million to these
vendors over the next two years exclusive of $33.3 million paid to these
vendors at closing.

      The warrants and convertible notes issued in the financing transactions
are exercisable at any time after their initial exercise dates, expected to
occur prior to the end of the calendar year, and prior to their respective
expiration dates and the convertible notes are convertible at any time after
their initial exercise dates, expected to occur prior to the end of the
calendar year, and prior to their respective maturity dates. The convertible
note and warrant agreements contain antidilution and similar adjustment
provisions, which have been triggered by the Company's issuance of shares of
class A common stock after October 1, 2001. The Company does not believe the
dilution caused by such provisions will be material to it or to the holders
of its securities.

      The following unaudited condensed consolidated balance sheet illustrates
the effects of the closing of financings and restructuring of vendor payables,
which were consummated on October 1, 2001, as if these events were consummated
as of September 30, 2001.

      Where the Company was able to negotiate a restructuring of a vendor
payable whereby the vendor agreed to a concession, the Company plans to record
the restructuring as a troubled debt restructuring. Under this accounting, the
gain will be limited to the amount by which the recorded payable exceeds the
renegotiated amount of undiscounted cash flows and fair value of equity required
to repay the restructured obligation. The Company will record the resulting gain
as an extraordinary item.


                                       9
<Page>

6.  DEBT (CONTINUED)

                         METROMEDIA FIBER NETWORK, INC.
             CONDENSED COMBINED PRO FORMA BALANCE SHEET (UNAUDITED)
                               SEPTEMBER 30, 2001

<Table>
<Caption>

(IN THOUSANDS)

                                                                                           AS        PRO FORMA        PRO-FORMA
                                                                                        REPORTED    ADJUSTMENTS   SEPTEMBER 30, 2001
<S>                                                                                  <C>               <C>            <C>
                             ASSETS
Current assets:
      Cash and cash equivalents ................................................     $    12,628       311,404 (1)    $   324,032
      Marketable securities ....................................................              --            --                 --
      Restricted cash, current .................................................           1,919            --              1,919
      Accounts receivable ......................................................         169,438            --            169,438
      Prepaid expenses and other current assets ................................          38,340            --             38,340
                                                                                     -----------                      -----------
            Total current assets ...............................................         222,325            --            533,729
Fiber optic transmission network and related equipment, net ....................       4,038,995            --          4,038,995
Property and equipment, net ....................................................          89,616            --             89,616
Restricted cash ................................................................          12,535            --             12,535
Investment in/advance to joint ventures ........................................           9,436            --              9,436
Other assets ...................................................................          88,162         8,827 (2)         96,989
Intangibles, net ...............................................................       2,563,139            --          2,563,139
                                                                                     -----------                      -----------
            Total assets .......................................................     $ 7,024,208                      $ 7,344,439
                                                                                     ===========                      ===========

              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable and accrued expenses ....................................     $ 1,038,384      (682,434)(3)    $   355,950
      Deferred revenue, current portion ........................................          52,243            --             52,243
      Capital lease obligations and notes payable, current portion .............           2,709       105,518 (3)        108,227
                                                                                     -----------                      -----------
            Total current liabilities ..........................................       1,093,336            --            516,420
Senior notes payable ...........................................................       1,627,400       301,832 (1)(3)   1,929,232
Convertible subordinated notes payable .........................................         975,281            --            975,281
Convertible notes payable ......................................................              --       312,490 (1)(3)     312,490
Capital lease obligations and notes payable ....................................          44,133       103,938 (3)        148,071
Deferred revenue ...............................................................         462,765            --            462,765
Other long term liabilities ....................................................          59,171            --             59,171

Stockholders' equity:
      Class A common stock, $.01 par value; 2,404,031,240
        shares authorized; and 548,589,360 and 703,991,489
        shares issued and outstanding, actual and proforma
        respectively ...........................................................           5,485         1,554 (4)          7,039
      Class B common stock, $.01 par value; 522,254,782
        shares authorized; 67,538,544 shares issued
        and outstanding ........................................................             676            --                676
   Additional paid-in capital ..................................................       4,177,747       149,656 (4)      4,327,403
   Unearned stock-based compensation ...........................................        (241,637)           --           (241,637)
   Accumulated deficit .........................................................      (1,160,068)       27,677 (5)     (1,132,391)
   Cumulative comprehensive loss ...............................................         (20,081)           --            (20,081)
                                                                                     -----------                      -----------
            Total stockholders' equity .........................................       2,762,122                        2,941,009
                                                                                     -----------                      -----------
            Total liabilities and stockholders' equity .........................     $ 7,024,208                      $ 7,344,439
                                                                                     ===========                      ===========
</Table>


                                       10
<Page>

6.  DEBT (CONTINUED)

Notes:

(1)   Reflects the amount of cash received from the issuance and sale of $150.0
      million of our floating rate guaranteed notes due 2006 and the associated
      warrants and $230.0 million of our 8.5% senior convertible notes, net of
      issuance costs of $6.2 million, payments to vendors of $58.0 million and
      fees of $4.4 million paid in connection with the consent solicitation
      regarding our 10% senior notes.

(2)   Reflects the deferred financing costs of the transactions we completed on
      October 1, 2001.

(3)   Reflects the issuance of notes and restructuring of payment terms of
      estimated amounts owed to vendors.

(4)   Consists of the fair value of shares of our class A common stock issued on
      October 1, 2001, plus the value, determined in accordance with the
      Black-Scholes methodology, of warrants issued on such date.

(5)   Consists of an estimated $30.2 million extraordinary gain on the
      restructuring of vendor payables, offset by $2.5 million of fees paid in
      connection with the consent solicitation regarding our 10% senior notes.


7.  VERIZON INVESTMENT

      On March 6, 2000, the Company closed a securities purchase agreement with
Verizon, under which Verizon purchased approximately 51.1 million newly issued
shares of MFN class A common stock at a purchase price of $14.00 per share and a
convertible subordinated note of approximately $975.3 million, which was
convertible into shares of MFN class A common stock at a conversion price of
$17.00 per share (see Note 6).

      As is set forth in Note 6, on October 1, 2001, pursuant to a Notes
Purchase Agreement, the Company issued to Verizon $50 million of its 8.5% senior
secured convertible promissory notes due 2011. These notes are convertible into
92,807,425 shares of the Company's class A common stock at a price per share of
approximately $0.54. Also on October 1, 2001, the Company exchanged $975.3
million of its 6.15% convertible subordinated notes due 2010 held by Verizon for
(1) $500.0 million of our 6.15% series A convertible subordinated notes due 2010
that are convertible into 166,666,667 shares of our class A common stock at a
price per share of $3.00 and (2) $475.3 million of our 6.15% series B
convertible subordinated notes due 2010 that are convertible into 27,957,706
shares of our class A common stock at a price per share of $17.00.


8.  FIBERNET TELECOM GROUP INVESTMENT

      Prior to the second quarter of 2001, the Company considered the decline in
the market value of its investment in FiberNet Telecom Group, Inc. ("FiberNet")
to be temporary, due to the volatility and overall weakness in telecommunication
securities. However, during the second quarter of 2001, the Company no longer
deemed this decline to be temporary and recorded a loss of $24.3 million in
connection therewith. During the third quarter of 2001, an additional loss of
$4.5 million was recorded.


9.  CONTINGENCIES

      On or about September 12, 1998, Claudio E. Contardi commenced an action
against Peter Sahagen, Sahagen Consulting Group of Florida and the Company in
the United States District Court for the Southern District of New York (No. 98
CIV 4140) (the "Contardi Litigation"). Mr. Contardi alleges a cause of action
for, among other things, breach of a finder's fee agreement entered into
between Mr.Sahagen and Mr. Contardi on or about November 14, 1996 and breach
of an implied covenant of good faith and fair dealing contained in the
finder's fee agreement. Mr. Contardi is seeking, among other things, a number
of shares of the Company's common stock which the Company cannot currently
ascertain but believes to be approximately 112,500 shares (calculated as of
the date on which the complaint was filed without taking into account
subsequent stock splits) or damages in an amount which the Company cannot
currently ascertain but believes to be approximately $4.9 million
(calculated as of the date on which the complaint was filed) and all costs
and expenses incurred by him in this action. The Company has filed an answer
to the complaint and has raised affirmative defenses. The Company moved for
summary judgment on the complaint. On or about September 5, 2000, the court
denied the summary judgment motion. On or about July 20, 2000, the court
entered a stipulation and order dismissing this action without prejudice on
the grounds that the


                                       11
<Page>

9.  CONTINGENCIES (CONTINUED)

court lacks subject matter jurisdiction. On or about December 28, 2000, Contardi
refiled the action in the Southern District of New York, captioned Contardi v.
Sahagen et al. 00 CIV 9811 (JGK), alleging claims against the Company for breach
of contract, breach of the implied covenant of good faith and fair dealing,
conversion and unjust enrichment. Contardi seeks, among other things, 1,814,400
shares of the Company's stock or damages "in the amount of the highest value of
said MFN/NFN shares to which plaintiff was and is entitled, from the date of
defendants' breach to time of trial, together with interest therein."

      The Company intends to vigorously defend the Contardi Litigation because
the Company believes that it acted appropriately in connection with the matters
at issue. However, the Company can make no assurances that it will not determine
that the advantages of entering into a settlement outweigh the risk and expense
of protracted litigation or that ultimately it will not be successful in
defending against these allegations.

      In January 2000, Herman Goldsmith and Arnold S. Schickler commenced an
action against the Company, F. Garofalo Electric Co., Inc. and Stephen A.
Garofalo in the Supreme Court of the State of New York, County of New York (No.
600163/00) (the "Goldsmith Litigation"). The complaint alleges a cause of action
for breach of contract in connection with an alleged "finders agreement" entered
into in 1993 between Messrs. Goldsmith and Schickler, on the one hand, and F.
Garofalo Electric Co., Inc. and Stephen A. Garofalo, on the other. Plaintiffs
seek damages of $860.6 million, plus interest from September 7, 1999, in
addition to their costs, expenses and reasonable attorneys' fees. On March 28,
2001, the court dismissed the action for failure to state a cause of action. The
plaintiffs may appeal the dismissal.

      The Company is a respondent in a proceeding and before the California
Public Utilities Commission ("CPUC"). The issue before the CPUC is whether the
Company improperly engaged in certain construction actions under the authority
of its initial Certificate of Public Convenience and Necessity ("CPCN"). The
Company believes that it did not act improperly and is vigorously asserting its
defenses. The possible ramifications stemming from the proceeding includes
fines, sanctions and actions taken against the Company's CPCN.

      In June 2001, the Company commenced an action in New York State Court
against one of its fiber customers, Storage Networks, Inc. ("Storage") for
anticipatory breach of its fiber lease contract with the Company. In July 2001,
Storage filed an action against the Company in Massachusetts State Court
claiming, among other things, breach of contract, negligent misrepresentation
and fraudulent inducement. The Storage complaint seeks to relieve Storage from
its obligation under the fiber lease contract to lease additional fiber from MFN
and claims damages. The complaint does not seek to relieve Storage from its
obligation to continue to lease from MFN fiber it had previously ordered and
accepted.

      The Company believes that it has acted appropriately in connection with
the Storage fiber lease contract and plans to vigorously prosecute its claim in
New York State Court and defend against the Storage action in Massachusetts.
However, the Company can make no assurances that it will not determine that the
advantages of entering into a settlement outweigh the risk and expense of
protracted litigation or that ultimately the Company will be successful in
defending against these allegations.

      On or about August 8, 2001, Mary Jane Crescente filed an action against
the Company, Stephen A. Garofalo and Nicholas M. Tanzi in the United States
District Court for the Southern District of New York (No. 01 CV 7353). Ms.
Crescente alleges causes of action on behalf of herself and a class of the
Company's stockholders who purchased shares of the Company stock between January
8, 2001 and July 2, 2001, claiming that the defendants engaged in a fraudulent
scheme, deceptive course of action and the dissemination of false and misleading
statements in respect of disclosure regarding the commitment letter the Company
received from Citicorp USA, Inc. and Salomon Smith Barney, and are therefore
liable to the plaintiff class under Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder. The plaintiff also alleges that Messrs.
Garofalo and Tanzi are liable under Section 20(a) of the Securities Exchange
Act.

      Subsequent to the filing of the Crescente action, a number of similar
class action complaints against the Company, Stephen Garofalo and Nicholas Tanzi
have been announced including Black v. Metromedia Fiber Network, Inc., Stephen
A. Garofalo and Nicholas Tanzi (filed by the law firms of Milberg Weiss and
Cauley Geller Bowman and Coates in the United States District Court for the
Southern District of New York); a class action complaint announced by Bernstein
Liebhard &


                                       12
<Page>

9.  CONTINGENCIES (CONTINUED)

Lifshitz in the United States District Court for the Southern District of New
York (plaintiff currently not known to the Company); a class action complaint
announced by Kirby McInerney & Squire in the United States District Court for
the Southern District of New York (plaintiff currently not known to the
Company); a class action complaint announced by Stull, Stull & Brody in the
United States District Court for the Southern District of New York (plaintiff
currently not known to the Company); a class action complaint announced by
Schiffrin & Barroway in the United States District Court for the Southern
District of New York (plaintiff currently not known to the Company); a class
action complaint announced by Berger & Montague in the United States District
Court for the Southern District of New York (plaintiff currently not known to
the Company); a class action complaint served September 7, 2001, George Murphy
v. Metromedia Fiber Network, Inc., Stephen A. Garofalo and Nicholas Tanzi (filed
by the law firm of Lowey Dannenberg Bempaorad & Selinger, PC in the United
States District Court for the Southern District of New York (No. 01 CV 8341));
and Saul B. Linder and Claire Linder v. Metromedia Fiber Network, Inc., Stephen
A. Garofalo and Nicholas Tanzi (filed by the law firm of Wolf Popper LLP in the
United States District Court for the Southern District of New York (No. 01 CV
8178)).

      The Company intends to vigorously defend the Crescente litigation and the
other similar actions because the Company believes that its disclosure regarding
the Citicorp commitment letter was appropriate. However, the Company can make no
assurances that it will not determine that the advantages of entering into a
settlement outweigh the risk and expense of protracted litigation or that
ultimately it will be successful in defending against these allegations.

      On or about August 9, 2001, Mitsubishi Electric Information Corporation
("MIND") filed a complaint against the Company in the Southern District of New
York, (No. 01 CV 7409), alleging that the Company interfered in MIND's
contractual relations with Pacific Gateway Exchange, Inc. ("PGE"). MIND alleges
that the Company's purchase of PGE's ownership position in the cable consortia
that own and operate TAT-14 and Japan-US interfered in MIND's purchase of
capacity from PGE. The suit claims damages of $15.0 million or such amount as
proven at trial plus punitive damages of $100.0 million. The Company believes
that it acted appropriately in connection with its purchase of PGE's ownership
position in the cable consortia and intends to vigorously defend the litigation.
However, the Company can make no assurances that it will not determine that the
advantages of entering into a settlement outweigh the risk and expense of
protracted litigation or that ultimately the Company will be successful in
defending against these allegations.

      On or about August 16, 2001, Level 3 Communications, Inc. filed an action
for breach of contract against the Company in the State of Colorado for an
unspecified amount based on the Company's non-payment of amounts alleged to be
due under certain joint build contracts and our utilization of facilities
constructed by Level 3 without payment of such amounts alleged to be due. On or
about October 24, 2001 and October 30, 2001, Level 3 filed a similar actions
in California and Illinois, respectively, with respect to facilities
constructed by Level 3 in those states. In the California action, Level 3
also alleged that it has a security interest in the California facilities
that it constructed for the Company. The Company believes that it has acted
appropriately in connection with its joint build activities with Level 3 and
intends to vigorously defend the litigation in Colorado, California, and
Illinois. However, the Company can make no assurances that it will not
determine that the advantages of entering into a settlement outweigh the risk
and expense of protracted litigation or that ultimately the Company will be
successful in defending against these allegations.

      In addition, the Company is subject to various claims and proceedings in
the ordinary course of business. Based on information currently available, the
Company believes that none of such current claims, or proceedings, individually
or in the aggregate will seriously harm its financial condition or results of
operations, although it can make no assurances in this regard.



                                       13
<Page>

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

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Any statements in this Quarterly Report on Form 10-Q about our expectations,
beliefs, plans, objectives, assumptions or future events or performance are not
historical facts and are forward-looking statements. These statements are often,
but not always, made through the use of words or phrases such as "will," "will
likely result," "expect," "will continue," "anticipate," "estimate," "intend,"
"plan," "projection," "would," "should" and "outlook." Accordingly, these
statements involve estimates, assumptions and uncertainties which could cause
actual results to differ materially from those expressed in them. Any
forward-looking statements are qualified in their entirety by reference to the
factors discussed throughout this Report and our Annual Report on Form 10-K for
the year ended December 31, 2000. The following cautionary statements identify
important factors that could cause our actual results to differ materially from
those projected in the forward-looking statements made in this prospectus. Among
the key factors that have a direct bearing on our results of operations are:

      o     general economic and business conditions; the existence or absence
            of adverse publicity; changes in, or failure to comply with,
            government regulations; changes in marketing and technology; changes
            in political, social and economic conditions;

      o     increased competition in the telecommunications industry; industry
            capacity; general risks of the telecommunications industries;

      o     success of acquisitions and operating initiatives; changes in
            business strategy or development plans; management of growth;

      o     availability, terms and deployment of capital;

      o     construction schedules; costs and other effects of legal and
            administrative proceedings;

      o     dependence on senior management; business abilities and judgment of
            personnel; availability of qualified personnel; labor and employee
            benefit costs;

      o     development risks; risks relating to the availability of financing;
            and

      o     other factors referenced in this Report and the Form 10-K.

Because the risk factors referred to above could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statements made by us, you should not place undue reliance on any such
forward-looking statements. Further, any forward-looking statement speaks only
as of the date on which it is made and we undertake no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for us to predict which will arise. In addition, we cannot assess the
impact of each factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

GENERAL

      We provide dedicated fiber optic infrastructure, high-bandwidth internet
connectivity and managed internet infrastructure services for our communications
intensive customers. We are a facilities-based provider of end-to-end optical
solutions that offer virtually unlimited, unmetered bandwidth at a fixed cost to
our communications carrier, corporate and government customers in the United
States and Europe. We provide a comprehensive internet infrastructure management
solution that includes design and architecture, hardware and software,
installation, co-location and network connectivity and ongoing management. The
combined company facilitates the growth of e-commerce and advanced internet and
communications applications by delivering secure,


                                       14
<Page>

reliable and scaleable optical networks and IP services to internet content and
service providers, communications carriers and enterprise users worldwide.

      As of September 30, 2001, we have 1,575 employees.

      On October 1, 2001, we completed a $611.0 million financing package (see
Liquidity and Capital Resources of this Item). As a result of our covenants in
connection with this financing and due to the changing economic climate, we are
prioritizing our build out and allocating our capital resources towards the
cities that have the greatest demand.

      Our existing intra-city networks consist of approximately 1,579,000 fiber
miles covering in excess of 3,987 route miles in the United States. Our
inter-city network consists of approximately 336,000 fiber miles primarily
covering the 407 route-mile network that we have built between New York City and
Washington, D.C. and our nationwide dark fiber network linking our intra-city
networks.

      In Europe, our existing intra-city international network consists of
approximately 169,000 fiber miles covering approximately 484 route miles. Our
inter-city international network consists of approximately 21,000 fiber miles on
the Circe network, which connects a number of European markets. Additionally, we
have installed a conduit covering 1,450 route miles that connects 14 of
Germany's largest cities such as Hamberg, Berlin, Munich, Frankfurt and
Dusseldorf. Separately, we have also entered into a contract to acquire rights
to dark fiber network facilities in Toronto, Canada.


RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 30, 2000, AND NINE MONTHS ENDED SEPTEMBER 30, 2001
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2000


REVENUES

      Revenues for the third quarter of 2001 were $91.5 million or 76% greater
than revenues of $51.9 million for the third quarter of 2000. Revenues for the
nine months ended September 30, 2001 were $260.2 million, or 105% greater than
revenues of $127.1 million for the same period in 2000. The increases for the
three and nine months ended September 30, 2001, compared with the three and nine
months ended September 30, 2000 reflect higher revenues associated with
commencement of service to an increased total number of customers and the
inclusion of SiteSmith's revenue for the period from February 8, 2001, the
acquisition date. Internet infrastructure revenue rose 45% to $56.0 million
for the third quarter of 2001, compared with $38.7 million for the third quarter
of 2000. Optical infrastructure revenues increased to $35.5 million, up 173%
from the third quarter of 2000.


COST OF SALES

      Cost of sales was $63.4 million in the third quarter of 2001, a 25%
increase over cost of sales of $50.7 million for the third quarter of 2000. Cost
of sales for the nine months ended September 30, 2001 was $205.5 million, or 54%
greater than cost of sales of $133.5 million for the same period in 2000. The
increases for the three and nine months ended September 30, 2001, compared with
the three and nine months ended September 30, 2000, are primarily due to costs
associated with an increased amount of customers and the costs associated with
the operation of our networks and the inclusion of SiteSmith's cost of sales
since the acquisition date. Cost of sales as percentages of revenue for the
third quarters of 2001 and 2000 was 69% and 98%, respectively, and 79% and 105%
for the nine months ended September 30, 2001 and 2000, respectively. The
decreased percentages of cost of sales as compared to revenue for the three and
nine months ended September 30, 2001 reflect headcount reductions, as well as
our decreased cost of data circuits coupled with revenue growth.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling, general and administrative expenses increased to $63.1 million
for the third quarter of 2001, from $38.7 million during the third quarter of
2000, an increase of $24.4 million or 63%. Selling, general and administrative
expenses, for the nine month period ended September 30, 2001 versus the nine
month period ended September 30, 2000 increased 96% to $185.1 million


                                       15
<Page>

from $94.4 million. The increase in selling, general and administrative expenses
in the three and nine month periods ended September 30, 2001 as compared to the
same periods in 2000 resulted primarily from the increased headcount and other
overhead to support our network expansion as well as the inclusion of
SiteSmith's results since the acquisition date. As a percentage of revenue,
selling, general and administrative expenses were 69% and 71% for the three and
nine month periods ended September 30, 2001 compared to 75% and 74% for the
comparable periods in 2000.


NON-CASH COMPENSATION

      Non-cash compensation increased to $18.0 million and $48.6 million for the
three and nine months ended September 30, 2001 from $1.0 million for the three
and nine months ended September 30, 2001. Non-cash compensation is primarily
attributable to the issuance of unvested stock options and restricted shares of
stock in connection with the acquisition of SiteSmith.


EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)

      EBITDA consists of earnings (losses) before income taxes plus all net
interest expense, other income (expense), depreciation and amortization expense
and losses from joint ventures. Although EBITDA is not a measure of financial
performance under generally accepted accounting principles, it is a widely used
financial measure of the potential capacity of a company to incur and service
debt. We also believe that such calculation provides relevant and useful
information for evaluating performance. However, EBITDA should not be considered
as an alternative to measures of operating performance as determined by
generally accepted accounting principles. As it is not calculated identically by
all companies, our reported EBITDA may not be comparable to similarly titled
measures used by other companies. In addition, there may be significant factors
or trends that EBITDA fails to capture.

      For the three and nine months ended September 30, 2001, we recognized
EBITDA losses of $53.0 million and $179.0 million, respectively, compared with
EBITDA losses for the three and nine months ended September 30, 2000 of $38.5
million and $101.6 million, respectively. The increased EBITDA losses are
primarily due to the recording of non-cash compensation charges in connection
with the SiteSmith acquisition, higher fixed costs related to the operation of
the network and increased overhead to support out network expansion.


DEPRECIATION AND AMORTIZATION

      Depreciation and amortization expense was $125.7 million and $288.9
million for the three and nine months ended September 30, 2001, respectively,
versus $46.0 million and $118.6 million for the three and nine months ended
September 30, 2000, respectively. This represents increases of $79.7 million and
$170.3 million for the three and nine months ended September 30, 2001 as
compared to the same periods in 2000. The increase in depreciation and
amortization expense resulted primarily from amortization of the goodwill
relating to the acquisition of SiteSmith and increased investment in our
completed fiber optic network and data centers and additional property and
equipment acquired.


LOSS FROM OPERATIONS

      For the three and nine months ended September 30, 2001 we recognized
losses from operations of $178.6 million and $467.9 million, respectively. This
represents an increased loss of $94.1 million for the three months ended
September 30, 2001 from the $84.5 million loss from operations reported for the
three months ended September 30, 2000, and an increased loss of $247.7 million
for the nine months ended September 30, 2001 from the $220.2 million loss from
operations reported for the nine months ended September 30, 2000. The increased
loss from operations was attributable to the acquisition of SiteSmith and the
related goodwill amortization and increased overhead and fixed costs to support
our network expansion.


OTHER INCOME AND EXPENSE

      Other income and expense was a net expense of $20.7 million for the three
months ended September 30, 2001, as compared to a net income of $31.3 million
for the three months ended September 30, 2000. For the nine months ended
September


                                       16
<Page>

30, 2001, other income and expense was a net expense amount of $5.1 million
compared to a net income of $93.2 million for the nine months ended September
30, 2000. The decreases in other income are primarily due to smaller cash
balances generating less interest income, as well as write downs of our
investment in FiberNet Telecom Group of $4.5 million and $28.8 million for the
three and nine months ended September 30, 2001, respectively. For the three
months ended September 30, 2001, these losses were increased by a foreign
currency loss of $16.4 million. For the nine months ended September 30, 2001,
these losses were partially offset by a foreign currency gain of $6.5 million.


INTEREST EXPENSE

      Interest expense increased in the three months ended September 30, 2001
to $42.1 million, versus $41.9 million for the three months ended
September 30, 2000. Interest expense decreased in the nine months ended
September 30, 2001 to $121.5 million from $142.8 million in the nine months
ended September 30, 2000. The increased interest expense in the third quarter
of 2001 as compared to the third quarter of 2000 is primarily attributable to
an increase in capital lease obligations. The year to date decrease in
interest expense is due to the effect of the favorable exchange rate between
the dollar and the Eurodollar on the expense due on our Eurodollar
denominated debt, and an increase in capitalized interest.


NET LOSS

      We had net losses of $242.1 million and $595.7 million, respectively for
the three and nine months ended September 30, 2001, versus net losses of $95.3
million and $272.5 million, respectively for the comparable periods of 2000. For
the three and nine months ended September 30, 2001, basic net loss per share was
$0.39 and $1.00, respectively, versus basic net loss per share of $0.17 and
$0.51, respectively for the three and nine months ended September 30, 2000.


LIQUIDITY AND CAPITAL RESOURCES

      Our initial public offering, on October 28, 1997, of 145,728,000 shares of
class A common stock generated net proceeds of $133.9 million, after deducting
the underwriter's commission and expenses relating to such initial public
offering. In addition, on November 25, 1998, we issued and sold 10% senior notes
due 2008, which generated net proceeds of $630.0 million. Also, on October 25,
1999, we issued and sold 10% senior notes due 2009, which generated net proceeds
of $974.2 million. On October 7, 1999, we entered into a securities purchase
agreement with Verizon, under which Verizon purchased shares of our class A
common stock and a convertible subordinated note. The agreement closed on March
6, 2000 and generated net proceeds of approximately $1.7 billion.

      Cash used in operating activities was $222.9 million for the nine months
ended September 30, 2001, compared with $24.5 million used in operations for the
comparable period in 2000. For the nine months ended September 30, 2001 we used
$947.4 million of cash for investing activities as compared to $1.5 billion for
the comparable period in 2000. For the nine months ended September 30, 2001,
financing activities provided $45.0 million compared to the $1.8 billion of cash
provided during the comparable period in 2000.

      We filed a universal shelf registration statement on Form S-3 which was
declared effective in October 1999. Under that registration statement,
approximately $490.0 million aggregate principal amount of securities remain
eligible to be sold in primary offerings and approximately 9.1 million shares of
class A common stock remain eligible to be resold in secondary offerings. We may
issue and sell shares of our class A common stock or our debt or other
securities, or facilitate the sale of shares of our class A common stock by some
of our existing stockholders. In addition, on February 13, 2001, we filed a
universal shelf registration statement on Form S-3 to register the primary
offering of up to approximately $1.0 billion of debt and equity securities.


                                       17
<Page>

      On October 1, 2001, we completed a $611.0 million financing package
comprised of a $150.0 million note purchase facility led by Citicorp, USA;
$230.0 million in convertible debt financing of which $180.0 million was
purchased by affiliates of the Company and $50.0 million was purchased by a
subsidiary of Verizion Communications and $231.0 million in vendor financing for
equipment previously purchased. We also completed agreements with other Company
vendors to modify payments of our pre-existing obligations to such vendors.
Additionally, MFN and Verizon adjusted the conversion price on $500.0 million of
the 6.15% convertible subordinated notes due 2010 from $17 per share to $3 per
share (See Note 6 of the Financial Statements in Item 1 for full description of
financing). The terms of the financing include a variety of affirmative and
negative covenants, including various financial covenants and limitations on the
incurrence of additional indebtedness, sale and leaseback transactions,
transactions with affiliates and capital expenditures. As a result of these
covenants and changing market conditions, we have reevaluated our capital
expenditure program, and we expect that our planned network buildout of 67
cities in North America and Europe by 2004 will be driven by customer demand.
Currently we have commitments to fund the construction of approximately $28.0
million of network over the next three months. Except for those commitments,
over the next twelve months, we anticipate that additions to our Network will
be limited to customer specific projects, primarily to connect our customers
to our existing network.

      After completion of the October 1, 2001 financing, we believe we have
sufficient liquidity to fund our operations for the next twelve months.


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<Page>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      In the normal course of business, our financial position is routinely
subjected to a variety of risks. In addition to the market risk associated
with interest and currency movements on our outstanding debt, we are subject
to other types of risk such as the collectibility of our accounts
receivables. At September 30, 2001, our principal long term obligations are
our $650.0 million 10% senior notes due 2008 and $977.4 million 10% senior
notes due 2009, and the convertible subordinated note of approximately $975.3
million issued to Verizon Communications in March 2000. The fair value of the
long-term debt at September 30, 2001 was $1.2 billion. A 10% decrease and a
10% increase in the level of interest rates would result in an increase in
the fair value of our long term obligations by approximately $134.5 million
and a decrease in the fair value of our long term obligation by approximately
$126.0 million, respectively.

      We are also subject to market risk associated with foreign currency
exchange rates. Approximately, $227.4 million of our 10% senior notes are
denominated in Euros. We have not utilized financial instruments to minimize
our exposure to foreign currency fluctuations. We will continue to analyze
risk management strategies to minimize foreign currency exchange risk in the
future. A 10% decrease and a 10% increase in the currency rates related to
our Euro denominated 10% senior notes due 2009 would result in a decrease in
the fair value of our long term obligations by $14.4 million and an increase
in the fair value of our long term obligations by $14.4 million, respectively.

      We had approximately $27.1 million in cash and cash equivalents at
September 30, 2001 (approximately $14.5 million was restricted cash). To the
extent our cash and cash equivalents exceed our short-term funding requirements,
we may invest our excess cash and cash equivalents in longer-term high-quality
financial instruments. Such investments when made will be subject to changes in
interest rates.


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<Page>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

      On or about June 12, 1998, Claudio E. Contardi commenced an action against
Peter Sahagen, Sahagen Consulting Group of Florida and us in the United States
District Court for the Southern District of New York (No. 98 CIV 4140) (the
"Contardi Litigation"). Mr. Contardi alleges a cause of action for, among other
things, breach of a finder's fee agreement entered into between Mr. Sahagen and
Mr. Contardi on or about November 14, 1996 and breach of an implied covenant of
good faith and fair dealing contained in the finder's fee agreement. Mr.
Contardi is seeking, among other things, a number of shares of our common stock
which we cannot currently ascertain but believe to be approximately 112,500
shares (calculated as of the date on which the complaint was filed without
taking into account subsequent stock splits) or damages in an amount which we
cannot currently ascertain but believes to be approximately $4.9 million
(calculated as of the date on which the complaint was filed) and all costs and
expenses incurred by him in this action. We have filed an answer to the
complaint and have raised affirmative defenses. We moved for summary judgment on
the complaint. On or about June 5, 2000, the court denied the summary judgment
motion. On or about July 20, 2000, the court entered a stipulation and order
dismissing this action without prejudice on the grounds that the court lacks
subject matter jurisdiction. On or about December 28, 2000, Contardi refiled the
action in the Southern District of New York, captioned Contardi v. Sahagen et
al. 00 CIV 9811 (JGK), alleging claims against the Company for breach of
contract, breach of the implied covenant of good faith and fair dealing,
conversion and unjust enrichment. Contardi seeks, among other things, 1,814,400
shares of our stock or damages "in the amount of the highest value of said
MFN/NFN shares to which plaintiff was and is entitled, from the date of
defendants' breach to time of trial, together with interest therein."

      We intend to vigorously defend the Contardi Litigation because we believe
that we acted appropriately in connection with the matters at issue. However, we
can make no assurances that we will not determine that the advantages of
entering into a settlement outweigh the risk and expense of protracted
litigation or that ultimately we will be successful in defending against these
allegations.

      In January 2000, Herman Goldsmith and Arnold S. Schickler commenced an
action against us, F. Garofalo Electric Co., Inc. and Stephen A. Garofalo in
the Supreme Court of the State of New York, County of New York (No.
600163/00). The complaint alleges a cause of action for breach of contract in
connection with an alleged "finders agreement" entered into in 1993 between
Messrs. Goldsmith and Schickler, on the one hand, and F. Garofalo Electric
Co., Inc. and Stephen A. Garofalo, on the other. Plaintiffs seek damages of
$860.6 million, plus interest from September 7, 1999, in addition to their
costs, expenses and reasonable attorneys' fees. On March 28, 2001, the court
dismissed the action for failure to state a cause of action.  The plaintiffs
may appeal the dismissal.

      We are a respondent in a proceeding and before the California Public
Utilities Commission. The issue before the California Public Utilities
Commission is whether we improperly engaged in certain construction actions
under the authority of our initial certificate of public convenience and
necessity or CPCN. We believe that we did not act improperly and are vigorously
asserting our defenses. The possible ramifications stemming from the proceeding
includes fines, sanctions and actions taken against our CPCN.

      In June 2001, we commenced an action in New York State Court against one
of our fiber customers, Storage Networks, Inc. for anticipatory breach of its
fiber lease contract with us. In July 2001, Storage Networks filed an action
against us in Massachusetts State Court claiming, among other things, breach of
contract, negligent misrepresentation and fraudulent inducement. The Storage
Networks complaint seeks to relieve Storage Networks from its obligation under
the fiber lease contract to lease additional fiber from us and claims damages.
The complaint does not seek to relieve Storage Networks from its obligation to
continue to lease from us fiber it had previously ordered and accepted.

      We believe that we have acted appropriately in connection with the Storage
Networks fiber lease contract and plan to vigorously prosecute our claim in New
York State Court and defend against the Storage Networks action in
Massachusetts.


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However, we can make no assurances that we will not determine that the
advantages of entering into a settlement outweigh the risk and expense of
protracted litigation or that ultimately we will be successful in defending
against these allegations.

      On or about August 8, 2001, Mary Jane Crescente filed an action against
us, Stephen A. Garofalo and Nicholas M. Tanzi in the United States District
Court for the Southern District of New York (No. 01 CV 7353). Ms. Crescente
alleges causes of action on behalf of herself and a class of the Company's
stockholders who purchased shares of the Company's stock between January 8, 2001
and July 2, 2001, claiming that the defendants engaged in a fraudulent scheme, a
deceptive course of action and the dissemination of false and misleading
statements in respect of disclosure regarding the commitment letter that we
received from Citicorp USA, Inc. and Salomon Smith Barney, and are therefore
liable to the plaintiff class under Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder. The plaintiff also alleges that Messrs.
Garofalo and Tanzi are liable under Section 20(a) of the Securities Exchange
Act.

      Subsequent to the filing of the Crescente action, a number of similar
class action complaints against us, Stephen Garofalo and Nicholas Tanzi have
been announced including Black v. Metromedia Fiber Network, Inc., Stephen A.
Garofalo and Nicholas Tanzi (filed by the law firms of Milberg Weiss and Cauley
Geller Bowman and Coates in the United States District Court for the Southern
District of New York); a class action complaint announced by Bernstein Liebhard
& Lifshitz in the United States District Court for the Southern District of New
York (plaintiff currently not known to the Company); a class action complaint
announced by Kirby McInerney & Squire in the United States District Court for
the Southern District of New York (plaintiff currently not known to the
Company); a class action complaint announced by Stull, Stull & Brody in the
United States District Court for the Southern District of New York (plaintiff
currently not known to the Company); a class action complaint announced by
Schiffrin & Barroway in the United States District Court for the Southern
District of New York (plaintiff currently not known to the Company); a class
action complaint announced by Berger & Montague in the United States District
Court for the Southern District of New York (plaintiff currently not known to
the Company); a class action complaint served September 7, 2001, George Murphy
v. Metromedia Fiber Network, Inc., Stephen A. Garofalo and Nicholas Tanzi (filed
by the law firm of Lowey Dannenberg Bempaorad & Selinger, PC in the United
States District Court for the Southern District of New York (No. 01 CV 8341));
and Saul B. Linder and Claire Linder v. Metromedia Fiber Network, Inc., Stephen
A. Garofalo and Nicholas Tanzi (filed by the law firm of Wolf Popper LLP in the
United States District Court for the Southern District of New York (No. 01 CV
8178)).

      We intend to vigorously defend the Crescente litigation and the other
similar actions because we believe that our disclosure regarding the Citicorp
commitment letter was appropriate. However, we can make no assurances that we
will not determine that the advantages of entering into a settlement outweigh
the risk and expense of protracted litigation or that ultimately we will be
successful in defending against these allegations.

      On or about August 9, 2001 Mitsubishi Electric Information Corporation
filed a complaint against us in the Southern District of New York, (No. 01 CV
7409), alleging that we interfered in Mitsubishi Electric's contractual
relations with Pacific Gateway Exchange, Inc.. Mitsubishi Electric alleges
that our purchase of PGE's ownership position in the cable consortia that own
and operate TAT-14 and Japan-US interfered in Mitsubishi Electric's purchase
of capacity from Pacific Gateway. The suit claims damages of $15.0 million or
such amount as proven at trial plus punitive damages of $100.0 million. We
believe that we acted appropriately in connection with our purchase of
Pacific Gateway's ownership position in the cable consortia and intend to
vigorously defend the litigation. However, we can make no assurances that we
will not determine that the advantages of entering into a settlement outweigh
the risk and expense of protracted litigation or that ultimately we will be
successful in defending against these allegations.

      On or about August 16, 2001, Level 3 Communications, Inc. filed an action
for breach of contract against us in the State of Colorado for an unspecified
amount based on our non-payment of amounts alleged to be due under certain joint
build contracts and our utilization of facilities constructed by Level 3 without
payment of such amounts alleged to be due. On or about October 24, 2001 and
October 30, 2001, Level 3 filed similar actions in California and Illinois,
respectively, with respect to facilities constructed by Level 3 in those
states. In the California action, Level 3 also alleged that it has a security
interest in the California facilities that it constructed for us. We believe
that we have acted appropriately in connection with our joint build
activities with Level 3 and intend to vigorously

                                       21
<Page>

defend the litigation in Colorado, California and Illinois. However, we can
make no assurances that we will not determine that the advantages of entering
into a settlement outweigh the risk and expense of protracted litigation or
that ultimately we will be successful in defending against these allegations.

      In addition, we are subject to various claims and proceedings in the
ordinary course of business. Based on information currently available, we
believe that none of such current claims, or proceedings, individually or in the
aggregate will seriously harm our financial condition or results of operations,
although we can make no assurances in this regard.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      As of September 30, 2001, we were in default under the indentures
governing our 10% senior notes. Some of our vendor agreements provide for or
purport to impose purchase money liens on the property acquired under such
agreements. In addition, some of our contractors filed contractor's,
materialmen's and similar liens on our property. Such vendor liens and filed
contractor's, materialmen's and similar liens exceeded the ceiling on such liens
permitted under the indentures and constituted a default under the indentures.

      In connection with the financing transactions effected October 1, 2001, we
procured the release of a substantial amount of vendor liens and filed
contractor's, materialmen's and similar liens. We also solicited the holders of
the 10% senior notes to consent to specified modifications of the indentures
governing the notes and to waive the defaults. We received the requisite number
of consents from the holders, and accordingly the indentures have been modified
with the effect that our existing financing structure does not give rise to an
event of default under the indentures, and the defaults have been waived. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."


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

None.


ITEM 5. OTHER INFORMATION

Not applicable


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a)    Exhibits

None

b)    Reports on Form 8-K

On October 10, 2001, we filed a current report on Form 8-K to report the
financing transactions effected October 1, 2000 and described in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."


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<Page>


SIGNATURE


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

                                    METROMEDIA FIBER NETWORK, INC.
                                    ------------------------------
                                          (Registrant)

                                          By:  /s/ RANDALL LAY
                                             -----------------------------------
                                          Randall Lay
                                          Senior Vice President and Chief
                                          Financial Officer
                                          (Principal Financial and Accounting
                                          Officer and Duly Authorized Officer)

                                          November 14, 2001




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