<PAGE>

================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                   FORM 10-Q/A
             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     For the period ended September 30, 2000

                                       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 Identification No.)
 incorporation or organization)

                   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
27, 2000 was:

<TABLE>
<CAPTION>
                 CLASS         NUMBER OF SHARES
                 -----         ----------------
<S>                             <C>
                   A            483,329,806
                   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, 2000


                                TABLE OF CONTENTS



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


  Item 1.   Financial Statements

            Consolidated Statements of Operations for the Three and Nine
            Month Periods Ended September 30, 2000 and 1999.....................          1

            Consolidated Balance Sheets as of September 30, 2000 and December
            31, 1999............................................................          2

            Consolidated Statements of Cash Flows for the Nine Month Periods
            Ended September 30, 2000 and 1999...................................          3

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

  Item 2.   Management's Discussion and Analysis of Financial Condition and
            Results of Operations...............................................         12

  Item 3.   Quantitative and Qualitative Disclosures about Market Risk..........         16


                               PART II - OTHER INFORMATION

  Item 1.   Legal Proceedings...................................................         17

  Item 2.   Changes in Securities and Use of Proceeds...........................         18

  Item 3.   Defaults Upon Senior Securities.....................................         18

  Item 4.   Submission of Matters to a Vote of Security Holders.................         18

  Item 5.   Other Information...................................................         18

  Item 6.   Exhibits and Reports on Form 8-K....................................         18
</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,
                                           ----------------------    ----------------------
                                             2000         1999         2000         1999
                                           ---------    ---------    ---------    ---------
<S>                                        <C>          <C>          <C>          <C>
Revenue ................................   $  51,882    $  10,723    $ 127,118    $  49,397

Expenses:
     Cost of sales .....................      50,742        9,595      133,466       24,414
     Selling, general and administrative      38,735       13,581       94,363       27,369
     Deferred compensation .............         919         --            919         --
     Depreciation and amortization .....      46,033       10,588      118,567       15,645
                                           ---------    ---------    ---------    ---------
Income (loss) from operations ..........     (84,547)     (23,041)    (220,197)     (18,031)
Other income (expenses):
     Interest income ...................      31,306        5,615       93,194       19,127
     Interest expense ..................     (41,876)     (14,504)    (142,745)     (44,911)
     Loss from joint ventures ..........        (198)         (82)      (2,739)        (475)
                                           ---------    ---------    ---------    ---------
Net loss ...............................     (95,315)     (32,012)    (272,487)     (44,290)
                                           =========    =========    =========    =========

Net loss per share, basic ..............   $   (0.17)   $   (0.08)   $   (0.51)   $   (0.12)
                                           =========    =========    =========    =========

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

Weighted average number of shares
     outstanding, basic ................     549,471      399,578      536,808      381,278
                                           =========    =========    =========    =========

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,
                                                                       2000           1999
                                                                   ------------    -----------
                                                                    (UNAUDITED)
<S>                                                                 <C>            <C>
                            ASSETS
Current assets:
     Cash and cash equivalents ..................................   $ 1,492,513    $ 1,262,391
     Marketable securities ......................................       188,433             --
     Pledged securities .........................................          --           31,960
     Accounts receivable ........................................        86,249         72,166
     Prepaid expenses and other current assets ..................        33,291         10,948
                                                                    -----------    -----------
          Total current assets ..................................     1,800,486      1,377,465

Fiber optic transmission network and related equipment, net .....     2,049,166        796,684
Property and equipment, net .....................................        32,613          9,215
Restricted cash .................................................        52,605         82,193
Marketable securities ...........................................          --           29,628
Investment in/advances to joint ventures ........................        23,068         23,130
Other assets ....................................................        97,642        102,573
Intangibles, net ................................................     1,604,259      1,539,097
                                                                    -----------    -----------
          Total assets ..........................................   $ 5,659,839    $ 3,959,985
                                                                    ===========    ===========

              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable ...........................................   $    91,242    $    43,344
     Accrued expenses ...........................................       257,674        186,528
     Deferred revenue, current portion ..........................        21,048         12,867
     Capital lease obligations and notes payable, current portion         8,037          6,781
                                                                    -----------    -----------
          Total current liabilities .............................       378,001        249,520
Senior notes payable ............................................     1,660,900      1,660,900
Convertible subordinated notes payable ..........................       975,281           --
Capital lease obligations and notes payable .....................        34,389         38,414
Deferred revenue ................................................       226,278        175,405
Other long term liabilities .....................................        16,445          1,070

Commitments and contingencies (see notes)

Stockholders' equity:
     Class A common stock, $.01 par value; 2,404,031,240
          shares authorized; 483,020,162 and 411,116,800
          shares issued and outstanding, respectively ...........         4,829          4,111
     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 ....................................     2,812,671      1,995,741
  Accumulated deficit ...........................................      (429,661)      (157,175)
  Cumulative comprehensive loss .................................       (19,970)        (8,677)
                                                                    -----------    -----------
          Total stockholders' equity ............................     2,368,545      1,834,676
                                                                    -----------    -----------
          Total liabilities and stockholders' equity ............   $ 5,659,839    $ 3,959,985
                                                                    ===========    ===========
</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,
                                                                 --------------------------
                                                                    2000            1999
                                                                 -----------    -----------
<S>                                                              <C>            <C>
CASH FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES:
Net loss .....................................................   $  (272,487)   $   (44,290)
Adjustments to reconcile net loss to net cash (used in)
     provided by operating activities:
          Depreciation and amortization ......................       118,567         15,645
          Amortization of deferred financing costs ...........         4,259          1,503
          Stocks, options and warrants issued for services ...           108            401
          Deferred compensation ..............................           919           --
          Loss from joint ventures ...........................         2,739            329
CHANGE IN OPERATING ASSETS AND LIABILITIES:
          Accounts receivable ................................       (14,016)       (61,465)
          Accounts payable and accrued expenses ..............        83,172         52,350
          Deferred revenue ...................................        57,453         50,765
          Other ..............................................        (5,164)        (8,925)
                                                                 -----------    -----------
       Net cash (used in) provided by operating activities ...       (24,450)         6,313
                                                                 -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities ...........................      (158,805)       (29,628)
Capital expenditures on fiber optic transmission
  network and related equipment ..............................    (1,309,320)      (229,104)
Restricted cash secured by letters of credit .................          --          (63,014)
Investment in / advances to joint ventures ...................        (7,236)        (3,359)
Capital expenditures on property and equipment ...............       (41,199)        (3,284)
Business acquisitions (net of cash acquired) .................        (8,426)       117,126
                                                                 -----------    -----------
  Net cash used in investing activities ......................    (1,524,986)      (211,263)
                                                                 -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock .......................       757,341          3,559
Purchases and sales of pledged securities, net ...............        31,960           --
Restricted cash secured by letter of credit ..................        29,588           --
Repayment of notes payable ...................................        (3,319)          --
Proceeds from issuance of notes payable ......................       975,281           --
Payments of business acquisition's pre-acquisition debt ......          --          (15,028)
                                                                 -----------    -----------
  Net cash provided by (used in) financing activities              1,790,851        (11,469)
                                                                 -----------    -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH ......................       (11,293)          --
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .........       230,122       (216,419)
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD ................     1,262,391        569,319
                                                                 -----------    -----------
CASH AND CASH EQUIVALENTS-END OF PERIOD ......................   $ 1,492,513    $   352,900
                                                                 ===========    ===========
Supplemental information:
     Interest paid ...........................................   $    31,489    $    31,375
                                                                 ===========    ===========
     Income taxes paid .......................................   $      --      $     2,771
                                                                 ===========    ===========
     Accrued capital expenditures ............................   $   105,954    $    65,629
                                                                 ===========    ===========
</TABLE>

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 19

                                       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 intercompany 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, 1999,
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 dedicated fiber optic infrastructure and high-bandwidth
Internet connectivity 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. Through its acquisition of
AboveNet Communications, Inc. ("AboveNet") on September 8, 1999, the Company
also provides "one-hop" connectivity that enables mission critical Internet
applications to thrive, as well as high-bandwidth infrastructure, including
managed co-location services. AboveNet's wholly owned subsidiary, PAIX.net, Inc.
("PAIX"), serves as a packet switching center for ISPs and also offers secure,
fault-tolerant co-location services to ISPs.

The Company intends to expand its presence to include approximately 50 Tier I
and Tier II markets in the United States and 17 major international markets.

The Company's existing intra-city networks consist of approximately 924,000
fiber miles covering in excess of 1,600 route miles in the United States. Its
inter-city network consists of approximately 225,000 fiber miles primarily
covering its 255 route-mile network that the Company has built between New York
City and Washington D.C. The Company has also built or contracted to acquire a
nationwide dark fiber network linking its intra-city networks.

In February 1999, the Company entered into an agreement with Viatel, Inc. and
Carrier 1 Holdings, Ltd. to jointly build a dark fiber inter-city network among
selected cities throughout Germany. Once completed, our German network will
consist of approximately 320,000 fiber miles covering in excess of 1,450 route
miles connecting 14 major cities. The Company has also acquired fiber on the
Circe network, which connects a number of European markets. In addition to its
inter-city networks, the Company is constructing 16 intra-city networks
throughout Europe. Separately, the Company has also entered into a contract to
acquire rights to dark fiber network facilities in Toronto, Canada.

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.



                                       4
<PAGE>

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

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 computed using the straight-line method through
the life of either the franchise agreement or right of way for the related
network.

RECAPITALIZATIONS

On March 2, 2000 the Company announced a two-for-one stock split of the
Company's class A and class B common stock in the form of a 100 percent stock
dividend to all shareholders of record on March 14, 2000. This split was
effective on April 17, 2000.

The accompanying financial statements give retroactive effect to the above
recapitalization.

RECOGNITION OF REVENUE

The Company recognizes 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
bandwidth and space requirement charges is recognized in the period in which the
services are provided. In addition, the Company had occasionally entered into
sales-type leases for portions of its network. For those leases entered into
prior to completion of the portion of the network and under contracts entered
into before June 30, 1999, the Company recognizes revenue using the percentage
of completion method.

Under the percentage of completion method, progress is generally measured on
performance milestones relating to the contract where such milestones fairly
reflect the progress toward contract completion. Network construction costs
include all direct material and labor costs and those indirect costs related to
contract performance. General and administrative costs are charged to expense as
incurred. If necessary, the estimated loss on an uncompleted contract is
expensed in the period in which it is identified. Contract costs are estimated
using allocations of the total cost of constructing the specific phase of the
network. Revisions to estimated profits on contracts are recognized in the
period that they become known.

Most of the Company's contracts for the provision of dark fiber are accounted as
operating leases under which it recognizes recurring monthly revenues. For
certain other contracts the Company recognizes revenue under the percentage of
completion method for the provision of dark fiber. Effective June 30, 1999, the
Financial Accounting Standards Board issued FASB Interpretation No. 43 "Real
Estate Sales" ("FIN 43") which requires that sales or leases of integral
equipment be accounted for in accordance with real estate accounting rules. The
Company believes that the staff of the Securities and Exchange Commission
requires the classification of dark fiber cables in the ground as integral
equipment as defined in FIN 43. Accounting for dark fiber leases as defined by
FIN 43 does not change any of the economics of the contracts. It requires the
Company, however, to recognize the revenue from certain leases as operating
leases over the term of the contract as opposed to the prior method of
recognizing revenue when the Company delivers the fiber. As a result, this
change in accounting treatment reduces the revenue and income that the Company
recognizes in the earlier years of the contract and spreads it out over the life
of the contract regardless of when the cash was received or the delivery of the
fiber took place.

By way of example, if the Company entered into an agreement for a 25-year lease
for dark fiber with a customer who pays $100.0 million in cash when the contract
is signed, the Company previously recorded revenues of $20.0 million per year
over the 5 years during which the Company delivered the dark fiber. By contrast,
the real estate accounting rules of FIN 43 would require recognition of revenue
of $4.0 million per year over the 25 year term of the contract, even though the
Company would receive a cash payment of $100.0 million when the contract is
signed.


                                       5
<PAGE>





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


The Company implemented FIN 43 real estate accounting for certain of its leases
entered into after June 30, 1999, and has not restated any amounts for contracts
executed prior to such date. Although there was no change to the economics of
the contracts or the timing of the cash to be received by the Company, the
impact of the change in accounting resulted in the Company recording
substantially less revenue after July 1, 1999 than would have been recorded if
this change had not been imposed. Revenue recognized for the three months ended
September 30, 2000 and 1999 related to the percentage of completion method was
zero and $4.1 million, respectively. Revenue recognized for the nine months
ended September 30, 2000 and 1999 related to the percentage of completion method
was $325,000 and $37.7 million, respectively. The related cost of sales recorded
was zero and $620,000, respectively, for the three months ended September 30,
2000 and 1999, and $49,000 and $10.3 million for the nine months ended September
30, 2000 and 1999, respectively. In the future, similar revenues will be
recognized over the term of the related contracts, typically 20 to 25 years.

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 No. 130 ("SFAS 130") Reporting
Comprehensive Income establishes rules for the reporting of comprehensive income
and its components. Comprehensive loss consists of net loss and foreign currency
translation adjustments. The comprehensive loss for the three and nine months
ended September 30, 2000 was approximately $100.7 million and $283.8 million,
respectively, compared to a loss of $28.2 million and $45.4 million for the
three and nine months ended September 30, 1999, respectively.

SEGMENT INFORMATION

The Company discloses information regarding segments in accordance with
Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosures
about Segments of an Enterprise and Related Information." SFAS 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, 2000 and
1999, substantially all 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 March 2000, the FASB issued FASB Interpretation No. 44 "Accounting for
Certain Transactions involving Stock Compensation" ("FIN 44"), an
interpretation of APB Opinion No. 25 "Accounting for Stock Issued to Employees".
FIN 44 is effective July 1, 2000 and effects the way certain stock options
granted to non-employees will be accounted for. The Company has adopted FIN 44
and in connection therewith recorded compensation expense of $919,000 for the
nine months ended September 30, 2000.

In December 1999, the Securities and Exchange Commission issued SEC Staff
Accounting Bulleting No. 101 or SAB 101, "Revenue Recognition in Financial
Statements." SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
The Company does not believe the adoption of SAB 101 will have a material impact
on its results of operations.


                                       6
<PAGE>

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

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133 ("SFAS 133"), "Accounting for Derivatives and Hedging Activities," which
establishes accounting and reporting standards for derivative instruments and
hedging activities. This standard is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. The Company does not expect the adoption of
SFAS 133 to have an impact on its results of operations, financial position or
cash flows.

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,
                                                2000           1999
                                             -----------    -----------
<S>                                          <C>            <C>
       Fiber optic network ...............   $   777,510    $   318,494
       Data Centers ......................       189,435         97,400
       Telecommunication equipment & other        82,176         51,878
       Construction in progress ..........     1,077,999        356,404
                                             -----------    -----------
           Total Network .................     2,127,120        824,176
       Less: accumulated depreciation ....       (77,954)       (27,492)
                                             -----------    -----------
                                             $ 2,049,166    $   796,684
                                             ===========    ===========
</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.

3.  INVESTMENT IN/ADVANCES TO JOINT VENTURES

During 1997 the Company formed a joint venture with Racal Telecommunications,
Inc. ("Racal") that provides broad-based transatlantic communication services
between New York and London. During 1999 and 1998, the Company made capital
contributions of $1.8 million and $4.3 million, respectively. The Company
accounts for its investment using the equity method. The Company records equity
losses based on its 50% interest in the joint venture.

As part of its international expansion strategy, the Company has entered into
joint ventures to provide managed co-location and Internet connectivity
solutions for mission critical Internet operations overseas. In March 1999, the
Company entered into agreements to form joint ventures in Austria, Germany,
France and the United Kingdom. (The Company purchased additional interests in
the joint ventures in Austria, Germany and the United Kingdom in September, June
and February 2000, respectively - see note 4). The Company invested a total of
$30.7 million in these ventures through September 30, 2000. These joint ventures
are accounted for under the equity method of accounting.

In December 1999, the Company entered into a joint venture agreement in Japan.
The Company invested a total of $4.0 million through September 30, 2000, and is
required to invest an additional $4.0 million for up to a 40% ownership interest
in this venture.

In September 2000, the Company entered into a joint venture agreement in Taiwan,
and purchased a 50% interest for approximately $2 million.


                                       7
<PAGE>


4. ACQUISITIONS

In September 2000, the Company purchased the remaining 50% interest in its 50%
owned joint venture in Austria, AboveNet Austria GMBH, for approximately $2
million.

In June 2000, the Company purchased an additional 37.5% interest in its 50%
owned joint venture in Germany, AboveNet Germany GMBH, for approximately $1.4
million.

On May 9, 2000 the Company finalized an agreement with Pacific Gateway Exchange
("PGE") to purchase PGE's ownership position in the cable consortia that owns
and operates the TAT-14 and Japan-U.S. Cable Networks, and two of PGE's
subsidiaries. The Japan-U.S. transaction closed in June 2000 and the TAT -14
transaction closed in August 2000. Under the terms of the sale, the Company has
paid approximately $52 million in net cash proceeds to PGE, primarily to
reimburse it for payments made by PGE to the consortia. MFN has assumed PGE's
future payment obligations to the cable consortia. The acquisition of related
Japanese subsidiary and a related U.S subsidiary has been accounted for under
the purchase method of accounting. The excess of purchase price over the fair
value of net assets acquired of approximately $1.6 million has been recorded as
goodwill.

In February 2000, the Company purchased the remaining 60% of its 40% owned joint
venture in the United Kingdom, AboveNet UK Limited, for shares of the Company's
stock with a market value of $10 million. The excess of purchase price over the
fair values of net assets acquired was approximately $10 million and has been
recorded as goodwill.

On January 19, 2000, the Company completed the acquisition of MIBH Inc., a
network outsourcing provider offering full-service management of business
Internet connectivity solutions for approximately $52.3 million in cash and
stock. The excess of purchase price over the fair values of net assets acquired
was approximately $51 million and has been recorded as goodwill.

Under the terms of the agreement, MIBH became a wholly owned subsidiary of
Metromedia Fiber Network, Inc., and has subsequently merged into Metromedia
Fiber Network Services, Inc. The shareholders of MIBH, a privately held company,
received an aggregate of 1,884,418 shares of Metromedia Fiber Network class A
common stock having a fair market value of approximately $49.3 million and $3.0
million in cash.

On September 8, 1999, the Company acquired all of the outstanding common stock
of AboveNet for a total purchase price, paid in Company class A common stock, of
approximately $1.8 billion. The holders of AboveNet common stock, stock options
and warrants received, in exchange for those securities, 2.35 shares of the
Company's class A common stock, stock options and warrants, respectively. The
excess of the purchase price over the fair values of the net assets acquired was
approximately $1.6 billion and has been recorded as goodwill.

In addition, in connection with the acquisition, the Company issued a letter of
credit, secured by the Company's restricted cash in the amount of $25 million,
to further secure a credit facility of AboveNet.

On June 21, 1999, AboveNet acquired certain assets and assumed certain
liabilities of PAIX from Compaq Computer Corporation ("Compaq") for a total
purchase price of $76.4 million consisting of $70 million in cash, certain
future ongoing services to be provided by AboveNet to Compaq, with a value
estimated to be $5.0 million, and acquisition related costs of $1.4 million.

On March 11, 1999, the Company acquired all the outstanding common stock of
Communication Systems Development, Inc. ("CSD") for $25 million in cash. CSD has
its primary operations in Dallas, Texas and is engaged in the engineering and
construction of fiber optic networks. The excess of the purchase price over the
fair values of the net assets acquired was approximately $11.2 million and has
been recorded as goodwill.

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. Goodwill is amortized on a
straight-line basis over 10 to 20 years.


                                       8
<PAGE>

5. GERMAN NETWORK BUILD

In February 1999, the Company entered into a joint venture with Viatel, Inc. and
Carrier 1 Holdings, Ltd. to jointly build a national fiber optic
telecommunications network in Germany. Upon completion of construction, the
joint venture will be dissolved and the Company will own its own separate German
broadband network. In connection with the terms of this agreement, the Company
made a deposit payment of $4.7 million, during the third quarter of 1998. Upon
signing an agreement, the Company provided an irrevocable standby letter of
credit in the amount of $64 million as security for the construction costs of
the network. During the first quarter of 2000, the letter of credit amount was
increased by $12.5 million. As of September 30, 2000, construction costs of
approximately $136.1 million have been incurred and are included in fiber optic
transmission network.

6. 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 2000 and 1999 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. NOTES PAYABLE

On March 6, 2000, the Company issued $975.3 million of 6.15% convertible
subordinated notes due March 6, 2010, to Bell Atlantic Investments, Inc. ("Bell
Atlantic" now Verizon Communications, or "Verizon"). The notes are convertible
into shares of class A common stock at a conversion price of $17.00 per share.
Interest on the notes is 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 will have 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 is
subordinated to the prior payment of the senior notes.

At September 30, 2000, AboveNet had $14.7 million outstanding under its credit
facility (the "Credit Facility"), with no additional borrowings available.
Borrowings outstanding under the Credit Facility are payable in 42 monthly
installments, bear interest at rates ranging from 13.3% to 15.1% and are
collateralized by the equipment and leasehold improvements purchased with the
proceeds of the borrowing. Additionally, in connection with the AboveNet
acquisition, the Company issued a letter of credit, secured by the Company's
restricted cash in the amount of $25.0 million, to further secure the Credit
Facility. At September 30, 2000, the outstanding borrowings on the Credit
Facility are due as follows: 2000 - $1.5 million, 2001 - $7.0 million, and 2002
- $6.2 million.

8. 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 is
convertible into shares of MFN class A common stock at a conversion price of
$17.00 per share (see Note 7). After the issuance of the 51.1 million shares of
class A common stock and assuming conversion of the convertible subordinated
notes, this investment represents 18.2% of the Company's outstanding shares.
Verizon has also agreed to pay the Company $550 million over the next three
years in exchange for delivery of fiber optic facilities over the next five
years. The proceeds from these transactions will be used to fund the expansion
of the Company's network.

                                       9
<PAGE>

9. CONTINGENCIES

On or about June 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 our shares of class A
common stock which the Company 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 the Company cannot currently ascertain but believe 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 and
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 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."

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 approximately $861 million, plus interest from September 7, 1999, in
addition to their costs, expenses and reasonable attorneys' fees. On April 7,
2000, the Company filed a motion to dismiss the complaint.

The Company intends to vigorously defend both the Goldsmith Litigation (and the
Contardi Litigation if plaintiff pursues the action) because it believes that it
acted appropriately in connection with the matters at issue in these two cases.
However, there can be no assurance that the Company 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. If the Company is unsuccessful in defending against
these allegations, awards of the magnitude being sought in the Goldsmith
Litigation would have a material adverse effect on its financial condition and
results of operations.

On June 29, 1999, an alleged stockholder of AboveNet filed a lawsuit, captioned
Kaufman v. Tuan, et al, Del. Ch. C.A. No. 17259NC, in the Court of Chancery of
the State of Delaware in and for the New Castle County. The plaintiff, who
purports to represent a class of all AboveNet stockholders, challenges the terms
of the proposed merger between the Company and AboveNet. The complaint names, as
defendants, AboveNet, the directors of AboveNet, and the Company (as an aider
and abettor). The complaint alleges generally that AboveNet's directors breached
their fiduciary duty to stockholders of AboveNet, and seeks an injunction
against the merger, or, in the alternative, rescission and the recovery of
unspecified damages, fees and expenses. AboveNet, the Company and the individual
defendants believe the lawsuit is without merit and intend to defend against it
vigorously. AboveNet and the individual director defendants' responses were
filed on July 22, 1999. In connection with these responses, a motion to dismiss
the complaint in its entirety and a motion to stay discovery pending the outcome
of the motion to dismiss were filed by AboveNet and the individual directors of
AboveNet on July 22, 1999. Similar motions to dismiss the complaint and stay
discovery were filed by the Company on July 26, 1999. Upon stipulation of the
parties, this action was dismissed without prejudice in December 1999.

Four other complaints, which are virtually identical to the complaint in Kaufman
v. Tuan, have also been filed in the Delaware Court of the Chancery. None of
these four complaints have been served. The four actions are captioned Brosious
v. Tuan, et al, Del. Ch. C.A. No. 17271NC, Chong v. Tuan, et al, Del. Ch. C.A.
No. 17281NC, Ehlert v. Tuan, et al, Del. Ch. C.A. No. 17284NC, Horn v. Tuan, et
al, Del. Ch. C.A. No. 17300NC.

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, including the Goldsmith Litigation, will have a material
adverse effect on our financial condition or results of operations, although the
Company can make no assurances in this regard.



                                       10
<PAGE>

9. SUBSEQUENT EVENT


On October 9, 2000, the Company entered into an agreement with SiteSmith Inc.
("SiteSmith"), a provider of Internet infrastructure management services, to
exchange all outstanding shares of SiteSmith common and preferred stock for the
right to receive between 55 million and 62.5 million shares of MFN class A
common stock. The exchange ratio will depend on the average closing price of MFN
class A common stock during the 20 trading day period ending on the fourth
business day prior to the effective time of merger. This transaction is expected
to close during the fourth quarter of fiscal 2000, subject to various closing
conditions.
      The aggregate merger consideration will be based on the average trading
price of MFN class A common stock on The Nasdaq National Market during the
twenty trading day period ending four days prior to consummation of the merger
subject to the following conditions:

   -  If the average trading price is greater than or equal to $24.00 and less
      than or equal to $27.2727, then the aggregate merger consideration will be
      the number of shares obtained by dividing $1,500,000,000 by the average
      trading price.

   -  If the average trading price is less than $24.00, then the aggregate
      merger consideration will be 62,500,000 shares.

   -  If the average trading price is greater than $27.2727, then the aggregate
      merger consideration will be 55,000,000 shares.



                                       11
<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, 1999. 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:

      -  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;

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

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

      -  availability, terms and deployment of capital;

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

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

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

      -  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 and high-bandwidth
   Internet connectivity for our communications intensive customers. We are 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



                                       12
<PAGE>

Europe. Through our acquisition of AboveNet, we also provide "one-hop"
connectivity that enables mission-critical Internet applications to thrive, as
well as high-bandwidth infrastructure, including managed co-location services.

      As of September 30, 2000, we have 1,351 employees.

      We intend to expand our presence to include approximately 50 Tier I and
Tier II markets in the United States and 17 major international markets. To date
we have 10 cities operational, 24 cities currently under construction, and the
balance in the engineering phase.

      Our existing intra-city networks consist of approximately 924,000 fiber
miles covering in excess of 1,600 route miles in the United States. Our
inter-city network consists of approximately 225,000 fiber miles primarily
covering its 255 route-mile network that we have built between New York City and
Washington D.C. We have also built or contracted to acquire a nationwide dark
fiber network linking its intra-city networks.

      In February 1999, we entered into an agreement with Viatel, Inc. and
Carrier 1 Holdings, Ltd. to jointly build a dark fiber inter-city network
connecting selected cities throughout Germany. Once completed, the German
network will consist of approximately 320,000 fiber miles covering in excess of
1,450 route miles connecting 14 major cities. We have also acquired fiber on the
Circe network, which connects a number of European markets. In addition to our
inter-city networks, we are constructing 16 intra-city networks throughout
Europe. Separately, we have also entered into a contract to acquire rights to
dark fiber network facilities in Toronto, Canada.

      On September 8, 1999, we completed the acquisition of AboveNet. The
holders of AboveNet common stock received 2.35 shares of our class A common
stock for each share of AboveNet common stock. AboveNet is a leading provider of
facilities-based, managed services for customer-owned Web servers and related
equipment, known as co-location, and high performance Internet connectivity
solutions for electronic commerce and other business critical Internet
operations. PAIX, AboveNet's wholly owned subsidiary, serves as a packet
switching center for ISPs. PAIX also offers secure, fault-tolerant co-location
services to ISPs. The acquisition has been recorded under the purchase method of
accounting and AboveNet's results are included in the results of operations
subsequent to the acquisition date.

      As of September 30, 2000, the operational gross square footage of
co-location/data center space was 385,000 square feet.

       On October 7, 1999, we entered into a securities purchase agreement with
Verizon, under which Verizon purchased approximately 51.1 million newly issued
shares of our class A common stock at a purchase price of $14.00 per share and a
convertible subordinated note of approximately $975.3 million, which is
convertible into shares of our class A common stock at a conversion price of
$17.00 per share. This transaction closed on March 6, 2000. After the issuance
of the 51.1 million shares of class A common stock and assuming conversion of
the convertible subordinated note, this investment represents 18.2% of our
outstanding shares. Verizon has also agreed to pay us $550 million over the next
three years in exchange for delivery of fiber optic facilities over the next
five years. The proceeds from these two transactions will be used to fund the
expansion of our network.

      Most of our contracts for the provision of dark fiber are accounted for as
operating leases under which we recognize recurring monthly revenues. For
certain other contracts we recognize revenue under the percentage of completion
method for the provision of dark fiber. Effective June 30, 1999, the Financial
Accounting Standards Board issued FASB Interpretation No. 43, "Real Estate
Sales" ("FIN 43"), which requires that sales or leases of integral equipment
subsequent to June 30, 1999, be accounted for in accordance with real estate
accounting rules. We believe that the staff of the Securities and Exchange
Commission requires the classification of dark fiber cables in the ground as
integral equipment as defined in FIN 43. Accounting for dark fiber leases as
defined by FIN 43 does not change any of the economics of the contracts. It
requires us, however, to recognize the revenue from certain leases as
operating leases over the term of the contract as opposed to the prior method
of recognizing revenue when we deliver the fiber. As a result, this change in
accounting treatment reduces the revenue and income that we recognize in the
earlier years of the contract and spreads it out over the life of the
contract regardless of when the cash was received or the delivery of the
fiber took place.

      By way of example, if we entered into an agreement for a 25 year lease for
dark fiber with a customer who pays $100.0 million in cash when the contract is
signed, we previously recorded average revenues of $20.0 million per year over
the 5 years



                                       13
<PAGE>

during which we delivered the dark fiber. By contrast, the real estate
accounting rules of FIN 43 would require us to recognize revenue of $4.0 million
per year over the 25 year term of the contract, even though we would receive a
cash payment of $100.0 million when the contract is signed.

      We implemented this method of accounting for our contracts entered into
after June 30, 1999, as required. Although there was no change to the economics
of the contracts or the timing of the cash to be received by the Company, the
impact of the change in accounting resulted in the Company recording
substantially less revenue after the date of July 1, 1999 than would have been
recorded if this change had not been imposed.

      Total revenue for the quarter ended September 30, 2000 was $51.9 million.
Of the $13.0 million of optical infrastructure revenue, 96% came from recurring
domestic revenue with pricing in line with our expectations. Approximately 85%
of the optical infrastructure revenue is from carrier customers. Internet
infrastructure revenue rose 19% over the previous quarter to $38.9 million.

      On March 2, 2000, the Company announced a two-for-one stock split of the
Company's class A and class B common stock in the form of a 100 percent stock
dividend to all shareholders of record on March 14, 2000. This stock split
became effective on April 17, 2000.

All share and per share amounts presented herein give retroactive effect to the
above stock split.

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 30, 1999, AND NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1999

REVENUES
Revenues for the third quarter of 2000 were $51.9 million or 385% greater than
revenues of $10.7 million for the third quarter of 1999. Revenues for the nine
months ended September 30, 2000 were $127.1 million, or 157% greater than
revenues of $49.4 million for the same period in 1999. The increase for the
three and nine months ended September 30, 2000, compared with the three and nine
months ended September 30, 1999 reflected higher revenues associated with
commencement of service to an increased total number of customers, and the
inclusion of AboveNet's revenue in 2000. Revenue recognized for the three and
nine months ended September 30, 2000 using the percentage of completion method
was zero and $325,000, respectively, compared to $4.1 million and $37.7 million
for the three and nine months ended September 30, 1999, respectively. If not for
the impact of the aforementioned accounting change, effective June 30,1999, the
increase in revenues for the nine month period would have been greater.

COST OF SALES
Cost of sales was $50.7 million in the third quarter of 2000, a 428% increase
over cost of sales of $9.6 million for the third quarter of 1999. Cost of sales
for the nine months ended September 30, 2000 was $133.5 million, or 447% greater
than cost of sales of $24.4 million for the same period in 1999. The increase
for the three and nine months ended September 30, 2000, compared with the three
and nine months ended September 30, 1999, is primarily due to the inclusion of
AboveNet and costs associated with an increased amount of customers and higher
fixed costs associated with the operation of our network in service. Cost of
sales as percentages of revenue for the third quarters of 2000 and 1999 was 98%
and 89%, respectively, and 105% and 49% for the nine months ended September 30,
2000 and 1999, respectively, increasing in 2000 as a result of the higher fixed
costs related to the operation and maintenance of the Company's network, as well
as the higher fixed costs of the internet connectivity services related to
AboveNet's operations. Cost of sales in the three and nine months ended
September 30, 2000 related to the percentage of completion method was zero and
$48,000, compared to $620,000 and $10.3 million for the three and nine months
ended September 30, 1999. Costs of sales were also impacted as a direct result
of the aforementioned accounting change, effective June 30, 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased to $38.7 million for the
third quarter of 2000, from $13.6 million during the third quarter of 1999, an
increase of $25.1 million or 185%. Selling, general and administrative expenses,
for the nine month period ended September 30, 2000 versus the nine month period
ended September 30, 1999, increased 245% to $94.4 million from $27.4 million.
The increase in selling, general and administrative expenses in the three and
nine month periods ended September 30, 2000 as compared to the same periods in
1999 resulted primarily from the acquisition of AboveNet and the increased
headcount



                                       14
<PAGE>

and other overhead to support our network expansion. As a percentage of revenue,
selling, general and administrative expenses were 74.7% and 74.2% for the three
and nine months ended September 30, 2000, respectively compared to 126.7% and
55.4%, respectively for the comparable periods in 1999.

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)
EBITDA consists of earning (loss) before income taxes plus all net interest
expense and all depreciation and amortization expense and losses from joint
ventures. We have included EBITDA because it is a widely used financial
measure of the potential capacity of a company to incur and service debt. Our
reported EBITDA may not be comparable to similarly titled measures used by
other companies.

For the three and nine months ended September 30, 2000, we recognized an EBITDA
loss of $38.5 million and $101.6 million, respectively, compared with an EBITDA
loss for the three and nine months ended September 30, 1999 of $12.4 million and
$2.4 million, respectively. The change in EBITDA is primarily due to the
acquisition of AboveNet and, for the nine month period, the aforementioned
accounting change.

DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense was $46.0 million and $118.6 million for
the three and nine months ended September 30, 2000, respectively, versus $10.6
million and $15.7 million for the three and nine months ended September 30,
1999, respectively. This represents increases of $35.4 million for the third
quarter of 2000 as compared to the third quarter of 1999 and $102.9 million for
the nine months ended September 30, 2000 as compared to the same period in 1999.
The increases in depreciation and amortization expense resulted primarily from
amortization of the goodwill relating to the acquisition of AboveNet and
increased investment in our completed fiber optic network and additional
property and equipment acquired.

LOSS FROM OPERATIONS
For the three and nine months ended September 30, 2000 we recognized losses from
operations of $84.6 million and $220.2 million, respectively. This represents an
increased loss of $61.6 million for the three months ended September 30, 2000
from the $23.0 million loss from operations reported for the three months ended
September 30, 1999, and an increased loss of $202.2 million for the nine months
ended September 30, 2000 from the $18.0 million loss from operations recognized
at September 30, 1999. The increased loss from operations was attributable to
the acquisition of AboveNet and the related goodwill and, for the nine month
period, the aforementioned accounting change.

INTEREST INCOME
Interest income was $31.3 million during the three months ended September 30,
2000, as compared to $5.6 million during the comparable 1999 period, an increase
of $25.7 million, or 459%. Interest income was $93.2 million during the nine
months ended September 30, 2000, as compared to $19.1 million during the
comparable 1999 period, an increase of $74.1 million, or 388%. Interest income
increased in 2000 as a result of the investment of our excess cash received as
proceeds from the issuance and sale of our 10% senior notes in October 1999, as
well as from the convertible subordinated notes issued in March 2000.

INTEREST EXPENSE
Interest expense increased in the three and nine months ended September 30, 2000
to $41.9 million and $142.8 million, respectively, versus $14.5 million and
$44.9 million for the three and nine months ended September 30, 1999,
respectively. The increase in interest expense reflects the cost of additional
debt acquired related to the issuance and sale of 10% senior notes in October
1999, as well as the convertible subordinated notes issued in March 2000.

NET LOSS
We had a net loss of $95.3 million and $272.5 million for the three and nine
months ended September 30, 2000, respectively, versus net losses of $32.0
million and $44.3 million for the comparable periods of 1999. For the three and
nine months ended September 30, 2000, basic net loss per share was $0.17 and
$0.51, respectively, versus basic net loss per share of $0.08 and $0.12 for the
three and nine months ended September 30, 1999, respectively.


                                       15
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

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 would purchase
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. In addition, Verizon has agreed to purchase a minimum of $550
million of fiber optic facilities payable over the next three years.

Cash used in operating activities was $24.5 million for the nine months ended
September 30, 2000, compared with $6.3 million provided by operations during the
comparable period in 1999. For the nine months ended September 30, 2000 we used
$1.5 billion of cash for investing activities as compared to $211.3 million for
the same period in 1999. This increase was due primarily to investments in the
expansion of our networks and related construction in progress. For the nine
months ended September 30, 2000, $1.8 billion was provided by financing
activities, primarily through the Verizon investment, compared to the $11.5
million cash outflow in the nine months ended September 30, 1999.

On May 9, 2000, we finalized an agreement with Pacific Gateway Exchange ("PGE")
to purchase PGE's ownership position in two transoceanic fiber-optic consortia.
One of the transactions closed in June 2000 and the other closed in August 2000.
Under the terms of the sale, we paid approximately $52.0 million in net cash
proceeds to PGE, primarily to reimburse it for payment to the consortia to date.
We have assumed PGE's future payment obligations to the cable consortia.

We anticipate that we will continue to incur net operating losses as we expand
and complete our existing networks, construct additional networks, market our
services to an expanding customer base and incur operating expenses related to
the business of SiteSmith. We anticipate spending approximately $3.4 billion
through the year ending December 31, 2001 on the build-out of our fiber optic
networks and Internet service exchanges in 50 major markets in the United States
and in 17 major international markets. We believe that the net proceeds from the
investment by Verizon, the net proceeds from the senior notes, cash on hand,
certain vendor financing and cash generated by operations (including advance
customer payments), will enable us to fully fund the planned build-out of our
networks and our other working capital needs through the year ending December
31, 2001. The indentures governing our debt obligations permit us to incur
additional indebtedness to finance the engineering, construction, installation,
acquisition, lease, development or improvement of telecommunications assets. As
a result, we may also consider from time to time private or public sales of
additional equity or debt securities, entering into other credit facilities and
financings, depending upon market conditions, in order to finance the continued
build-out of our network. We cannot assure you that we will be able to
successfully consummate any such financing on acceptable terms or at all.

We expect to experience negative cash flows for the foreseeable future. In
addition, as part of our acquisition of AboveNet, we recorded approximately $1.6
billion in goodwill and other intangible assets, which we are amortizing over
periods up to twenty years. Accordingly, we expect to report further net
operating losses for the foreseeable future.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, the financial position of the Company is
routinely subjected to a variety of risks. In addition to the market risk
associated with interest movements on the Company's outstanding debt, the
Company is subject to other types of risk such as the collectibility of its
accounts receivables. The Company's principal long term obligation are its $650
million 10% senior notes due 2008 and $1 billion 10% senior notes due 2009, and
the convertible subordinated note of approximately $975.3 million issued to
Verizon in March 2000. The fair value of the long-term debt at June 30, 2000 was
$2.63 billion. A 10% decrease and a 10% increase in the level of interest rates
would result in an increase in the fair value of the Company's long term
obligation by $73 million and a decrease in the fair value of the Company's long
term obligation by $33 million respectively.




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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 the Company in the
United States District Court for the Southern District of New York, No. 98
CIV 4140(JGK) (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 our shares which we cannot currently ascertain but believe to be
approximately 112,500 (calculated as of the date on which the complaint was
filed and does not take into account subsequent stock splits) or damages in
an amount which we cannot currently ascertain but believe 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 and 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 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."

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 approximately $861 million, plus interest from September 7, 1999, in
addition to their costs, expenses and reasonable attorneys' fees. On April 7,
2000, we filed a motion to dismiss the complaint.

We intend to vigorously defend both the Goldsmith Litigation (and the Contardi
Litigation if plaintiff pursues the action) because we believe that we acted
appropriately in connection with the matters at issue in these two cases.
However, we cannot assure you 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. If we are unsuccessful in defending against these allegations,
awards of the magnitude being sought in the Goldsmith Litigation would have a
material adverse effect on our financial condition and results of operations.

On June 29, 1999, an alleged stockholder of AboveNet filed a lawsuit, captioned
Kaufman v. Tuan, et al, Del. Ch. C.A. No. 17259NC, in the Court of Chancery of
the State of Delaware in and for the New Castle County. The plaintiff, who
purports to represent a class of all AboveNet stockholders, challenges the terms
of the proposed merger between the Company and AboveNet. The complaint names, as
defendants, AboveNet, the directors of AboveNet, and the Company (as an aider
and abettor). The complaint alleges generally that AboveNet's directors breached
their fiduciary duty to stockholders of AboveNet, and seeks an injunction
against the merger, or, in the alternative, rescission and the recovery of
unspecified damages, fees and expenses. AboveNet, the Company and the individual
defendants believe the lawsuit is without merit and intend to defend against it
vigorously. AboveNet and the individual director defendants' responses were
filed on July 22, 1999. In connection with these responses, a motion to dismiss
the complaint in its entirety and a motion to stay discovery pending the outcome
of the motion to dismiss were filed by the AboveNet and the individual directors
of AboveNet on July 22, 1999. Similar motions to dismiss the complaint and stay
discovery were filed by us on July 26, 1999. Upon stipulation of the parties,
this action was dismissed without prejudice in December 1999.

Four other complaints, which are virtually identical to the complaint in Kaufman
v. Tuan, have also been filed in the Delaware Court of the Chancery. None of
these four complaints have been served. The four actions are captioned Brosious
v. Tuan, et al, Del. Ch. C.A. No. 17271NC, Chong v. Tuan, et al, Del. Ch. C.A.
No. 17281NC, Ehlert v. Tuan, et al, Del. Ch. C.A. No. 17284NC, Horn v. Tuan, et
al, Del. Ch. C.A. No. 17300NC.

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,
including the Goldsmith



                                       17
<PAGE>

Litigation, will have a material adverse effect on 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

Not applicable

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

1. On October 11, 2000, we filed a current report on Form 8-K to announce our
entering into an Agreement and Plan of Merger in connection with our acquisition
of SiteSmith, Inc.




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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/ Gerard Benedetto
                              -----------------------------------------
                          Gerard Benedetto
                          Senior Vice President and Chief Financial Officer
                          (Principal Financial and Accounting Officer and Duly
                          Authorized Officer)

                          January 26, 2001



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