<PAGE>



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

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

                  For the period ended September 30, 2000

                                       or

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 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>
                         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)    $  (0.16)    $   (0.51)    $   (0.23)
                                         ========     ========     =========     =========

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

Weighted average number of shares
 outstanding, basic ................      549,471      199,789       538,811       190,639
                                         ========     ========     =========     =========

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; 4,808,062,482
     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; 1,044,509,564
     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

                                       3
<PAGE>

                                     19

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, PAIXnet, 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 $48,000 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
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, 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 $2.0 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
$2.0 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 $52.0 million in net cash proceeds to PGE,
primarily to reimburse it for payment made by PGE to the consortia. MFN has
assumed PGE's future payment obligations to the cable consortia. The
acquisition of a 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 $10.0 million. The excess of purchase
price over the fair values of net assets acquired was approximately $10.0
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 $51.0 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 $25.0
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 $70.0 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 $25.0 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 $64.0 million as security for the
construction costs of the network. Payment made, covers the Company's portion
of the estimated construction. 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 Communication, 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 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 (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.

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 twenty 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 had 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 our 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 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

                                       13
<PAGE>

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. Optical infrastructure revenue increased to $13.0 million, up 25%
from last quarter. Of the $13.0 million, 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 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.

                                       14
<PAGE>

For the three and nine months ended September 30, 2000, we recognized EBITDA
losses 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 net losses 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 $0.16 and $0.23
for the three and nine months ended September 30, 1999, respectively.

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

                                       15
<PAGE>

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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                           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.

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.



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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 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

      EXHIBIT #

            27 Financial Data Schedule for the period ended September 30, 2000.

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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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)

                           October 31, 2000


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