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                                                                    Exhibit 10.6


                                                                October 23, 2001

Michael Tschiderer
34 Park View Drive
Pittsford, New York 14534



                        Retention and Severance Agreement

Dear Michael:

                  As you are aware, the CLEC sector, as well as the
telecommunications industry in general, has experienced tremendous volatility
and economic challenges over the past several months. Consequently, Mpower
Communications Corp., a Nevada corporation ("Mpower", and collectively with its
parent and subsidiaries, the "Company") is currently contemplating a corporate
restructuring (the "Restructuring"). We consider your continued dedication,
attention and service to the Company essential to our on going operations. To
address any uncertainty regarding your professional and financial future, and to
induce you to remain in the employ of the Company; the Company is pleased to
offer you the benefits described in this letter agreement (the "Agreement").

                  1. YOUR UNDERTAKINGS. You hereby agree that you will continue
to use your best efforts and devote your full business time to the business and
affairs of the Company and will use your best efforts to assist the Company in
effecting the Restructuring.

                  "Cause" for termination of your employment with the Company
means the occurrence of any of the following events: (i) your willful material
violation of any law or regulation applicable to the business of the Company;
(ii) your conviction of, or plea of "no contest" to, a felony; (iii) any willful
perpetration by you of an act involving moral turpitude or common law fraud
whether or not related to your activities on behalf of the Company; (iv) any act
of gross negligence by you in the performance of your duties as an employee; (v)
any violation of the "Standards of Conduct" set forth in the Company's employee
manual, as in effect from time to time; or (vi) any willful misconduct by you
that is materially injurious to the financial condition or business reputation
of, or is otherwise materially injurious to, the Company.

                  "Disability" shall have the meaning set forth in the Company's
long-term disability plan applicable to you.

                  "Good Reason" for termination of your employment means the
occurrence of any of the following events: (i) a material reduction in your base
salary or incentive bonus opportunity in effect on October 1, 2001, or (ii) the
relocation of your principal place of business to a location that is more than
35 miles from your primary business location on October 1, 2001 without your
consent.

                  2.  GUARANTEED ANNUAL INCENTIVE BONUS.
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                  (a) If you remain employed by the Company on January 11, 2002
(the "Guaranteed Bonus Payment Date"), you will be entitled to receive 50% of
your 2001 targeted annual incentive bonus under the Company's 2001 Management
Incentive Program (the "Guaranteed Bonus"). This amount will be calculated using
your calendar year 2001 earnings, and will be prorated for promotions and/or
demotions. The Guaranteed Bonus will be paid to you in a lump sum cash payment
as soon as reasonably practicable following the Guaranteed Bonus Payment Date.
The remaining unpaid portion of your 2001 targeted incentive bonus, if any, will
be paid in accordance with the Company's 2001 Management Incentive Program.

                  (b) If, prior to January 11, 2002, your employment is
terminated (i) by the Company without Cause, (ii) due to your death or
Disability, or (iii) by you for Good Reason, you will be entitled to payment of
the full amount of the Guaranteed Bonus as soon as reasonably practicable
following your termination of employment.

                  (c) If, prior to the payment of the Guaranteed Bonus, your
employment is terminated by the Company for Cause or by you without Good Reason,
you will forfeit the right to receive the Guaranteed Bonus.

                  3.  SEVERANCE BENEFIT.

                  (a) You are entitled to receive a severance benefit (the
"Severance Benefit") of $150,000.00 if your employment is terminated (i) by the
Company without Cause, (ii) due to your death or Disability or (iii) by you for
Good Reason.

                  (b) The Severance Benefit will be paid over approximately
twelve months (the "Severance Period") in equal installments in accordance with
the Company's standard payroll practices; provided, however, that the Mpower
Board of Directors (the "Board") may elect, in its sole discretion, to pay the
Severance Benefit in a lump sum.

                  (c) During the Severance Period, you shall make yourself
reasonably available to the Company, on an "as needed" basis, to provide
information regarding the business and affairs of the Company that you attained
in connection with your employment. The Company shall reimburse you for all
reasonable expenses incurred in connection with this Section 3(c) in accordance
with the Company's policies as in effect from time to time.

                  (d) If your employment is terminated by the Company for Cause
or by you without Good Reason, you will not be entitled to receive a Severance
Benefit.

                  4. CONFIDENTIALITY; PROTECTIVE COVENANTS. If at any time you
(i) disclose the terms of this Agreement to any third party, including, without
limitation, a Company employee, or (ii) violate any of the protective covenants
set forth in Section 6 of this Agreement, you shall immediately forfeit your
rights to any unpaid portion of the Retention Bonus, the Guaranteed Bonus and
the Severance Benefit; provided, however that nothing in this Section 4 shall
prohibit you from disclosing the terms of this Agreement to (i) the Company's
Chief Executive Officer, (ii) the direct reports of the Chief Executive Officer
(President and COO, Chief Financial Officer, EVP Strategy Planning and Business
Development, SVP Legal, SVP People Services, VP Corporate Communications) (iii)
your immediate family members and/or (iv) your legal, tax and financial
advisors.

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                  5.  SUCCESSORS; BINDING AGREEMENT.

                  (a) Assumption by Successor. The Company will use its best
efforts to require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) (the "Successor") to (i) all or
substantially all of the business or assets of the Company or (ii) the Company's
"Market" applicable to you, to expressly assume and to agree to perform the
Company's obligations under this Agreement in the same manner and to the same
extent that the Company would be required to perform such obligations if no such
succession had taken place; provided, however, that in the event that this
Agreement is not assumed by the Successor, the unpaid portions of the Retention
Bonus, the Guaranteed Bonus and the Severance Benefit shall become immediately
payable in accordance with the terms of this Agreement. As used herein, the
"Company" shall mean the Company as hereinbefore defined and any Successor which
assumes and agrees to perform its obligations by operation of law or otherwise.

                  (b) Enforceability; Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of you (and your personal representatives
and heirs) and the Company and any Successor which expressly agrees to assume
and perform its obligations under this Agreement. This Agreement shall inure to
the benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee or other designee or, if there is no such designee, to
your estate.

                  6.  PROTECTION OF THE COMPANY'S INTERESTS.

                  (a) No Competing Employment. For so long as you are employed
by the Company and during the Severance Period (such period being referred to
hereinafter as the "Restricted Period"), you shall not, without the prior
written consent of the Board, directly or indirectly, own an interest in,
manage, operate, join, control, lend money or render financial or other
assistance to or participate in or be connected with, as an officer, employee,
partner, stockholder, consultant or otherwise, any individual, partnership,
firm, corporation or other business organization or entity that competes with
the business of the Company by providing any goods or services provided or under
development by the Company at the effective date of your termination of
employment (the "Business"); provided, however, that this subparagraph 6(a)
shall not proscribe your ownership, either directly or indirectly, of less than
one (1) percent of any class of securities which are listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc.

                  (b) No Interference. During the Restricted Period, you shall
not, directly or indirectly, whether for your own account or for the account of
any other individual, partnership, firm, corporation or other business
organization (other than the Company), (i) solicit, or endeavor to entice away
from the Company, or otherwise interfere with the relationship of the Company
with, any person or entity who is, or was within the then most recent
twelve-month period, (A) employed by, or otherwise engaged to perform services
for, the Company, or (B) a customer or client of the Company or (ii) otherwise
interfere with the business of the Company.

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                  (c) Non-Disparagement. During the Restricted Period and
thereafter, you shall not intentionally make any public statement, or publicly
release any information, that disparages or defames the Company, or any of its
officers and directors, and shall not intentionally cause or encourage any other
person to make any such statement or publicly release any such information.

                  (d) Confidentiality. You understand and acknowledge that in
the course of your employment, you have had and will continue to have access to
and will learn confidential information regarding the Company that concerns the
technological innovations, operations and methodologies of the Company,
including, without limitation, business plans, financial information, protocols,
proposals, manuals, procedures and guidelines, computer source codes, programs,
software, know-how and specifications, copyrights, trade secrets, market
information, Developments (as hereinafter defined), data and customer
information (collectively, "Proprietary Information"). You agree that during the
period beginning on the date hereof and continuing in perpetuity thereafter, you
shall keep confidential and shall not directly or indirectly disclose any such
Proprietary Information to any third party, except as required to fulfill your
duties in connection with your employment by the Company, and shall not misuse,
misappropriate or exploit such Proprietary Information in any way. The
restrictions contained herein shall not apply to any information which you can
demonstrate (i) was already available to the public at the time of disclosure,
or subsequently became available to the public, otherwise than by breach of this
Agreement or (ii) was the subject of a court order to disclose. Upon your
termination of employment, you will immediately return to the Company all
Proprietary Information and copies thereof in your possession.

                  "Developments" shall mean all data, discoveries, findings,
reports, designs, inventions, improvements, methods, practices, techniques,
developments, programs, concepts and ideas, whether or not patentable, relating
to the present or planned activities, or the products and services of the
Company.

                  (e) Assignment of Developments. During your employment, all
Developments that are at any time made, conceived or suggested by you, whether
acting alone or in conjunction with others, shall be the sole and absolute
property of the Company, free of any reserved or other rights of any kind on
your part. If such Developments were made, conceived or suggested by you during
or as a result of your employment relationship with the Company, you shall
promptly make full disclosure of any such Developments to the Company and, at
the Company's cost and expense, do all acts and things (including, among others,
the execution and delivery under oath of patent and copyright applications and
instruments of assignment) deemed by the Company to be necessary or desirable at
any time in order to effect the full assignment to the Company, of your right
and title, if any, to such Developments. You acknowledge and agree that any
invention, concept, design or discovery that concretely relates to or is
associated with your work for the Company that is described in a patent
application or is disclosed to a third party directly or indirectly by you
during the Restricted Period shall be the property of and owned by the Company
and such disclosure by patent application or otherwise shall constitute a breach
of Section 6(a) above.

                  (f) Injunctive Relief. Without intending to limit the remedies
available to the Company, you acknowledge that a breach of any of the covenants
contained in this Section 6 may result in material irreparable injury to the
Company for which there is no adequate remedy

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at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof, the Company
shall be entitled to obtain a temporary restraining order and/or a preliminary
or permanent injunction restraining you from engaging in activities prohibited
by this Section 6 or such other relief as may be required to specifically
enforce any of the covenants in this Section 6.

                  7.  MISCELLANEOUS.

                  (a) Amendments, Waivers, Etc. No provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to by you and the Company in writing. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement and this Agreement shall supersede all prior agreements,
negotiations, correspondence, undertakings and communications of the parties,
oral or written, with respect to the subject matter hereof.

                  (b) Effective Date. This Agreement shall become effective upon
the receipt by the Company of your signed acknowledgement of this Agreement.

                  (c) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                  (d) No Contract of Employment. Nothing in this Agreement shall
be construed as giving you any right to be retained in the employ of the Company
or interfere in any way with the Company's right to terminate your employment
for any reason, subject to the provisions of this Agreement.

                  (e) Tax Withholding. Amounts paid to you hereunder shall be
subject to all applicable federal, state and local withholding taxes.

                  (f) Waiver and Release. The Company's obligations to you under
this Agreement (including, without limitation, any obligations with respect to
the Severance Benefit, if any) will be subject to your execution and delivery to
the Company of a Waiver and Release substantially in the form attached hereto as
Exhibit A.

                  (g) Arbitration. Any dispute or controversy arising under or
in connection with this Agreement that cannot be mutually resolved by you and
the Company will be settled exclusively by arbitration in New York, New York,
before three arbitrators of exemplary qualifications and stature. One such
arbitrator will be selected by each of you and the Company. The arbitrators
selected by you and the Company will jointly select the third arbitrator.
Judgment may be entered on the arbitrators' award in any court having
jurisdiction. You and the Company hereby agree that the arbitrators will be
empowered to enter an equitable decree mandating specific enforcement of the
terms of this Agreement. The party that prevails in any arbitration hereunder
will be reimbursed by the other party hereto for any reasonable legal fees

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and out-of-pocket expenses directly attributable to such arbitration, and such
other party will bear all expenses of the arbitrators.

                  (h) Notice. Any notice to be given to the Company under the
terms of this Agreement shall be addressed to the Company in care of its General
Counsel, 175 Sully's Trail, Suite 300, Pittsford, New York 14534 and with a copy
to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, Attn:
Douglas P. Bartner, Esq., and any notice to be given to you may be addressed to
you at your address as it appears on the payroll records of the Company, or at
such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed to have been duly given if and when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
postage paid and deposited in a government post office.

                  (i) Governing Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York without
reference to any choice of law provisions therein.

                  (j) Supersedes Prior Agreements. This Agreement represents the
entire agreement of the parties on the subject matter hereof and shall supersede
any and all previous contracts, arrangements or understandings between you and
the Company regarding your employment and termination of employment.

                  (k) Headings. The headings contained in this Agreement are
intended solely for convenience of reference and shall not affect the rights of
the parties to this Agreement.

                  (l) ERISA. It is the intent of the Company that the Severance
Benefit payable pursuant to this Agreement constitute an "employee welfare
benefit plan" within the meaning of Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and comply with the applicable
requirements of ERISA.

                                      Sincerely,

                                      Mpower Communications Corp.


                                      By:      /s/ Rolla P. Huff
                                               --------------------------
                                               Rolla P. Huff
                                               Chief Executive Officer


Accepted and Agreed

/s/ Michael Tschiderer
------------------------
Michael Tschiderer

Dated:  October 23, 2001

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                                    EXHIBIT A

Mpower Communications Corp.
175 Sully's Trail, Suite 300
Pittsford, NY 14534

                                     RELEASE

                  I, Michael Tschiderer, am a party to a Retention Agreement
(the "AGREEMENT"), dated October 23, 2001, with Mpower Communications Corp., a
Nevada corporation (the "COMPANY"). The Agreement contemplates that, in
consideration for my receipt of the Severance Benefit (as such term is defined
in the Agreement), I will deliver a Release in the form set forth below, and I
now desire to deliver such Release to the Company in the manner contemplated by
the Agreement.

                  1. General Release. In consideration of the Severance Benefit,
I hereby release and forever discharge the Released Parties (as defined below)
from any and all claims, actions, causes of action, suits, costs controversies,
judgments, decrees, verdicts, damages, liabilities, attorney's fees, covenants,
contracts and agreements (collectively, including claims, actions and causes of
action set forth in Section 2 below, "CLAIMS") that I may have against the
Released Parties based on or arising out of (i) my employment relationship with
and service as an employee, officer or director of the Company, and the
termination of such relationship or service, or (ii) any event, condition,
circumstance or obligation that occurred, existed or arose on or prior to the
date hereof, including, without limitation, any Claims arising under any
applicable federal, state or local law, or any law of any foreign jurisdiction,
whether such Claim arises under statute, common law or in equity, and whether or
not I am presently aware of such claim. I further agree that the payments and
benefits described in the Agreement are in full satisfaction of any and all
Claims for payments or benefits that I may have against the Company arising out
of my employment relationship, my service as an employee, officer or director of
the Company and the termination thereof. I also do forever release, discharge
and waive any rights that I may have to recover in any proceedings brought by
any federal, state or local agency against the Released Parties to enforce any
laws.

                  For purposes of this release, the "RELEASED PARTIES" means,
individually and collectively, the Company, its present, former and future
shareholders, partners, limited partners, affiliates, parents, subsidiaries,
successors, directors, officers, employees, agents, attorneys, successors and
assigns.

                  2. Specific Release of ADEA Claims. In further consideration
of the Severance Benefit, I hereby release and forever discharge the Company and
its employees, officers and directors from any and all Claims that I may have as
of the date of my signing of this Release arising under the FEDERAL AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, and the applicable rules
and regulations promulgated thereunder ("ADEA").

                  3. Release of Unknown Claims. I understand that I am releasing
Claims pursuant to this Agreement that I may not know about, and that is my
intent. I expressly waive all rights that I might have under any law that is
intended to prevent unknown Claims from being released and I understand the
significance of doing so. In addition, I expressly acknowledge that the Release
under this Agreement is intended to include and does include in its effect,
without limitation, all Claims which I do not know or suspect to exist in my
favor at the time of execution of this Release and that this Release expressly
contemplates the extinguishment of all such Claims.

                  4. No Pending Litigation. I hereby represent and agree that I
have not filed, and will not file, any action, complaint, charge, grievance or
arbitration against any Released Party.

                  5. No Right to Commence any Legal Action. I will not commence
or join any legal action, which term includes, without limitation, any demand
for arbitration proceedings and any complaint to any federal, state or local
agency, court or other tribunal, to assert any Claim released by me under this
Agreement against a Released Party. If I commence or join any such legal action
against a Released Party, I will promptly indemnify such
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Released Party for its reasonable costs and attorneys' fees incurred in
defending such action as well as any monetary judgment obtained by me against
any Released Party in such action.

                  6. Acknowledgment. By signing this Release, I hereby
acknowledge and confirm the following:

                  (a) Consultation with an Attorney. I was advised in writing by
       the Company in connection with my termination of employment to consult
       with an attorney of my choice prior to signing the Agreement and this
       Release and to have such attorney explain to me the terms of the
       Agreement and this Release, including, without limitation, the terms
       relating to my release of claims arising under ADEA.

                  (b) Understand this Agreement. I have read the Agreement and
       this Release carefully and completely and understand each of the terms
       thereof.

                  (c) Twenty-One Days to Consider. I was given not less than
       twenty-one days to consider the terms of the Agreement and this Release
       and to consult with an attorney of my choosing with respect thereto, and
       that for a period of seven days following my signing of this Release, I
       have the option to revoke this Release in accordance with the terms set
       forth below.

                  (d) Consideration. By signing this Release, I hereby
       acknowledge and confirm that I am providing the Release and discharge set
       forth herein only in exchange for consideration in addition to anything
       of value to which I am already entitled.

                  7. Revocation. I have the right to revoke this Release during
the seven-day period (the "REVOCATION PERIOD") commencing immediately following
the date I sign and deliver this Release to the Company . The Revocation Period
shall expire at 5:00 p.m., New York time, on the last day of the Revocation
Period; PROVIDED, HOWEVER, that if such seventh day is not a business day, the
Revocation Period shall extend to 5:00 p.m. on the next succeeding business day.
In the event of any such revocation by me, the obligations of the Company to pay
the Severance Benefit pursuant to the Agreement shall terminate and be of no
further force and effect as of the date of such revocation. No such revocation
by me shall be effective unless it is in writing and signed by me and received
by a representative of the Company prior to the expiration of the Revocation
Period.

       My signature below indicates my agreement with the terms and provisions
described above.

       /s/ Michael Tschiderer                            Michael Tschiderer
       ------------------------                          October 23, 2001
                                                         ----------------
                                                         Date

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