ELECTRIC LIGHTWAVE, INC.           FORM 10-Q

















                                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                                          OF THE SECURITIES EXCHANGE ACT OF 1934

                           FOR THE  QUARTERLY  PERIOD  ENDED  SEPTEMBER  30,1999



<PAGE>





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


                                  FORM 10-Q


|X|  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1999

                                      OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the transition period from   ____  to ____

                         Commission file number 0-23393


                           ELECTRIC LIGHTWAVE, INC.
            (Exact name of registrant as specified in its charter)

         DELAWARE                                             93-1035711
      (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                         Identification No.)


                             4400 NE 77TH AVENUE
                         VANCOUVER, WASHINGTON 98662
              (Address, zip code of principal executive offices)


      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (360) 816-3000


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  twelve 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 ninety days.
                                 YES   |X|       NO   |_|

The number of shares outstanding of the registrant's class of common stock as of
October 26, 1999 were:

                        COMMON STOCK CLASS A 8,769,934
                       COMMON STOCK CLASS B 41,165,000

================================================================================
<PAGE>




Electric Lightwave, Inc.

INDEX
<TABLE>
<CAPTION>
                                                                        PAGE NO.
PART I.  FINANCIAL INFORMATION
  ITEM 1.   FINANCIAL STATEMENTS
<S>                                                                          <C>
   Balance Sheets at September 30, 1999 and December 31, 1998 (unaudited)     2

   Statements of Operations for the Three Months Ended
     September 30, 1999 and 1998 (unaudited).........................         3

   Statements of Operations for the Nine Months Ended
     September 30, 1999 and 1998 (unaudited).........................         4

   Condensed Statements of Cash Flows for the Nine Months Ended
     September 30, 1999 and 1998 (unaudited).........................         5

   Notes to Financial Statements.....................................         6

  ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.............................................  10

  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        18

PART II. OTHER INFORMATION                                                   19

  SIGNATURE..........................................................        21

</TABLE>






















                                     -1-


<PAGE>



Electric Lightwave, Inc.
PART I.  FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
BALANCE SHEETS

(In thousands)
(Unaudited)

                                                       September 30,   December 31,
ASSETS                                                     1999            1998
                                                         -----------    -----------

Current assets:
<S>                                                        <C>            <C>
  Cash ...........................................     $    24,612    $    13,120
  Trade receivables, net..........................          32,431         20,320
  Other receivables...............................           1,595          2,671
  Other current assets............................           1,540          1,953
                                                         -----------    -----------
   Total current assets...........................          60,178         38,064
                                                         -----------    -----------

Property, plant and equipment.....................         723,141        528,582
Less accumulated depreciation and amortization....         (65,212)       (40,912)
                                                         -----------    -----------
  Property, plant and equipment, net..............         657,929        487,670
                                                         -----------    -----------

Other assets......................................           8,875          6,575
                                                         -----------    -----------

   Total assets...................................     $   726,982    $   532,309
                                                         ===========    ===========

LIABILITIES AND EQUITY

Current liabilities:
  Accounts payable and accrued liabilities........     $    56,151    $    61,760
  Current portion of long-term debt...............          15,412            351
  Due to Citizens Utilities Company...............          15,251          5,254
  Interest payable................................           9,853          1,833
  Other accrued taxes.............................           9,582          5,577
  Other current liabilities.......................           3,778          3,191
                                                         -----------    -----------
   Total current liabilities......................         110,027         77,966

Deferred credits and other........................           1,600          1,834
Deferred income taxes payable.....................           2,769          1,760
Long-term debt....................................         560,574        302,256
                                                         -----------    -----------
   Total liabilities..............................         674,970        383,816
                                                         -----------    -----------

Shareholders' equity:
  Common stock issued, $.01 par value
   Class A........................................              88             86
   Class B........................................             412            412
  Additional paid-in-capital......................         323,974        321,926
  Deficit.........................................        (272,462)      (173,931)
                                                         -----------    -----------
   Total shareholders' equity.....................          52,012        148,493
                                                         -----------    -----------

   Total liabilities and shareholders' equity.....     $   726,982    $   532,309
                                                         ===========    ===========
</TABLE>

                           See accompanying notes.

                                     -2-


<PAGE>


<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS


(In thousands, except per-share amounts)
(Unaudited)                               For the three months ended September 30,
                                                            1999          1998
                                                         -----------    -----------
<S>                                                    <C>            <C>
Revenues...........................................    $    48,602    $    25,664
                                                         -----------    -----------
Operating expenses:
  Network access ..................................         14,719         12,317
  Operations.......................................         10,732          7,308
  Selling, general and administrative..............         32,017         21,243
  Depreciation and amortization....................          9,807          4,090
                                                         -----------    -----------
   Total operating expenses........................         67,275         44,958
                                                         -----------    -----------

  Loss from operations.............................        (18,673)       (19,294)

Interest expense and other.........................         11,424          2,742
                                                         -----------    -----------

  Net loss before income taxes.....................        (30,097)       (22,036)

Income tax expense (benefit).......................            277         (3,631)
                                                         -----------    -----------

  Net Loss.........................................    $   (30,374)   $   (18,405)
                                                         ===========    ===========

Net loss per common share:
   Basic...........................................    $      (.61)   $      (.37)
   Diluted.........................................    $      (.61)   $      (.37)

Weighted average shares outstanding................         49,915         49,711

</TABLE>



















                           See accompanying notes.

                                     -3-


<PAGE>


<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS


(In thousands, except per-share amounts)
(Unaudited)                                For the nine months ended September 30,
                                                            1999           1998
                                                         -----------    -----------

<S>                                                        <C>            <C>
Revenues..........................................     $   132,913    $    67,164
                                                         -----------    -----------

Operating expenses:
  Network access .................................          63,645         31,389
  Operations......................................          29,399         19,082
  Selling, general and administrative.............          88,231         54,206
  Depreciation and amortization...................          24,951         11,754
                                                         -----------    -----------
   Total operating expenses.......................         206,226        116,431
                                                         -----------    -----------

  Loss from operations............................         (73,313)       (49,267)

Interest expense and other........................          24,271          4,953
                                                         -----------    -----------

  Net loss before income taxes and  cumulative  effect
   of change in accounting principle..............         (97,584)       (54,220)

Income tax expense (benefit)......................             947         (9,102)
                                                         -----------    -----------

  Net loss  before  cumulative  effect  of  change  in
   accounting principle...........................         (98,531)       (45,118)

Cumulative effect of change in accounting principle
  (net of $577 income tax benefit)................              --          2,817
                                                         -----------    -----------

  Net loss........................................     $   (98,531)   $   (47,935)
                                                         ===========    ===========

Net loss per share before  cumulative effect of change
in accounting principle:
   Basic..........................................     $     (1.98)   $      (.91)
   Diluted........................................     $     (1.98)   $      (.91)

Net loss per common share:
   Basic..........................................     $     (1.98)   $      (.96)
   Diluted........................................     $     (1.98)   $      (.96)

Weighted average shares outstanding...............          49,846         49,697

</TABLE>






                           See accompanying notes.

                                     -4-


<PAGE>


<TABLE>
<CAPTION>
CONDENSED STATEMENTS OF CASH FLOWS


(In thousands)
(Unaudited)                                   For the nine months ended September 30,
                                                           1999            1998
                                                         -----------    -----------

<S>                                                      <C>             <C>
Net cash used for operating activities.............    $  (76,421)    $   (29,507)
                                                         -----------    -----------

Cash flows used for investing activities:
  Capital expenditures.............................      (138,676)       (119,154)
  Other............................................           119              --
                                                         -----------    -----------
   Net cash used for investing activities                (138,557)       (119,154)
                                                         -----------    -----------

Cash flows from financing activities:
  Net revolving bank credit facility
    proceeds (repayments)..........................       (84,000)        134,000
  Note issuance....................................       325,000              --
  Capital lease payments...........................       (12,816)           (256)
  Other............................................        (1,714)            284
                                                         -----------    -----------
   Net cash provided by financing activities.......       226,470         134,028
                                                         -----------    -----------

Net increase (decrease) in cash....................        11,492         (14,633)

Cash at January 1,.................................        13,120          26,531
                                                         -----------    -----------
Cash at September 30,..............................    $   24,612     $    11,898
                                                         ===========    ===========




Supplemental cash flow information:
  Cash paid for interest, net of capitalized
    portion........................................    $   16,572     $     4,784
  Non-cash increase in capital lease asset
    and obligation.................................        45,195          25,830
</TABLE>






















                           See accompanying notes.

                                     -5-



<PAGE>



Electric Lightwave, Inc.

NOTES TO FINANCIAL STATEMENTS

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.    BASIS OF PRESENTATION AND USE OF ESTIMATES

        Electric  Lightwave,  Inc. is referred to as "we", "us" or "our" in this
        report.  We  have  prepared  these  unaudited  financial  statements  in
        accordance  with generally  accepted  accounting  principles  (GAAP) for
        interim financial information and with the instructions to Form 10-Q and
        Article 10 of Regulation S-X. Accordingly,  we have condensed or omitted
        certain  information  and footnote  disclosures.  In our opinion,  these
        financial  statements  include all  adjustments  and recurring  accruals
        necessary to present fairly the results for the interim periods shown.

        Preparing  financial  statements in conformity  with GAAP requires us to
        make  estimates  and  assumptions  which  affect the  amounts of assets,
        liabilities,  revenues and expenses we have reported and our  disclosure
        of  contingent  assets  and  liabilities  at the  date of the  financial
        statements.  The  results of the  interim  periods  are not  necessarily
        indicative  of the  results  for the full  year.  We have  made  certain
        reclassifications  of  balances  previously  reported  to conform to the
        current  financial  statement   presentation.   You  should  read  these
        financial   statements  in  conjunction   with  the  audited   financial
        statements  and the related notes  included in our Annual Report on Form
        10-K for the year ended December 31, 1998.

B.    CAPITALIZED INTEREST

        Property, plant and equipment includes interest costs capitalized during
        the   installation  and  expansion  of  our   communications   networks.
        Approximately   $2,697,000   and   $2,079,000  of  interest  costs  were
        capitalized  in the three  months  ended  September  30,  1999 and 1998,
        respectively,  with approximately  $8,864,000 and $5,917,000 capitalized
        in the nine months ended September 30, 1999 and 1998, respectively.

C.    RECIPROCAL COMPENSATION

        We have various interconnection agreements with U S West Communications,
        Inc. (US West) and GTE Corporation  (GTE),  the Incumbent Local Exchange
        Carriers  (ILECs) in the states in which we  operate.  These  agreements
        govern reciprocal compensation relating to the transport and termination
        of traffic  between the ILEC's  networks and our  network.  We recognize
        reciprocal  compensation  revenues as earned,  based on the terms of the
        interconnection agreements.

        We have a process  in place to  monitor  regulatory  matters  related to
        reciprocal  compensation  specifically  for us as well as  others in the
        industry. Using the information available, we review revenue recognition
        on reciprocal compensation and adjust revenues as we deem appropriate.


D.     NET LOSS PER SHARE

        We follow the provisions of Statement of Financial  Accounting Standards
        (SFAS) 128,  "Earnings Per Share" which  requires  presentation  of both
        basic and diluted  earnings per share (EPS) on the face of the statement
        of operations.  Basic EPS is computed using the weighted  average number
        of  common  shares  outstanding  during  the  period.  The  diluted  EPS
        calculation  assumes that all stock options or contracts to issue common
        stock were  exercised or converted into common stock at the beginning of
        the period.  We have excluded certain common stock  equivalents from our
        diluted EPS calculation during the quarters ended September 30, 1999 and
        1998 because the effect would have reduced our net loss per share.

                                      -6-

<PAGE>

2.    EXIT COSTS

        In the third quarter 1999, we announced two strategic decisions that led
        to $1.5  million  in  employee  severance  and  shutdown  costs  that we
        recorded  in  selling,   general  and  administrative   expense  in  our
        Statements  of Operations in the third quarter 1999. On August 24, 1999,
        we  announced  that we were  eliminating  our prepaid  calling  card and
        videoconferencing products,  effective November 1, 1999. This initiative
        was  taken as a result  of our  decision  to focus on our core  business
        strategy.  Prepaid calling cards are a high-volume,  low-margin  product
        that we determined did not support our strategy of  accelerating  EBITDA
        profitability.   On  September  1,  1999,  we  announced  that  we  were
        consolidating  our national retail sales efforts in Dallas,  closing six
        retail sales offices in the eastern U.S. by October 8, 1999. The offices
        closed included Cleveland,  Chicago, Atlanta,  Washington D.C., New York
        and Philadelphia.  We have maintained all of our data points-of-presence
        and wholesale sales offices.

        As a result of both of these decisions,  we eliminated  approximately 68
        positions,  and  incurred  charges  relating to employee  severance  and
        facility  shutdown costs. The following table summarizes the activity in
        the related accrual account during the quarter ended September 30, 1999.
        The balance of the exit cost accrual at  September  30, 1999 is included
        in Accounts Payable and Accrued  Liabilities on our balance sheet and is
        anticipated to be paid within 12 months.

<TABLE>
<CAPTION>



                                                                        Balance
                                                                     September 30,
  ($ IN THOUSANDS)                        Exit Costs     Payments        1999
                                          -----------   ----------   -------------
<S>                                       <C>           <C>            <C>
  Severance related costs...............  $   681       $   342         $  339
  Network   and   facilities costs......      799           300            499
                                            -------      -------         -------
                                          $ 1,480       $   642         $  838
                                            =======      =======         =======
</TABLE>


3.    CHANGE IN ACCOUNTING PRINCIPLE

        On April 3, 1998, the Accounting  Standards  Executive  Committee of the
        AICPA released Statement of Position (SOP) 98-5, "Reporting on the Costs
        of Start-Up  Activities".  The SOP requires that at the beginning of the
        fiscal  year of  adoption,  any  remaining  deferred  start-up  costs be
        expensed and reported as a change in accounting principle.  Future costs
        of start-up activities should then be expensed as incurred.

        We adopted SOP 98-5  effective  January 1, 1998.  Previous to January 1,
        1998, we had  capitalized  certain third party direct costs  incurred in
        connection  with  negotiating  and securing  initial  rights-of-way  and
        developing  network  design for new markets or locations.  These amounts
        were being amortized over five years. We have reported the remaining net
        book value of these  deferred  amounts  of  $3,394,000  as a  cumulative
        effect  of  a  change  in  accounting  principle  in  the  statement  of
        operations  for the nine months ended  September 30, 1998, net of income
        tax benefit of $577,000.


                                       -7-

<PAGE>

4.    COMMITMENTS AND CONTINGENCIES

        Our license  agreements  for the exclusive  use of long-haul  facilities
        connecting our Portland to Seattle,  Portland to Spokane and Portland to
        Eugene  long-haul  transport  networks and for the  exclusive use of the
        Phoenix  network  contain  annual  minimum  usage  requirements.  If our
        traffic on any of these networks falls below the minimums,  the licensor
        will obtain the right to terminate our exclusive use of these fibers. We
        have  entered  arbitration  to resolve a dispute  regarding  the minimum
        usage required for exclusive use of our long-haul facilities  connecting
        Portland to Seattle and Portland to Spokane.

        In March 1999, we entered into a 20-year fiber-swap agreement,  in which
        we will exchange unused fiber on our network for unused fiber on another
        carrier's  network.  This  exchange will provide us with fiber from Salt
        Lake City to Denver,  continuing on to Dallas. We will provide the other
        carrier with unused fiber on our long-haul network that connects Spokane
        and  Seattle,   Washington,   Portland,  Oregon  and  the  Bay  Area  in
        California.  We anticipate  incorporating the other carrier's fiber into
        our network  during 2000.  We will pay the other  carrier  approximately
        $101 million over 20 years beginning in 2000. The other carrier will pay
        us approximately $77 million over the same time period.

        We were  previously  leasing  network  capacity  through a  private-line
        services  agreement  with a third party  which  allows us to utilize the
        third  party's  national  fiber optic network  through  2007,  and had a
        take-or-pay  commitment  of $122  million.  We amended the  private-line
        services  agreement  in June  1999 to  reflect  that we are now  leasing
        certain  capacity  under a new 20 year capital lease that had previously
        been leased under the private-line  services  agreement.  As a result of
        this  amendment,  our total minimum  commitment  under the  private-line
        services  agreement was reduced to $90 million for the remaining  period
        of July 1, 1999  through  December 31,  2007.

5.    RELATED PARTY TRANSACTIONS

        Citizens  Utilities  Company  (Citizens) owns  approximately  82% of our
        common  stock.   Through  May  1999,  Citizens  had  been  pursuing  its
        separation  plan.  Between  May 27, and  September  21,  1999,  Citizens
        announced  that it had  entered  into  agreements  to  purchase  776,000
        telephone  access  lines for $2.5  billion.  Permanent  funding  for the
        acquisitions  will  come  from the  sale of  Citizens'  public  services
        properties.  On October 18,  1999,  Citizens  announced it had agreed to
        sell its water and wastewater  operations for $835 million.  Citizens is
        continuing to investigate and review  opportunities  for the acquisition
        of new telecommunications properties.


        This table  summarizes  the  activity  in the  liability  account Due to
        Citizens for the nine months ended September 30, 1999:
<TABLE>
<CAPTION>

($ IN THOUSANDS)
<S>                                            <C>
Balance, December 31, 1998.................    $    5,254
Guarantee fees.............................        13,687
Administrative services:
   Services provided by Citizens...........         6,028
   ELI expenses paid by Citizens...........        11,282
Payments to Citizens.......................       (21,000)
                                                  ---------
Balance, September 30, 1999................    $   15,251
                                                  =========
</TABLE>


                                         -8-

<PAGE>





6.    SIGNIFICANT CUSTOMER

        During the three and nine  months  ended  September  30,  1999,  US West
        accounted  for 19% of our  total  revenues.  During  the  three and nine
        months ended  September  30, 1998,  US West  accounted  for 18% and 17%,
        respectively, of our total revenues.

7.    INCOME TAXES

        Citizens  includes us in their  consolidated  federal  income tax return
        which uses a calendar year reporting  period.  We record income taxes as
        if we were a  stand-alone  company.  We  recorded  income tax expense of
        $277,000 and $947,000 in the three and nine months ended  September  30,
        1999,  respectively.  This expense represents the deferred tax effect of
        the  increase  in  temporary  differences  between  our  GAAP  financial
        statements  and our tax return that may not be fully offset with the use
        of tax loss carryforwards when the timing differences  reverse in future
        periods.

        The  income  taxes  payable  by  Citizens' consolidated  group have been
        reduced as a  consequence  of our losses for tax purposes in past years.
        We would be able to  carry-forward  our tax losses to future  periods to
        offset net income for tax purposes in these  future  periods had we been
        stand-alone  for tax  purposes.  In  accordance  with  the  tax  sharing
        agreement,  Citizens  has agreed to  reimburse us for the taxes we would
        have to pay in the future, if we have taxable income, to the extent that
        these  carryforwards  would otherwise  remain available on a stand-alone
        basis.   This  is  a  result  of   Citizens   utilizing   our  tax  loss
        carryforwards.

8.    LONG-TERM DEBT

        The components of our long-term debt are as follows:
<TABLE>
<CAPTION>

                                                 September 30,   December 31,
         ($ IN THOUSANDS)                           1999            1998
                                                --------------  --------------
<S>                                           <C>             <C>
         Senior unsecured notes............   $    325,000    $         --
         Revolving bank credit facility....        200,000         284,000
         Capital leases....................         35,574          18,256
                                                  ---------       ---------
                                              $    560,574    $    302,256
                                                  =========       =========
</TABLE>

        We issued $325  million of  five-year  senior  unsecured  notes in April
        1999.  The notes have an  interest  rate of 6.05% and will mature on May
        15, 2004. Citizens has initially  guaranteed the notes for an annual fee
        of 4.0% of the outstanding balance.

        We  incurred  $2.6  million  of costs  related  to  issuing  the  senior
        unsecured  notes.  We have recorded these amounts in other assets on our
        September 30, 1999 balance sheet,  and are  amortizing  them to interest
        expense using the effective interest method over the term of the notes.

        We also recorded  $30,180,000  of long-term  capital  lease  obligations
        during  the nine  months  ended  September  30,  1999.  The  obligations
        primarily relate to constructed portions of our long-haul networks.


                                         -9-

<PAGE>





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

--------------------------------------------------------------------------------

        We  caution  you  that  this  quarterly  report  on Form  10-Q  contains
        forward-looking  statements  within the  meaning of the  Securities  and
        Exchange  Act  of  1934.   Forward-looking  statements  (including  oral
        representations)  are only  predictions  or  statements  of our  current
        plans,  which we  review  on a  continual  basis,  and are  based on our
        beliefs,  expectations  and  assumptions  and on  information  currently
        available  to us. The words  "may",  "should",  "expect",  "anticipate",
        "intend",   "plan",   "continue",   "believe",   "estimate"  or  similar
        expressions used in this report are intended to identify forward-looking
        statements.

        The  forward-looking  statements in this  quarterly  report on Form 10-Q
        involve  certain  risks,  uncertainties  and  assumptions.  They are not
        guarantees of future performance.  Factors that may cause actual results
        to  differ   materially   from  those   expressed   or  implied  in  any
        forward-looking  statements include,  but are not limited to, any of the
        following possibilities:

     *  if the local and  overall  economic  conditions  of our markets are less
        favorable than we expected;
     *  if there are changes in the nature and pace of technological advances in
        our industry;
     *  if competitive pressure in the telecommunications  industry increases in
        any of our  markets  because of the  entrance  of new  competitors,  the
        combination of existing  competitors and/or the more effective provision
        of products and services from our competitors, including ILECs, or other
        public utilities;
     *  if  our  business  strategy  or  its  execution,   including   financial
        performance goals, is not as successful as we anticipate;
     *  if we are not able to maintain exclusive use of fiber on our performance
        based leases;
     *  if state or federal  regulatory  changes are implemented that assist our
        competitors,  impair our  competitive  position,  threaten  our costs or
        impact our rate  structures,  including  the ability to bill  reciprocal
        compensation for calls terminated to ISPs;
     *  if we do not receive the services and support  which we require from the
        regional ILECs or cannot maintain our current relationships with ILECs;
     *  if we are  not  able  to  effectively  manage  rapid  growth,  including
        integrating any businesses acquired;
     *  if we are not able to correctly  identify future  markets,  successfully
        expand existing ones, or successfully expand through acquisitions;
     *  if the mix of products  and  services we are able to offer in our target
        markets is not appropriate to the demands of our customers;
     *  if we are not able to obtain additional financing; or
     *  if our stock price is volatile.

        You should consider these important  factors in evaluating any statement
        contained in this report and/or made by us or on our behalf.  We have no
        obligation to update or revise forward-looking statements.

--------------------------------------------------------------------------------

                                      -10-

<PAGE>




        The following  information  has not been  audited.  You should read this
        information in conjunction with the condensed  financial  statements and
        related  notes to  financial  statements  included  in this  report.  In
        addition, please see our Management Discussion and Analysis of Financial
        Condition and Results of Operations,  audited  financial  statements and
        related  notes  included in our Annual  Report on Form 10-K for the year
        ended December 31, 1998.

   OVERVIEW

        We have built an  extensive  fiber-optic  network in the western  United
        States,  which we use to provide  products  and services to customers in
        seven major cities and their surrounding areas. In addition,  we provide
        data services in certain other strategic markets.  Our product offerings
        include:

     *  Network services - includes  dedicated  service between two points for a
        customer's  exclusive  use.  We offer this in both  local and  long-haul
        applications.

     *  Local  telephone  services - consists of the delivery of local dial tone
        and related services, including reciprocal compensation.

     *  Long distance  services - includes  retail and  wholesale  long distance
        phone services.

     *  Data  services  - includes a wide  range of  products  to deliver  large
        quantities  of data from one  location to another  through  Asynchronous
        Transfer  Mode  (ATM),   Frame  Relay  and  Internet   Protocol   packet
        technologies.  These technologies group data (voice,  video,  images and
        character-based data) into small packets of information and transmit the
        packets over a network.

        We are investing in our network in the west and are developing long-haul
        networks  that will connect all of our seven major cities and several of
        our  data-only   cities  with   high-capacity   fiber-optic   cable  and
        electronics.  Certain  segments of our long-haul  networks are currently
        operational,  and we expect to complete the remainder of this network by
        the first quarter 2000.  During March 1999, we entered into a fiber-swap
        agreement,  which exchanges unused fiber on our network for unused fiber
        on another carrier's  network.  This exchange will provide us with fiber
        from Salt Lake  City,  Utah to Denver,  Colorado  and  continuing  on to
        Dallas,  Texas.  We anticipate  incorporating  the other carrier's fiber
        into our network during 2000.

        Refer to Note 5, in Part I,  Item 1,  for a  discussion  concerning  our
        relationship with Citizens, which owns 82% of our common stock.

A.    LIQUIDITY AND CAPITAL RESOURCES

        We used  net debt  borrowings  of $241  million  to fund  operating  and
        capital  expenditures  in the nine months ended  September 30, 1999. The
        source of these  borrowings was our revolving  bank credit  facility and
        $325  million of notes  which we issued  during  April 1999 in a private
        placement.  The notes are  five-year  senior  unsecured  notes,  have an
        annual  interest  rate of 6.05% and will mature on May 15, 2004. We used
        the majority of the net proceeds from the issuance to repay  outstanding
        borrowings  under our revolving bank credit  facility.  As a result,  we
        have $200 million of our bank credit  facility  which remains  available
        through November 2002 to fund future operating and capital expenditures.
        Citizens has guaranteed  both the revolving bank credit facility and the
        notes for per annum fees of 3.25% and 4.0%,  respectively,  assessed  on
        the respective outstanding balances.

                                      -11-

<PAGE>



        We expect that the $200 million  remaining on our revolving  bank credit
        facility  will be adequate to fund  operating  and capital  expenditures
        through the second  quarter 2000. At that point,  we will need to obtain
        additional debt or equity financing.  Citizens has historically provided
        the necessary  bridge  financing and other  guarantees in support of our
        obtaining financing. We cannot provide assurance that we will be able to
        obtain the required  financing or bridge  financing,  or that we will be
        able to obtain it on reasonable terms.

        We continue to invest in the installation,  development and expansion of
        our new and existing  communications  networks. A significant portion of
        these  expenditures  is incurred  before any revenues are realized.  Our
        capital  additions  were  approximately  $195 million in the nine months
        ended  September  30, 1999,  including  $45 million in non-cash  capital
        lease  additions.  These  expenditures,   combined  with  our  operating
        expenses,  have resulted in negative cash flows and operating losses. We
        expect to continue  incurring  operating  losses and negative cash flows
        until we can establish an adequate  customer base and revenue  stream to
        support our network. We cannot provide assurance that we will achieve or
        sustain  profitability or generate sufficient positive cash flow to fund
        our operating and capital requirements or service debt.

        We continue to evaluate opportunities to generate revenue growth through
        making  substantial  investments  in the  continued  development  of our
        existing  networks,  new  long-haul  routes and entry into new  markets.
        These opportunities may include  acquisitions and/or joint ventures that
        are  consistent  with our business  plan of  generating  revenue  growth
        through   expansion  of  our  network  and  customer   base.   Any  such
        acquisitions,  investments and/or strategic arrangements,  if available,
        could require additional  financial resources and/or reallocation of our
        financial resources.

        We were  previously  leasing  network  capacity  through a  private-line
        services  agreement  with a third party  which  allows us to utilize the
        third  party's  national  fiber optic network  through  2007,  and had a
        take-or-pay  commitment  of $122  million.  We amended the  private-line
        services  agreement  in June  1999 to  reflect  that we are now  leasing
        certain  capacity  under a new 20 year capital lease that had previously
        been leased under the private-line  services  agreement.  As a result of
        this  amendment,  our total minimum  commitment  under the  private-line
        services  agreement was reduced to $90 million for the remaining  period
        of July 1, 1999 through  December 31, 2007.  Effective June 30, 1999, we
        reported a capital lease asset and related  obligation of  approximately
        $7.5 million on our balance sheet.

        Since  December 31, 1998,  we have added $45.2  million in capital lease
        obligations,  including the $7.5 million  discussed above.  We have made
        payments  totaling  $12.8  million,  leaving a balance of $51 million of
        capital lease  obligations at September 30, 1999, of which $15.4 million
        is presented in the current  portion of long-term debt and $35.6 million
        in long-term debt.


   OTHER MATTERS

        YEAR 2000

        The Year  2000  (Y2K)  issue  stems  from the fact  that  many  computer
        programs  worldwide  use two  digits,  rather  than four,  to define the
        applicable  year.  For instance,  many  computers on January 1, 2000 may
        assume that 01/01/00 is the first day of the year 1900 rather than 2000.
        Massive system failures may occur globally if this issue is not properly
        addressed.  We have  developed  a Y2K  Initiative  (the  Initiative)  to
        mitigate  the impact of the Y2K issue for our  internal  systems and the
        systems that we rely on indirectly from third parties.

                                         -12-

<PAGE>





        Under the Initiative, we have formed a cross-functional Y2K project team
        that  reports  to the  Chief  Information  Officer  (CIO).  The  CIO has
        authority to establish methodologies,  approve expenditures, and marshal
        additional  resources  as  necessary.  A  full-time  consultant  project
        manager,  who reports  regularly to the CIO,  manages the Initiative and
        oversees  the project  team.  The CIO is  responsible  for  researching,
        planning, executing, implementing and completing the Initiative.

        The three functional categories evaluated in the Initiative include:

     *  Communications Network - software and electronics that process voice and
        data information  relating to our communications  operations,  including
        transmission equipment,

     *  Information  Technology  (IT) - consists of all  internal  hardware  and
        software used to support our financial  and  administrative  operations,
        and

     *  Facilities  -  consists  of all  systems  necessary  to  run  an  office
        including security systems,  fire suppression,  generators,  rectifiers,
        batteries and components  with embedded  technology at our  headquarters
        and leased facilities.

        The  Initiative is composed of three primary phases that we are applying
        to each of the three functional categories.

     *  Phase I - Inventory and assessment

           Inventory and assessment is the process of  identifying  all relevant
           systems and information sources company-wide, performing a risk-based
           analysis of each,  categorizing  each risk according to its impact on
           our  mission,   and  making  a  preliminary   determination   of  Y2K
           compliance. Phase I is complete for all functional categories.

     *  Phase II - Remediation

           Remediation  is the  process  of  making  changes  to  the  hardware,
           software or services  in order to become Y2K  compliant.  Phase II is
           complete for all functional categories.

     *  Phase III - Testing, contingency planning and certification

           Testing is the process of verifying  that systems and processes  will
           continue to operate properly in the Year 2000 and beyond.  Testing is
           required for all mission-critical systems and information sources. We
           have  performed  steps to test  hardware  and  software  and reviewed
           testing  documentation  prepared  by vendors  or  service  providers.
           Testing is complete for all functional categories.

           Contingency planning is required for all mission-critical systems and
           information  sources. The contingency plan will include an evaluation
           of the system or information  source business risk,  vulnerabilities,
           contingency steps and containment  measures.  Contingency planning is
           complete for all functional categories.

                                          -13-

<PAGE>




           Year 2000  certification  is achieved  when all Year 2000  milestones
           have been successfully completed and approved by the project manager.
           Certification   is   substantially   complete   for  all   functional
           categories.

        We anticipate the cost to address the Y2K issue to be approximately $2.3
        million.  This cost estimate is based on current information,  and there
        are no guarantees  that costs will not be higher than we anticipate.  As
        of September 30, 1999, we had incurred $1.7 million of Y2K costs.

        Within  the  Communications  Network,  we  depend  on the ILEC and other
        carriers  to  provide  systems  that  are Y2K  compliant  to allow us to
        connect   with  some  of  our   customers.   Within  IT,  we  depend  on
        appropriately skilled internal and external experts to develop software.
        Within Facilities, we depend on utility suppliers to provide services to
        allow our network to continue to operate.  If we are not Y2K  compliant,
        the  worst  case  scenario  would  be a  disruption  of  service  or the
        inability to bill or collect  revenues from our  customers,  which could
        have a material adverse effect on our business. However, we believe this
        is unlikely and that we will  succeed in  mitigating  Y2K issues.  As an
        added  precaution,  we have formed a Y2K Rapid Response Team composed of
        experts from key  operational  departments  that will be able to quickly
        respond in the event of Y2K failures.


        ELECTION OF RUDY GRAF AS VICE CHAIRMAN AND CHIEF EXECUTIVE OFFICER

        On October 8, 1999,  our Board of Directors  appointed Rudy Graf as Vice
        Chairman  and  Chief  Executive  Officer.  Mr.  Graf,  who has also been
        appointed  President and Chief Operating  Officer of Citizens,  succeeds
        Daryl A.  Ferguson,  who has retired.  Mr. Graf was  President and Chief
        Operating  Officer of Centennial  Cellular Corp., a provider of wireless
        telephone  services  throughout  the United  States and Puerto Rico from
        1991 to 1999.  Prior to 1991,  Mr. Graf was Regional  Vice  President of
        Metromedia Telecommunications.  Before that, he spent 13 years with AT&T
        in a variety of  management  positions.  Mr. Graf earned a B.A. from St.
        Thomas University in Miami, Florida.


        RECIPROCAL COMPENSATION

        We recognized  reciprocal  compensation  revenues for the three and nine
        months  ended  September  30, 1999 of $10.1  million and $24.8  million,
        respectively.  Net trade  accounts  receivable  relating  to  reciprocal
        compensation  at September 30, 1999 totaled $13.5  million,  compared to
        $10.4 million at December 31, 1998.

        We have a process  in place to  monitor  regulatory  matters  related to
        reciprocal  compensation  specifically  for us as well as  others in the
        industry. Using the information available, we review revenue recognition
        on reciprocal compensation and adjust revenues as we deem appropriate.


        On February 25, 1999, the FCC issued a Declaratory  Ruling and Notice of
        Proposed  Rulemaking  that  categorized  calls  terminated  to  ISPs  as
        "largely"   interstate  in  nature,  which  could  have  the  effect  of
        precluding these calls from reciprocal  compensation  charges.  However,
        the ruling  stated that ILECs are bound by the existing  interconnection
        agreements and the state  decisions that have defined them. The FCC gave
        the states authority to interpret existing  interconnection  agreements.
        Since the FCC order,  Oregon,  Washington,  California  and Arizona have
        ruled  that  calls   terminated  to  ISPs  should  be  included  in  the
        calculation to determine reciprocal compensation.

        Our Washington  and Oregon  interconnection  agreements  with GTE are in
        effect and have  generated both revenue and payments from GTE. These two
        agreements are scheduled to expire during the second quarter 2001.

                                      -14-



<PAGE>



        Our  interconnection  agreements with US West in Oregon,  Utah and Idaho
        expired  on  September  30,  1999.  As a  result,  we chose to opt-in to
        interconnection  agreements  that  US  West  currently  has  with  other
        telecommunications  companies  in  those  states.  However,  US  West is
        disputing our right to bill reciprocal compensation for calls terminated
        to ISPs  under  these  agreements.  US West is also  claiming  that  our
        interconnection   agreements  in  Washington  and  Arizona   expired  on
        September 30, 1999. We believe that these agreements  contain provisions
        that extend the term of the agreements until new agreements are reached.

        We believe  that the above  factors may reduce our ability to  recognize
        reciprocal  compensation  revenues in the fourth  quarter  from  current
        levels.


        EXIT COSTS

        Refer to Note 2 in Part I, Item 1, of this  report for a  discussion  of
        the exit costs we incurred in the third quarter 1999.

B.    RESULTS OF OPERATIONS

      REVENUES

        Revenues increased in the three and nine months ended September 30, 1999
        over the respective  periods in 1998 due to the expansion of our network
        and customer  base.  Since  September  30, 1998,  we completed our fiber
        network in Spokane, Washington, where we are providing our full suite of
        services. We also added 627 customers and 97 building  connections,  43%
        and 14% increases, respectively, since September 30, 1998.
<TABLE>
<CAPTION>

                          For the three months              For the nine months
                           ended September 30,              ended September 30,
                         ------------------------        -------------------------
                                                %                                 %
  ($ IN THOUSANDS)        1999      1998      Incr.         1999     1998       Incr.
                         -------   -------   ------       -------  -------     ------
<S>                    <C>       <C>          <C>      <C>         <C>          <C>
  Network services..   $ 14,024  $  9,009      56%      $  37,431   $ 26,487      41%
  Local telephone
  services..........     22,313     9,987     123%         55,221     23,780     132%
  Long distance
  services..........      4,812     2,512      92%         22,587      6,233     262%
  Data services.....      7,453     4,156      79%         17,674     10,664      66%
                         -------    -------   ------      -------   --------    ------
  Total.........       $ 48,602  $ 25,664      89%      $ 132,913   $ 67,164      98%
                         =======   =======                =======    ========
</TABLE>

        NETWORK SERVICES
        Network  services  revenues  increased in both the three and nine months
        ended  September 30, 1999 over the respective  periods in 1998 primarily
        due to sale of additional circuits to new and existing customers.

        LOCAL TELEPHONE SERVICES
        Local telephone  services revenues  increased in both the three and nine
        months ended  September  30, 1999 over the  respective  periods in 1998.
        Included in this category were reciprocal  compensation revenues,  which
        increased  $5.8 million,  or 135%,  and $14.6  million,  or 142%, in the
        three and nine months ended September 30, 1999,  respectively,  over the
        same  periods in 1998.  Our ISDN PRI  product  revenues  increased  $3.3
        million,  or 117%,  and $9.0  million,  or 142%,  in the  three and nine
        months ended September 30, 1999, respectively,  over the same periods in
        1998.  Over the same periods,  local dial tone services  increased  $3.2
        million, or 112%, and $7.8 million, or 109%, respectively.

                                     -15-

<PAGE>





        The increases were the result of an increase in access line  equivalents
        installed of 79,776 or 127%,  from  September  30, 1998 to September 30,
        1999. Also, we began recognizing  reciprocal  compensation revenues from
        US West in Idaho and GTE in  Washington  in the second  quarter of 1999,
        and from GTE in Oregon in the third quarter of 1999. The ISDN PRI growth
        has largely come from sales to Internet Service Providers.

        LONG DISTANCE SERVICES
        Long  distance  services  revenues  increased in both the three and nine
        months ended September 30, 1999 over the respective  periods in 1998 due
        to increased revenues from our retail,  wholesale, and prepaid services.
        The increases were due to large increases in the minutes  processed as a
        result of adding new customers and expanding the services we provide for
        existing customers.  We reduced sales efforts on our prepaid programs by
        eliminating or modifying a number of programs in the third quarter 1999.
        These changes caused a 72%, or $4.0 million decrease in prepaid services
        revenue from the second quarter 1999. Refer to additional  discussion in
        Note 2 of Part I, Item 1.

        DATA SERVICES
        Data services revenues increased in both the three and nine months ended
        September 30, 1999 over the respective  periods in 1998 primarily due to
        strong customer  demand for these  products.  Revenues from our Internet
        services product increased $1.8 million,  or 130%, and $4.5 million,  or
        131%,  respectively.  Additionally,  our frame  relay  product  revenues
        increased  by  $.2  million,   or  10%,  and  $1.5   million,   or  38%,
        respectively.  Data services  included $1.7 million revenue in the three
        months ended  September 30, 1999 from an 18-month  take-or-pay  contract
        with a significant customer.

      OPERATING EXPENSES

        Operating  expenses  increased  in both the three and nine months  ended
        September 30, 1999 over the  respective  periods in 1998.  This increase
        was due to our growth in  network  and  customer  base as  reflected  in
        revenues  as well as  increased  long  distance  network  access  costs,
        expansion  of our sales  force and the costs  incurred  to  support  our
        national data expansion.
<TABLE>
<CAPTION>

                              For the three months           For the nine months
                               ended September 30,           ended September 30,
                             ------------------------     -------------------------
     ($ IN THOUSANDS)                             %                                %
                              1999      1998      Incr.    1999       1998       Incr.
                             -------   -------   ------   -------    -------    ------
<S>                        <C>       <C>         <C>    <C>        <C>         <C>
     Network access.....   $ 14,719  $ 12,317    20%    $  63,645  $  31,389    103%
     Operations.........     10,732     7,308    47%       29,399     19,082     54%
     Selling, general
     and administrative....  32,017    21,243    51%       88,231     54,206     63%
     Depreciation and
       amortization........   9,807     4,090   140%       24,951     11,754    112%
                             -------   -------  ----      -------    -------    ------
     Total                 $ 67,275  $ 44,958    50%    $ 206,226  $ 116,431     77%
                             =======   =======            =======    =======
</TABLE>

        NETWORK ACCESS
        Network access  expenses  include resold product  expenses.  The primary
        components are usage-based  charges for carrying and terminating traffic
        on another carrier's network.

        Network  access  expenses  increased  in both the three and nine  months
        ended  September  30,  1999 over the  respective  periods in 1998 due to
        overall revenue growth and an increase in long distance costs related to
        our prepaid services  programs.  We have also incurred expenses relating
        to our  national  data  expansion  before we have  been able to  realize
        significant  related  revenues.  These  increases  were  offset  by $3.8
        million of vendor credits received during the third quarter.

                                         -16-


<PAGE>

        OPERATIONS
        Operations  expenses  consist of costs  related to providing  facilities
        based network and enhanced  communications  services  other than network
        access costs. The primary  components of these expenses are right-of-way
        and  telecommunications  equipment  leases  as  well as  operations  and
        engineering personnel costs.

        Operations  expenses  increased  in both the three and nine months ended
        September 30, 1999 over the respective  periods in 1998 due to increases
        in payroll and related  expenses  to support  the  expanded  delivery of
        services, and an expanded customer service organization.

        SELLING, GENERAL AND ADMINISTRATIVE
        Selling,  general  and  administrative  expenses  include all direct and
        indirect sales channel expenses and commissions,  as well as all general
        and administrative expenses.

        Selling, general and administrative expenses increased in both the three
        and nine months ended September 30, 1999 over the respective  periods in
        1998 due to  increases  in payroll and  related  expenses to support the
        delivery of services in existing and new markets  including the national
        data expansion.  We incurred exit costs of $1.5 million during the third
        quarter related to our announced plans to close six retail sales offices
        in the eastern  United  States and  eliminate the prepaid phone card and
        videoconferencing  products  (refer  to Note 2 in Part  I,  Item 1,  for
        further discussion).

        DEPRECIATION AND AMORTIZATION
        Depreciation   and  amortization   expenses   include   depreciation  of
        communications  network  assets  including  fiber-optic  cable,  network
        electronics, network switching and network data equipment.

        Depreciation  and amortization  expense  increased in both the three and
        nine months ended September 30, 1999 over the respective periods in 1998
        due  to  higher   plant  in  service   balances   for  newly   completed
        communications network facilities and electronics.

      INTEREST EXPENSE AND OTHER
<TABLE>
<CAPTION>

                               For the three months      For the nine months
                                ended September 30,      ended September 30,
                               ----------------------  ------------------------
                                                  %                         %
        ($ IN THOUSANDS)        1999    1998    Incr.   1999      1998    Incr.
                              -------  ------  -----   ------    ------  ------
<S>                           <C>      <C>      <C>    <C>                <C>
        Interest expense and
         other..........      $ 11,424 $ 2,742  317%   $ 24,271  $ 4,953  390%
</TABLE>


        Interest  expense  increased  in both the  three and nine  months  ended
        September 30, 1999 over the respective  periods in 1998 primarily due to
        higher levels of long-term debt outstanding. At September 30, 1999, $561
        million of long-term debt was  outstanding,  compared to $216 million at
        September 30, 1998.

                                         -17-

<PAGE>





      INCOME TAX EXPENSE (BENEFIT)
<TABLE>
<CAPTION>

                                           For the three months       For the nine months
                                            ended September 30,       ended September 30,
                                          ------------------------  ------------------------
                                                              %                         %
                                                            Incr./                    Incr./
        ($ IN THOUSANDS)                  1999     1998    (Decr.)  1999     1998    (Decr.)
                                         ------  -------  -------  ------  -------  -------
<S>                                      <C>     <C>               <C>     <C>
        Income tax expense (benefit)..   $ 277   $(3,631)   N/A    $ 947   $(9,012)   N/A
</TABLE>

        In  1998,  we were  able to  recognize  a tax  benefit  for our tax loss
        carryforwards  to a limited extent of our deferred tax  liabilities.  In
        1999,  the  benefit of our tax loss  carryforwards  is not able to fully
        offset the  deferred  tax expense  associated  with  current year timing
        differences.

      CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
<TABLE>
<CAPTION>

                                        For the three months        For the nine months
                                        ended September 30,        ended September 30,
                                       ------------------------   ------------------------
                                                            %                        %
                                                          Incr./                    Incr./
        ($ IN THOUSANDS)                1999     1998    (Decr.)   1999    1998    (Decr.)
                                       ------   ------   ------   ------  -------  -------
<S>                                    <C>      <C>        <C>    <C>     <C>        <C>
        Cumulative effect of change
         in acconting principle......  $ --     $ --       N/A    $ --    $ 2,817    N/A
</TABLE>

        Cumulative  effect of  change  in  accounting  principle  represented  a
        write-off of the unamortized  portion of deferred  start-up costs due to
        our adoption of AICPA  Statement  of Position  98-5,  "Reporting  on the
        costs of Start-Up Activities" in 1998.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We reduced our  interest  rate risk by issuing $325  million,  five-year
        senior  unsecured  notes in April 1999 that are  guaranteed by Citizens.
        The  notes  have a fixed  annual  interest  rate of 6.05%  and an annual
        guarantee  fee of 4.0%.  We used the net  proceeds  from the issuance to
        repay  outstanding  borrowings  under  our  floating  rate  bank  credit
        facility.

                                         -18-

<PAGE>




PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         In the third  quarter,  we resolved the legal  proceedings  and related
         arbitration  against  US West as  described  in Item 3 of our 1998 Form
         10-K. US West has entered into an 18-month service contract to purchase
         telecommunications services from us.

         In  accordance  with the terms of our contract  with  Bonneville  Power
         Administration, we requested arbitration to resolve a dispute regarding
         the exclusive use of our long-haul  facilities  connecting  Portland to
         Seattle and Seattle to Spokane.  We filed our Notice of Claim or Demand
         for  Arbitration  on April 19, 1999. It is pending before an arbitrator
         of the American Arbitration Association.

         We are party to routine  litigation  arising  in the  normal  course of
         business.  We do  not  expect  these  matters,  individually  or in the
         aggregate, to have a material adverse effect on our financial position,
         results  of  operations  or cash  flows.  We are also  party to various
         proceedings  before state PUCs. These  proceedings  typically relate to
         authority to operate in a state and regulatory arbitration  proceedings
         concerning our interconnection  agreements.  See "Part I., Management's
         Discussion   and  Analysis  of  Financial   Condition  and  Results  of
         Operations  -  Liquidity  and  Capital  Resources  -  Other  Matters  -
         Reciprocal Compensation".

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.

ITEM 5. OTHER INFORMATION

         None.

                                      -19-
<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         a) The exhibits below are filed as part of this report:

        EXHIBIT   DESCRIPTION
          NO.

         27.1     Financial  Data  Schedule  for the nine months ended September
                  30, 1999.

         b) Reports on Form 8-K

         On August 3, 1999, we filed a Current Report on Form 8-K, under Item 5,
         "Other Events" containing second quarter 1999 financial information. On
         August 24, 1999, we filed a Current  Report on Form 8-K,  under Item 5,
         "Other Events" to make available a press release dated August 24, 1999,
         announcing  our plans to eliminate  our prepaid  calling card and video
         conferencing  products. On September 9, 1999, we filed a Current Report
         on Form 8-K,  under Item 5,  "Other  Events" to make  available a press
         release  dated  September 1, 1999,  announcing a  consolidation  of our
         national retail sales efforts.

                                         -20-


<PAGE>



SIGNATURE



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


         ELECTRIC LIGHTWAVE, INC.
         (Registrant)

         By:  /S/ KERRY D. REA
                Kerry D. Rea
                Vice President and Controller





         November 2, 1999


                                      -21-



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