<PAGE>

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

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

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

                       For the period ended March 31, 2001

                                       or

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ____________to ______________

                       Commission File Number - 000-23269

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

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

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

                                 (914) 421-6700
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )

The number of shares outstanding of the registrant's common stock as of May 7,
2001 was:

                 Class         Number of Shares
                 -----         ----------------
                   A            540,380,442
                   B             67,538,544


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

<PAGE>




                  METROMEDIA FIBER NETWORK, INC. & SUBSIDIARIES
                          QUARTERLY REPORT ON FORM 10-Q
                 FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2001


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

    ITEM NO.      DESCRIPTION                                                                                PAGE

                         PART I - FINANCIAL INFORMATION

<S>               <C>                                                                                        <C>
    Item 1.       Financial Statements

                  Consolidated Statements of Operations for the Three Month Periods
                  Ended March 31, 2001 and 2000..............................................                  1

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

                  Consolidated Statements of Cash Flows for the Three Month Periods Ended
                  March 31, 2001 and 2000....................................................                  3

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

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

    Item 3.       Quantitative and Qualitative Disclosures about Market Risk.................                 17

                           PART II - OTHER INFORMATION

    Item 1.       Legal Proceedings..........................................................                 18

    Item 2.       Changes in Securities and Use of Proceeds..................................                 19

    Item 3.       Defaults Upon Senior Securities............................................                 19

    Item 4.       Submission of Matters to a Vote of Security Holders........................                 19

    Item 5.       Other Information..........................................................                 19

    Item 6.       Exhibits and Reports on Form 8-K...........................................                 19
</TABLE>


<PAGE>

                         PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>

                                                                                      THREE MONTHS ENDED
                                                                                            MARCH 31,
                                                                                    ------------------------
                                                                                      2001            2000
                                                                                    ---------      ---------
<S>                                                                                 <C>            <C>
                 Revenue ......................................................     $  76,976      $  31,921

                 Expenses:
                  Cost of sales (excluding non-cash compensation of $3,345)....        65,152         35,576
                  Selling, general and administrative,
                       (excluding non-cash compensation of $9,664).............        62,181         27,660
                  Non-cash compensation .......................................        13,009             --
                  Depreciation and amortization ...............................        71,433         32,489
                                                                                    ---------      ---------
                 Loss from operations .........................................      (134,799)       (63,804)
                 Other income (expenses):
                  Interest and other income ...................................        27,761         25,057
                  Interest expense ............................................       (41,141)       (45,180)
                  Loss from joint ventures ....................................          (154)        (1,233)
                                                                                    ---------      ---------
                 Net loss .....................................................      (148,333)       (85,160)
                                                                                    =========      =========

                 Net loss per share, basic ....................................     $   (0.26)     $   (0.16)
                                                                                    =========      =========

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

                 Weighted average number of shares
                  outstanding, basic ..........................................       572,361        533,410
                                                                                    =========      =========

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

                             SEE ACCOMPANYING NOTES


3
<PAGE>

                  METROMEDIA FIBER NETWORK, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (IN 000'S, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                                                       MARCH 31,       DECEMBER 31,
                                                                                                         2001              2000
                                                                                                      -----------      -----------
                                                                                                      (UNAUDITED)
<S>                                                                                                   <C>              <C>
                              ASSETS
Current assets:
    Cash and cash equivalents ...................................................................     $   453,347      $ 1,148,888
    Marketable securities .......................................................................         100,944          192,349
    Accounts receivable .........................................................................         116,293          111,157
    Prepaid expenses and other current assets ...................................................          47,926           52,993
                                                                                                      -----------      -----------
         Total current assets ...................................................................         718,510        1,505,387
Fiber optic transmission network and related equipment, net .....................................       3,416,867        2,958,096
Property and equipment, net .....................................................................          75,840           43,875
Restricted cash .................................................................................          46,321           61,204
Investment in/advances to joint ventures ........................................................           7,400           10,270
Other assets ....................................................................................          99,594           94,749
Intangibles, net ................................................................................       2,592,177        1,578,750
                                                                                                      -----------      -----------
         Total assets ...........................................................................     $ 6,956,709      $ 6,252,331
                                                                                                      ===========      ===========

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable ............................................................................     $   249,661      $   302,300
    Accrued expenses ............................................................................         457,703          551,507
    Deferred revenue, current portion ...........................................................          41,508           43,664
    Capital lease obligations and notes payable, current portion ................................           4,118            8,981
                                                                                                      -----------      -----------
         Total current liabilities ..............................................................         752,990          906,452
Senior notes payable ............................................................................       1,619,675        1,635,400
Convertible subordinated notes payable ..........................................................         975,281          975,281
Capital lease obligations and notes payable .....................................................          29,259           31,036
Deferred revenue ................................................................................         448,920          439,988
Other long term liabilities .....................................................................          21,214           18,949

Commitments and contingencies (see notes)

Stockholders' equity:
    Class A common stock, $.01 par value; 2,404,031,240
       shares authorized; 538,541,430 and 484,518,343
       shares issued and outstanding, respectively ..............................................           5,385            4,845
    Class B common stock, $.01 par value; 522,254,782
       shares authorized; 67,538,544 shares
       issued and outstanding ...................................................................             676              676
Additional paid-in capital ......................................................................       4,176,282        2,814,480
Unearned stock-based compensation ...............................................................        (320,065)              --
Accumulated deficit .............................................................................        (712,749)        (564,416)
Cumulative comprehensive loss ...................................................................         (40,159)         (10,360)
                                                                                                      -----------      -----------
         Total stockholders' equity .............................................................       3,109,370        2,245,225
                                                                                                      -----------      -----------
         Total liabilities and stockholders' equity .............................................     $ 6,956,709      $ 6,252,331
                                                                                                      ===========      ===========
</TABLE>

                             SEE ACCOMPANYING NOTES


4
<PAGE>

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

<TABLE>
<CAPTION>

                                                                                      THREE MONTHS ENDED
                                                                                           MARCH 31,
                                                                                 ----------------------------
                                                                                     2001            2000
                                                                                 -----------      -----------
<S>                                                                              <C>              <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net loss ...................................................................     $  (148,333)     $   (85,160)
Adjustments to reconcile net loss to net cash
    provided by operating activities:
         Depreciation ......................................................          34,784           12,514
         Amortization ......................................................          36,649           19,975
         Foreign currency gain .............................................         (15,708)              --
         Amortization of deferred financing costs ..........................           1,587            1,420
         Stocks, options and warrants issued for services ..................             166               --
         Non-cash compensation .............................................          13,009               --
         Loss from joint ventures ..........................................             154            1,233
CHANGE IN OPERATING ASSETS AND LIABILITIES:
         Accounts receivable ...............................................           4,630          (11,521)
         Accounts payable and accrued expenses .............................          56,048           53,431
         Deferred revenue ..................................................           6,776           16,986
         Other .............................................................          25,858              515
                                                                                 -----------      -----------
    Net cash provided by operating activities ..............................          15,620            9,393
                                                                                 -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales and purchases of marketable securities ...............................          91,405          (90,011)
Capital expenditures on fiber optic transmission
    network and related equipment ..........................................        (710,983)        (342,332)
Investment in/advances to joint ventures ...................................             459          (15,432)
Capital expenditures on property and equipment .............................         (17,616)          (7,370)
Business acquisitions (net of cash acquired)  ..............................         (34,882)             515
                                                                                 -----------      -----------
    Net cash used in investing activities ..................................        (671,617)        (454,630)
                                                                                 -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock .....................................           8,000          737,851
Purchases and sales of pledged securities, net .............................              --             (352)
Restricted cash secured by letter of credit ................................          14,415           12,838
Repayment of notes payable .................................................         (14,649)          (2,148)
Proceeds from issuance of notes payable ....................................              --          975,281
                                                                                 -----------      -----------
    Net cash provided by financing activities ..............................           7,766        1,723,470
                                                                                 -----------      -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH ....................................         (47,310)          (4,795)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .......................        (695,541)       1,273,438
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD ..............................       1,148,888        1,262,391
                                                                                 -----------      -----------
CASH AND CASH EQUIVALENTS-END OF PERIOD ....................................     $   453,347      $ 2,535,829
                                                                                 ===========      ===========
Supplemental information:
    Interest paid ..........................................................     $    30,468      $       592
                                                                                 ===========      ===========
    Income taxes paid ......................................................     $        --      $        --
                                                                                 ===========      ===========
    Accrued capital expenditures ...........................................     $   440,323      $   130,742
                                                                                 ===========      ===========
</TABLE>

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

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

                             SEE ACCOMPANYING NOTES


5
<PAGE>




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

BASIS OF PRESENTATION

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

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


DESCRIPTION OF BUSINESS

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


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


MANAGEMENT ESTIMATES

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

FIBER OPTIC TRANSMISSION NETWORK AND RELATED EQUIPMENT

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


6
<PAGE>

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

RECOGNITION OF REVENUE

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

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

DEFERRED REVENUE

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

COMPREHENSIVE LOSS

      SFAS No. 130 "Reporting Comprehensive Income (Loss)" establishes rules for
the reporting of comprehensive income and its components. Comprehensive income
(loss) consists of net income (loss), unrealized loss on an investment and
foreign currency translation adjustments. The comprehensive loss for the three
months ending March 31, 2001 and 2000 was approximately $177.6 million and $90
million, respectively.

SEGMENT INFORMATION

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

      As of and for the three months ended March 31, 2001 and 2000, in excess of
90% of the Company's assets were located in the United States and the Company
derived substantially all of its revenue from businesses located in the United
States.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

      In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives
and Hedging Activities," which establishes accounting and reporting standards
for derivative instruments and hedging activities. This standard is effective
for all fiscal quarters of fiscal years beginning after December 15, 1999. The
adoption of SFAS No. 133 did not have an impact on the results of operations,
financial position or cash flows.





7
<PAGE>

2.  FIBER OPTIC TRANSMISSION NETWORK AND RELATED EQUIPMENT

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

<TABLE>
<CAPTION>

                                               MARCH 31,      DECEMBER 31,
                                                 2001             2000
                                             -----------      -----------
<S>                                          <C>              <C>
     Fiber optic network                     $ 1,105,287      $ 1,062,982
     Data Centers                                340,008          337,146
     Telecommunication equipment & other         217,889          206,051
     Construction in progress                  1,896,509        1,464,190
                                             -----------      -----------
         Total Network                         3,559,693        3,070,369
     Less: accumulated depreciation             (142,826)        (112,273)
                                             -----------      -----------
                                             $ 3,416,867      $ 2,958,096
                                             ===========      ===========
</TABLE>


      Construction in progress includes amounts incurred in the Company's
expansion of its network and data centers. These amounts include fiber optic
cable and other materials, engineering and other layout costs, fiber optic cable
installation costs and other network assets held under capital leases.
Construction in progress also includes payments for rights of way for the
underlying sections of the network build. During the three months ended March
31, 2001 and 2000, $17.7 million and $3.3 million of interest expense was
capitalized, respectively. The Company's commitment to purchase materials and
contracts for the construction of fiber optic network systems was
approximately $838,000 as of March 31, 2001.

3.  INVESTMENT IN/ADVANCES TO JOINT VENTURES

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

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

<TABLE>
<CAPTION>

                                      MARCH 31,      DECEMBER 31,     OWNERSHIP
                                        2001            2000              %
                                   --------------  ---------------   -----------
<S>                                <C>             <C>                    <C>

      Abovenet France              $          248  $           248        50%
      Abovenet Japan                           --            2,285        (1)
      Abovenet Taiwan                       1,061            1,579        50%
      ION                                   6,083            6,150        50%
      Other                                     8                8        --
                                   --------------  ---------------
                                   $        7,400  $        10,270
                                   ==============  ===============
</TABLE>

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


8
<PAGE>

4. ACQUISITIONS

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

      On February 8, 2001, the Company acquired all the outstanding common stock
of SiteSmith for a total purchase price, paid in Company class A common stock,
of approximately $1.0 billion. The holders of SiteSmith common stock, stock
options and warrants received, in exchange for those securities, 1.3404 shares
of the Company's class A common stock, stock options and warrants, respectively.
The excess of purchase price over the fair values of the net assets acquired was
approximately $1.0 billion and has been recorded as goodwill, which is being
amortized over ten years.

      In addition, in connection with the issuance of unvested stock options and
restricted shares of class A common stock, the Company recorded approximately
$331.2 million of deferred compensation expense, which will be amortized over
the remaining vesting periods of three to four years.

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

      In September 2000, the Company purchased the remaining 50% interest in its
50% owned joint venture in Austria, AboveNet Austria GMBH, for approximately
$2.0 million.

      In June 2000, the Company purchased an additional 37.5% interest in its
50% owned joint venture in Germany, AboveNet Germany GMBH, for approximately
$1.4 million. In October 2000, the remaining 12.5% was purchased for
approximately $500,000.

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

      In February 2000, the Company purchased the remaining 60% of its 40% owned
joint venture in the United Kingdom, AboveNet UK Limited, for shares of the
Company's stock with a market value of $10.0 million. The excess of purchase
price over the fair values of net assets acquired was approximately $10.4
million and has been recorded as goodwill.

      On January 19, 2000, the Company completed the acquisition of MIBH Inc., a
network outsourcing provider offering full-service management of business
Internet connectivity solutions for approximately $52.3 million in cash and
stock. The excess of purchase price over the fair values of net assets acquired
was approximately $51.8 million and has been recorded as goodwill. The
shareholders of MIBH, a privately held company, received an aggregate of
1,884,418 shares of Metromedia Fiber Network class A common stock having a fair
market value of approximately $49.3 million and $3.0 million in cash.

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



9
<PAGE>

presented because the effects were not significant.













10
<PAGE>

4. ACQUISITIONS (CONTINUED)

<TABLE>
<CAPTION>

                                                  MARCH 31,
                                 --------------------------------------------
                                        2001                    2000
                                 --------------------    --------------------
<S>                                           <C>                     <C>
Revenue                                       79,890                  33,792
Net Loss                                    (196,337)                (92,912)
Loss per share, basic                          (0.34)                  (0.16)
</TABLE>

5. RELATED PARTY TRANSACTIONS

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

      At March 31, 2001, the Company has a note receivable from an officer for
approximately $980,000, which is recorded in other receivables in the
accompanying balance sheet.


6.  DEBT

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

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

      The Company has recently entered into a commitment letter with Citicorp
USA, Inc. and Salomon Smith Barney, which provides for senior credit
facilities in the aggregate amount of $350.0 million. The commitment letter
provides for a revolving credit facility of up to $150.0 million and a term
loan facility of up to $200.0 million The commitment of Citicorp and
Salomon Smith Barney, which is subject to customary conditions, will expire on
June 30, 2001 (extended from May 15, 2001) if the Company has not entered into
definitive documentation for the senior credit facilities by then.

      Borrowings under the senior credit facilities will bear interest at rates
which will depend on market conditions at the time of closing. The Company's
obligations under the senior credit facilities will be guaranteed by its
existing and future subsidiaries and will be secured by all of its assets and
assets of each guarantor, to the extent permitted in the trust indenture
governing the Company's outstanding senior notes. The senior credit facilities
will contain customary provisions relating to prepayments, representations and
warranties, covenants and events of default. Borrowings under the senior credit
facilities will be


11
<PAGE>

subject to customary conditions.


7. VERIZON INVESTMENT

      On March 6, 2000, the Company closed a securities purchase agreement with
Verizon, under which Verizon purchased approximately 51.1 million newly issued
shares of MFN class A common stock at a purchase price of $14.00 per share and a
convertible subordinated note of approximately $975.3 million, which is
convertible into shares of MFN class A common stock at a conversion price of
$17.00 per share (see Note 6). Assuming conversion of the convertible
subordinated notes, this investment represents approximately 18.0% of the
Company's outstanding shares.


8.  CONTINGENCIES

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

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

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

      As of March 31, 2001, the Company was preparing a response to a Rule
Nisi (show cause) action issued by the Georgia Public Service Commission
("GPSC") as a result of certain of its subcontractors causing damage to
underground utility facilities.

12
<PAGE>

Subsequent to March 31, 2001, the Company and GPSC entered into an agreement
settling the matter.


     Primarily because the Company is in the process of integrating
acquisitions, the Company is terminating employees in some of its locations.


13
<PAGE>

8.  CONTINGENCIES (CONTINUED)

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

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












14
<PAGE>

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


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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

   o  availability, terms and deployment of capital;

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

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

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

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

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


GENERAL

      We provide dedicated fiber optic infrastructure, high-bandwidth internet
connectivity and managed internet infrastructure services for our communications
intensive customers. We are a facilities-based provider of end-to-end optical
solutions that


15
<PAGE>

offer virtually unlimited, unmetered bandwidth at a fixed cost to our
communications carrier, corporate and government customers in the United States
and Europe. Through our AboveNet Communications, Inc. subsidiary, we provide
internet infrastructure to our customers. SiteSmith provides a comprehensive
internet infrastructure management solution that includes design and
architecture, hardware and software, installation, co-location and network
connectivity and ongoing management. The combined company facilitates the growth
of e-commerce and advanced internet and communications applications by
delivering secure, reliable and scaleable optical networks and IP services to
internet content and service providers, communications carriers and enterprise
users worldwide.

      As of March 31, 2001, we have 2,349 employees.

      We are expanding our presence to approximately 50 cities in the United
States and 17 international cities. To date, we have 27 cities operational, 33
cities currently under construction, and the balance in the engineering phase.

      Our existing intra-city networks consist of approximately 1,256,000 fiber
miles covering in excess of 2,300 route miles in the United States. Our
inter-city network consists of approximately 281,000 fiber miles primarily
covering the 255 route-mile network that we have built between New York City and
Washington, D.C. We have also built or contracted to acquire a nationwide dark
fiber network linking our intra-city networks.

      We are constructing 16 intra-city networks throughout Europe. Our
existing intra-city international network consists of approximately 144,000
fiber miles covering approximately 397 route miles. Our inter-city
international network consists of approximately 8,000 fiber miles on the
Circe network, which connects a number of European markets. Additionally, we
have entered into an agreement with Carrier 1 Holdings, Ltd. and Viatel,
Inc., to jointly build a dark fiber inter-city network between selected
cities throughout Germany. Once completed, our German inter-city network will
consist of approximately 320,000 fiber miles covering in excess of 1,450
route miles that will connect 14 of Germany's largest cities such as Hamburg,
Berlin, Munich, Frankfurt and Dusseldorf. Viatel has recently filed for
protection under Chapter 11 of the United States Bankruptcy Code. We cannot
yet estimate the effect of this filing on either out joint build or on our
results of operations and financial position. Separately, we have also
entered into a contract to acquire rights to dark fiber network facilities in
Toronto, Canada.

      On October 7, 1999, we entered into a securities purchase agreement with
Verizon, under which Verizon purchased approximately 51.1 million newly issued
shares of our class A common stock at a purchase price of $14.00 per share and a
convertible subordinated note of approximately $975.3 million, which is
convertible into shares of our class A common stock at a conversion price of
$17.00 per share. This transaction closed on March 6, 2000. Assuming the
conversion of the convertible subordinated note, this investment would represent
approximately 18.0% of our outstanding shares.

      On February 8, 2001, we completed a merger with SiteSmith pursuant to an
agreement and Plan of Merger, dated as of October 9, 2000. We acquired all of
the outstanding shares of SiteSmith for a total purchase price, paid in shares
of our class A common stock, of approximately $1.0 billion. The holders of
SiteSmith common stock, stock options and warrants received 1.3404 shares our
class A common stock, stock options and warrants, respectively. The Company has
recorded the acquisition using the purchase method of accounting. SiteSmith is a
provider of comprehensive, internet infrastructure management services. Its
services are designed to maximize the performance, reliability and security of
large-scale, complex internet sites. SiteSmith designs and architects the
infrastructure for its customers' internet operations, installs the necessary
hardware and software, recommends and establishes network connectivity, and
performs ongoing monitoring and security services.


RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE
MONTHS ENDED MARCH 31, 2000


REVENUES

      Revenues for the first quarter of 2001 were $77.0 million or 141% greater
than revenues of $31.9 million for the first quarter of 2000. The increase for
the three months ended March 31, 2001, compared with the three months ended
March 31, 2000 reflected higher revenues associated with commencement of service
to an increased total number of customers and the


16
<PAGE>

inclusion of SiteSmith's revenue for the period from February 8, 2001
(acquisition date) through March 31, 2001. Internet infrastructure revenue rose
24% to 57.1 million for the first quarter of 2001, compared with $46.0 million
for the fourth quarter of 2000. Optical infrastructure revenues increased to
$19.9 million, up 33% from the fourth quarter of 2000. Approximately 77% of the
optical infrastructure revenues were from carrier customers.


COST OF SALES

      Cost of sales was $65.2 million in the first quarter of 2001, an 83%
increase over cost of sales of $35.6 million for the first quarter of 2000. The
increase for the three months ended March 31, 2001, compared with the three
months ended March 31, 2000, is primarily due to costs associated with an
increased amount of customers and the costs associated with the operation of our
networks and the inclusion of SiteSmith's cost of sales since the acquisition
date. Cost of sales as percentages of revenue for the first quarters of 2001 and
2000 was 85% and 112%, respectively.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling, general and administrative expenses increased to $62.2 million
for the first quarter of 2001, from $27.7 million during the first quarter of
2000, an increase of $34.5 million or 125%. The increase in selling, general and
administrative expenses in the three month period ended March 31, 2001 as
compared to the same period in 2000 resulted primarily from the increased
headcount and other overhead to support our network expansion as well as the
inclusion of SiteSmith's results since the acquisition date. As a percentage of
revenue, selling, general and administrative expenses were 81% for the three
months ended March 31, 2001 compared to 87% for the comparable period in 2000.


NON-CASH COMPENSATION

      Non-cash compensation increased by $13.0 million, or 100% for the quarter
ended March 31, 2001 compared to the same period in the prior year. Non-cash
compensation is primarily attributable to the issuance of unvested stock options
and restricted shares of stock in connection with the acquisition of SiteSmith.


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

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

      For the three months ended March 31 2001, we recognized an EBITDA loss of
$63.4 million, compared with an EBITDA loss for the three months ended March 31,
2000 of $31.3 million. The increase in EBITDA loss is primarily due to higher
fixed costs related to the operation of the network, increased overhead to
support out network expansion, and the recording of a non-cash compensation
charges in connection with the SiteSmith acquisition.


DEPRECIATION AND AMORTIZATION

      Depreciation and amortization expense was $71.4 million for the three
months ended March 31, 2001, versus $32.5 million for the three months ended
March 31, 2000. This represents an increase of $38.9 million for the first
quarter of 2001 as compared to the first quarter of 2000. The increase in
depreciation and amortization expense resulted primarily from amortization of
the goodwill relating to the acquisition of SiteSmith and increased investment
in our completed fiber optic


17
<PAGE>

network and additional property and equipment acquired.


LOSS FROM OPERATIONS

      For the three months ended March 31, 2001 we recognized losses from
operations of $134.8 million. This represents an increased loss of $71.0 million
for the three months ended March 31, 2001 from the $63.8 million loss from
operations reported for the three months ended March 31, 2000. The increased
loss from operations was attributable to increased overhead and fixed costs to
support our network expansion and the acquisition of SiteSmith and the related
goodwill amortization.


INTEREST AND OTHER INCOME

      Interest and other income was $27.8 million during the three months ended
March 31, 2001, as compared to $25.1 million during the comparable 2000 period,
an increase of $2.7 million, or 11%. This increase is primarily due to a foreign
currency gain related to the Eurodollar denominated senior notes.


INTEREST EXPENSE

      Interest expense decreased in the three months ended March 31, 2001 to
$41.1 million, versus $45.2 million for the three months ended March 31, 2000.
The decrease in interest expense is due to the effect of the favorable exchange
rate between the dollar and the Eurodollar on the expense due on our Eurodollar
denominated debt.


NET LOSS

      We had a net loss of $148.3 million for the three months ended March 31,
2001, versus a net loss of $85.2 million for the comparable period of 2000. For
the three months ended March 31, 2001, basic net loss per share was $0.26,
versus basic net loss per share of $0.16 for the three months ended March 31,
2000.



LIQUIDITY AND CAPITAL RESOURCES

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

      Cash provided by operating activities was $15.6 million for the three
months ended March 31, 2001, compared with $9.4 million provided by operations
for the comparable period in 2000. For the three months ended March 31, 2001 we
used $671.6 million of cash for investing activities as compared to $454.6
million for the comparable period in 2000. This increase was due primarily to
investments in the expansion of our networks and related construction in
progress. For the three months ended March 31, 2001, financing activities
provided $7.7 million compared to the $1.7 billion cash provided during the
comparable period in 2000.

      We anticipate that we will continue to incur net operating losses as we
expand and complete our existing networks, construct additional network, market
our services to an expanding customer base and incur operating expenses related
to the business of SiteSmith. We anticipate spending approximately $3.4 billion
through the year ending December 31, 2001 on the expansion of our fiber optic
networks and internet service exchanges to 50 cities in the United States and in
17 international cities. Of this amount, we have incurred approximately $2.8
billion on the expansion through March 31, 2001.


18
<PAGE>

      We believe that the cash on hand, vendor financing, the proceeds of the
senior credit facilities described below, and cash generated by operations
(including advance customer payments), will enable us to fully fund the planned
build-out of our networks and internet service exchanges, and our other working
capital needs through March 31, 2002.

      The indentures governing our debt obligations permit us to incur
additional indebtedness to finance the engineering, construction, installation,
acquisition, lease, development or improvement of telecommunications assets. As
a result, we may also consider from time to time private or public sales of
additional equity or debt securities, and entering into other credit facilities
and financings, depending upon market conditions, in order to finance the
continued build-out of our network.

      We recently entered into a commitment letter with Citicorp USA, Inc.
and Salomon Smith Barney, which provides for senior credit facilities in the
aggregate amount of $350.0 million upon the execution and delivery of
definitive documentation. The commitment letter provides for a revolving
credit facility of up to $150.0 million and a term loan facility of up to
$200.0 million. The commitment of Citicorp and Salomon Smith Barney, which is
subject to customary conditions, will expire on June 30, 2001 (extended from
May 15, 2001) if we have not entered into definitive documentation for the
senior credit facilities by that date. We cannot assure you, however, that we
will be able to successfully consummate the senior credit facilities.

      Borrowings under the senior credit facilities will bear interest at rates
which will depend on market conditions at the time of the closing. Our
obligations under the senior credit facilities will be guaranteed by our
existing and future subsidiaries and will be secured by all of our assets and
the assets of each guarantor, to the extent permitted in the trust indentures
governing our outstanding senior notes. The senior credit facilities will
contain customary provisions relating to prepayments, representations and
warranties, covenants and events of default. Borrowings under the senior credit
facilities will be subject to customary conditions.

      We filed a universal shelf registration statement on Form S-3 which was
declared effective in October 1999. Under that registration statement,
approximately $490.0 million aggregate principal amount of securities remain
eligible to be sold in primary offerings and approximately 9.1 million shares of
class A common stock remain eligible to be resold in secondary offerings. We may
issue and sell shares of our class A common stock or our debt or other
securities, or facilitate the sale of shares of our class A common stock by some
of our existing stockholders. In addition, on February 13, 2001, we filed a
universal shelf registration statement on Form S-3 to register the primary
offering of up to approximately $1.0 billion of debt and equity securities. We
have no plans at the present time to issue securities pursuant to such
registration statements. However, if market conditions change, we could issue
such securities.

      We expect to continue to experience negative cash flows for the
foreseeable future. In addition, as part of our acquisition of AboveNet, we
recorded approximately $1.6 billion in goodwill and other intangible assets,
which we amortizing over periods up to twenty years. The excess of the cost of
the SiteSmith acquisition over the fair value of net tangible assets acquired is
approximately $1.0 billion and has been allocated to goodwill, which is being
amortized over ten years. Accordingly, we expect to report further net operating
losses for the foreseeable future.


     Primarily because the Company is in the process of integrating
acquisitions, the Company is terminating employees in some of its locations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


      In the normal course of business, our financial position is routinely
subjected to a variety of risks. In addition to the market risk associated with
interest and currency movements on our outstanding debt, we are subject to other
types of risk such as the collectibility of our accounts receivables. Our
principal long term obligations are our $650 million 10% senior notes due 2008
and $969.7 million 10% senior notes due 2009, and the convertible subordinated
note of approximately $975.3 million issued to Verizon Communications in March
2000. The fair value of the long-term debt at March 31, 2001 was $2.4 billion. A
10% decrease and a 10% increase in the level of interest rates would result in
an increase in the fair value of our long term obligations by approximately
$143.2 million and a decrease in the fair value of our long term obligation by
approximately $133.5 million respectively.


19
<PAGE>

      We are also subject to market risk associated with foreign currency
exchange rates. We plan to continue the expansion of our foreign operations and
$219.7 million of our 10% senior notes are denominated in Euros. We have not
utilized financial instruments to minimize our exposure to foreign currency
fluctuations. We will continue to analyze risk management strategies to minimize
foreign currency exchange risk in the future. A 10% decrease and a 10% increase
in the currency rates related to our Euro dollar based 10% senior notes due 2009
would result in a decrease in the fair value of our long term obligations by $14
million and an increase in the fair value of our long term obligation by $14
million, respectively.

      We had approximately $600.6 million in cash and cash and equivalents at
March 31, 2001. To the extent our cash and cash equivalents exceed our
short-term funding requirements, we may invest our excess cash and cash
equivalents in longer-term high-quality financial instruments. Such investments
when made will be subject to changes in interest rates.









20
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS


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

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

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

      As of March 31, 2001, we were preparing a response to a Rule Nisi (show
cause) action issued by the Georgia Public Service Commission ("GPSC") as a
result of certain of our subcontractors causing damage to underground utility
facilities. Subsequent to March 31, 2001, we and the GPSC entered into an
agreement settling the matter.

      We are a respondent in a proceeding and before the CA Public Utilities
Commission, "CPUC". The issue before the CPUC is whether we improperly engaged
in certain construction actions under the authority of our initial Certificate
of Public Convenience and Necessity, "CPCN". We believe that we did not act
improperly and are vigorously asserting our defenses. The possible ramifications
stemming from the proceeding includes fines, sanctions and actions taken against
our CPCN.

      In addition, we are subject to various claims and proceedings in the
ordinary course of business. Based on information currently available, we
believe that none of such current claims, or proceedings, individually or in the
aggregate will seriously


21
<PAGE>

harm our financial condition or results of operations, although we can make no
assurances in this regard.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable


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

None


ITEM 5. OTHER INFORMATION

Not applicable


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

None

b) Reports on Form 8-K

None


















22
<PAGE>



SIGNATURE


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

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

                            By:     /s/ GERARD BENEDETTO
                                ----------------------------------
                            Gerard Benedetto
                            Senior Vice President and Chief Financial Officer
                            (Principal Financial and Accounting Officer and Duly
                            Authorized Officer)

                            May 15, 2001




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