EXHIBIT 3.2










                                     BYLAWS
                                       OF
                            ELECTRIC LIGHTWAVE, INC.





































As amended October 16, 1997; May 21, 1998



<PAGE>


                                     BYLAWS
                                       OF
                            ELECTRIC LIGHTWAVE, INC.

                                      TITLE



        1.  The  title  of  this   Corporation  is  ELECTRIC   LIGHTWAVE,   INC.
                                ("Corporation").


                               LOCATION OF OFFICES


        2. The  principal  office of the  Corporation  in  Delaware  shall be in
Wilmington  and the resident  agent in charge  thereof shall be The  Corporation
Trust  Company,  located in New Castle County at The  Corporation  Trust Center,
1209 Orange Street, Wilmington, DE 19801.


           The  Corporation  may  also have an office or  offices  at such other
places  within or without the State of Delaware  as the Board of  Directors  may
from time to time designate.


                                 CORPORATE SEAL


         3. The  corporate  seal shall be  circular  in form and have  inscribed
thereon the name of the Corporation,  the year of its  incorporation  (1990) and
the words "Incorporated Delaware".


                            MEETINGS OF STOCKHOLDERS


         4. All  meetings  of  stockholders  shall be held at the offices of the
Corporation or such other place as shall be designated by the Board of Directors
of the Corporation.


            Annual  Meetings  of  stockholders  shall be held on a date and at a
time  designated  by the Board of Directors of the  Corporation.  At each annual
meeting the stockholders  shall elect a Board of Directors,  such election to be
by majority of the stock present or represented  by proxy,  and entitled to vote
at the meeting.


            Except  as   otherwise   provided  by  law,   the   Certificate   of
Incorporation or these Bylaws,  each stockholder  shall, at every meeting of the
stockholders,  be  entitled  to one vote for each  share of stock held by him or
her, in person or by written  proxy  signed by him or her, but no proxy shall be
voted on after one year from its date.  Such  right to vote  shall be subject to
the right of the Board of  Directors  to close  the  transfer  books or to fix a
record date for voting stockholders as hereinafter provided.


            Special  meetings  of the  stockholders  may be  called by the Chief
Executive  Officer and shall be called on the request in writing or by vote of a
majority of the Board of  Directors or on demand in writing of  stockholders  of
record  owning  twenty-five  percent  (25%)  in  amount  of  the  capital  stock
outstanding and entitled to vote.


            Notice of each meeting of  stockholders,  whether annual or special,
shall be mailed by the secretary to each  stockholder  of record,  at his or her
post office address as shown by the stock books of the Corporation, at least ten
days and not more  than  sixty  days  prior to the date of the  meeting.  If the
transfer books are closed or a record date is fixed in connection with an annual
meeting,  as permitted by Bylaw 19, the notice of the meeting  shall be given to
the  stockholders  of record as of the time said books are closed or record date
is  fixed,  but if the  transfer  books are not  closed or a record  date is not
fixed,  said notice shall be given to the stockholders of record at the time the
notice is mailed.
<PAGE>

            The holders of a majority of the stock  outstanding  and entitled to
vote shall constitute a quorum,  but the holders of a smaller amount may adjourn
any meeting from time to time without further notice until a quorum is secured.


            At the annual meeting of  stockholders,  only such business shall be
conducted  as shall have been  brought  before the meeting  (a)  pursuant to the
Corporation's  notice of  meeting,  (b) by or at the  direction  of the Board of
Directors or (c) by any  stockholder of the  Corporation who is a stockholder of
record at the time of giving of the  notice  provided  for  below,  who shall be
entitled to vote at such meeting and who complies with the  procedures set forth
below;  provided that any such business  proposed by a stockholder  is otherwise
proper for consideration under applicable law, the Corporation's  certificate of
incorporation and these Bylaws.


            For  business  to  be  brought   before  an  annual   meeting  by  a
stockholder,  the  stockholder  must have given notice thereof in writing to the
Secretary  of the  Corporation,  delivered  to or  mailed  and  received  at the
principal  office of the  Corporation no earlier than the January 1 and no later
than the February 15 preceding the annual meeting. A stockholder's notice to the
Secretary  shall set forth as to each matter the  stockholder  proposes to bring
before the meeting (a) a brief description of the business desired to be brought
before the meeting and the reasons for conducting  such business at the meeting,
(b) the name and  address,  as they appear on the  Corporation's  books,  of the
stockholder proposing such business,  and the name and address of the beneficial
owner, if any, on whose behalf the proposal is made, (c) the class and number of
shares of the  Corporation  which are owned  beneficially  and of record by such
stockholder of record and by the beneficial  owner,  if any, on whose behalf the
proposal is made,  together with documentary support for any claim of beneficial
ownership,  (d) any  material  interest  of such  stockholder  of record and the
beneficial  owner, if any, on whose behalf the proposal is made in such business
and (e) any  information,  in  addition  to that  required  above,  which may be
required from time to time by Regulation 14A of the  Securities  Exchange Act of
1934 with respect to security holder proposals.

            The  Chairman  of the  meeting,  in  addition  to  making  any other
determinations  that may be  appropriate  to the conduct of the  meeting,  shall
determine  whether such notice has been duly given and whether such  business is
otherwise  proper for  consideration  (using as a  non-exclusive  guideline  the
provisions  of Rule 14a-8(c)  under the  Securities  Exchange Act of 1934),  and
shall direct that any business not properly brought before the meeting shall not
be transacted.

                                       -2-
<PAGE>

                                    DIRECTORS


         5. The property and  business of the  Corporation  shall be managed and
controlled by its Board of Directors, which shall consist of not less than three
or more than seven members.  The number of Directors shall be fixed from time to
time,  within the limits  prescribed,  by  resolution of the Board of Directors.
Vacancies in the Board of Directors (except vacancies resulting from the removal
of directors  by  stockholders),  including  vacancies in the Board of Directors
resulting  from any  increase  in the  number of  Directors,  may be filled by a
majority of the Directors then in office, though less than a quorum.


            Directors shall otherwise be elected by the stockholders at
the annual  meeting and shall hold office  until the next  annual  election  and
until their successors are elected and qualified.  Except as otherwise  provided
by law, the Certificate of  Incorporation  or these Bylaws,  at all elections of
Directors of this Corporation each stockholder shall be entitled to one vote for
each share of stock owned by him or her, in person or by written proxy signed by
him or her,  and  election  shall be by  majority  vote of the stock  present or
represented by proxy and entitled to vote at the meeting.  The  stockholders  of
this  Corporation  shall have no  preemptive  right to subscribe to any issue of
shares of stock of this Corporation now or hereafter made.


            The  Board of  Directors  shall  have an  Executive  Committee.  The
Executive  Committee  of the Board  shall  consist of (3 three)  members,  to be
appointed  by and to serve at the  pleasure  of the Board.  The  Chairman of the
Board shall be the Chairman of the Executive Committee. During intervals between
meetings of the Board,  the Committee  shall have the power and authority of the
Board of Directors of the management of the business affairs and property of the
Corporation.


            Nominations of persons for election to the Board of Directors of the
Corporation  may  be  made  by  any  stockholder  of  the  Corporation  who is a
stockholder  of record at the time of giving of the notice  provided  for below,
who shall be entitled to vote for the  election of  Directors at the meeting and
who complies with the notice procedures set forth below.


            Nominations  by  stockholders  shall be made  pursuant  to notice in
writing to the Secretary of the Corporation, delivered to or mailed and received
at the principal  office of the Corporation no earlier than the January 1 and no
later than the  February 15 preceding  the annual  meeting.  Such  stockholder's
notice  shall set forth (a) as to each person whom the  stockholder  proposes to
nominate for election as a Director all information relating to such person that
is  required  to be  disclosed  in  solicitations  of proxies  for  election  of
Directors,  or is otherwise  required,  in each case pursuant to Regulation  14A
under the  Securities  Exchange Act of 1934  (including  such  person's  written
consent to being  named in the proxy  statement  as a nominee  and to serve as a
Director if elected);  (b) as to the stockholder giving the notice; (i) the name
and address, as they appear on the Corporation's  books, of such stockholder and
(ii) the class and number of shares of the  Corporation  which are  beneficially
owned by such stockholder and also which are owned of record by such stockholder
and (iii) documentary support for such claim of beneficial ownership;  (c) as to
the  beneficial  owner,  if any, on whose behalf the nomination is made, (i) the
name and  address  of such  person,  (ii) the class and  number of shares of the
Corporation  which are beneficially  owned by such person and (iii)  documentary
support for such claim of beneficial  ownership;  and (d), a description  of all
arrangements  or  understandings  between the  stockholder  giving  notice,  the
beneficial  owner and each nominee and any other person or persons  (naming such
person  or  persons)  relating  to  the  nomination  to  be  made  or  resulting
directorship.


            The Board of Directors or a Nominating Committee  established by the
Board of Directors shall determine whether a stockholder  nomination was made in
accordance with the procedures  prescribed  herein and whether the stockholder's
nominee  should  be  recommended  as a member  of the  slate of  nominees  to be
proposed at the annual  meeting,  and the Board of Directors  or its  Nominating
Committee may disregard any nomination not made in accordance with these Bylaws.
The  Chairman of the meeting  shall not  nominate  for  election to the Board of
Directors  any  stockholder  nominee  who has been  disregarded  by the Board of
Directors or its Nominating Committee.
   
                                   -3-
<PAGE>
                               POWERS OF DIRECTORS


         6. The  Board  of  Directors  shall  have  all  such  powers  as may be
exercised by the  Corporation,  subject to the  provisions of the statutes,  the
Certificate of Incorporation, and the Bylaws.


                              MEETINGS OF DIRECTORS


         7.  Meetings  of the  Board of  Directors  shall be held at such  place
within or  without  the State of  Delaware  as may from time to time be fixed by
resolution  of the  Board of  Directors,  or as may be  specified  by the  Chief
Executive  Officer in the call of any meeting.  Regular meetings of the Board of
Directors  shall  be held at such  times  as may  from  time to time be fixed by
resolution  of the Board of  Directors  and special  meetings may be held at any
time upon the call of two (2)  Directors,  the Chief  Executive  Officer  or the
Chief Operating Officer,  by oral,  telegraphic or written notice duly served or
sent or mailed to each Director not less than five (5) days before such meeting.
A meeting of the Board may be held without notice  immediately  after the annual
meeting of stockholders at the same place at which such meeting is held.  Notice
need  not be given of  regular  meetings  of the  Board  held at times  fixed by
resolution of the Board.  Meetings may be held at any time without notice if all
the Directors are present or if those not present waive notice of the meeting in
writing.


            Members of the Board of Directors  (or any  committees  thereof) may
participate  in a meeting of the Board of Directors (or of such  committees)  by
means of conference  telephone or other  communications  equipment via which all
persons participating can hear each other. Such participation in the substantive
discussion and  determinations of a meeting shall constitute  presence in person
at such meeting.


            A majority of the Directors shall constitute a quorum, but a smaller
number may adjourn any meeting from time to time without  further notice until a
quorum is secured.


                           OFFICERS OF THE CORPORATION


        8. The officers of the  Corporation  shall be a Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors,  a President,  one or more
vice  presidents  (with such duties and titles as may be  assigned  to them),  a
secretary, a treasurer,  one or more assistant vice presidents (with such duties
and titles as may be assigned to them), and such other officers as may from time
to time be chosen by the Board of Directors.


            The  officers  of the  Corporation  shall hold  office  until  their
successors are elected and  qualified.  If the office of any officer or officers
becomes  vacant for any reason,  the vacancy shall be filled by the  affirmative
vote of a majority of the whole Board of Directors.


                             DUTIES OF THE CHAIRMAN


         9. The Chairman  presides at all meetings of the Board of Directors and
at all meetings of the  shareholders.  It shall be his or her prerogative to see
that  all  orders,  resolutions,  and  policy  determinations  of the  Board  of
Directors  are carried into effect.  He or she acts in a general  oversight  and
advisory  capacity  with  respect to the affairs of the  Corporation.  He or she
provides  leadership  to the Board in reviewing  and deciding upon matters which
constitute major policies of the Corporation,  what the Corporation does and the
manner in which the Corporation business is conducted. Any of such duties may be
delegated by the Chairman to the Vice-Chairman.


                      DUTIES OF THE CHIEF EXECUTIVE OFFICER


         10. It shall be the duty of the Chief  Executive  Officer to carry into
effect  all  orders,  resolutions,  and  policy  determinations  of the Board of
Directors;  to execute all  contracts  and  agreements;  to keep the seal of the
Corporation;  and to  sign  and to  affix  the  seal of the  Corporation  to any
instrument  requiring the same, which seal shall be attested by the signature of
the Secretary or Treasurer or Assistant Secretary or Assistant Treasurer.  He or
she shall have the general  supervision  and direction of the other  officers of
the Corporation.

                                      -4-
<PAGE>

            He shall submit a report of the  operations of the  Corporation  for
the year to the Directors at their meeting next  preceding the annual meeting of
the stockholders and to the stockholders at their annual meeting.


            He shall  have the  general  duties and  powers of  supervision  and
management usually vested in the chief executive officer of a Corporation.


            The  Chief   Executive  may  also  hold  another   office  with  the
Corporation. Accordingly, the duties and responsibilities of the position may be
assigned by the Board of Directors to any Corporation officer.


                                       -5-
<PAGE>
                             DUTIES OF THE PRESIDENT


         11. Unless otherwise  decided by the Board of Directors,  the President
shall be the chief operating and administrative  officer of the Corporation.  It
shall  be his or her  duty to see  that  all  orders  and  policy  determination
conveyed by the  Chairman  are  carried  into  effect.  He or she shall have the
general  supervision and direction of the operations and  administration  of the
affairs of the  Corporation  and general  supervision and direction of the other
officers and  employees of the  Corporation  and shall see that their duties are
properly performed.


                                 VICE PRESIDENT


         12.  The  vice  president  or vice  presidents,  in the  order of their
seniority,  shall be vested with all the powers and  required to perform all the
duties of the  President in his or her absence or  disability  and shall perform
such other duties as may be prescribed by the Board of Directors.


                             CHIEF EXECUTIVE PRO TEM


         13. In the absence or  disability of the  Chairman,  Vice-Chairman  and
President, the Board may appoint a chief executive pro tem.


                                    SECRETARY


         14. The secretary  shall attend all meetings of the Corporation and the
Board of Directors. He or she shall act as clerk thereof and shall record all of
the  proceedings  of such  meetings in a book kept for that  purpose.  He or she
shall give proper  notice of meetings of  stockholders  and  Directors and shall
perform  such other  duties as shall be assigned to him or her by the  Chairman,
Vice-Chairman, President or the Board of Directors.


                                    TREASURER


         15. The treasurer shall have custody of the funds and securities of the
Corporation  and  shall  keep  full  and  accurate   accounts  of  receipts  and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable  effects in the name and to the credit of the  Corporation in
such  depositories  as may be designated  by the Board of  Directors.  He or she
shall disburse the funds of the  Corporation as may be ordered by the Board,  or
Chairman,   Vice-Chairman   or  President,   taking  proper  vouchers  for  such
disbursements  and shall render to the Chairman,  Vice  Chairman,  President and
Directors,  whenever  they  may  require  it,  an  account  of  all  his  or her
transactions as treasurer and of the financial condition of the Corporation.


            He shall keep an account of stock and income  notes  registered  and
transferred  in such  manner  and  subject to such  regulations  as the Board of
Directors may prescribe.


            He shall give the  Corporation  a bond,  if required by the Board of
Directors,  in such sum and in form and with security  satisfactory to the Board
of Directors for the faithful performance of the duties of his or her office and
the restoration to the Corporation, in case of his or her death, resignation, or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession,  belonging to the Corporation. He or she
shall  perform such other duties as the Board of Directors may from time to time
prescribe or require.


                       DUTIES OF OFFICERS MAY BE DELEGATED


         16.  In  case  of the  absence  or  disability  of any  officer  of the
Corporation  or for any other  reason  deemed  sufficient  by a majority  of the
Board,  the Board of  Directors  may delegate his or her powers or duties to any
other officer or to any Director for the time being.  The duties relating to the
execution  of  contracts  and  agreements  and the  signing of  instruments  and
affixing the seal of the  Corporation  and other matters may be delegated to any
officer, from time to time, as the Board shall see fit.
   
                                   -6-
<PAGE>
                              CERTIFICATES OF STOCK


         17.   Certificates   of  stock   shall  be  signed  by  the   Chairman,
Vice-Chairman, President or a vice president and either the treasurer, assistant
treasurer,  secretary or assistant secretary.  If a certificate of stock be lost
or  destroyed,  another  may be issued in its stead  upon  proof of such loss or
destruction  and the giving of a  satisfactory  bond of indemnity,  in an amount
sufficient to indemnify the Corporation against any claim.


                                TRANSFER OF STOCK


         18. All  transfers of stock of the  Corporation  shall be made upon its
books upon  presentation of the certificate or certificates  therefor,  properly
endorsed  by the  holder  of the  shares  in  person  or by his or her  lawfully
constituted   representative,   and  upon  surrender  of  such   certificate  or
certificates of stock for cancellation.


                            CLOSING OF TRANSFER BOOKS


         19.  The  Board of  Directors  shall  have the power to close the stock
transfer  books  of the  Corporation  for a  period  not  exceeding  sixty  days
preceding  the  date for any  meeting  of  stockholders  or for  payment  of any
dividend  or for the  allotment  of rights or when any change or  conversion  or
exchange of capital stock shall go into effect, or for a period of not exceeding
sixty days in  connection  with  obtaining the consent of  stockholders  for any
purpose.  In lieu of so closing  the books,  the Board of  Directors  may fix in
advance a date,  not exceeding  sixty days  preceding  the said above  mentioned
dates, as a record date for the  determination of the  stockholders  entitled to
notice  of or to vote at any  such  meeting,  and any  adjournment  thereof,  or
entitled to dividends or other rights  hereinbefore  mentioned,  or to give such
consent.


                             STOCKHOLDERS OF RECORD


         20. The Corporation  shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof and accordingly shall
not be bound to  recognize  any  equitable or other claim to or interest in such
share on the part of any other  person  whether or not it shall have  express or
other notice thereof, save as expressly provided by the laws of Delaware.


                                   FISCAL YEAR


         21. The fiscal year of the Corporation  shall begin on the first day in
January in each year.


                                    DIVIDENDS


         22.  Dividends,  to the  extent not  restricted  by  provisions  of the
Corporation's  Certificate of Incorporation  or by subsisting  agreements of the
Corporation,  may be declared  by the Board of  Directors  and paid in cash,  in
property,  or in shares of the capital  stock of the  Corporation  to the extent
permitted  by law,  out of net assets in excess of its capital or out of its net
profits, provided there shall be no impairment of the capital of the Corporation
represented  by its  issued  and  outstanding  stock  of all  classes  having  a
preference upon the distribution of assets.


                                BOOKS AND RECORDS


         23. The books,  accounts,  and records of the  Corporation  may be kept
within or  without  the State of  Delaware,  at such place or places as may from
time to time be designated by the Bylaws or by resolution of the Directors.

                                      -7-

<PAGE>
                                     NOTICES


         24. Notice required to be given under the provisions of these Bylaws to
any  Director,  officer or  stockholder  shall not be construed to mean personal
notice,  but may be given in writing by depositing  the same in a post office or
letter  box,  in a  postpaid  sealed  or  unsealed  wrapper,  addressed  to such
stockholder,  officer or Director at such address as appears on the books of the
Corporation,  and such  notice  shall be deemed to be given at the time when the
same shall be thus mailed.  In computing the number of days notice  required for
any meeting,  the day on which the notice shall be deposited in the mail or sent
by telegraph shall be excluded.


                                WAIVER OF NOTICE


         25. Any stockholder,  officer,  or Director may waive in writing, or by
telegraph, any notice required to be given under these Bylaws, whether before or
after the time stated therein.

                               INDEMNIFICATION OF
                             DIRECTORS AND OFFICERS

         26. (a) Right of Indemnification. The Corporation shall, to the fullest
extent permitted by applicable law as then in effect,  indemnify any person (the
"indemnitee")  who  was  or  is  involved  in  any  manner  (including,  without
limitation,  as a party  or a  witness)  or was or is  threatened  to be made so
involved in any threatened,  pending or completed investigation,  claim, action,
suit or proceeding,  whether civil,  criminal,  administrative  or investigative
(including,  without limitation,  any action or proceeding by or in the right of
the Corporation to procure a judgement in its favor) (a  "Proceeding") by reason
of the fact that he or she is or was a director  or officer of the  Corporation,
or is or was serving at the request of the  Corporation as a director or officer
of another  Corporation,  or of a  partnership,  joint  venture,  trust or other
enterprise (including,  without limitation, service with respect to any employee
benefit plan),  whether the basis of any such Proceeding is alleged action in an
official  capacity as director or officer or in any other capacity while serving
as a director or officer,  against all expenses,  liability and loss (including,
without  limitation,  attorneys' fees,  judgments,  fines, ERISA excise taxes or
penalties, and amounts paid or to be paid in settlement) actually and reasonably
incurred by him or her in connection with such Proceeding.  Such indemnification
shall  continue  as to a person who has ceased to be a director  or officer  and
shall inure to the benefit of his or her heirs,  executors,  administrators  and
legal  representatives.  The right to  indemnification  conferred  in this Bylaw
shall  include  the right to receive  payment of any  expenses  incurred  by the
indemnitee  in  connection   with  such  Proceeding  in  advance  of  the  final
disposition of the Proceeding, consistent with applicable law as then in effect.
All rights to indemnification  conferred in this Bylaw,  including rights to the
advancement of expenses and the evidentiary,  procedural and other provisions of
this Bylaw,  shall be  contract  rights with the same effect as if embodied in a
separate written  agreement for each  indemnitee,  executed and delivered by the
Corporation and such indemnitee.  The Corporation may, by action of its Board of
Directors,   provide  indemnification  for  employees,   agents,  attorneys  and
representatives  of the Corporation  with the same, or with more or less,  scope
and extent as herein  provided for officers and  directors.  No amendment to the
Restated  Certificate  of  Incorporation  or  amendment  or repeal of this Bylaw
purporting to have the effect of modifying or repealing any of the provisions of
this Bylaw in a manner  adverse to the  indemnitee  shall  abridge or  adversely
affect any right to  indemnification  or other similar  rights and benefits with
respect to any acts or omissions  occurring  prior to such  amendment or repeal.
This Bylaw shall be applicable to all Proceedings,  whether arising from acts or
omissions occurring before or after the adoption of this Bylaw. The phrase "this
Bylaw" shall refer to Bylaws 26 and 27. For all  purposes,  except the corporate
procedure  required for amendment of Bylaws 26 and 27, Bylaws 26 and 27 shall be
considered as one Bylaw.


         (b) ByLaw Not Exclusive.  The right of  indemnification,  including the
right to receive  payment in advance of expenses,  conferred in this Bylaw shall
not be exclusive of any other rights to which any person seeking indemnification
may  otherwise be entitled  under any provision of the Restated  Certificate  of
Incorporation,  Bylaw, agreement,  applicable corporate law and statute, vote of
disinterested directors or stockholders or otherwise.  The indemnitee is free to
proceed under any or all of the rights or procedures available to him or her.

                                      -8-

<PAGE>
         (c) Burden of Proof. In any  determination,  review of a determination,
action,   arbitration,   or  other   proceeding   relating   to  the   right  to
indemnification  conferred in this Bylaw, the Corporation  shall have the burden
of proof that the indemnitee has not met any standard of conduct or belief which
may  be  required  by  applicable  law  to  be  applied  in  connection  with  a
determination  that the  indemnitee  is not entitled to  indemnity  and also the
burden of proof on any of the issues  which may be material  to a  determination
that the  indemnitee  is not entitled to  indemnification.  Neither a failure to
make  such a  determination  of  entitlement  nor an  adverse  determination  of
entitlement to indemnity  shall be a defense of the  Corporation in an action or
proceeding  brought  by the  indemnitee  or by or on behalf  of the  Corporation
relating to  indemnification  or create any presumption  that the indemnitee has
not met any such  standard of conduct or belief or is otherwise  not entitled to
indemnity.  If successful  in whole or in part in such an action or  proceeding,
the indemnitee  shall be entitled to be further  indemnified by the  Corporation
for the expenses  actually and  reasonably  incurred by him or her in connection
with such action or proceeding.


         (d) Advancement of Expenses.  All reasonable expenses incurred by or on
behalf of indemnitee in connection  with any  Proceeding  shall be advanced from
time to time to the indemnitee by the Corporation  promptly after the receipt by
the  Corporation  of a statement from the  indemnitee  requesting  such advance,
whether prior to or after final disposition of such Proceeding.


         (e) Insurance,  Contracts and Funding. The Corporation may purchase and
maintain  insurance  to  protect  itself and any person who is, or may become an
officer, director,  employee, agent, attorney, trustee or representative (any of
the foregoing being herein referred to as a "Representative") of the Corporation
or, at the request of the Corporation,  a Representative of another  corporation
or entity,  against any expenses,  liability or loss asserted against him or her
or  incurred  by him or  her in  connection  with  any  Proceeding  in any  such
capacity,  or  arising  out of his or her  status  as such,  whether  or not the
Corporation  would have the power to indemnify  him or her against such expense,
liability  or  loss  under  the  provisions  of this  Bylaw  or  otherwise.  The
Corporation may enter into contracts with any Representative of the Corporation,
or any person  serving as such at the  request of the  Corporation  for  another
corporation or entity,  in  furtherance  of the  provisions of this Bylaw.  Such
contracts  shall  be  deemed   specifically   approved  and  authorized  by  the
stockholders  of the  Corporation and not subject to invalidity by reason of any
interested directors.  The Corporation may create a trust fund, grant a security
interest or use other means (including,  without limitation, a letter of credit)
to  ensure  the  payment  of  such   amounts  as  may  be  necessary  to  effect
indemnification of any person entitled thereto.


         (f) Severability; Statutory Alternative. If any provision or provisions
of this Bylaw  shall be held to be  invalid,  illegal or  unenforceable  for any
reason  whatsoever (i) the validity,  legality and  enforceability of all of the
remaining  provisions of this Bylaw shall not in any way be affected or impaired
thereby;  and (ii) to the fullest extent possible,  the remaining  provisions of
this Bylaw shall be construed so as to give effect to the intent  manifested  by
the provision  held  invalid,  illegal or  unenforceable.  In the event that the
indemnitee elects, as an alternative to the procedures  specified in this Bylaw,
to follow  one of the  procedures  authorized  by  applicable  corporate  law or
statute  to  enforce  his or her  right  to  indemnification  and  notifies  the
Corporation  of his or her  election,  the  Corporation  agrees  to  follow  the
procedure so elected by the  indemnitee.  If, in  accordance  with the preceding
sentence the procedure therefor  contemplated herein or the procedure elected by
the  indemnitee  in  any  specific   circumstances  (or  such  election  by  the
indemnitee)  shall be  invalid  or  ineffective  in  bringing  about a valid and
binding  determination of the entitlement of the indemnitee to  indemnification,
the most nearly comparable  procedure  authorized by applicable corporate law or
statute shall be followed by the Corporation and the indemnitee.


                                      -9-

<PAGE>
                           INDEMNIFICATION PROCEDURES;
                            PRESUMPTIONS AND REMEDIES

         27. In furtherance,  but not in limitation, of the foregoing provisions
of this Bylaw, the following  procedures,  presumptions and remedies shall apply
with respect to advancement of expenses and the right to  indemnification  under
this Bylaw:

              (a) Advancement of Expenses.  The advancement or  reimbursement of
expenses to an  indemnitee  provided in paragraph  (d) of Bylaw 26 shall be made
within 20 days after the receipt by the  Corporation of a request  therefor from
the indemnitee.  Such request shall reasonably evidence the expenses incurred or
about to be  incurred by the  indemnitee  and, if required by law at the time of
such advance,  shall include or be accompanied by an undertaking by or on behalf
of the  indemnitee  to repay the  amounts  advanced if it should  ultimately  be
determined  that the indemnitee is not entitled to be  indemnified  against such
expenses.

              (b) Procedure for Determination of Entitlement to Indemnification.

                   (i) To obtain  indemnification  (except  with  respect to the
               advancement of expenses), an indemnitee shall submit to the Chief
               Executive  Officer  or  Secretary  of the  Corporation  a written
               request,  including  such  documentation  and  information  as is
               reasonably  available to the indemnitee and reasonably  necessary
               to  determine  whether  and to  what  extent  the  indemnitee  is
               entitled to indemnification (the "Supporting Documentation"). The
               Secretary of the  Corporation  shall promptly advise the Board of
               Directors  in  writing   that  the   indemnitee   has   requested
               indemnification.    The   determination   of   the   indemnitee's
               entitlement  to  indemnification  shall be made not later than 60
               days after receipt by the  Corporation of the written request and
               Supporting Documentation.

                   (ii) The indemnitee's entitlement to indemnification shall be
               determined in one of the following  ways:  (A) by a majority vote
               of the  Disinterested  Directors (as hereinafter  defined) (which
               term  shall  mean the  Disinterested  Director,  if there is only
               one);  (B) by a written  opinion of the  Independent  Counsel (as
               hereinafter  defined)  if (x) a  majority  of  the  Disinterested
               Directors so directs; (y) there is no Disinterested  Director, or
               (z) a Change of  Control  (as  hereinafter  defined)  shall  have
               occurred  and the  indemnitee  so  requests  in  which  case  the
               Disinterested  Directors shall be deemed to have so directed; (C)
               by the stockholders of the Corporation (but only if a majority of
               the  Disinterested   Directors   determines  that  the  issue  of
               entitlement  to  indemnification   should  be  submitted  to  the
               stockholders  for their  determination);  or (D) as  provided  in
               paragraph (c) of Bylaw 27.

                   (iii)  In the  event  the  determination  of  entitlement  to
               indemnification is to be made by Independent  Counsel pursuant to
               clause  (ii) of  paragraph  (b) of Bylaw  27, a  majority  of the
               Disinterested Directors shall select the Independent Counsel, but
               only an  Independent  Counsel  to which the  indemnitee  does not
               reasonably object; provided, however, that if a Change of Control
               shall have occurred, the indemnitee shall select such Independent
               Counsel,  but only an  Independent  Counsel to which the Board of
               Directors does not reasonably object.

              (c)  Presumptions  and  Effect of Certain  Proceedings.  Except as
otherwise  expressly provided in this Bylaw, the indemnitee shall be presumed to
be entitled to indemnification  upon submission of a request for indemnification
together with the Supporting Documentation,  and thereafter in any determination
or  review  of  any  determination,  and  in  any  arbitration,   proceeding  or
adjudication  the  Corporation  shall have the burden of proof to overcome  that
presumption in reaching a contrary determination. In any event, if the person or
persons  empowered  under clause (ii) of paragraph  (b) of Bylaw 27 to determine
entitlement to  indemnification  shall not have been appointed or shall not have
made a  determination  within 60 days after  receipt by the  Corporation  of the
request  therefor  together with the  Supporting  Documentation,  the indemnitee
shall  be  deemed  to be  entitled  to  indemnification.  In  either  case,  the
indemnitee shall be entitled to such indemnification,  unless (i) the indemnitee
misrepresented  or failed to disclose a material  fact in making the request for
indemnification or in the Supporting  Documentation or (ii) such indemnification
is prohibited by law, as finally determined by adjudication.  The termination of
    
                                  -10-

<PAGE>
any Proceeding,  or of any claim, issue or matter therein,  by judgment,  order,
settlement or conviction,  or upon a plea of nolo  contendre or its  equivalent,
shall  not,  of  itself,  adversely  affect  the  right  of  the  indemnitee  to
indemnification  or create  any  presumption  with  respect to any  standard  of
conduct  or  belief  or  any  other  matter  which  might  form  a  basis  for a
determination  that the  indemnitee  is not  entitled to  indemnification.  With
regard to the right to  indemnification  for expenses,  (i) if and to the extent
that the  indemnitee  has been  successful  on the  merits or  otherwise  in any
Proceeding,  or (ii) if a Proceeding was terminated  without a determination  of
liability  on the part of the  indemnitee  with  respect to any claim,  issue or
matter therein or without any payments in settlement or compromise being made by
the indemnitee with respect to a claim, issue or matter therein, or (iii) if and
to the  extent  that  the  indemnitee  was not a party  to the  Proceeding,  the
indemnitee shall be deemed to be entitled to indemnification,  which entitlement
shall not be  defeated  or  diminished  by any  determination  which may be made
pursuant to clauses (A), (B) or (C) of clause (ii) of paragraph (b) of Bylaw 27.
The  indemnitee  shall  be  presumptively  entitled  to  indemnification  in all
respects for any act,  omission or conduct taken or occurring  which (whether by
condition or otherwise) is required,  authorized or approved by any order issued
or other action by any commission or  governmental  body pursuant to any federal
statute or state statute  regulating the Corporation or any of its  subsidiaries
by  reason  of  its  status  as a  public  utility  or  public  utility  holding
Corporation or by reason of its  activities as such. To the extent  permitted by
law, the  presumption  shall be  conclusive on all parties with respect to acts,
omissions or conduct of the indemnitee if he or she acted in good faith and in a
manner  he or she  reasonably  believed  to be in or  not  opposed  to the  best
interests of the  Corporation or its  subsidiary.  No presumption  adverse to an
indemnitee  shall be drawn with  respect to any act,  omission or conduct of the
indemnitee if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Corporation or its
subsidiary taken or occurring in the absence of, or inconsistent with, any order
issued or action by any commission or governmental body.

              (d) Remedies of Indemnitee.

                  (i) In the event  that a  determination  is made  pursuant  to
              paragraph  (b) of Bylaw 27 that the  indemnitee is not entitled to
              indemnification  under this  Bylaw,  (A) the  indemnitee  shall be
              entitled to seek an adjudication of his or her entitlement to such
              indemnification  in an appropriate  court of the State of Delaware
              or any  other  court  of  competent  jurisdiction;  (B)  any  such
              judicial  proceeding shall be de novo and the indemnitee shall not
              be prejudiced by reason of such adverse determination;  and (C) in
              any such judicial proceeding the Corporation shall have the burden
              of proof that the  indemnitee  is not entitled to  indemnification
              under this Bylaw.

                  (ii) If a determination shall have been made or deemed to have
              been made, pursuant to paragraphs (b) or (c) of Bylaw 27, that the
              indemnitee is entitled to  indemnification,  the Corporation shall
              be obligated to pay the amounts  constituting such indemnification
              within five days after such  determination has been made or deemed
              to  have  been  made  and  shall  be  conclusively  bound  by such
              determination,  unless (A) the indemnitee misrepresented or failed
              to   disclose  a  material   fact  in  making  the   request   for
              indemnification  or in the  Supporting  Documentation  or (B) such
              indemnification  is  prohibited  by law, in either case as finally
              determined by  adjudication.  In the event that (x) advancement of
              expenses  is not timely made by the  Corporation  pursuant to this
              Bylaw or (y)  payment of  indemnification  is not made within five
              days after a determination of entitlement to  indemnification  has
              been made or deemed to have been made pursuant to  paragraphs  (b)
              or (c) of Bylaw  27,  the  indemnitee  shall be  entitled  to seek
              judicial  enforcement of the  Corporation's  obligations to pay to
              the indemnitee  such  advancement  of expense of  indemnification.
              Notwithstanding  the  foregoing,  the  Corporation  may  bring  an
              action,  in an  appropriate  court in the State of Delaware or any
              other court of competent jurisdiction, contesting the right of the
              indemnitee  to  receive  indemnification   hereunder  due  to  the
              occurrence  of a  circumstance  described in subclause (A) of this
              clause (ii) of paragraph (d) of Bylaw 27 or a  prohibition  of law
              (both  of  which  are  herein  referred  to  as  a  "Disqualifying
              Circumstance.  In any such enforcement  action or other proceeding
              whether brought by the indemnitee or the  Corporation,  indemnitee
              shall be entitled to  indemnification  unless the  Corporation can
              satisfy the burden or proof that  indemnification is prohibited by
              reason of a Disqualifying Circumstance.

                                      -11-

<PAGE>
                  (iii) The Corporation shall be precluded from asserting in any
             judicial  proceeding  commenced pursuant to this paragraph (d) that
             the  procedures  and  presumptions  of this  Bylaw  are not  valid,
             binding and  enforceable  and shall  stipulate in any such court or
             before any such  arbitrator or arbitrators  that the Corporation is
             bound by all the provisions of this Bylaw.


                  (iv) In the event that the indemnitee, pursuant to this Bylaw,
             seeks a judicial  adjudication  of his or her rights  under,  or to
             recover damages for breach of, this Bylaw, or is otherwise involved
             in  any   adjudication   with  respect  to  his  or  her  right  to
             indemnification,  the indemnitee  shall be entitled to recover from
             the  Corporation,  and  shall  be  indemnified  by the  Corporation
             against,  any expenses  actually and reasonably  incurred by him or
             her if the indemnitee prevails in such judicial adjudication. If it
             shall  be  determined  in  such  judicial   adjudication  that  the
             indemnitee  is  entitled  to  receive  part  but  not  all  of  the
             indemnification  or  advancement of expenses  sought,  the expenses
             incurred  by  the  indemnitee  in  connection  with  such  judicial
             adjudication shall be prorated accordingly.


              (e) Definitions.  For purposes of indemnification under this Bylaw
or otherwise:


                  (i)  "Change  in  Control"  means a change in  control  of the
         Corporation  of a nature  that  would be  required  to be  reported  in
         response  to  Schedule  14A of  Regulation  14A  promulgated  under the
         Securities  Exchange  Act of  1934  (the  "Act"),  whether  or not  the
         Corporation  is then subject to such  reporting  requirement;  provided
         that, without  limitation,  such a change in control shall be deemed to
         have  occurred  if (A) any  "person"  (as such term is used in Sections
         13(d) and 14(d) of the Act) other than Citizens  Utilities  Corporation
         is or becomes  the  "beneficial  owner" (as defined in Rule 13d-3 under
         the Act),  directly or  indirectly,  of securities  of the  Corporation
         representing  20 percent or more of the  combined  voting  power of the
         Corporation's then outstanding securities without the prior approval of
         at least  two-thirds of the members of the Board of Directors in office
         immediately prior to such  acquisition;  (B) the Corporation is a party
         to a merger, consolidation,  sale of assets or other reorganization, or
         a proxy  contest,  as a consequence  of which,  members of the Board of
         Directors  in office  immediately  prior to such  transaction  or event
         constitute  less than a majority of the Board of Directors  thereafter;
         or (C) during any period of two consecutive  years,  individuals who at
         the  beginning  of such  period  constituted  the  Board  of  Directors
         (including  for  this  purpose  any  new  Director  whose  election  or
         nomination for election by the Corporation's  stockholders was approved
         by a vote of at least  two-thirds of the Directors then still in office
         who were  Directors  at the  beginning  of such  period)  cease for any
         reason to constitute at least a majority of the Board of Directors.


                  (ii)   "Disinterested   Director"  means  a  Director  of  the
         Corporation who is not or was not a material party to the Proceeding in
         respect of which indemnification is sought by the indemnitee.


                  (iii) "Independent  Counsel" means a law firm or a member of a
         law firm that  neither  presently  is,  nor in the past five  years has
         been,  retained to represent (A) the  Corporation  or the indemnitee in
         any manner or (B) any other  party to the  Proceeding  giving rise to a
         claim  for  indemnification  under  this  Bylaw.   Notwithstanding  the
         foregoing,  the term "Independent Counsel" shall not include any person
         who,  under the  applicable  standards  of  professional  conduct  then
         prevailing  under  the  law of the  State  of  Delaware,  would  have a
         conflict of  interest in  representing  either the  Corporation  or the
         indemnitee in an action to determine the indemnitee's rights under this
         Bylaw.


              (f)  Acts  of  Disinterested  Directors.  Disinterested  Directors
considering  or acting on any  indemnification  matter under this Bylaw or under
governing corporate law or otherwise may consider or take action as the Board of
Directors  or may  consider  or take action as a committee  or  individually  or
otherwise.  In the event that Disinterested Directors consider or take action as
the Board of  Directors,  one-third  of the total  number of Directors in office
shall constitute a quorum.

                                      -12-

<PAGE>

                              AMENDMENTS OF BYLAWS


         28. These Bylaws may be amended or altered by the vote of a majority of
the  whole  Board of  Directors  at any  meeting  provided  that  notice of such
proposed amendment shall have been given in the notice given to the Directors of
such meeting.  Such  authority in the Board of Directors is subject to the power
of the  stockholders  to change or repeal any  Bylaws by a majority  vote of the
stockholders  present and  represented  at any annual  meeting or at any special
meeting called for such purpose,  and Bylaws adopted by the stockholders  (other
than  Bylaw  27) shall  not be  repeated,  altered  or  amended  by the Board of
Directors.






                                      -13-