EXHIBIT 99.1


                    CERTAIN FACTORS TO CONSIDER IN CONNECTION
                         WITH FORWARD LOOKING STATEMENTS


     Historical and Anticipated  Future Losses;  Negative Cash Flow. The Company
has never  been  profitable  and has  never  generated  positive  cash flow from
consolidated  operations.  As of June 30, 1996 the  Company  had an  accumulated
deficit of $47.5 million. Currently,  although the Company has begun to generate
revenue in 18 markets,  it has not yet generated  revenues in any other markets.
Until December 1994, when it recorded its first operating revenues,  the Company
was considered a development stage Company for accounting purposes. There can be
no assurance that the Company will achieve or sustain  profitability or positive
cash flow from operations in the future.

     The Company has incurred significant net operating losses and negative cash
flow to date in connection with  establishing  its fiber optic networks.  Losses
and  negative  cash flow will  continue  while the Company  concentrates  on the
development and  construction  of additional  fiber optic networks and until its
networks have  established a sufficient  revenue-generating  customer  base. The
Company will also incur losses during the initial  start-up  phases of its local
switched voice, enhanced voice messaging and high-speed data services. There can
be no assurance that an adequate  revenue base will be established or that these
services will generate  positive cash flow.  Continued  losses and negative cash
flow may prevent the Company from meeting its debt  obligations and pursuing its
strategies for growth.

     Rapid  Expansion of Operations;  Implementation  of Growth  Strategy.  ASCI
plans to continue to expand its  business  rapidly.  The Company  currently  has
commenced  service  in 18 of its target  markets,  and its goal is to have begun
service in all 50  contemplated  target  markets by the end of the calendar year
1998.  The  Company's  ability to manage its rapid  expansion  effectively  will
require it to continue to implement  and improve its  operating,  financial  and
accounting  systems, to attract and hire qualified personnel in each market, and
to expand,  train and manage  its  employee  base.  Delays in  constructing  any
network may  require  the Company to scale back the number of other  networks it
expects to build within a given time frame.  There can be no assurance  that the
Company  will be able to  implement  its growth  strategy or manage its expanded
operations effectively.  Any failure to do so may have a material adverse effect
on the Company's business, results of operations and financial condition.

     As part of its strategy, ACSI plans to expand the range of services that it
offers.  The Company is  developing  and has begun  offering on a limited  basis
high-speed  data and enhanced  voice  messaging  services  and,  upon receipt of
requisite  regulatory  approvals and where cost effective,  plans to offer local
switched voice services in certain of its markets  beginning in late 1996. These
are  services  that the  Company  has not  previously  offered.  There can be no
assurance  that a market will  develop for these  services,  that the  Company's
implementation  will be technically or economically  feasible,  that the Company
will be able to develop or market them successfully, or that the Company will be
able to operate and maintain these services profitably.


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     Substantial  Leverage,  Future  Cash  Obligations.   Since  inception,  the
Company's consolidated cash flow from operations has been negative. As a result,
the Company has been  required to pay its fixed charges  (including  interest on
existing  indebtedness)  and operating  expenses with the proceeds from sales of
its debt and equity  securities.  As of June 30, 1996, the Company  (through its
subsidiaries)  had  approximately  $15.0  million  in debt  outstanding  under a
secured  credit   facility  (the  "AT&T  Credit   Facility")  with  AT&T  Credit
Corporation,  a subsidiary of AT&T. The maximum  potential  borrowings under the
AT&T Credit Facility is approximately  $31.3 million.  Borrowings under the AT&T
Credit Facility may be used to fund the  construction  and operation of only six
of the Company's 50 contemplated  networks.  With the issuance of $190.0 million
principal  amount of the Company's 13% Senior Discount Notes due 2005 (the "2005
Notes") and the issuance of $120.0 million  principal amount of the Company's 12
3/4% Senior Discount Notes due 2006 (the "2006 Notes," and collectively with the
2005 Notes, the "Notes"),  the Company will be required to satisfy substantially
higher periodic cash debt service  obligations in the future.  Commencing in the
year  2001,  cash  interest  on the 2005  Notes and 2006  Notes  will be payable
semi-annually  at the rate of 13% per annum  (approximately  $24.7  million  per
year)  and  12  3/4%  per  annum   (approximately   $15.3   million  per  year),
respectively.  The full  accredited,  value of the 2005  Notes and 2006 Notes of
$190.0 million and $120.0 million, respectively,  will become due on November 1,
2005 and April 1, 2006,  respectively.  As of June 30,  1996,  the  Company  had
approximately  $184.4  million  of  outstanding  long-term  indebtedness.  It is
expected   that  the  Company  and  it   subsidiaries   will  incur   additional
indebtedness, including increasing its borrowings under the AT&T Credit Facility
to the  maximum  amount,  which  would be  possible  provided  the  Company  can
successfully  raise additional equity capital.  Many factors,  some of which are
beyond the Company's control,  will affect its performance and,  therefore,  its
ability to meet its ongoing  obligations  to repay the Notes and its other debt.
There can be no assurance  that the Company will be able to generate  sufficient
cash  flow or  otherwise  obtain  funds  in the  future  to cover  interest  and
principal payments associated with the Notes and its other debt.

     Certain Financial and Operating Restrictions.  The Indenture dated November
14, 1995  pursuant to which the 2005 Notes were issued and the  Indenture  dated
March 21, 1996 pursuant to which the 2006 Notes were issued  (collectively,  the
"Indentures")  and the AT&T Credit  Facility,  impose  operating  and  financial
restrictions on the Company and its subsidiaries. These restrictions affect, and
in certain  cases  significantly  limit or  prohibit,  among other  things,  the
ability of the Company or its subsidiaries to incur  additional  indebtedness or
create liens on its assets,  pay  dividends,  sell assets,  engage in mergers or
acquisitions  or  make  investments.   Failure  to  comply  with  any  of  these
restrictions  could limit the  availability  of borrowing or result in a default
thereunder.

     Significant   Future   Capital   Requirements.   The  Company's   continued
development,  construction,  expansion,  operation and potential  acquisition of
fiber optic networks, as well as the further development and introduction of new
services,  including  local switched  voice,  enhanced voice  messaging and high
speed  data  services,  will  require  substantial  capable  expenditures.   The
Company's  ability to fund these  expenditures  is dependent  upon the Company's
raising  substantial  financing.  To date, the Company has raised  approximately
$202.6  million in debt and equity  financing and obtained  approximately  $31.2
million in financing commitments from the AT&T Credit Facility.  The Company has
estimated  that from July 1, 1996  through  the end of the  calendar  year 1998,
capital  requirements for implementation of the Company's 50 city business plan,
including  the  development  and  construction  of  fiber  optic  networks,  the
deployment of a broadband inter-city data communications network and development
and introduction of new services, such as local switched voice,

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enhanced voice messaging and high-speed data services,  and for expansion of the
Company's existing networks, are approximately $410.9 million. At June 30, 1996,
the  Company  had  approximately  $132.7  million  of cash and cash  equivalents
available for the  completion of its planned  networks.  To meet its  additional
remaining capital requirements,  the Company may sell additional equity for debt
securities or increase its existing credit facility. Before incurring additional
indebtedness,  the  Company  may be  required  to seek  such  additional  equity
financing to maintain  balance sheet and liquidity ratios required under certain
of its debt instruments. In addition, the Company in the past has considered and
expects to  continue  to  consider  potential  acquisitions  or other  strategic
arrangements that may fit the Company's strategic plan. Although the Company has
had discussions concerning such potential acquisitions or arrangements,  to date
no agreements have been reached with regard to any particular  transaction.  Any
such acquisitions or strategic  arrangements that the Company might consider are
likely to require  additional  equity or debt financing,  which the Company will
seek to obtain as required. Failure to raise sufficient capital could compel the
Company  to delay or  abandon  some or all of its plans or  expenditures,  which
could have material  adverse  effect on its business,  results of operations and
financial condition. Also, the terms of any debt or equity capital raised by the
Company in the future could restrict the Company's  operational  flexibility and
ability to raise additional  capital and thereby  adversely affect the Company's
business, results of operations and financial condition.

     Business Combinations; Strategic Investments. The Company from time to time
engages in preliminary  discussions with (i) potential strategic investors (i.e.
investors  in the same or related  business)  who have  expressed an interest in
making an  investment in or acquiring  the Company and (ii)  potential  business
partners  looking  toward  formation  of  business   combinations  or  strategic
alliances that would expand the reach of the Company's networks or services.  In
addition to providing  additional  growth capital,  the Company believes that an
alliance  with an  appropriate  strategic  investor  or business  partner  could
provide  operating  synergies to, and enhance the competitive  position of, both
ACSI  and  such   strategic   investor/business   partner   within  the  rapidly
consolidating  telecommunications  industry.  There can be no assurance that any
agreement  with any  potential  strategic  investor or business  partner will be
reached on terms acceptable to the Company nor does the Company believe that any
such  investment,  business  combination or strategic  alliance is necessary for
successful   consummation  of  its  strategic  plan.  An  investment,   business
combination  or  strategic  alliance  could  constitute  a Change of Control (as
defined  in the  Indentures)  requiring  the  Company to offer to  purchase  all
outstanding  Notes.  In the event that such a Change of Control occurs at a time
when the Company does not have sufficient  available funds to purchase all Notes
tendered or a time when the Company is prohibited  from purchasing the Notes, an
Event  of  Default  (as  defined  in  the  Indentures)  could  occur  under  the
Indentures.  However,  the Company  currently has no agreement,  arrangement  or
understanding  with any  potential  strategic  investor  or  potential  business
partner  with  respect to any  acquisition,  business  combination  or strategic
alliance.


     Effect of  Regulation.  As a common  carrier,  the  Company  is  subject to
substantial  federal,  state and local  regulation.  The  Company's  fiber optic
networks do not require authorization from the Federal Communications Commission
for construction or installation. However, the Company must file tariffs stating
its rates, terms and conditions of service for interstate traffic,  although the
FCC has proposed  adopting  rules which would  preclude IXCs from filing tariffs
and is  considering  a request that the  proposed  rules also be  applicable  to
CLECs. State regulatory agencies regulate intrastate communications, while local
authorities control the Company's access to and use of municipal  rights-of-way.
The  Telecommunications  Act  preempted  all state and local legal  requirements
which prohibit or have the effect of prohibiting any entity from providing any

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intrastate  telecommunications service. However, many states continue to require
telecommunications carriers to obtain a certificate,  license, permit or similar
approval  before  providing  services.  Thus,  the Company's  ability to provide
additional  intrastate services is dependent upon its receipt of requisite state
regulatory approval.  The inability to obtain the approvals necessary to provide
intrastate switched services could have material adverse effect on the Company's
business,   results  of  operations  and  financial  condition.   Moreover,  the
Telecommunications Act has increased local competition by IXCs, cable television
service  providers  ("CATVs")  and public  utility  companies,  which may have a
material adverse effect on the Company. In addition,  the Telecommunications Act
has granted important benefits to the LECs, including providing LECs substantial
new pricing flexibility, restoring the ability of RBOCs to provide long distance
services and allowing RBOCs to provide certain cable television services.  These
changes  will tend to enhance the  competitive  position of the LECs,  which may
materially adversely affect the Company.  Furthermore, no assurance can be given
that  court  decisions  or  changes  in  current  or  future  federal  or  state
legislation or regulations would not materially adversely affect the Company.

     Internet-related services are not currently subject to direct regulation by
the FCC or any other U.S. agency other than regulation  applicable to businesses
generally.  The FCC  recently  requested  comments  on a  petition  filed by the
America's  Carriers  Telecommunication  Association  which requests that the FCC
regulate  certain voice  transmissions  over the Internet as  telecommunications
services.    Changes   in   the   regulatory   environment   relating   to   the
telecommunications  or Internet-related  services industry could have an adverse
effect   on   the   Company's    Internet-related    services   business.    The
Telecommunications Act may permit telecommunications  companies, RBOCs or others
to increase the scope or reduce the cost of their Internet access services.  The
Company cannot predict the effect that the Telecommunications Act or any further
legislation, regulation or regulatory changes may have on its business

     Competition.  The Company operates in a highly competitive  environment for
all of its services.  An increasing trend toward strategic business alliances in
the telecommunications industry may create significant new competition for ACSI.

     Dedicated and Switched Voice  Services.  The Company's  competitors in this
market are predominantly LECs, other CLECs and CATVs and may potentially include
microwave carriers,  satellite carriers,  teleports, public utilities,  wireless
telecommunications  providers,  IXCs,  integrated  communications  providers and
private   networks   built  by  large  end  users.   With  the  passage  of  the
Telecommunications Act and the entry of RBOCs into the long distance market, the
Company  believes  that IXCs may  construct  their own local  facilities  and/or
resell  local  services  in order to  compete  with the  bundled  local and long
distance   services   to  be   offered   by  the  LECs  and  a  result   of  the
Telecommunications  Act.  Given  that a  substantial  portion  of the  Company's
revenues  are  billed to IXCs for  services  provided  for the  benefit of their
customers, such action could have a material adverse effect on the Company.

     Currently,  the Company  does not have a  significant  market  share in any
market.   Most  of  the  Company's   actual  and  potential   competitors   have
substantially  greater  financial,  technical and marketing  resources  than the
Company.  In  particular,  LECs  have  long-standing  relationships  with  their
customers, have the potential to subsidize access services with monopoly service
revenue and benefit from certain existing  federal,  state and local regulations
that the Company believes, in certain respects, favor LECs over the Company. For
example,  the  interconnection  decisions issued by the FCC in 1992 and 1993 and
the Telecommunications Act, which

                                      - 4 -

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allow CLECs to  interconnect  with LECs'  facilities,  have been  accompanied by
increased  pricing  flexibility and partially  relaxed  regulatory  oversight of
LECs.  The Company  expects  that LECs will offer time and volume  discounts  to
customers,  which will further  increase  competition  for the Company and other
CLECs and which  could  significantly  adversely  affect  the  Company's  future
dedicated services revenues.  Moreover, some LECs impose reconfiguration charges
on  customers  seeking  to  shift  their  traffic  from LEC  facilities  to CLEC
facilities,  which may have an  adverse  effect on a CLEC's  ability  to attract
these customers.

     The Company  expects  that other CLECs may operate in most,  if not all, of
the markets targeted by the Company and many of these markets may not be able to
support multiple CLECs.  Additionally,  delays in constructing any network could
adversely affect the Company's competitive position in markets where another CAP
or  CLEC  has a  network  under  construction  or  can  provide  services  on an
already-existing  network.  There can be no  assurance  that the Company will be
able to achieve or maintain  an adequate  market  share,  maintain  construction
schedules or compete effectively in any of its markets.

     Data Services.  The market for data communications  services,  including IP
switching,  is extremely competitive.  The are no substantial barriers to entry,
and the Company  expects that  competition  will  intensify  in the future.  The
Company believes that its ability to compete successfully depends on a number of
factors,  including  market  presence;  the ability to execute a rapid expansion
strategy; the capacity, reliability and security of this network infrastructure;
ease of access to and  navigation of the Internet;  the pricing  policies of its
competitors  and suppliers;  the timing of the  introduction of new products and
services by the Company and its  competitors;  the Company's  ability to support
industry  standards;  and industry and general  economic  trends.  The Company's
success in this  matter  will depend  heavily  upon its ability to provide  high
quality Internet  connectively and value-added  Internet services at competitive
prices.

     Dependence  on a Small Number of Major  Customers.  The Company  receives a
significant  portion  of its  revenue  from a small  number of major  customers,
particularly  the IXCs that serve the  Company's  markets.  For the fiscal  year
ended  June  30,  1996,   approximately  60%  of  the  Company's  revenues  were
attributable to dedicated access services  provided to four of the largest IXCs,
respectively,  including  services  provided for the benefit of their customers.
The Company is, and expects to continue to be,  dependent  upon such  customers,
and the loss of any one of them  could  have a  material  adverse  effect on the
Company's   business,   results  of   operations   and   financial   conditions.
Additionally,  customers who account for  significant  portions of the Company's
revenues may have the ability to  negotiate  prices for the  Company's  services
that are more  favorable to the customer and that result in lower profit margins
for the Company. The Telecommunications Act may also encourage IXCs to construct
their  own  local  facilities   and/or  resell  the  local  services  of  ACSI's
competitors, which may materially adversely affect the Company.

     Limited  Operating  Revenues;  Limited  Marketing  and  Operating  Efforts.
Although the Company has begun to generate operating revenues in 18 markets,  it
has not yet  commenced  operations  or generated  revenue in its other  targeted
markets. The Company will be required to expand its marketing efforts to attract
customers as its networks  are being built in each market.  Additional  staffing
will be required to manage future administrative, operating, marketing and sales
functions  effectively.  Failure to obtain significant and widespread commercial
and public  acceptance  of its  networks  and access to certain  buildings  in a
market  could  jeopardize  the  Company's  ability to remain in business in that
market. There can be no assurance that the

                                      - 5 -

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Company will be able to secure  customers for the commercial use of its proposed
networks or access to buildings in each market.

     Impact of Technological Change. The telecommunications  industry is subject
to rapid and significant  technological  change that could materially affect the
continued use of fiber optic cable or the electronics  utilized in the Company's
networks.  Although  the  affect of  technological  changes,  including  changes
related  to the  emerging  wireline  and  wireless  transmission  and  switching
technologies,  on the future  business of the Company  cannot be  predicted,  it
could have a  material  adverse  effect on the  Company's  business,  results of
operations and financial condition.

     The market for the  Company's  telecommunications  products and services is
characterized  by rapidly  changing  technology,  evolving  industry  standards,
emerging competition and frequent new product and service  introductions.  There
can be so assurance that the Company will successfully  identify new product and
service opportunities and develop and bring new products and services to market.
The   Company   is  also  at  risk   from   fundamental   changes   in  the  way
telecommunications  services are  marketed and  delivered.  The  Company's  data
communications  service  strategy  assumes that the TCP/IP,  frame relay and ATM
protocols,   utilizing   fiber   optic   or   cooper-based    telecommunications
infrastructures,  will  continue  to be  the  primary  protocols  and  transport
infrastructures  for data  communications  services.  The  Company's  pursuit of
necessary  technological  advances may require substantial time and expense, and
there  can be no  assurance  that the  Company  will  succeed  in  adapting  its
telecommunications  services business to alternate access devices,  conduits and
protocols.

     Dependence on Rights-of-Way and Other Third Party  Agreements.  The Company
must obtain  easements,  rights-of-way,  franchises and licenses  (collectively,
"local   approvals")  from  various  private   parties,   actual  and  potential
competitors  and local  governments in order to construct and maintain its fiber
optic  networks.  The Company has  obtained  the local  approvals  necessary  to
construct and operate its networks in the central  business  districts of all of
the markets in which the Company's  digital  fiber optic  networks are presently
operating  or are under  construction.  The Company does not yet have all of the
local  approvals  required to implement  its business  plan in  prospective  new
markets,  and there can be no assurance  that the Company will be able to obtain
and maintain  local  approvals on acceptable  terms or that other CLECs will not
obtain  similar  local  approvals  that will allow them to compete  against  the
Company or enter a market before the Company.  Some of the  agreements for local
approvals  obtained by the Company may be short-term,  or revocable at will, and
there  can be no  assurance  that the  Company  will  have  continued  access to
existing  rights-of-way and franchises after their  expiration.  If any of these
agreements were terminated or could not be renewed and the Company was forced to
remove  its fiber  from the  streets  or  abandon  its  network  in place,  such
termination would be likely to have a materially adverse effect on the Company's
business, results of operations and financial condition.

     As a condition to allowing use of rights-of-way  or granting  franchises to
the Company,  certain local governments  require the Company to post performance
bonds or letters of credit and to pay ongoing fees based upon the gross revenues
generated by, or linear  footage of, the  applicable  network.  In many markets,
LECs are not required to pay such fees or pay substantially less than those paid
by the Company  which may put the Company at a competitive  disadvantage  in its
markets.


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     Potential  Liability of Internet  Access  Providers.  The law governing the
liability of on-line  services  providers  and  Internet  access  providers  for
participating  in the hosting or  transmission  of  objectionable  materials  or
information  currently is unsettled.  Under the terms of the  Telecommunications
Act, both civil and criminal penalties can be imposed for the use of interactive
computer   services  for  the   transmission  of  certain  indecent  or  obscene
communications.  While this  provision  has been stayed by a federal court while
its  constitutionality  is being  considered,  many states  have  adopted or are
considering adopting similar requirements. In addition, several private lawsuits
have been filed  seeking  to hold  Internet  access  providers  accountable  for
information  which they transmit.  In one such case pending in the United States
District  Court  for  the  Northern  District  of  California,   i.e.  Religious
Technology  Center v. NETCOM On-Line  Communications  Services,  Inc., the court
ruled that an Internet  access  provider can  potentially be held liable for the
copyright infringement committed by its subscribers.  While the outcome of these
activities  is  uncertain,  the ultimate  imposition  of potential  liability on
Internet  access  providers  for  information  which  they host,  distribute  or
transport could materially change the way they must conduct  business.  To avoid
undue exposure to such liability, Internet access providers will be compelled to
engage in burdensome  investigation of subscriber  materials or even discontinue
offering the service all together.

     Dependence Upon Network  Infrastructure,  Risk of System Failure;  Security
Risks.  The  Company's  success  in  marketing  its  services  to  business  and
government  users  requires  that  the  Company  provide  superior  reliability,
capacity and security via its network infrastructure. The Company's networks are
subject to physical damage, power loss, capacity limitations,  software defects,
breaches of security  (by computer  virus,  break-ins  or  otherwise)  and other
factors,  certain  of which may  cause,  interruptions  in  service  or  reduced
capacity for the customers.  Interruptions in service,  capacity  limitations or
security  breaches  could  have a  material  adverse  effect  on  the  Company's
business, financial condition and results of operations.

     Dependence Upon Suppliers;  Sole and Limited Sources of Supply. The Company
relies on other  companies  to supply  certain  key  components  of its  network
infrastructure,  including telecommunications services and networking equipment,
which, in the quantities and quality demanded by the Company, are available only
from sole or limited sources. The Company is also dependent upon IECs to provide
telecommunications  services to the Company and its  customers.  The Company has
from time to time experienced delays in receiving  telecommunications  services,
and there  can be no  assurance  that the  Company  will be able to obtain  such
services on the scale and within the time  frames  required by the Company at an
affordable  cost,  or at all. Any failure to obtain such  services or additional
capacity  on a timely  basis at an  affordable  cost,  or at all,  would  have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations.  The Company also is dependent on its suppliers'  ability
to provide  necessary  products and components that comply with various Internet
and  telecommunications  standards,  inter- operate with products and components
from other  vendors  and  function  as intended  when  installed  as part of the
network  infrastructure.  Any failure of the  Company's  sole or limited  source
suppliers to provide products or components that comply with Internet standards,
interoperate  with  other  products  or  components  used by the  Company in its
network infrastructure or by its customers or fulfill their intended function as
part of the network  infrastructure  could have a material adverse effect on the
Company's business, financial condition and results of operations.

     Dependence on Key  Personnel.  The Company is currently  managed by a small
number of key  management  and operating  personnel,  whose efforts will largely
determine the Company's success. The success

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of the  Company  also  depends  upon its  ability to hire and  retain  qualified
operating,  marketing and financial and  technical  personnel.  Competition  for
qualified  personnel  in  the   telecommunications   industry  is  intense  and,
accordingly, there can be no assurance that the Company will be able to continue
to hire or retain  necessary  personnel.  The loss of key management  personnel,
particularly Anthony J. Pompliano,  the Company's Chairman, or Richard A. Kozak,
its President and Chief Executive Officer,  would likely have a material adverse
effect on the Company.


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