<PAGE>

    As filed with the Securities and Exchange Commission on August 14, 2000

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

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

                                   FORM 10-Q

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

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

For the Quarterly Period Ended June 30, 2000   Commission file number 333-49397

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

                       Focal Communications Corporation
            (Exact name of registrant as specified in its charter)

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

<TABLE>
<S>                                            <C>
                  Delaware                                       36-4167094
          (State of incorporation)                  (IRS Employer Identification Number)
</TABLE>

                             200 N. LaSalle Street
                                  Suite 1100
                               Chicago, IL 60601
         (Address of principal executive offices, including zip code)

                                (312) 895-8400
                        (Registrant's telephone number)

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

  Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or required 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 issuer's common stock, as of July
31, 2000:

                Common stock ($.01 par value) 61,118,099 shares

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>

                                     INDEX

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
 <C>     <S>                                                               <C>
 PART I--FINANCIAL INFORMATION

 Item 1. Financial Statements (Unaudited)...............................     4

         Condensed Consolidated Statements of Operations for the three
         and six months ended June 30, 2000 and 1999....................     4

         Condensed Consolidated Balance Sheets as of June 30, 2000 and
         December 31, 1999..............................................     5

         Condensed Consolidated Statements of Cash Flows for the six
         months ended June 30, 2000 and 1999............................     6

         Condensed Notes to Interim Consolidated Financial Statements...     7

 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..............................................    19

 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...............................    20

 SIGNATURES..............................................................   21
</TABLE>
<PAGE>

               INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

  We make statements in this Report on Form 10-Q that are not historical
facts. These "forward-looking statements" can be identified by the use of
terminology such as "believes," "expects," "may," "will," "should" or
"anticipates" or comparable terminology. These forward-looking statements
include, among others, statements concerning:

 . Our business strategy and competitive advantages

 . Our anticipation of potential revenues from designated markets or customers

 . Statements regarding the growth of the communications services industry and
   our business

 . The market potential of our services and products

 . Forecasts of when we will enter particular geographic markets or begin
   offering particular services

 . Our anticipated capital expenditures and funding requirements

 . Anticipated regulatory developments

  These statements are only predictions. You should be aware that these
forward-looking statements are subject to risks and uncertainties, including
financial, regulatory developments, industry growth and trend projections,
that could cause actual events or results to differ materially from those
expressed or implied by the statements. The most important factors that could
affect these statements or prevent us from achieving our stated goals include,
but are not limited to, our failure to:

 . Successfully expand our operations into new geographic markets on a timely
   and cost-effective basis

 . Successfully introduce and expand our data and voice service offerings on a
   timely and cost effective basis

 . Design and install our Internet services infrastructure

 . Respond to competitors in our existing and planned markets

 . Execute and renew interconnection agreements with incumbent carriers on
   terms satisfactory to us

 . Enter into and maintain our agreements for transport facilities and
   services, including Internet transit services

 . Maintain acceptance of our services by new and existing customers

 . Attract and retain talented employees

 . Prevail in legal and regulatory proceedings regarding reciprocal
   compensation for Internet-related calls

 . Obtain and maintain any required governmental authorizations, franchises
   and permits, all in a timely manner, at reasonable costs and on
   satisfactory terms and conditions

 . Respond effectively to regulatory, legislative and judicial developments,
   including developments relating to reciprocal compensation

 . Manage administrative, technical and operational issues presented by our
   expansion plans

 . Raise sufficient capital on acceptable terms and on a timely basis

 . Successfully provision digital subscriber line, or DSL, services

                                       3
<PAGE>

                         Part I--Financial Information

Item 1. Financial Statements

               FOCAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
           For the Three and Six Months Ended June 30, 2000 and 1999
                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                             For the three months       For the six months
                                 ended June 30             ended June 30
                            ------------------------  ------------------------
                               2000         1999         2000         1999
                            -----------  -----------  -----------  -----------
<S>                         <C>          <C>          <C>          <C>
REVENUES:
  Data services............ $    42,638  $    24,232  $    74,828  $    44,211
  Telecom services.........      18,050        6,095       31,189       12,120
                            -----------  -----------  -----------  -----------
    Total revenues.........      60,688       30,327      106,017       56,331
                            -----------  -----------  -----------  -----------
EXPENSES:
  Customer service and
   network operations......      43,205       14,986       76,460       25,355
  Selling, general and
   administrative..........      18,110        6,919       32,691       12,585
  Depreciation and
   amortization............      12,768        4,938       23,144        8,965
  Non-cash compensation
   expense.................       1,597          811        3,045        2,371
                            -----------  -----------  -----------  -----------
    Total operating
     expenses..............      75,680       27,654      135,340       49,276
                            -----------  -----------  -----------  -----------
OPERATING INCOME (LOSS)....     (14,992)       2,673      (29,323)       7,055
                            -----------  -----------  -----------  -----------
OTHER INCOME (EXPENSE):
  Interest income..........       6,431        1,214       12,239        2,520
  Interest expense, net....     (13,893)      (5,881)     (26,768)     (11,284)
  Other income (expense),
   net.....................         --           --           242          --
                            -----------  -----------  -----------  -----------
    Total other expense....      (7,462)      (4,667)     (14,287)      (8,764)
                            -----------  -----------  -----------  -----------
LOSS BEFORE INCOME TAXES...     (22,454)      (1,994)     (43,610)      (1,709)
INCOME TAX BENEFIT
 (EXPENSE).................       1,069         (308)       1,400         (308)
                            -----------  -----------  -----------  -----------
NET LOSS................... $   (21,385) $    (2,302) $   (42,210) $    (2,017)
                            ===========  ===========  ===========  ===========
BASIC AND DILUTED NET LOSS
 PER SHARE OF COMMON
 STOCK..................... $     (0.35) $     (0.05) $     (0.70) $     (0.05)
                            ===========  ===========  ===========  ===========
BASIC AND DILUTED WEIGHTED
 AVERAGE NUMBER OF SHARES
 OF COMMON STOCK
 OUTSTANDING...............  60,309,169   44,111,000   60,229,965   44,037,515
                            ===========  ===========  ===========  ===========
</TABLE>

    The accompanying condensed notes are an integral part of these condensed
                       consolidated financial statements.

                                       4
<PAGE>

               FOCAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   As of June 30, 2000 and December 31, 1999
                  (Dollars in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                        June 30,   December 31,
                                                          2000         1999
                                                       ----------- ------------
                                                       (unaudited)
<S>                                                    <C>         <C>
                        ASSETS
CURRENT ASSETS:
  Cash and cash equivalents...........................  $329,069     $178,142
  Short-term investments..............................    12,891       10,000
  Accounts receivable, net of allowance for doubtful
   accounts of $7,200 and $7,700 at June 30, 2000 and
   December 31, 1999, respectively....................    40,991       27,247
  Other current assets................................     6,012        4,543
                                                        --------     --------
    Total current assets..............................   388,963      219,932
                                                        --------     --------
PROPERTY, PLANT and EQUIPMENT, at cost................   353,599      224,470
  Less--Accumulated depreciation and amortization.....   (50,323)     (28,169)
                                                        --------     --------
    Property, Plant and Equipment, net................   303,276      196,301
OTHER NONCURRENT ASSETS...............................    10,852        4,753
                                                        --------     --------
                                                        $703,091     $420,986
                                                        ========     ========

         LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable....................................  $ 46,559     $ 15,324
  Accrued liabilities.................................    15,216        7,560
  Current maturities of long-term debt................     9,708        9,252
                                                        --------     --------
    Total current liabilities.........................    71,483       32,136
                                                        --------     --------
LONG-TERM DEBT, net of current maturities.............   525,101      244,534
                                                        --------     --------
COMMITMENTS AND CONTINGENCIES

OTHER NONCURRENT LIABILITIES..........................     2,436        1,829
                                                        --------     --------
STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value; 100,000,000 shares
   authorized; 61,033,463 and 60,748,981 issued and
   outstanding at June 30, 2000 and December 31, 1999,
   respectively.......................................       610          607
  Additional paid-in capital..........................   180,738      177,535
  Deferred compensation...............................    (1,331)      (1,919)
  Accumulated deficit.................................   (75,946)     (33,736)
                                                        --------     --------
    Total stockholders' equity........................   104,071      142,487
                                                        --------     --------
                                                        $703,091     $420,986
                                                        ========     ========
</TABLE>

The accompanying condensed notes are an integral part of these condensed
consolidated financial statements.

                                       5
<PAGE>

               FOCAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                For the Six Months Ended June 30, 2000 and 1999
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                           For the six months
                                                             ended June 30
                                                           -------------------
                                                             2000       1999
                                                           ---------  --------
<S>                                                        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (42,210) $ (2,017)
Adjustments to reconcile net loss to net cash
 provided by operating activities--
  Depreciation and amortization...........................    23,144     8,965
  Non-cash compensation expense...........................     3,045     2,371
  Gain on sale of investment in affiliate.................      (199)      --
  Loss on disposal of property, plant and equipment.......        99       --
  Amortization of obligation under capital lease..........     1,132       --
  Amortization of discount on senior notes................    11,397    10,052
  Provision for losses on accounts receivable.............     4,372     2,711
  Changes in operating assets and liabilities--
    Accounts receivable...................................   (18,116)  (13,172)
    Other current assets..................................    (1,469)   (2,277)
    Accounts payable and accrued liabilities..............    38,891     4,546
    Other noncurrent assets and liabilities, net..........       490     1,114
                                                           ---------  --------
      Net cash provided by operating activities...........    20,576    12,293
                                                           ---------  --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures....................................  (129,245)  (60,053)
  Change in short-term investments........................    (2,891)  (10,586)
  Proceeds from sale of investment in affiliate...........       900       --
                                                           ---------  --------
      Net cash used in investing activities...............  (131,236)  (70,639)
                                                           ---------  --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Deferred debt issuance costs............................    (7,656)      --
  Proceeds from issuance of long-term debt................   273,020    19,094
  Payments on long-term debt..............................    (4,526)   (1,472)
  Net proceeds from the issuance of common stock..........       749       948
                                                           ---------  --------
      Net cash provided by financing activities...........   261,587    18,570
                                                           ---------  --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS......   150,927   (39,776)

CASH AND CASH EQUIVALENTS, beginning of period............   178,142   126,041
                                                           ---------  --------
CASH AND CASH EQUIVALENTS, end of period.................. $ 329,069  $ 86,265
                                                           =========  ========
</TABLE>

    The accompanying condensed notes are an integral part of these condensed
                       consolidated financial statements.

                                       6
<PAGE>

               FOCAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES

         CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                 (Dollars in thousands, except share amounts)

1. Basis of Presentation

  Except as otherwise required by the context, references in this Form 10-Q to
"Focal", "we", "us", or "our" refer to the combined businesses of Focal
Communications Corporation and all of its subsidiaries. The accompanying
interim condensed consolidated financial statements reflect all adjustments,
consisting of normal recurring accruals, which we believe are necessary to
present fairly the financial position, results of operations, and cash flows
for Focal for the respective periods presented. Certain information and
footnote disclosures normally included in the annual consolidated financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission for Form 10-Q. These
interim condensed consolidated financial statements should be read in
conjunction with our Annual Report on Form 10-K for the year ended December
31, 1999, filed on March 10, 2000. The consolidated balance sheet at December
31, 1999 included herein was derived from our audited consolidated financial
statements, but does not include all disclosures required under generally
accepted accounting principles.

  Certain amounts in the prior period's consolidated financial statements have
been reclassified to conform with the current period presentation.

2. Risks and Uncertainties

  Reciprocal compensation payments are amounts paid by one carrier to send
traffic to another carrier's network. Reciprocal compensation is currently a
significant component of our total revenues. As a result of several trends in
our business and the current regulatory environment, we expect revenues from
reciprocal compensation to decline as a percentage of total revenues. A
reduction in or elimination of revenues attributable to reciprocal
compensation which is not offset by increases in other revenues generated by
us may have a material adverse effect on us and our results of operations.

3. Property, Plant and Equipment

  Property, plant and equipment are stated at cost, which includes direct
costs and capitalized interest, and are depreciated once placed in service
using the straight line method.

  Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                                        June 30,   December 31,
                                                          2000         1999
                                                       ----------- ------------
                                                       (Unaudited)
   <S>                                                 <C>         <C>
   Building and improvements..........................  $  8,433     $  8,365
   Communications network.............................   159,059      106,723
   Computer equipment.................................    17,247       11,646
   Leasehold improvements.............................    31,779       24,756
   Furniture and fixtures.............................     7,227        5,020
   Motor vehicles.....................................       353          152
   Construction in progress...........................   108,584       46,891
   Assets under capital lease.........................    20,917       20,917
                                                        --------     --------
                                                         353,599      224,470
   Less--Accumulated depreciation and amortization....   (50,323)     (28,169)
                                                        --------     --------
     Total............................................  $303,276     $196,301
                                                        ========     ========
</TABLE>

                                       7
<PAGE>

4. Debt

  Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                        June 30,   December 31,
                                                          2000         1999
                                                       ----------- ------------
                                                       (Unaudited)
   <S>                                                 <C>         <C>
   12.125% senior discount notes due 2008, net of
    unamortized discount of $71,878 and $83,184 at
    June 30, 2000 and December 31, 1999,
    respectively......................................  $198,122     $186,816
   11.875% senior notes due 2010, net of unamortized
    discount of $1,888 at June 30, 2000...............   273,112          --
   Secured equipment term loan, maximum borrowing
    level at $50,000..................................    39,934       44,214
   Obligation under capital lease.....................    23,126       21,994
   Term loan payable in monthly installments through
    June 2001 at an interest rate of 6.5%.............       515          762
                                                        --------     --------
                                                         534,809      253,786
   Less--current maturities...........................    (9,708)      (9,252)
                                                        --------     --------
     Total............................................  $525,101     $244,534
                                                        ========     ========
</TABLE>

  Aggregate maturities of long-term debt outstanding as of June 30, 2000, are
as follows:

<TABLE>
      <S>                                                               <C>
      2000............................................................. $  4,726
      2001.............................................................    9,912
      2002.............................................................   10,638
      2003.............................................................   11,728
      2004.............................................................    3,447
      Thereafter.......................................................  494,358
                                                                        --------
        Total.......................................................... $534,809
                                                                        ========
</TABLE>

  On January 12, 2000, we received net proceeds of approximately $265,700 from
the issuance of our $275,000 117/8% senior notes due 2010 ("2000 Notes"). The
2000 Notes bear interest at a rate of 11.875% per annum payable in cash on
July 15 and January 15, commencing July 15, 2000. The 2000 Notes are not
secured by any of our assets and rank equally in right of payment with all our
unsubordinated and unsecured indebtedness. The 2000 Notes are senior in right
of payment to all of our future subordinated indebtedness. We may elect to
redeem all or part of the 2000 Notes at any time from time to time, on or
after January 15, 2005 at specified redemption prices. In addition, at any
time and from time to time prior to January 15, 2003 we may redeem in the
aggregate up to 35% of the initially outstanding aggregate principal amount of
the 2000 Notes with the proceeds from one or more registered underwritten
primary public offerings of common stock at a price of 111.875% of the
principal amount of the 2000 Notes so long as at least 65% of the original
aggregate principal amount of the 2000 Notes remains outstanding after each
redemption.

5. Loss Per Share

  We compute basic earnings per common share based on the weighted average
number of shares of common stock outstanding for the period. This calculation
excludes certain unvested shares of common stock held by our executives.
Diluted earnings per common share are adjusted for the assumed exercise of
dilutive stock options and unvested shares of common stock. Since the
adjustments required for the calculation of diluted weighted average common
shares outstanding are anti-dilutive for the three and six months ended June
30, 2000 and 1999,

                                       8
<PAGE>

this calculation has been excluded from the net loss per share calculation.
Our basic and diluted weighted average number of shares outstanding for the
three and six months ended June 30, 2000 and 1999 is as follows:

<TABLE>
<CAPTION>
                             Three Months Three Months
                                Ended        Ended      Six Months    Six Months
                               June 30,     June 30,       Ended         Ended
                                 2000         1999     June 30, 2000 June 30, 1999
                             ------------ ------------ ------------- -------------
   <S>                       <C>          <C>          <C>           <C>
   Basic weighted average
    number of common shares
    outstanding............   60,309,169   44,111,000   60,229,965    44,037,515
   Dilutive stock options
    and unvested common
    shares.................    8,003,199    8,149,648    7,418,608     7,873,410
                              ----------   ----------   ----------    ----------
   Dilutive weighted
    average number of
    common shares
    outstanding............   68,312,368   52,260,648   67,648,573    51,910,925
                              ==========   ==========   ==========    ==========
</TABLE>

6. Commitments and Contingencies

  Under the terms of various short- and long-term contracts and agreements, we
are obligated to make payments for office rents and for leasing components of
our communications network through 2019. The office rent contracts provide for
certain scheduled increases and for possible escalation of basic rentals based
on a change in the cost of living or on other factors. We expect to enter into
other contracts for additional components of our communications network,
office space, other facilities, equipment and maintenance services.

  A summary of such fixed commitments at June 30, 2000 is as follows:

<TABLE>
<CAPTION>
      Year                                                               Amount
      ----                                                              --------
      <S>                                                               <C>
      2000............................................................. $ 21,336
      2001.............................................................   29,270
      2002.............................................................   31,624
      2003.............................................................   31,525
      2004.............................................................   23,979
      Thereafter.......................................................  109,670
                                                                        --------
        Total.......................................................... $247,404
                                                                        ========
</TABLE>

  Rent expense under operating leases for office rent and for leasing
components of our communications network was approximately $2,649 and $4,801
and $1,381 and $ 2,503 for the three and six months ended June 30, 2000 and
1999, respectively.

7. Stock Options

  We established the Focal Communications Corporation 1997 Non Qualified Stock
Option Plan (the "1997 Plan") effective February 27, 1997. The 1997 Plan is
administered by the compensation committee of our Board of Directors ("the
Board"). Options to purchase 6,927,650 shares were issued under the 1997 Plan
and no further options will be granted under the 1997 Plan.

  We adopted the Focal Communications Corporation 1998 Equity and Performance
Incentive Plan (the "1998 Plan") on August 21, 1998. The total number of
shares available under the 1998 Plan shall not exceed 12,050,000 shares. The
Board and, with respect to non-executive employees, the stock option committee
of our Board of Directors, has sole and complete authority to select
participants and grant options, and other equity-based instruments for our
common stock.

  On August 21, 1998, we also adopted the 1998 Equity Plan for Non-Employee
Directors of Focal Communications Corporation (the "1998 Non-Employee Plan").
The total number of shares available under the 1998 Non-Employee Plan shall
not exceed 150,000 shares. The Board has sole and complete authority to select
participants and grant options for our common stock, as defined in the 1998
Non-Employee Plan.

  Under our stock option plans, the Board and stock option committee have
complete discretion in determining vesting periods and terms of each
participant's options granted. The options granted to participants

                                       9
<PAGE>

under our stock option plans typically vest at 25% on the first anniversary
from grant date, with vesting at 12.5% every six months for the remainder of
vesting years. The term of each option has a life of 10 years. In addition,
the plans provide for accelerated vesting upon certain events.

  The following summarizes option activity:

<TABLE>
<CAPTION>
                                                                      Weighted
                                             Shares of                Average
                                              Common      Exercise    Exercise
                                               Stock       Prices      Price
                                             ---------  ------------- --------
   <S>                                       <C>        <C>           <C>
   Outstanding at December 31, 1999......... 6,353,820  $ 0.58-$25.00  $ 4.14
   Activity for the six months ended June
    30, 2000:
   Options Granted.......................... 3,868,791   26.25- 45.06   33.00
   Options Exercised........................  (309,482)   0.58-  3.73    2.40
   Options Canceled.........................  (288,760)   2.21- 45.06   20.27
                                             ---------  -------------  ------
   Outstanding at June 30, 2000............. 9,624,369  $ 0.58-$45.06  $15.31
                                             =========  =============  ======
</TABLE>

  The following table summarizes information about fixed stock options
outstanding at June 30, 2000:

<TABLE>
<CAPTION>
                                    Options Outstanding        Options Exercisable
                              -------------------------------- --------------------
                                           Weighted
                                            Average   Weighted             Weighted
                                           Remaining  Average              Average
                                Options   Contractual Exercise   Options   Exercise
   Range of Exercise Prices   Outstanding    Life      Price   Exercisable  Price
   ------------------------   ----------- ----------- -------- ----------- --------
   <S>                        <C>         <C>         <C>      <C>         <C>
   At December 31, 1999....    6,353,820      8.7      $ 4.14     943,023   $ 2.12
                               =========      ===      ======   =========   ======
   $ 0.58-$ 4.51...........    5,594,578      8.2        2.99   1,206,935     2.27
   $22.53-$27.04...........    1,022,593      9.4       25.91         --       --
   $27.04-$31.54...........    1,843,875      9.9       29.88         --       --
   $31.54-$36.05...........      257,000      9.8       32.75         --       --
   $40.56-$45.06...........      906,323      9.7       44.82         268    44.50
                               ---------      ---      ------   ---------   ------
   At June 30, 2000........    9,624,369      8.9      $15.31   1,207,203   $ 2.29
                               =========      ===      ======   =========   ======
</TABLE>

8. Segment Information

  We are organized primarily on the basis of strategic geographic operating
segments that provide communications services in each respective geographic
region. All of our geographic operating segments have been aggregated into one
reportable segment as of and for the periods ended June 30, 2000 and 1999, and
as of December 31, 1999.

  Our chief operating decision maker views earnings before interest, income
taxes, depreciation and amortization ("EBITDA") as the primary measure of
profit and loss. The following represents information about revenues, EBITDA
(which excludes non-cash compensation), total assets and capital expenditures
as of June 30, 2000 and December 31, 1999; and for the six months ended June
30, 2000 and 1999:

<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                          ----------------------
                                                          June 30,    June 30,
                                                            2000        1999
                                                          --------  ------------
   <S>                                                    <C>       <C>
   Data services revenue................................. $ 74,828    $ 44,211
   Telecom services revenue..............................   31,189      12,120
                                                          --------    --------
   Total revenues........................................  106,017      56,331

   EBITDA................................................ $ (7,050)   $ 17,832

<CAPTION>
                                                          June 30,  December 31,
                                                            2000        1999
                                                          --------  ------------
   <S>                                                    <C>       <C>
   Total assets.......................................... $311,640    $202,324
   Capital expenditures..................................  129,245     128,550
                                                          ========    ========
</TABLE>


                                      10
<PAGE>

  The following reconciles our total segment EBITDA to our consolidated net
income (loss) before income taxes for the six months ended June 30, 2000 and
1999:

<TABLE>
<CAPTION>
                                                                     Six months
                                                         Six months    Ended
                                                         Ended June   June 30,
                                                          30, 2000      1999
                                                         ---------- ------------
   <S>                                                   <C>        <C>
   Total EBITDA for reportable segment..................  $ (7,050)   $ 17,832
   Corporate EBITDA.....................................     3,916         559
   Depreciation and amortization........................   (23,144)     (8,965)
   Interest expense, net................................   (26,768)    (11,284)
   Interest income......................................    12,239       2,520
   Other income (expense), net..........................       242         --
   Non-cash compensation................................    (3,045)     (2,371)
                                                          --------    --------
     Net loss before income taxes.......................  $(43,610)   $ (1,709)
                                                          ========    ========

  The following reconciles our total segment assets to our consolidated total
assets as of June 30, 2000 and December 31, 1999:

<CAPTION>
                                                          June 30,  December 31,
                                                            2000        1999
                                                         ---------- ------------
   <S>                                                   <C>        <C>
   Total assets for reportable segment..................  $311,640    $202,324
   Cash and short-term investments......................   341,960     188,142
   Other current assets.................................     2,450       3,745
   Property, plant and equipment, net...................    36,189      22,022
   Other noncurrent assets..............................    10,852       4,753
                                                          --------    --------
     Total consolidated assets..........................  $703,091    $420,986
                                                          ========    ========
</TABLE>

  We currently operate solely in the United States. We have no customers that
accounted for more than 10% of our revenues during the six months ended June
30, 2000 and 1999.

  Our relationships with Ameritech and Bell Atlantic are mandatory, co-carrier
relationships and are not that of a customer and supplier. Nevertheless,
Ameritech and Bell Atlantic are shown here due to their contribution to our
revenues for the six months ended June 30, 2000 and 1999.

<TABLE>
<CAPTION>
                                                           Six months Six months
                                                           Ended June Ended June
                                                            30, 2000   30, 1999
                                                           ---------- ----------
   <S>                                                     <C>        <C>
   Revenue contribution from Ameritech....................  $29,251    $27,548
   Revenue contribution from Bell Atlantic................  $18,629    $13,058
</TABLE>

9. Subsequent Event

  In July, we received a commitment for $300 million of senior secured credit
facilities. The credit facilities are subject to customary conditions for a
transaction of this type, including completion of definitive documentation and
finalization of all terms and conditions. We expect to close these facilities
in August of 2000.

                                      11
<PAGE>

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

Overview

  General. Focal provides data and telecom services to large, communications-
intensive users in major cities. We began operations in 1996 and currently
serve a total of 19 markets, which encompass a total of 48 metropolitan
statistical areas, or MSAs. We plan to serve 24 markets, or 56 MSAs, by the
end of 2001. As of June 30, 2000, we had sold 356,918 access lines, of which
298,983 were installed and in service. During 2000, we estimate that we will
install at least 250,000 new access lines as our existing markets continue to
mature and as we launch services in additional new markets.

  In April, we announced a new suite of Internet infrastructure services
designed to improve Internet performance. These leading edge services include
managed high-speed Internet access, colocation and private peering services.
In preparation for the rollout of these services, during the second quarter we
began the deployment of Focal Internet eXchange (FIX) platforms in a number of
our markets. We recently began beta testing with a number of existing
customers in our Chicago market and expect to launch commercial service in
Chicago during the third quarter of this year. Additionally, we began the
rollout of our commercial DSL service during the second quarter in a number of
our markets.

  We expect our continued expansion to result in continued negative operating
cash flows and operating losses for a period of time. We expect to again
produce positive operating cash flows during the second half of 2001 once
these trends stabilize and operating activities in our newer markets are
established and mature. If, however, these trends do not stabilize or our
operating activities are not established or do not mature as expected, we may
continue to sustain negative operating cash flows and net losses.

  Revenues. Data services revenue includes revenues from circuit switched
lines sold to ISP customers, DSL, private line, colocation, and internet
infrastructure services. Telecom services revenue includes circuit switched
lines sold to corporate and VAR customers. Our data and telecom services
revenue is comprised of monthly recurring charges, usage charges, and initial
non-recurring charges. Monthly recurring charges include the fees paid by our
customers for lines in service, additional features on those lines, and
colocation space. Monthly recurring charges are derived only from end user
customers. Usage charges consist of fees paid by end users for each call made,
fees paid by the ILEC and other CLECs as reciprocal compensation, and access
charges paid by the IXCs for long distance traffic that we originate and
terminate. Non-recurring revenues are typically derived from fees charged to
install new customer lines.

  We earn reciprocal compensation revenue for calls made by customers of
another local exchange carrier to our customers. Conversely, we incur
reciprocal compensation expense to other local exchange carriers for calls by
our customers to their customers. Reciprocal compensation has historically
been a significant component of our total revenues due to the preponderance of
inbound applications utilized by our customers.

  We expect the proportion of revenues represented by reciprocal compensation
to decrease in the future as a result of the expiration and subsequent
renegotiation of our existing interconnection agreements with the ILECs and
the impact of recent and future regulatory developments. While per minute of
use rates may decline further, we believe that any decline will be modest. We
expect to generate additional revenues from other services which will offset
this anticipated decrease in reciprocal compensation revenues. A reduction in
or elimination of reciprocal compensation revenues that are not offset by
increases in other revenues generated by us could have a material adverse
effect on us and our results of operations.

  Operating Expenses. Our operating expenses are categorized as customer
service and network operations, selling, general and administrative,
depreciation and amortization, and non-cash compensation expense. Settlement
costs represented approximately 51% of customer service and network operations
expense for the six month period ended June 30, 2000, and are comprised of
leased transport charges, reciprocal compensation payments and other usage
costs. Leased transport charges are the lease payments we make for the use of
fiber

                                      12
<PAGE>

transport facilities connecting our customers to our switches and for our
connection to the ILECs' and other CLECs' networks. Our strategy of initially
leasing rather than building our own fiber transport facilities has resulted
in our cost of service being a significant component of total costs. To date,
we have been successful in negotiating lease agreements that match the
duration of our customer contracts, thereby allowing us to avoid the risk of
incurring expenses associated with transport facilities that are not being
used by revenue generating customers.

  Historically, leasing rather than building our transport network has
resulted in capital expenditures which we believe are lower than those of
CLECs of similar size that own their fiber networks. Our capital expenditures
have been driven by customer service demands and projected near-term revenue
streams from our established markets. In addition, we believe that the
percentage of these "success-based" capital expenditures is higher than those
of fiber-based CLECs. In contrast, we incur operating expenses for leased
facilities that are proportionately higher than those incurred by fiber-based
CLECs.

  In the second quarter of 1999, we entered into a number of agreements to own
fiber transport capacity as well as lease transport facilities for combined
minimum commitments of $98.6 million through December 2004 and $42.6 million
from January 2005 through June 2019. These commitments will result in
increased operating expenses for future periods, which we believe should be
more than offset by future revenues associated with new services made
possible, in part, by these agreements. As of June 30, 2000, we are operating
our own fiber networks in four of our markets and have approximately 4,400
fiber miles in operation. We expect to activate our remaining transport
networks in other markets by the end of 2000.

  Other customer service and network operations expense consists of the costs
of operating our network and the costs of providing customer care activities.
Major components include wages, rent, power, equipment maintenance, supplies
and contract employees.

  Selling, general and administrative expense ("SG&A") consists of sales force
compensation and promotional expenses as well as the cost of corporate
activities related to regulatory, finance, human resources, legal, executive,
and other administrative activities. We expect our SG&A to be lower as a
percentage of revenue than that of our competitors because we have relatively
high sales productivity associated with our strategy of serving
communications-intensive customers. These customers generally utilize a large
number of switched access lines relative to the average business customer,
resulting in more revenue per sale. Further, fewer sales representatives are
required to service the relatively smaller number of communications-intensive
customers in a given region.

  We record monthly non-cash compensation expense related to shares issued to
some of our executive officers in November 1996, in connection with the
September 30, 1998 amendments to vesting agreements with some of our executive
officers, in connection with stock options granted to employees, an outside
consultant, and directors during 1999, and shares issued to a director during
the first quarter of 1999. We will continue to record non-cash compensation
expense in future periods relating to these events through the third quarter
of 2003.

                                      13
<PAGE>

Quarterly Results

  The following table sets forth unaudited financial, operating and
statistical data for each of the specified quarters of 2000 and 1999. The
unaudited quarterly financial information has been prepared on the same basis
as our Consolidated Financial Statements and, in our opinion, contains all
normal recurring adjustments necessary to fairly state this information. The
operating results for any quarter are not necessarily indicative of results
for any future period.

<TABLE>
<CAPTION>
                                  2000                     1999
                            ------------------  ----------------------------
                             Second    First     Fourth    Third     Second
                            Quarter   Quarter   Quarter   Quarter   Quarter
                            --------  --------  --------  --------  --------
<S>                         <C>       <C>       <C>       <C>       <C>
Data Services Revenue ($
 mil).....................  $ 42,638  $ 32,190  $ 26,306  $ 26,339  $ 24,232
Telecom Services Revenue
 ($ mil)..................  $ 18,050  $ 13,139  $  9,740  $  8,145  $  6,095
Switched Lines Sold to
 Date.....................   356,918   291,443   237,167   169,122   133,536
Switched Lines Installed
 to Date..................   298,983   238,697   181,103   137,033   106,749
Estimated Data Lines (% of
 Installed Lines).........        68%       71%       72%       72%       72%
Lines on Switch (%).......       100%      100%      100%      100%      100%
ILEC Switches
 Interconnected...........     1,677     1,447     1,209       948       771
ILEC Central Office
 Colocations in Service or
 Under Development........       270       223       221       201        58
Quarterly Minutes of Use
 (mil)....................     6,640     6,421     5,158     3,514     2,657
Markets in Operation......        19        18        16        14        13
Markets Under
 Development..............         5         6         4         6         7
MSAs Served...............        48        47        40        38        34
MSAs Under Development....         8         9        10        12        16
Circuit Switches
 Operational..............        16        14        12        10         9
Circuit Switches Under
 Development..............         8         7         7         7         6
ATM Switches Deployed.....        16         6         2       --        --
Fiber Miles Operational...     4,488       864       --        --        --
Focal Customer Colocation
 Space in Service (Sqr.
 Ft.).....................    80,096    73,840    70,105    53,478    41,081
Focal Customer Colocation
 Space Under Development
 (Sqr. Ft.)...............    54,802    36,549    24,654    20,362    29,024
Capital Expenditures ($
 mil).....................  $     77  $     52  $     34  $     34  $     57(1)
Employees.................       935       747       592       478       418
Sales Force (2)...........       166       124       116       105        93
</TABLE>
--------
(1) Includes approximately $21 million of assets acquired under a capital
    lease during the second quarter of 1999.
(2) Quota bearing sales professionals. Does not include sales engineers or
    customer support personnel.

Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999

  Data services revenue increased 76% from $24.2 million in the second quarter
of 1999 to $42.6 million during the second quarter of 2000. Telecom services
revenue increased 196% from the second quarter of 1999 to $18.1 million during
the second quarter of 2000. This increase in data and telecom services revenue
is primarily due to the generation of revenues from a number of new markets
that went into operation subsequent to the second quarter of 1999 and from an
increase in revenues from our more mature markets in the second quarter of
2000. Revenues for the second quarter of 2000 included $6.4 million from
deferred carrier settlements, primarily related to the recognition of
previously disputed carrier settlement amounts in Illinois. In addition, we
installed 7,658 and 16,451 more data and telecom services lines, respectively,
during the second quarter of 2000 compared to the second quarter of 1999.

                                      14
<PAGE>

  Customer service and network operations expense totaled $43.2 million for
the second quarter of 2000 compared to $15.0 million for the second quarter of
1999. This $28.2 million increase resulted from our rapid expansion into new
markets and related costs for leased facilities, usage settlements, customer
care and operational personnel, equipment maintenance and other operating
expenses. Our gross margin, which represents total revenues less carrier costs
and other direct network costs, was approximately 58% (excludes deferred
carrier settlements) and 81% for the three months ended June 30, 2000 and
1999, respectively. This decrease in our gross margin between comparable
periods is a direct result of our reciprocal compensation revenues as a
percentage of total revenues decreasing over the comparable periods and the
initial transport expense associated with new geographic markets. Selling,
general and administrative ("SG&A") expenses increased by $11.2 million, from
$6.9 million during the three months ended June 30, 1999 to $18.1 million
during the second quarter of 2000 as a result of our rapid expansion into new
markets and the rollout of our FIX platforms. In addition, our overall
customer service, network operations, and SG&A expenses increased between
comparable periods due to a corresponding increase in our employee base of 517
employees.

  Depreciation and amortization increased from $4.9 million to $12.8 million
in the comparative three-month periods. This increase of $7.9 million is a
result of our expansion into an additional six new markets, to a total of 19
markets in operation as of June 30, 2000.

  Interest income increased from $1.2 million in the second quarter of 1999,
to $6.4 million in the comparable period of 2000. This $5.2 million increase
is primarily due to our cash, cash equivalents, and short-term investments
increasing from $104.8 million at June 30, 1999 to $342.0 million at June 30,
2000 due to the receipt of approximately $137.0 million in net proceeds from
our initial public offering that was completed in August 1999 and the receipt
of $265.7 million in net proceeds from our 11 7/8% senior notes ("2000 Notes")
offering completed in January 2000. Interest expense increased from $5.9
million in the second quarter of 1999 to $13.9 million in the second quarter
of 2000. This $8.0 million net increase is due to an additional $8.9 million
of interest expense charged relating to our outstanding notes and $0.7 million
of interest expense related to our secured equipment term loan and our capital
lease obligation for dark fiber transport capacity, which was partially offset
by interest capitalized during the second quarter of 2000 totaling $1.6
million.

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

  Our data services revenue increased 69% for the first half of 2000 to $74.8
million. Telecom services revenue increased 157% to $31.2 million compared to
$12.1 million in the first half of 1999. This increase in our data and telecom
services revenue is primarily due to the generation of revenues from a number
of new markets that went into operation subsequent to the second quarter of
1999 and from an increase in revenues from our more mature markets in the
second quarter of 2000. In addition, we installed 34,224 and 28,918 more data
and telecom services lines, respectively, during the first half of 2000
compared to the first half of 1999.

  Customer service and network operations expense were $76.5 million for the
first half of 2000 compared to $25.4 million for the first half of 1999. This
$51.1 million increase resulted from our rapid expansion into new markets and
related costs for leased facilities, usage settlements, customer care and
operational personnel, equipment maintenance and other operating expenses. Our
gross margin was approximately 61% (excludes deferred carrier settlements) and
83% for the six months ended June 30, 2000 and 1999, respectively. This
decrease in our gross margin between comparable periods is a direct result of
our reciprocal compensation revenues as a percentage of total revenues
decreasing over comparable periods and the initial transport expense
associated with new geographic markets. SG&A expenses increased by $20.1
million, from $12.6 million during the six months ended June 30, 1999 to $32.7
million during the first half of 2000 as a result of our rapid expansion into
new markets and the rollout of our FIX platforms. In addition, our overall
customer service, network operations, and SG&A expenses increased between
comparable periods due to a corresponding increase in our employee base of 517
employees.

  Depreciation and amortization increased from $9.0 million to $23.1 million
in the comparative six-month periods. This increase of $14.1 million is a
result of our expansion into an additional six new markets, to a total of 19
markets in operation as of June 30, 2000.

                                      15
<PAGE>

  Interest income increased from $2.5 million in the first half of 1999, to
$12.2 million in the comparable period of 2000. This $9.7 million increase is
primarily due to our cash, cash equivalents, and short-term investments
increasing from $104.8 million at June 30, 1999 to $342.0 million at June 30,
2000 due to the receipt of approximately $137.0 million in net proceeds from
our initial public offering that was completed in August 1999 and the receipt
of $265.7 million in net proceeds from our 11 7/8% senior notes ("2000 Notes")
offering completed in January 2000. Interest expense increased from $11.3
million in the first half of 1999 to $26.8 million in the first half of 2000.
This $15.5 million net increase is due to an additional $16.6 million of
interest expense charged relating to our outstanding notes and $2.0 million of
interest expense related to our secured equipment term loan and our capital
lease obligation for dark fiber transport capacity, which was partially offset
by interest capitalized during the first half of 2000 totaling $3.1 million.

Liquidity and Capital Resources

  During the second quarter of 2000 we launched service in Cleveland, our 19th
market and we expect to complete our original 20-market plan by the end of the
third quarter of 2000. We intend to continue to increase our coverage of major
U.S. cities by expanding our services to another four markets in 2001. Our
business plan requires that we expand our existing networks and services,
deploy our own fiber capacity in a majority of our markets, construct our FIX
platforms and expanded colocation centers, and fund our initial operating
losses. We will require significant capital to fund the purchase and
installation of voice and data switches, routers, equipment, infrastructure
and fiber facilities and/or long-term rights to use fiber transport capacity.
The implementation of this plan requires significant capital expenditures, a
substantial portion of which will be incurred before significant related
revenues from our new markets are expected to be realized. These expenditures,
together with associated early operating expenses, may result in our having
substantial negative operating cash flow and substantial net operating losses
for the foreseeable future, including the remainder of 2000 and 2001. Although
we believe that our cost estimates and the scope and timing of our build-out
are reasonable, we cannot assure you that actual costs or the timing of the
expenditures, or that the scope and timing of our build-out, will be
consistent with current estimates.

  Our capital expenditures were approximately $129.2 million for the first
half of 2000, primarily reflecting capital spending for the build-out of our
additional markets and the roll-out of new services. We estimate that our
capital expenditures in connection with our current business plan will be
approximately $300 million for 2000 and approximately $305 million for 2001.
The 2000 capital expenditures are expected to be made primarily for the build-
out of additional markets, the expansion of our existing markets, the roll-out
of new services, including managed high-speed Internet access, colocation and
peering services, and the purchase of local dark fiber transport capacity in a
majority of our markets. We estimate that approximately 95% of our total
expenditures through 2001 will be for network expansion, rather than for
operating losses.

  Net cash provided by operating activities for the first half of 2000 was
$20.6 million, an increase of $8.3 million from the same period in 1999. This
increase is primarily the result of a $14.2 million increase in depreciation
and amortization, a $34.3 million increase in accounts payable and accrued
liabilities, and an additional $1.3 million of amortization of discount on our
2000 and 1998 Notes, which was offset by additional net losses of $40.2
million. Net cash used in investing activities was $131.2 million for the
first half of 2000 compared to $70.6 million in the first half of 1999. This
increase of $60.6 million is primarily the result of our expansion into six
new markets and the build-out of our FIX platforms, which resulted in capital
expenditures that exceeded the first half of 1999 by $69.2 million. Net cash
provided by financing activities for the first half of 2000 was $261.6
million, an increase of $243.0 million from the first half of 1999. This
increase is primarily due to the $265.7 million in net proceeds received from
the issuance of our 2000 Notes.

  On February 18, 1998, we received $150 million in gross proceeds from the
sale of our 1998 Notes. The 1998 Notes will accrete to an aggregate stated
principal amount of $270 million by February 15, 2003. As of June 30, 2000,
the principal amount of the 1998 Notes had accreted to approximately $198.1
million. No interest is payable on the 1998 Notes prior to August 15, 2003.
Thereafter, cash interest will be payable semiannually on

                                      16
<PAGE>

August 15 and February 15 of each year. On August 2, 1999, we raised net
proceeds of approximately $137 million in our initial public offering in which
we sold 11,442,500 shares of our common stock at a price of $13 per share,
which includes the underwriter's exercise of their over-allotment option to
purchase 1,492,500 common shares at $13 per share. On January 12, 2000, we
received approximately $265.7 million in net proceeds from our 2000 Notes
offering. The 2000 Notes interest payment dates are July 15 and January 15,
commencing July 15, 2000. During July 2000, we paid $16.6 million in interest
to the 2000 Note holders.

  We currently have a commitment for a $300 million senior secured credit
facility (the "Facility"). We expect to close this Facility in August 2000.

  We have historically incurred net losses and have an accumulated deficit of
$75.9 million as of June 30, 2000. The aggregate net proceeds totaling
approximately $602.7 million that we received from the offering of our 1998
Notes, the August 1999 equity offering, the 2000 Notes and certain other
financings, have funded a large portion of our operating losses and capital
expenditures through June 30, 2000. We expect that our existing cash and
investment balances of $342.0 million as of June 30, 2000, our anticipated
Facility, and future cash flows that are expected to be provided from ongoing
operations will be sufficient to fund our operations and capital expenditure
requirements into the second quarter of 2002. Our expectations of our future
capital requirements and cash flows from operations are based on current
estimates. If our plans or assumptions change or prove to be inaccurate, we
may be required to seek additional sources of capital or seek additional
capital sooner than currently anticipated.

  Presently there is a labor stoppage at an ILEC that provides a portion of
our transport facilities. If this labor stoppage continues for a prolonged
period, our ability to install new customer lines and our financial results
for the third quarter of 2000 could be negatively impacted.

  The discussions under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contain forward-looking statements. Our
future performance is subject to a number of risks and uncertainties that
could cause actual results to differ substantially from our projections. See
"Information Regarding Forward-looking Statements" on page 3 of this report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

  We are exposed to minimal market risks. We manage sensitivity of our results
of operations to these risks by maintaining a conservative investment
portfolio, which primarily consists of debt securities, typically maturing
within one year, and entering into long-term debt obligations with appropriate
pricing and terms. We do not hold or issue derivative, derivative commodity or
other financial instruments for trading purposes. Financial instruments held
for other than trading purposes do not impose a material market risk on us.

  We are exposed to interest rate risk, as additional debt financing is
periodically needed due to the large operating losses and capital expenditures
associated with establishing and expanding our network coverage. The interest
rate that we will be able to obtain on debt financing will depend on market
conditions at that time, and may differ from the rates we have secured on our
current debt.

                                      17
<PAGE>

  While all of our long-term debt bears fixed interest rates, the fair market
value of our fixed rate long-term debt is sensitive to changes in interest
rates. We have no cash flow or earnings exposure due to market interest rate
changes for our fixed long-term debt obligations. The table below provides
additional information about our 1998 Notes and 2000 Notes. For additional
information about our long-term debt obligations, see our condensed
consolidated financial statements and accompanying notes related thereto
appearing elsewhere in this report.

<TABLE>
<CAPTION>
                                                           As of June 30, 2000
                                                          ----------------------
                                                           Fixed      Average
   Expected Maturity                                        Debt   Interest Rate
   -----------------                                      -------- -------------
   <S>                                                    <C>      <C>
   2000.................................................. $    --       --
   2001..................................................      --       --
   2002..................................................      --       --
   2003..................................................      --       --
   2004..................................................      --       --
   Thereafter............................................  545,000       12%
                                                          --------      ---
                                                          $545,000       12%
                                                          ========      ===
   Fair Market Value..................................... $458,625
                                                          ========
</TABLE>

                                      18
<PAGE>

                          PART II--OTHER INFORMATION

Item 1. Legal and Administrative Proceedings

  With the exception of the matters discussed in our Annual Report on Form 10-
K for the year ended December 31, 1999, filed on March 10, 2000 we are not
aware of any material litigation against us. In the ordinary course of our
business, we are involved in a number of regulatory proceedings before various
state commissions and the FCC.

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

  At the Annual Meeting of Shareholders held on June 15, 2000, the following
proposals were adopted by the margins indicated.

  1. Election of Directors:

<TABLE>
      <S>                    <C>                <C>             <C>             <C>
                                For             Against         Abstain         Non-Vote
      Joseph A. Beatty       54,553,637            0            88,680             0
      Todd A. Dagres         54,554,157            0            88,160             0
      Andrew E. Sinwell      54,554,896            0            87,421             0
</TABLE>

  2. Approval of amendment to the Amended and Restated Certificate of
     Incorporation to increase the Authorized Capital Stock.

<TABLE>
      <S>         <C>                    <C>                   <C>                 <C>
                     For                  Against              Abstain             Non-Vote
                  50,300,169             2,338,064             61,340              1,942,744
</TABLE>

  3. Approval of amendment to the Focal Communications Corporation 1998
     Equity and Performance Incentive Plan to increase the number of shares
     of common stock available for issuance from 1,768,000 to 12,050,000:

<TABLE>
      <S>         <C>                    <C>                   <C>                 <C>
                     For                  Against              Abstain             Non-Vote
                  46,290,638             6,389,402             19,533              1,942,744
</TABLE>

  4. Ratify the appointment of Arthur Andersen LLP as independent
     accountants.

<TABLE>
   <S>           <C>                        <C>                     <C>                     <C>
                    For                     Against                 Abstain                 Non-Vote
                 54,626,184                 10,235                   5,898                     0
</TABLE>

Item 5. Other Information

  Not Applicable.

                                      19
<PAGE>

Item 6. Exhibits and Reports on Form 8-K

  (a) Exhibits

<TABLE>
<CAPTION>
   Exhibit
   Number                 Exhibit Description                    Location
   -------                -------------------                 --------------
   <C>     <S>                                                <C>
    3.1    Certificate of Amendment of Amended and Restated   Filed herewith
           Certificate of Incorporation
   27.1    Financial Data Schedule #                          Filed herewith
</TABLE>
--------
 #Management contract or compensatory plan

  (b) Reports on Form 8-K

    None

                                       20
<PAGE>

                                   SIGNATURES

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

                        Focal Communications Corporation

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----

<S>                                    <C>                        <C>
      /s/ Robert C. Taylor, Jr.        President, Chief Executive   August 14, 2000
______________________________________  Officer and (Authorized
        Robert C. Taylor, Jr.,          Officer)

         /s/ Joseph A. Beatty          Executive Vice President,    August 14, 2000
______________________________________  Chief Financial Officer
          Joseph A. Beatty,             and (Principal Financial
                                        Officer)

        /s/ Gregory J. Swanson         Controller (Principal        August 14, 2000
______________________________________  Accounting Officer)
         Gregory J. Swanson,
</TABLE>

                                       21
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
      Exhibit
      Number             Exhibit Description                Location
      -------            -------------------                --------
     <C>       <S>                                       <C>
      3.1      Certificate of Amendment of Amended and   Filed herewith
               Restated Certificate of Incorporation
     27.1      Financial Data Schedule                   Filed herewith
</TABLE>

                                       22