<PAGE>
 
          INTERCONNECTION AGREEMENT UNDER SECTIONS 251 AND 252 OF THE
                        TELECOMMUNICATIONS ACT OF 1996

                          Dated as of October 2, 1998


                                by and between


                        BELL ATLANTIC - VIRGINIA, INC.

                                      and

                       FOCAL COMMUNICATIONS CORPORATION
                                  OF VIRGINIA
<PAGE>
 
          INTERCONNECTION AGREEMENT UNDER SECTIONS 251 AND 252 OF THE
                        TELECOMMUNICATIONS ACT OF 1996


     This Interconnection Agreement (this "Agreement"), under Sections 251 and
252 of the Telecommunications Act of 1996 (the "Act"), is effective as of the
2nd day of October, 1998 (the "Effective Date"), by and between Bell Atlantic -
Virginia, Inc. ("BA"), a Virginia corporation with offices at 600 East Main
Street, Richmond, Virginia 23219, and Focal Communications Corporation of 
Virigina ("Focal"), a Virginia corporation with offices at 200 N. LaSalle
Street, Suite 800, Chicago, Illinois 60601 (each a "Party" and, collectively,
the "Parties").

     WHEREAS, Focal has requested that BA make available to Focal
Interconnection, service and unbundled Network Elements upon the same terms and
conditions as provided in the Interconnection Agreement (and amendments thereto)
between MFS Intelenet of Virginia, Inc. and BA, dated as of July 16, 1996
(revised as of July 29, 1997), for Virginia, approved by the Commission under
Section 252 of the Act (the "Separate Agreement") and attached as Appendix 1
hereto; and

     WHEREAS, BA has undertaken to make such terms and conditions available to
Focal hereby only because and, to the extent required by, Section 252(i) of the
Act.

     NOW, THEREFORE, in consideration of the mutual provisions contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Focal and BA hereby agree as follows:

     1.0  INCORPORATION OF APPENDICES BY REFERENCE

     1.1  Except as expressly stated herein, the terms and conditions of the
Separate Agreement (as set forth in Appendix 1 hereto), as it is in effect on
the date hereof after giving effect to operation of law, and of the other
Appendices hereto are incorporated by reference in their entirety herein and
form an integral part of this Agreement.

     1.2  References in Appendix 1 hereto to MFS Intelenet of Virginia, Inc. or
to MFS shall for purposes of this Agreement be deemed to refer to Focal.

     1.3  References in Appendix 1 hereto to the "Effective Date", the date of
effectiveness thereof and like provisions shall for purposes of this Agreement
be deemed to refer to the date first written above. Unless terminated earlier in
accordance with the terms of Appendix 1 hereto, this Agreement shall continue in
effect until the Separate Agreement expires or is otherwise terminated.

     1.4  The Joint Grooming Plan referred to in Section 10.1 of Appendix 1 
hereto shall be developed upon the request of either Party within a reasonable 
amount of time after receipt of such request.
<PAGE>
 
     1.5  Notwithstanding Section 27.5 of Appendix 1 hereto, at such time as BA
makes available the Performance Monitoring Reports set forth in the Memorandum
Opinion and Order adopted by the FCC on August 14, 1997 (the "FCC Merger Order")
to other Telecommunications Carriers purchasing Interconnection from BA, BA
shall provide Focal with the Performance Monitoring Reports applicable to Focal
in accordance with the requirements of said FCC Merger Order.

     1.6  All notices, affidavits, exemption-certificates or other
communications to Focal under Section 29.6.6 of Appendix 1 hereto shall be sent
to the following address:

          Focal Communications Corporation of the Mid - Atlantic
          Attn:  Corporate Tax Department
          200 N. LaSalle Street, Suite 800
          Chicago, Illinois 60601
          Facsimile: (312) 895-8403
          Phone:  (312) 895-8400

     1.7  All notices, affidavits, exemption-certificates or other
communications to BA under Section 29.6.6 of Appendix 1 hereto shall be sent to
the following address:

          Tax Administration
          Bell Atlantic Corporation
          1095 Avenue of the Americas
          Room 3109
          New York, New York 10036

     1.8  Notices to Focal under Section 29.10 of Appendix 1 hereto shall be
sent to the following address:

          Focal Communications Corporation of the Mid - Atlantic
          Attn:  Senior Manager - Carrier Relations
          200 N. LaSalle Street, Suite 800
          Chicago, Illinois 60601
          Facsimile: (312) 895-8403
          Phone:  (312) 895-8400

     1.9  Notices to BA under Section 29.10 of Appendix 1 hereto shall be sent
to the following address:

          President - Telecom Industry Services
          Bell Atlantic Corporation
          1095 Avenue of the Americas
          40/th/ Floor
          New York, New York 10036
          Facsimile: (212) 597-2585 

                                       2
<PAGE>
 
          with a copy to:

          Bell Atlantic Network Services, Inc.
          Attn: Mr. Jack H. White,
          Associate General Counsel
          1320 N. Court House Road, 8/th/ Floor
          Arlington, Virginia 22201
          Facsimile: (703) 974-O744

          with a copy to:

          Vice President and General Counsel
          Bell Atlantic - Virginia, Inc.
          600 East Main Street
          24th Floor
          Richmond, Virginia 23261
          Facsimile: (804) 772-2143

     1.10 Schedules 3.0 and 4.0 set forth at Appendix 2 hereto shall replace and
supersede in their entirety Schedules 3.0 and 4.0 of Appendix 1 hereto.

     2.0  CLARIFICATIONS

     2.1  The entry into, filing and performance by BA of this Agreement does
not in any way constitute a waiver by BA of any of the rights and remedies it
may have to seek review of any of the provisions of the Separate Agreement, or
to petition the Commission, other administrative body or court for
reconsideration or reversal of any determination made by any of them, or to seek
review in any way of any portion of this Agreement in connection with Focal's
election under Section 252(i) of the Act.





                          [Intentionally Left Blank]

                                       3
<PAGE>
 
     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be 
executed as of this 2nd day of October, 1998.



FOCAL COMMUNICATIONS                  BELL ATLANTIC-
CORPORATION OF VIRGINIA               VIRGINIA, INC.


By:  /s/ John R. Barnicle             By: /s/ Jeffrey A. Masoner
    --------------------------            --------------------------------------

Printed: John R. Barnicle             Printed: Jeffrey A. Masoner
         ---------------------                 ---------------------------------

Title:   E.V.P. - C.O.O.              Title: Vice-President - Interconnection 
       -----------------------               -----------------------------------
                                             Services Policy & Planning
                                             --------------------------
      
                                       4
<PAGE>
 




                                   APPENDIX 1
<PAGE>
 
          INTERCONNECTION AGREEMENT UNDER SECTIONS 251 AND 252 OF THE
                        TELECOMMUNICATIONS ACT OF 1996

                           Dated as of July 16, 1996


                                by and between


                         BELL ATLANTIC-VIRGINIA, INC.

                                      and

                        MFS INTELENET OF VIRGINIA, INC.
<PAGE>
 

                               TABLE OF CONTENTS
                               -----------------
<TABLE> 
<CAPTION>                                                                   PAGE
                                                                            ----
<S>                                                                         <C> 
1.0   DEFINITIONS                                                             2

2.0   INTERPRETATION AND CONSTRUCTION                                        10 

3.0   INTERCONNECTION ACTIVATION DATES AND IMPLEMENTATION 
      SCHEDULE                                                               11 

4.0   INTERCONNECTION PURSUANT TO SECTION TO SECTION 251(c)(2)               11
4.1   Scope                                                                  12
4.2   Physical Architecture                                                  13 
4.3   Initial Architecture                                                   13
4.4   Interconnection in Additional LATAs                                    14
4.5   Interconnection Points for Different Types of Traffic                  15

5.0   TRANSMISSION AND ROUTING OF TELEPHONE EXCHANGE SERVICE 
      TRAFFIC PURSUANT TO SECTION 251(c)(2)                                  15
5.1   Scope of Traffic                                                       15
5.2   Trunk Group Connections and Ordering                                   15
5.3   Additional Switching System Hierarchy and Trunking Requirements        15
5.4   Signaling                                                              16
5.5   Grades of Service                                                      16
5.6   Measurement and Billing                                                16
5.7   Reciprocal Compensation Arrangements -- Section 251(b)(5)              17

6.0   TRANSMISSION AND ROUTING OF EXCHANGE ACCESS TRAFFIC 
      PURSUANT TO 251(c)(2)                                                  18
6.1   Scope of Traffic                                                       18
6.2   Trunk Group Architecture and Traffic Routing                           18
6.3   Meet-Point Billing Arrangements                                        19
6.4   800/888 Traffic                                                        21 

7.0   TRANSPORT AND TERMINATION OF OTHER TYPES OF TRAFFIC                    22
7.1   Information Services Traffic                                           22
7.2   LSV/VCI Traffic                                                        23
7.3   Transit Service                                                        24
7.4   911/E911 Arrangements                                                  25
7.5   Ancillary Traffic Generally                                            26

8.0   NUMBER RESOURCES, RATE CENTERS, AND RATING POINTS                      26 
</TABLE> 

                                       i
<PAGE>
 
9.0   NETWORK MAINTENANCE AND MANAGEMENT; OUTAGES                        26

9.3   Interference or Impairment                                         28
9.4   Repeated or Willful Noncompliance                                  28
9.5   Outage Repair Standard                                             28
9.6   Notice of Changes -- Section 251(c)(5)                             28

10.0  JOINT NETWORK RECONFIGURATION AND GROOMING PLAN AND
      INSTALLATION, MAINTENANCE, TESTING AND REPAIR                      28
10.1  Joint Network Reconfiguration and Grooming Plan                    28
10.2  Installation, Maintenance, Testing and Repair                      29
10.3  Forecasting Requirements for Trunk Provisioning                    29

11.0  UNBUNDLED ACCESS -- SECTION 251(c)(3)                              30
11.1  Unbundled Local Loop (ULL) Transmission Types                      30
11.2  Port Types                                                         31
11.3  Trunk Side Local Transport                                         32
11.4  Limitations on Unbundled Access                                    32
11.5  Availability of Other Network Elements on an Unbundled Basis       33
11.6  Provisioning of Unbundled Local Loops                              33
11.7  Maintenance of Unbundled Local Loops                               35
11.8  Rates and Charges                                                  35

12.0  RESALE -- SECTIONS 251(c)(4)and 251(b)(1)                          35
12.1  Availability of Retail Rates for Resale                            35
12.2  Availability of Wholesale Rates for Resale                         35

13.0  COLLOCATION -- SECTION 251(c)(6)                                   36

14.0  NUMBER PORTABILITY -- SECTION 251(b)(2)                            37
14.1  Scope                                                              37
14.2  Procedures for Providing INP Through Remote Call Forwarding        38     
14.3  Procedures for Providing INP Through Direct Inward Dial Trunks
      (Flex-DID)                                                         39
14.4  Procedures for Providing LTNP Through Full NXX Code Migration      39
14.5  Receipt of Terminating Compensation on Traffic to INP'ed Numbers   39
14.6  Recovery of INP Costs Pursuant to FCC Order and Rulemaking         40


15.0  DIALING PARITY -- SECTION 251(b)(3)                                41

16.0  ACCESS TO RIGHTS-OF-WAY -- SECTION 251(b)(4)                       41

17.0  DATABASES AND SIGNALING                                            41

                                     ii   
<PAGE>
 
18.0  COORDINATED SERVICE ARRANGEMENTS                                42
18.1  Intercept and Referral Announcements                            42
18.2  Coordinated Repair Calls                                        43
18.3  Customer Authorization                                          43
                                                              
19.0  DIRECTORY SERVICES ARRANGEMENTS                                 43
19.1  Directory Listings and Directory Distributions                  44
19.2  Yellow Page Maintenance                                         45
19.3  Service Information Pages                                       45
19.4  Directory Assistance (DA); Call Completion                      46
                                                              
20.0  COORDINATION WITH TARIFF TERMS                                  45
                                                              
21.0  INSURANCE                                                       46
                                                              
22.0  TERM AND TERMINATION                                            47
                                                              
23.0  DISCLAIMER OF REPRESENTATIONS AND WARRANTIES                    48
                                                              
24.0  CANCELLATION CHARGES                                            48
                                                              
25.0  INDEMNIFICATION                                                 48
                                                              
26.0  LIMITATION OF LIABILITY                                         49
                                                              
27.0  PERFORMANCE STANDARDS FOR SPECIFIED ACTIVITIES                  50
27.1  Certain Definitions                                             50
27.2  Performance Standards                                           51
27.3  Limitations                                                     51
27.4  Service Quality Standards                                       52
27.5  Records                                                         52
                                                              
28.0  COMPLIANCE WITH LAWS; REGULATORY APPROVAL                       52
                                                              
29.0  MISCELLANEOUS                                                   53
29.1  Authorization                                                   53
29.2  Independent Contractor                                          53
29.3  Force Majeure                                                   53
29.4  Confidentiality                                                 54
29.5  Choice of Law                                                   55
29.6  Taxes                                                           55
29.7  Assignment                                                      57
29.8  Billing and Payment; Disputed Amounts                           57
29.9  Dispute Resolution                                              58
29.10 Notices                                                         59

                                      iii
<PAGE>
 



29.11 Section 252(i) Obligations                                       59
29.12 Joint Work Product                                               60
29.13 No Third Party Beneficiaries; Disclaimer of Agency               61 
29.14 No License                                                       61
29.15 Technology Upgrades                                              61
29.16 Survival                                                         62
29.17 Entire Agreement                                                 62 
29.18 Counterparts                                                     62
29.19 Modification, Amendment, Supplement or Waiver                    62
29.20 Successors and Assigns                                           62   
29.21 Publicity                                                        62

                        LIST OF SCHEDULES AND EXHIBITS
                        ------------------------------ 
                 
Schedules
---------

Schedule 1.0        Certain Terms As Defined in the Act, As of July 16, 1996
Schedule 3.0        Implementation Schedule
Schedule 4.0        Interconnection Points in LATA
Schedule 4.2        Physical Architecture Diagram
Schedule 4.3        Initial Architecture Diagram
Schedule 4.5        Interconnection Points for Different Types of Traffic
Schedule 6.3        Rate Elements Under Meet Point Billing
Schedule 27.0       Performance Interval Dates for Specified Activities
Schedule 27.1       MFS Service Quality Standards

Exhibits      
--------

Exhibit A           Detailed Schedule of Itemized Charges
Exhibit B           Network Element Bona Fide Request
Exhibit C           Directory Assistance and Call Completion Services Agreement


                                      iv
<PAGE>
 
          INTERCONNECTION AGREEMENT UNDER SECTIONS 251 AND 252 OF THE
                        TELECOMMUNICATIONS ACT OF 1996


     This Interconnection Agreement under Sections 251 and 252 of the
Telecommunications Act of 1996, is effective as of the 16th day of July, 1996
(the "Effective Date"), by and between Bell Atlantic-Virginia, Inc. ("BA"), a
Virginia corporation with offices at 600 East Main Street, Richmond, Virginia
23219, and MFS Intelenet of Virginia, Inc. ("MFS"), a Delaware corporation with
offices at 33 Whitehall Street, 15th Floor, New York, New York 10004.

     WHEREAS, the Parties want to interconnect their networks at mutually agreed
upon points of interconnection to provide Telephone Exchange Services, Switched
Exchange Access Services, and other Telecommunications Services (all as defined
below) to their respective customers;

     WHEREAS, the Parties are entering into this Agreement to set forth the
respective obligations of the Parties and the terms and conditions under which
the Parties will interconnect their networks and provide other services as
required by the Act (as defined below) and additional services as set forth
herein; and

     WHEREAS, Sections 251, 252, and 271 of the Telecommunications Act of 1996
have specific requirements for interconnection, unbundling, and service resale,
commonly referred to as the "Checklist", and the Parties intend that this
Agreement meet those Checklist requirements.

     NOW, THEREFORE, in consideration of the mutual provisions contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, MFS and BA hereby agree as follows:

     This Agreement sets forth the terms, conditions and pricing under which BA
and MFS (individually, a "Party" and collectively, the "Parties") will offer and
provide to each other network Interconnection, access to Network Elements,
ancillary services, and wholesale Telecommunications Services available for
resale within each LATA in which they both operate within Virginia. As such,
this Agreement is an integrated package that reflects a balancing of interests
critical to the Parties. It will be submitted to the Virginia State Corporation
Commission and the Parties will specifically request that the Commission refrain
from taking any action to change, suspend or otherwise delay implementation of
the Agreement. So long as the Agreement remains in effect, neither Party shall
advocate before any legislative, regulatory, or other public forum that any term
of this Agreement be modified or eliminated, unless otherwise mutually agreed by
the Parties.

                                       1
<PAGE>
 
1.0  DEFINITIONS.

     As used in this Agreement, the following terms shall have the meanings
specified below in this Section 1.0. For convenience of reference only, the
definitions of certain terms that are As Defined in the Act (as defined below)
are set forth on Schedule 1.0.

     1.1  "Act" means the Communications Act of 1934 (47 U.S.C. 151 et. seq.) as
                                                                    --  ---
amended by the Telecommunications Act of 1996, and as from time to time
interpreted in the duly authorized rules and regulations of the FCC or the
Commission.

     1.2  "ADSL" or "Asymmetrical Digital Subscriber Line" means a transmission
technology which transmits an asymmetrical digital signal of up to 6 mbps to the
Customer and up to 640 kbps from the Customer.

     1.3  [Reserved]

     1.4  "Agreement" means this Interconnection Agreement under Sections 251
and 252 of the Act and all Exhibits and Schedules appended hereto.

     1.5  "Ancillary Traffic," means all traffic that is destined for ancillary
services, or that may have special billing requirements, including but not
limited to the following: LSV/VCI, Directory Assistance, 911/E911, Operator
Services (call completion), 800/888 database query, LIDB, and information
services requiring special billing.

     1.6  "As Defined in the Act" means as specifically defined by the Act and
as from time to time interpreted in the duly authorized rules and regulations of
the FCC or the Commission.

     1.7  "As Described in the Act" means as described in or required by the Act
and as from time to time interpreted in the duly authorized rules and
regulations of the FCC or the Commission.

     1.8  "Automatic Number Identification" or "ANI" means a Feature Group D
signaling parameter which refers to the number transmitted through a network
identifying the billing number of the calling party.

     1.9  "Calling Party Number" or "CPN" is a Common Channel Signaling ("CCS")
parameter which refers to the number transmitted through a network identifying
the calling party.

     1.10 "Central Office Switch" means a switch used to provide
Telecommunications Services, including, but not limited to:

          (a) "End Office Switch" or "End Office" which is used to terminate
Customer station Loops for the purpose of interconnection to each other and to
trunks; and

                                       2
<PAGE>
 
          (b) "Tandem Switch" or "Tandem Office" which is a switching entity
that is used to connect and switch trunk circuits between and among End Office
Switches and between and among End Office Switches and carriers' aggregation
points, points of termination, or points of presence. An "Access Tandem Office"
or "Access Tandem" is a Tandem Office with billing and recording capabilities
that is used to provide Switched Exchange Access Services.

     A Central Office Switch may also be employed as a combination End
Office/Tandem Office Switch.

     1.11 [Reserved]

     1.12 "CLASS Features" means certain CCS-based features available to
Customers including, but not limited to: Automatic Call Back; Call Trace; Caller
Identification, and future offerings.

     1.13 "Collocation" means an arrangement whereby one Party's (the
"Collocating Party") facilities are terminated in equipment necessary for
Interconnection or for access to Network Elements offered by the second Party on
an unbundled basis that has been installed and maintained at the premises of a
second Party (the "Housing Party"). For purposes of Collocation, the "premises"
of a Housing Party is limited to a Housing Party Wire Center, other mutually
agreed-upon locations of the Housing Party, or any other location for which
Collocation has been ordered by the FCC or Commission. Collocation may be
"physical" or "virtual". In "Physical Collocation," the Collocating Party
installs and maintains its own equipment in the Housing Party's premises. In
"Virtual Collocation," the Housing Party owns, installs, and maintains equipment
dedicated to use by the Collocating Party in the Housing Party's premises. BA
currently provides Collocation under terms, rates, and conditions as described
in tariffs on file or soon to be filed with the FCC and the Commission. Upon
request by either Party, BA and MFS will address the provision of additional
types of Collocation arrangements, including additional physical locations and
alternative utilizations of space and facilities.

     1.14 "Commission" means the Virginia State Corporation Commission.

     1.15 "Common Channel Signaling" or "CCS" means a method of transmitting
call set-up and network control data over a digital signaling network separate
from the public switched telephone network facilities that carry the actual
voice or data traffic of the call. "SS7" means the common channel out of band
signaling protocol developed by the Consultative Committee for International
Telephone and Telegraph ("CCITT") and the American National Standards Institute
("ANSI"). BA and MFS currently utilize this out-of-band signaling protocol.
"CCSAC" or "CCSAS" means the common channel signaling access connection or
service, respectively, which connects one Party's signaling point of
interconnection ("SPOI") to the other Party's STP for the exchange of SS7
messages.

                                       3
<PAGE>
 
     1.16  "Competing Local Exchange Carrier" or "CLEC" means any Local Exchange
Carrier other than BA, operating as such in BA's certificated territory in
Virginia. MFS is or will shortly become a CLEC.

     1.17  "Cross Connection" means a jumper cable or similar connection
provided pursuant to Collocation at the digital signal cross connect, Main
Distribution Frame or other suitable frame or panel between (i) the Collocating
Party's equipment and (ii) the equipment or facilities of the Housing Party.

     1.18  "Customer" means a third-party residence or business subscriber to
Telecommunications Services provided by either of the Parties.

     1.19  "Dialing Parity" is As Defined in the Act.

     1.20  "Digital Signal Level" means one of several transmission rates in the
time-division multiplex hierarchy.

     1.21  "Digital Signal Level 0" or "DS0" means the 64 Kbps zero-level signal
in the time-division multiplex hierarchy.

     1.22  "Digital Signal Level 1" or "DS1" means the 1.544 Mbps first-level
signal in the time-division multiplex hierarchy. In the time-division
multiplexing hierarchy of the telephone network, DS1 is the initial level of
multiplexing.

     1.23  "Digital Signal Level 3" or "DS3" means the 44.736 Mbps third-level
in the time-division multiplex hierarchy. In the time-division multiplexing
hierarchy of the telephone network, DS3 is defined as the third level of
multiplexing.

     1.24  "Exchange Access" is As Defined in the Act.

     1.25. "Exchange Message Record" or "EMR" means the standard used for
exchange of telecommunications message information among Local Exchange Carriers
for billable, non-billable, sample, settlement, and study data. EMR format is
contained in BR-010-200-010 CRIS Exchange Message Record, a Bell Communications
Research, Inc. ("Bellcore") document that defines industry standards for
Exchange Message Records.

     1.26  [Reserved]

     1.27  "FCC" means the Federal Communications Commission.

     1.28  "HDSL" or "High-Bit Rate Digital Subscriber Line" means a
transmission technology which transmits up to 784 kbps simultaneously in both
directions on a two-wire channel using a 2 Binary / 1 Quartenary ("2B1Q") line
code.

                                       4
<PAGE>
 
     1.29  "Independent Telephone Company" or "ITC" means any entity other than
BA which, with respect to its operations within Virginia, is an "Incumbent Local
Exchange Carrier" As Described in the Act.

     1.30  "Information Service Traffic" means Local Traffic or IntraLATA Toll
Traffic which originates on a Telephone Exchange Service line and which is
addressed to an information service provided over a Party's information services
platform.

     1.31  "Integrated Digital Loop Carrier" means a subscriber loop carrier
system which integrates within the switch at a DSI level that is twenty-four
(24) loop transmission paths combined into a 1.544 Mbps digital signal.

     1.32. "Integrated Services Digital Network" or "ISDN" means a switched
network service providing end-to-end digital connectivity for the simultaneous
transmission of voice and data. Basic Rate Interface-ISDN ("BRI-ISDN") provides
for digital transmission of two 64 kbps bearer channels and one 16 kbps data and
signaling channel (2B+D). Primary Rate Interface-ISDN ("PRI-ISDN") provides for
digital transmission of twenty three (23) 64 kbps bearer channels and one 16
kbps data and signaling channel (23 B+D).

     1.33  "Interconnection" is as Described in the Act, and means the
connection of separate pieces of equipment or transmission facilities within,
between, or among networks. The architecture of Interconnection may include, but
is not limited to, Collocation Arrangements, entrance facilities, and Mid-Span
Meet arrangements.

     1.34  "Interexchange Carrier" or "IXC" means a carrier that provides,
directly or indirectly, interLATA or intraLATA Telephone Toll Services.

     1.35  "Interim Number Portability" or "INP" means the use of existing and
available call routing, forwarding, and addressing capabilities (e.g. remote
call forwarding) to enable a Customer to receive Telephone Exchange Service
provided by any Local Exchange Carrier operating within the exchange area with
which the Customer's telephone number(s) is associated, without having to change
the telephone number presently assigned to the Customer and regardless of
whether the Customer's chosen Local Exchange Carrier is the carrier that
originally assigned the number to the Customer.

     1.36  "InterLATA" is As Defined in the Act.

     1.37  "IntraLATA Toll Traffic" means those intraLATA calls that are not
defined as Local Traffic in this Agreement.

     1.38  "Line Side" means an End Office Switch connection that provides
transmission, switching and optional features suitable for Customer connection
to the public switched network, including loop start supervision, ground start
supervision, and signaling for basic rate ISDN service.

                                       5
<PAGE>
 
     1.39. "Line Status Verification" or "LSV" means an operator request for a
status check on the line of a called party. The request is made by one Party's
operator to an operator of the other Party. The verification of the status check
is provided to the requesting operator.

     1.40  "Local Access and Transport Area" or "LATA" is As Defined in the Act.

     1.41  "Local Exchange Carrier" or "LEC" is As Defined in the Act. The
Parties to this Agreement are or will shortly become Local Exchange Carriers.

     1.42. "Local Serving Wire Center" means a Wire Center that (i) serves the
area in which the other Party's or a third party's Wire Center, aggregation
point, point of termination, or point of presence is located, or any Wire Center
in the LATA in which the other Party's Wire Center, aggregation point, point of
termination or point of presence is located in which the other Party has
established a Collocation Arrangement or is purchasing an entrance facility, and
(ii) has the necessary multiplexing capabilities for providing transport
services.

     1.43  "Local Telephone Number Portability" or "LTNP" means "number
portability" As Defined in the Act.

     1.44  "Local Traffic," means traffic that is originated by a Customer of
one Party on that Party's network and terminates to a Customer of the other
Party on that other Party's network, within a given local calling area, or
expanded area service ("EAS") area, as defined in BA's effective Customer
tariffs. Local Traffic does not include traffic originated or terminated by a
commercial mobile radio service carrier.

     1.45. "Main Distribution Frame" or "MDF" means the primary point at which
outside plant facilities terminate within a Wire Center, for interconnection to
other telecommunications facilities within the Wire Center.

     1.46. "MECAB" means the Multiple Exchange Carrier Access Billing (MECAB)
document prepared by the Billing Committee of the Ordering and Billing Forum
("OBF"), which functions under the auspices of the Carrier Liaison Committee
("CLC") of the Alliance for Telecommunications Industry Solutions ("ATIS"). The
MECAB document, published by Bellcore as Special Report SR-BDS-000983, contains
the recommended guidelines for the billing of an Exchange Access service
provided by two or more LECs, or by one LEC in two or more states, within a
single LATA.

     1.47  "MECOD" means the Multiple Exchange Carriers Ordering and Design
(MECOD) Guidelines for Access Services - Industry Support Interface, a document
developed by the Ordering/Provisioning Committee under the auspices of OBF. The
MECOD document, published by Bellcore as Special Report SR-STS-002643,
establishes methods for processing orders for Exchange Access service which is
to be provided by two or more LECs.

     1.48  "Meet-Point Billing" or "MPB" means an arrangement whereby two or
more LECs jointly provide to a third party the transport element of a Switched
Exchange Access Service to one

                                       6
<PAGE>
 
of the LECs' End Office Switches, with each LEC receiving an appropriate share
of the transport element revenues as defined by their effective Exchange Access
tariffs. "Meet-Point Billing Traffic" means traffic that is subject to an
effective Meet-Point Billing arrangement.

     1.49. "Mid-Span Meet" means an Interconnection architecture whereby two
carriers' fiber transmission facilities meet at a mutually agreed-upon
Interconnection point.

     1.50  "Multiple Bill/Single Tariff" or "Multiple Bill/Multiple Tariff"
means the MPB method whereby each LEC prepares and renders its own meet point
bill in accordance with its own Tariff(s) for the portion of the jointly-
provided Switched Exchange Access Service which the LEC provides.

     1.51  "Network Element" is As Defined in the Act.

     1.52  "Network Element Bona Fide Request" means the process described on
Exhibit B that prescribes the terms and conditions relating to a Party's request
that the other Party provide a Network Element not otherwise provided by the
terms of this Agreement.

     1.53  "North American Numbering Plan" or "NANP" means the numbering plan
used in the United States that also serves Canada, Bermuda, Puerto Rico and
certain Caribbean Islands. The NANP format is a 10-digit number that consists of
a 3-digit NPA code (commonly referred to as the area code), followed by a 3-
digit NXX code and 4-digit line number.

     1.54. "Numbering Plan Area" or "NPA" is also sometimes referred to as an
area code. There are two general categories of NPAs, "Geographic NPAs" and "Non-
Geographic NPAs." A Geographic NPA is associated with a defined geographic
area, and all telephone numbers bearing such NPA are associated with services
provided within that geographic area. A Non-Geographic NPA, also known as a
"Service Access Code" or "SAC Code," is typically associated with a specialized
telecommunications service which may be provided across multiple geographic NPA
areas; 800, 900, 700, 500 and 888 are examples of Non-Geographic NPAs.

     1.55  "NXX," "NXX Code," or "End Office Code" means the three digit switch
entity indicator (i.e. the first three digits of a seven digit telephone
number).

     1.56  "Permanent Number Portability" or "PNP" means the use of a database
or other technical solution that comports with regulations issued by the FCC to
provide LTNP for all customers and service providers.

     1.57  "Port Element" or "Port" means a line card (or equivalent) and
associated peripheral equipment on an End Office Switch which serves as the
Interconnection between individual loops or individual Customer trunks and the
switching components of an End Office Switch and the associated switching
functionality in that End Office Switch. Each Port is typically associated with
one (or more) telephone number(s) which serves as the Customer's network 
address.

                                       7
<PAGE>
 
     1.58  "Rate Center Area" or "Exchange Area" means the specific geographic
point and corresponding geographic area which has been identified by a given LEC
as being associated with a particular NPA-NXX code assigned to the LEC for its
provision of Telephone Exchange Services. The Rate Center Area is the exclusive
geographic area which the LEC has identified as the area within which it will
provide Telephone Exchange Services bearing the particular NPA-NXX designation
associated with the specific Rate Center Area. A "Rate Center Point" is a
specific geographic point, defined by a V&H coordinate, located within the Rate
Center Area and used to measure distance for the purpose of billing Customers
for distance-sensitive Telephone Exchange Services and Toll Traffic.

     1.59  "Rate Demarcation Point" means the point of minimum penetration at
the Customer's premises or other point, as defined in a Party's Tariffs, where
network access recurring charges and LEC responsibility ends and beyond which
Customer responsibility begins.

     1.60  "Rating Point" or "Routing Point" means a specific geographic point
identified by a specific V&H coordinate. The Rating Point is used to route
inbound traffic to specified NPA-NXXs and to calculate mileage measurements for
distance-sensitive transport charges of switched access services. Pursuant to
Bellcore Practice BR-795-100-100, the Rating Point may be an End Office
location, or a "LEC Consortium Point of Interconnection." Pursuant to that same
Bellcore Practice, examples of the latter shall be designated by a common
language location identifier (CLLI) code with (x)KD in positions 9, 10, 11,
where (x) may be any alphanumeric A-Z or 0-9. The Rating Point/Routing Point
must be located within the LATA in which the corresponding NPA-NXX is located.
However, the Rating Point/Routing Point associated with each NPA-NXX need not be
the same as the corresponding Rate Center Point, nor must it be located within
the corresponding Rate Center Area, nor must there be a unique and separate
Rating Point corresponding to each unique and separate Rate Center.

     1.61  "Reciprocal Compensation" is As Described in the Act, and refers to
the payment arrangements that recover costs incurred for the transport and
termination of Local Traffic originating on one Party's network and terminating
on the other Party's network.

     1.62  "Service Control Point" or "SCP" means the node in the common channel
signaling network to which informational requests for service handling, such as
routing, are directed and processed. The SCP is a real time database system
that, based on a query from a service switching point and via a Signaling
Transfer Point, performs subscriber or application-specific service logic, and
then sends instructions back to the SSP on how to continue call processing.

     1.63  "Signaling Transfer Point" or "STP" means a specialized switch that
provides SS7 network access and performs SS7 message routing and screening.

     1.64  "Switched Access Detail Usage Data" means a category 1101XX record
as defined in the EMR Bellcore Practice BR-010-200-010.

     1.65  "Switched Access Summary Usage Data" means a category 1150XX record
as defined in the EMR Bellcore Practice BR-0l0-200-0l0.

                                       8
<PAGE>
 
     1.66  "Switched Exchange Access Service" means the offering of transmission
and switching services for the purpose of the origination or termination of Toll
Traffic. Switched Exchange Access Services include but may not be limited to:
Feature Group A, Feature Group B, Feature Group D, 700 access, 800 access, 888
access, and 900 access.

     1.67  "Synchronous Optical Network" or "SONET" means an optical interface
standard that allows inter-networking of transmission products from multiple
vendors. The base rate is 51.84 Mbps (OC-l/STS-l) and higher rates are direct
multiples of the base rate, up to 13.22 Gpbs.

     1.68  "Tariff" means any applicable federal or state tariff of a Party, or
standard agreement or other document that sets forth the generally available
terms and conditions under which a Party offers a particular service, facility,
or arrangement.

     1.69  "Technically Feasible Point" is As Described in the Act.

     1.70  "Telecommunications" is As Defined in the Act.

     1.71  "Telecommunications Act" means the Telecommunications Act of 1996 and
any rules and regulations promulgated thereunder.

     1.72  "Telecommunications Carrier" is As Defined in the Act.

     1.73  "Telecommunications Service" is As Defined in the Act.

     1.74  "Telephone Exchange Service," sometimes also referred to as "Exchange
Service," is As Defined in the Act. Telephone Exchange Service generally
provides the Customer with a telephonic connection to, and a unique telephone
number address on, the public switched telecommunications network, and enables
such Customer to place or receive calls to all other stations on the public
switched telecommunications network.

     1.75. "Toll Traffic" means traffic that is originated by a Customer of one
Party on that Party's network and terminates to a Customer of the other Party on
that Party's network and is not Local Traffic or Ancillary Traffic. Toll Traffic
may be either "IntraLATA Toll Traffic" or "InterLATA Toll Traffic," depending on
whether the originating and terminating points are within the same LATA.

     1.76  "Transit Traffic" means any traffic that originates from or
terminates at MFS's network, "transits" BA's network substantially unchanged,
and terminates to or originates from a third carrier's network, as the case may
be. "Transit Traffic Service" provides MFS with the ability to use its
connection to a BA Access Tandem Switch for the delivery of calls which
originate or terminate with MFS and terminate to or originate from a carrier
other than BA, such as another CLEC, a LEC other than BA, or a wireless carrier.
In these cases, neither the originating nor terminating Customer is a Customer
of BA. This service is provided through BA's Access Tandem

                                       9
<PAGE>
 
Switches. "Transit Traffic" and "Transit Traffic Service" do not include or
apply to traffic that is subject to an effective Meet-Point Billing arrangement.

     1.77  "Trunk Side" means a Central Office Switch connection that is capable
of, and has been programmed to treat the circuit as, connecting to another
switching entity (e.g. another carrier's network). Trunk Side connections offer
those transmission and signaling features appropriate for the connection of
switching entities.

     1.78  "Unbundled Local Loop Element" or "ULL" means a transmission path
that extends from a Main Distribution Frame, DSX-panel, or functionally
comparable piece of equipment in the Customer's serving End Office to the Rate
Demarcation Point (or network interface device (NID) if installed) in or at a
Customer's premises. The actual loop transmission facilities used to provide an
ULL may utilize any of several technologies.

     1.79  "Verification with Call Interruption" or "VCI" means a service that
may be requested and provided when Line Status Verification has determined that
a line is busy due to an ongoing call. VCI is an operator interruption of that
ongoing call to inform the called party that a calling party is seeking to
complete his or her call to the called party.

     1.80  "Voice Grade" means either an analog signal of 300 to 3000 Hz or a
digital signal of 56/64 kilobits per second. When referring to digital voice
grade service (a 56/64 kbps channel), the terms "DS-0" or "sub-DS-1" may also be
used.

     1.81  "Wire Center" means a building or portion thereof in which a Party
has the exclusive right of occupancy and which serves as a Routing Point for
Switched Exchange Access Service.

2.0  INTERPRETATION AND CONSTRUCTION.

     2.1   All references to Sections, Exhibits and Schedules shall be deemed to
be references to Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. The headings used in this Agreement
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning of this Agreement. Unless the context shall
otherwise require, any reference to any agreement, other instrument (including
BA or other third party offerings, guides or practices), statute, regulation,
rule or tariff is to such agreement, instrument, statute, regulation, or rule or
tariff as amended and supplemented from time to time (and, in the case of a
statute, regulation, rule or tariff, to any successor provision).

     2.2   Subject to the terms set forth in Section 20, each Party hereby
incorporates by reference those provisions of its tariffs that govern the
provision of any of the services or facilities provided hereunder. If any
provision of this Agreement and an applicable tariff cannot be reasonably
construed or interpreted to avoid conflict, the Parties agree to negotiate in
good faith to reconcile and resolve such conflict. If any provision contained in
this main body of the Agreement and any Exhibit hereto cannot be reasonably
construed or interpreted to avoid conflict, the

                                      10
<PAGE>
 
provision contained in this main body of the Agreement shall prevail. The fact
that a condition, right, obligation, or other term appears in this Agreement but
not in any such tariff shall not be interpreted as, or be deemed grounds for
finding, a conflict for purposes of this Section 2.


3.0  INTERCONNECTION ACTIVATION DATES AND IMPLEMENTATION SCHEDULE.

     3.1  Subject to the terms and conditions of this Agreement, each Party
shall exercise its best efforts to adhere to the Interconnection Activation
Dates and Network Implementation Schedule set forth in Schedule 3.0, and to
provide fully operational service predominantly over its own Telephone Exchange
Service facilities to business and residential Customers upon the achievement of
the milestones in said Schedule for each listed LATA in Virginia. For purposes
of this Agreement, MFS's service in Virginia shall be considered provided
"predominantly over its own Telephone Exchange Service facilities" if MFS uses
its own Central Office Switch(es) (as opposed to resale of another carrier's
Telephone Exchange Service or Ports) to serve the majority of its Telephone
Exchange Service Customers, its own interoffice transport facilities for the
majority of its interoffice transport needs, and its own local loops (or
functional equivalent), in addition to resale of other carriers' Telephone
Exchange Service or ULLs, to serve its Telephone Exchange Service Customers.

     3.2  Schedule 3.0 may be revised and supplemented from time to time upon
the mutual agreement of the Parties to reflect the intention of the Parties to
interconnect in additional LATAs pursuant to subsection 4.4 by attaching one or
more supplementary schedules to Schedule 3.0. The Parties stipulate and agree
that the performance of the terms of this Agreement will satisfy BA's obligation
to provide Interconnection under Section 251 of the Act, and the requirements of
the Competitive Checklist, under Section 271 of the Act. MFS represents that it
is, or intends to become, a provider of Telephone Exchange Service to
residential and business subscribers offered exclusively over its own Telephone
Exchange Service facilities or predominantly over its own Telephone Exchange
Service facilities in combination with the resale of the Telecommunications
Services of other carriers.

4.0  INTERCONNECTION PURSUANT TO SECTION 251(C)(2)

     The types of Traffic to be exchanged under this Agreement shall be Local
Traffic, IntraLATA Toll (and InterLATA Toll, as applicable) Traffic, Transit
Traffic, Meet Point Billing Traffic, and Ancillary Traffic. Subject to the terms
and conditions of this Agreement, Interconnection of the Parties facilities and
equipment for the transmission and routing of Local Traffic and Toll Traffic
pursuant to this Section 4 shall be established on or before the corresponding
"Interconnection Activation Date" shown for each such LATA within Virginia on
Schedule 3.0. Both Schedule 3.0 and Schedule 4.0 may be revised and supplemented
from time to time upon the mutual agreement of the Parties to reflect
Interconnection in additional LATAs

                                      11
<PAGE>
 
in Virginia pursuant to subsection 4.4 by attaching one or more supplementary   
addenda to such Schedules.
 
     4.1  SCOPE

          4.1.1  Section 4 describes the architecture for Interconnection of the
Parties' facilities and equipment over which the Parties shall configure the
following separate and distinct trunk groups:

          Traffic Exchange Trunks for the transmission and routing of
          -----------------------
          terminating Local Traffic and IntraLATA Toll Traffic between their
          respective Telephone Exchange Service customers pursuant to Section
          251 (c)(2) of the Act, in accordance with Section 5 below;

          Access Toll Connecting Trunks for the transmission and routing of
          -----------------------------                                    
          Exchange Access traffic between MFS Telephone Exchange Service
          customers and purchasers of BA's Switched Exchange Access Service via
          a BA Access Tandem, pursuant to Section 251 (c)(2) of the Act, in
          accordance with Section 6 below;

          Information Services Trunks for the transmission and routing of
          ---------------------------                                    
          terminating Information Services Traffic in accordance with Section 7
          below;

          LSV/VCI Trunks for the transmission and routing of terminating LSV/VCI
          --------------                                                        
          traffic, in accordance with Section 7 below;

          911/E911 Trunks for the transmission and routing of terminating E911/
          ---------------
          911 traffic, in accordance with Section 7 below;

          Directory Assistance Trunks for the transmission and routing of
          ---------------------------                                    
          terminating directory assistance traffic, in accordance with
          subsection 19.4 below; and

          Operator services (call completion) Trunks for the transmission and
          ------------------------------------------                         
          routing of terminating call completion traffic, in accordance with
          subsection 19.4 below.

          4.1.2  The SONET interconnection arrangement described in subsection
4.2 shall be (i) used only for the termination of Local Traffic and IntraLATA
Toll Traffic until such time as the Parties have agreed to appropriate
compensation arrangements relating to the exchange of other types of traffic
over such system, and (ii) subject to the Parties' reaching agreement on an
appropriate compensation arrangement in the event either Party will be providing
or utilizing (in terms of minutes of use) significantly more than one-half of
the SONET facility. Unless otherwise agreed to by the Parties, the SONET system
described herein shall not be used to exchange InterLATA Toll Traffic. Until the
SONET system has been established by the Parties in accordance with subsection
4.3 and this subsection 4.1.2, the Parties agree to adopt an initial
interconnection architection for the exchange of Local Traffic and Toll
(IntraLATA and InterLATA) Traffic.

                                      12
<PAGE>
 
          4.1.3  To the extent required by Section 251 of the Act, the Parties
represent that the arrangements provided in subsections 4.2 and 4.3 of this
Agreement provide for Interconnection to each other's networks at any
technically feasible point. For the purposes of this Agreement, the Parties
agree that Interconnection for the transport and termination of traffic may take
place, in the case of BA, at a terminating End Office, an Access Tandem, a Local
Serving Wire Center and/or other points as specified herein, and, in the case of
MFS, at a node or Central Office and/or other points as specified herein
(collectively, the "Interconnection Points" or "IPs").

          4.1.4  The Parties shall establish physical interconnection points at
the available IPs at the locations designated in Schedule 4.0. The mutually
agreed-upon IPs on the MFS network at which MFS will provide transport and
termination of traffic shall be designated as the MFS Interconnection Points
("M-IPs"); the mutually agreed-upon IPs on the BA network shall be designated as
the BA Interconnection Points ("BA-IPs"), provided that, for the purpose of
charging for the transport of traffic from the BA-IP to the M-IP in any given
LATA, the M-IP shall be no further than an entrance facility away from the BA-IP
in such LATA. The Parties may by mutual agreement establish additional
interconnection points at any technically feasible points consistent with the
Act.

     4.2  PHYSICAL ARCHITECTURE. In each LATA identified on Schedule 4.0, MFS
and Bell Atlantic shall jointly engineer and operate a diverse Synchronous
Optical Network ("SONET") transmission system by which they shall interconnect
their networks pursuant to the joint network reconfiguration and grooming plan
specified in subsection 10.1 ("Joint Grooming Plan"), and according to the
following specifications:

          4.2.1  The SONET system shall be used to deliver appropriate traffic
to a mutually agreed-upon Interconnection Point on each Party's network.

          4.2.2  The SONET transmission system in each LATA shall be configured
substantially as illustrated in Schedule 4.2 and pursuant to the Joint Grooming
Plan, or as otherwise mutually agreed. The Parties shall agree upon which Party
or Parties shall be responsible for procuring, installing, and maintaining the
agreed-upon Optical Line Terminating Multiplexor ("OLTM") equipment, fiber optic
facilities and other equipment pursuant to the Joint Grooming Plan, as
illustrated in that Schedule.

          4.2.3  The physical interface of MFS's and BA's facilities necessary
to effect SONET transmission shall be at the optical level via a Mid-Span Meet
or other comparable means, or as otherwise mutually agreed.

     4.3  INITIAL ARCHITECTURE

          4.3.1  The Parties agree to provide initial interconnection
arrangements utilizing electrical handoffs, substantially as illustrated in
Schedule 4.3, for a period of no more than

                                      13
<PAGE>
 
eighteen (18) months after the later of the Effective Date and the LATA Start
Date set forth for the LATA in Schedule 3.0; provided, however, that such
initial interconnection arrangements shall continue until (i) facilities
suitable for the SONET arrangements described in subsection 4.2 are established
by each of the Parties in its own sole discretion in the LATA at the mutually
agreed-upon SONET meet points and made available, and (ii) the Parties have
agreed upon fully compatible OLTM equipment for use with such facilities.

          4.3.2  The Parties agree to utilize the M-IP and BA-IP in each LATA as
designated in Schedule 4.0 as the points from which each Party will provide the
transport and termination of traffic.

          4.3.3  MFS shall provide its own facilities for the delivery of
traffic to a collocation arrangement established at the BA-IP pursuant to
Section 13. Bell Atlantic shall provide transport and termination of the traffic
beyond the BA-IP.

          4.3.4  BA shall purchase an MFS entrance facility (and any necessary
multiplexing) from the BA-IP to the M-IP for the delivery of traffic to the 
M-IP. Alternatively, BA may choose to provide its own facilities to a
collocation arrangement established at the M-IP pursuant to Section 13. MFS
shall provide transport and termination of the traffic beyond the M-IP.

          4.3.5  Under this initial architecture described in this subsection
4.3, either Party may utilize the Traffic Exchange Trunks for the termination of
its InterLATA Toll Traffic in accordance with the terms contained in Section 5
below and pursuant to the other Party's Switched Exchange Access Service
tariffs. The other Party's Switched Exchange Access Service rates shall apply to
such Traffic. Such InterLATA Toll Traffic may not be routed over the trunk
groups under the SONET architecture described in subsection 4.2, however, unless
specifically agreed to by the Parties.

     4.4  INTERCONNECTION IN ADDITIONAL LATAS

          4.4.1  If MFS determines to offer Telephone Exchange Services in any
LATA not listed in Schedule 3.0 in which BA also offers Telephone Exchange
Services, MFS shall provide written notice to BA of the need to establish
Interconnection in such LATA pursuant to this Agreement.

          4.4.2  The notice provided in subsection 4.4.1 shall include (i) the
initial Routing Point MFS has designated in the new LATA; (ii) MFS's requested
Interconnection Activation Date (and related milestone dates in accordance with
the format in Schedule 3.0); and (iii) a non-binding forecast of MFS's trunking
requirements.

          4.4.3  Unless otherwise agreed to by the Parties, the Parties shall
designate the Wire Center MFS has identified as its initial Routing Point in the
LATA as the M-IP in that LATA and shall designate a mutually agreed BA Local
Serving Wire Center that houses an Access Tandem Office within the LATA nearest
to the M-IP (as measured in airline miles

                                      14
<PAGE>
 
utilizing the V&H coordinates method) as the BA-IP in that LATA, provided that,
for the purpose of charging for the transport of traffic from the BA-IP to the 
M-IP, the M-IP shall be no further than an entrance facility away from the 
BA-IP.

          4.4.4  The Parties shall agree upon an addendum to Schedule 3.0 to
reflect the schedule applicable to each new LATA requested by MFS; provided,
however, that unless agreed by the Parties, the Interconnection Activation Date
in a new LATA shall not be earlier than forty-five (45) days after receipt by BA
of all complete and accurate trunk orders and routing information. Within ten
(10) business days of BA's receipt of MFS's notice, BA and MFS shall confirm the
BA-IP, the M-IP and the Interconnection Activation Date for the new LATA by
attaching an addendum to Schedule 3.0.

     4.5  INTERCONNECTION POINTS FOR DIFFERENT TYPES OF TRAFFIC. Each Party
shall make available Interconnection Points and facilities for routing of
traffic from those Interconnection Points as designated in Schedule 4.5. Any
additional traffic that is not covered in Schedule 4.5 shall be subject to
separate negotiations between the Parties, except that (i) either Party may
deliver traffic of any type or character to the other Party for termination as
long as the delivering Party pays the receiving Party's then current Switched
Exchange Access rates for such traffic, and (ii) upon a bona fide request from
                                                        ---- ----
either Party, the Parties will exercise all reasonable efforts to conclude an
agreement covering the exchange of such traffic.

5.0  TRANSMISSION AND ROUTING OF TELEPHONE EXCHANGE SERVICE TRAFFIC PURSUANT TO
SECTION 251(c)(2)

     5.1  SCOPE OF TRAFFIC. Section 5 prescribes parameters for trunk groups
(the "Traffic Exchange Trunks") to be effected over the Interconnections
specified in Section 4.0 for the transmission and routing of Local Traffic and
IntraLATA Toll Traffic between the Parties' respective Telephone Exchange
Service Customers.

     5.2  TRUNK GROUP CONNECTIONS AND ORDERING

          5.2.1  Trunk group connections will be made at a DS-l level or higher
for exchange of Local and Toll Traffic. Higher speed connections shall be made,
when and where available, in accordance with the Joint Grooming Plan prescribed
in Section 10. Ancillary Traffic trunk groups may be made below a DS-l level, as
may be agreed to by the Parties.

          5.2.2  Each Party will identify its Carrier Identification Code, a
three or four digit numeric obtained from Bellcore, to the other Party when
ordering a trunk group.

     5.3  ADDITIONAL SWITCHING SYSTEM HIERARCHY AND TRUNKING REQUIREMENTS

       5.3.1  For purposes of routing MFS traffic to BA, the subtending
arrangements between BA Access Tandem Switches and BA End Office Switches shall
be the same as the Access Tandem/End Office subtending arrangements BA maintains
for the routing of its own or

                                      15
<PAGE>
 
other carriers' traffic. For purposes of routing BA traffic to MFS, the
subtending arrangements between MFS Access Tandem Switches (or functional
equivalent) and MFS End Office Switches (or functional equivalent) shall be the
same as the Access Tandem/End Office subtending arrangements (or functional
equivalent) which MFS maintains for the routing of its own or other carriers'
traffic.

     5.4     SIGNALING

     Each Party will provide the other Party with access to its databases and
associated signaling necessary for the routing and completion of the other
Party's traffic in accordance with the provisions contained in Section 17 below.

     5.5     GRADES OF SERVICE

     The Parties shall initially engineer and shall jointly monitor and enhance
all trunk groups consistent with the Joint Grooming Plan as set forth in Section
10.

     5.6     MEASUREMENT AND BILLING

         5.6.1   For billing purposes, each Party shall pass Calling Party
Number ("CPN") information on each call carried over the Traffic Exchange
Trunks, wherever technically feasible. At such time as either Party has the
ability, as the Party receiving the traffic, to use such CPN information to
classify on an automated basis traffic delivered by the other Party as either
Local Traffic or Toll Traffic, such receiving Party shall bill the originating
Party the Local Traffic termination rates, Intrastate Exchange Access rates, or
Interstate Exchange Access rates applicable to each minute of Traffic for which
CPN is passed, as provided in Exhibit A and applicable Tariffs.

         5.6.2   If, under the circumstances set forth in subsection 5.6.1. it
is not technically feasible for the originating Party to pass CPN on up to ten
percent (10%) of calls, the receiving Party shall bill the originating Party the
Local Traffic termination rates, Intrastate Exchange Access rates, or Interstate
Exchange Access rates applicable to each minute of traffic, as provided in
Exhibit A and applicable Tariffs, for which CPN is passed. For the remaining up
to ten percent (10%) of calls without CPN information, the receiving Party shall
bill the originating Party for such traffic as Local Traffic termination rates,
Intrastate Exchange Access rates, or Interstate Exchange Access rates applicable
to each minute of traffic, as provided in Exhibit A and applicable Tariffs, in
direct proportion to the minutes of use of calls passed with CPN information.

         5.6.3   If it is not technically feasible for the originating Party to
pass CPN on more than ten percent (10%) of calls, or if the receiving Party
lacks the ability to use CPN information to classify on an automated basis
traffic delivered by the other Party as either Local Traffic or Toll Traffic,
and the originating Party chooses to combine Local and Toll Traffic on the same
trunk group, it will supply an auditable Percent Local Use ("PLU") report
quarterly, based on the previous three months' traffic, and applicable to the
following three months. If the originating

                                      16
<PAGE>
 
Party also chooses to combine Interstate and Intrastate Toll Traffic on the same
trunk group, it will supply an auditable Percent Interstate Use ("PIU") report
quarterly, based on the previous three months' terminating traffic, and
applicable to the following three months. In lieu of the foregoing PLU and/or
PIU reports, the Parties may agree to provide and accept reasonable surrogate
measures for an agreed-upon interim period.

         5.6.4   Measurement of billing minutes for purposes of determining
terminating compensation shall be in conversation seconds.

     5.7     RECIPROCAL COMPENSATION ARRANGEMENTS -- SECTION 251(B)(5).

     Reciprocal Compensation arrangements address the transport and termination
of Local Traffic. BA's delivery of Traffic to MFS that originated with a third
carrier is addressed in subsection 7.3. Where MFS delivers Traffic (other than
Local Traffic) to BA, except as may be set forth herein or subsequently agreed
to by the Parties, MFS shall pay BA the same amount that such carrier would have
paid BA for termination of that Traffic at the location the Traffic is delivered
to BA by MFS. Compensation for the transport and termination of traffic not
specifically addressed in this subsection 5.7 shall be as provided elsewhere in
this Agreement, or if not so provided, as required by the Tariffs of the Party
transporting and/or terminating the traffic.

         5.7.1   Nothing in this Agreement shall be construed to limit either
Party's ability to designate the areas within which that Party's Customers may
make calls which that Party rates as "local" in its Customer Tariffs.

         5.7.2   The Parties shall compensate each other for transport and
termination of Local Traffic in an equal and symmetrical manner at the rates
provided in the Detailed Schedule of Itemized Charges (Exhibit A hereto) or, if
not set forth therein, in the applicable Tariff(s) of the terminating Party, as
the case may be. These rates are to be applied at the M-IP for traffic delivered
by BA, and at the BA-IP for traffic delivered by MFS. No additional charges,
including port or transport charges, shall apply for the termination of Local
Traffic delivered to the BA-IP or the M-IP, except as set forth in Exhibit A.
When Local Traffic is terminated over the same trunks as Toll Traffic, any port
or transport or other applicable access charges related to the Toll Traffic
shall be prorated to be applied only to the Toll Traffic.

         5.7.3   The Reciprocal Compensation arrangements set forth in this
Agreement are not applicable to Switched Exchange Access Service. All Switched
Exchange Access Service and all Toll Traffic shall continue to be governed by
the terms and conditions of the applicable federal and state Tariffs.

         5.7.4   Compensation for transport and termination of all Traffic which
has been subject to performance of INP by one Party for the other Party pursuant
to Section 14 shall be as specified in subsection 14.5. 

                                      17
<PAGE>
 
         5.7.5   The designation of Traffic as Local or Toll for purposes of
compensation shall be based on the actual originating and terminating points of
the complete end-to-end call, regardless of the carrier(s) involved in carrying
any segment of the call.

         5.7.6   Each Party reserves the right to measure and audit all Traffic
to ensure that proper rates are being applied appropriately. Each Party agrees
to provide the necessary Traffic data or permit the other Party's recording
equipment to be installed for sampling purposes in conjunction with any such
audit.

         5.7.7   The Parties will engage in settlements of alternate-billed
calls (e.g. collect, calling card, and third-party billed calls) originated or
       - -
authorized by their respective Customers in Virginia in accordance with the
terms of an appropriate billing services agreement for intraLATA intrastate
alternate-billed calls or such other arrangement as may be agreed to by the
Parties.


6.0  TRANSMISSION AND ROUTING OF EXCHANGE ACCESS TRAFFIC PURSUANT TO 251(C)(2).

     6.1     SCOPE OF TRAFFIC

     Section 6 prescribes parameters for certain trunks to be established over
the Interconnections specified in Section 4 for the transmission and routing of
traffic between MFS Telephone Exchange Service Customers and Interexchange
Carriers ("Access Toll Connecting Trunks"). This includes casually-dialed (10XXX
and 101XXXX) traffic.

     6.2     TRUNK GROUP ARCHITECTURE AND TRAFFIC ROUTING

         6.2.1   MFS shall establish Access Toll Connecting Trunks by which it
will provide tandem-transported Switched Exchange Access Services to
Interexchange Carriers to enable such Interexchange Carriers to originate and
terminate traffic to and from MFS's Customers.

         6.2.2   Access Toll Connecting Trunks shall be used solely for the
transmission and routing of Exchange Access to allow MFS's Customers to connect
to or be connected to the interexchange trunks of any Interexchange Carrier
which is connected to an BA Access Tandem.

         6.2.3   The Access Toll Connecting Trunks shall be two-way trunks
connecting an End Office Switch MFS utilizes to provide Telephone Exchange
Service and Switched Exchange Access in a given LATA to an Access Tandem BA
utilizes to provide Exchange Access in such LATA.

         6.2.4   The Parties shall jointly determine which BA Access Tandem(s)
will be subtended by each MFS End Office Switch. MFS's End Office switch shall
subtend the BA Access Tandem that would have served the same rate center on BA's
network. Alternative configurations will be discussed as part of the Joint Plan.

                                      18
<PAGE>
 
     6.3     MEET-POINT BILLING ARRANGEMENTS

             6.3.1  MFS and BA will establish Meet-Point Billing arrangements
in order to provide a common transport option to Switched Access Services
Customers via an Access Tandem Switch in accordance with the Meet-Point Billing
guidelines contained in the OBF's MECAB and MECOD documents, except as modified
herein, and BA's Virginia Tariff Number 217, Section 2.4.8. The arrangements
described in this Section 6 are intended to be used to provide Switched Exchange
Access Service that originates and/or terminates on a Telephone Exchange Service
that is provided by either Party, where the transport component of the Switched
Exchange Access Service is routed through a Tandem Switch that is provided by
BA.

             6.3.2  In each LATA, the Parties shall establish MPB arrangements
between the applicable Rating Point/BA Local Serving Wire Center combinations.

             6.3.3  Interconnection for the MPB arrangement shall occur at the
BA-IP in the LATA, unless otherwise agreed to by the Parties.

             6.3.4. MFS and BA will use reasonable efforts, individually and
collectively, to maintain provisions in their respective state access tariffs,
and/or provisions within the National Exchange Carrier Association ("NECA")
tariff No. 4, or any successor Tariff sufficient to reflect the MPB arrangements
established pursuant to this Agreement.

             6.3.5  Each Party shall implement the "Multiple Bill/Single Tariff"
or "Multiple Bill/Multiple Tariff" option, as appropriate, in order to bill an
IXC for the portion of the jointly provided telecommunications service provided
by that Party.

             6.3.6  The rate elements to be billed by each Party are as set
forth in Schedule 6.3. The actual rate values for each Party's affected access
service rate element shall be the rates contained in that Party's own effective
federal and state access tariffs, or other document that contains the terms
under which that Party's access services are offered. The MPB billing
percentages for each Rating Point/BA Local Serving Wire Center combination shall
be calculated in accordance with the formula set forth in subsection 6.3.16
below.

             6.3.7  Each Party shall provide the other Party with the billing
name, billing address, and Carrier Identification Code ("CIC") of the IXC, and
identification of the IXC's Local Serving Wire Center in order to comply with
the MPB notification process as outlined in the MECAB document via facsimile
or such other media as the Parties may agree to.

             6.3.8  BA shall provide MFS with the Switched Access Detail Usage
Data (category 1101XX records) on magnetic tape or via such other media as the
Parties may agree to, no later than ten (10) business days after the date the
usage occurred.

             6.3.9  MFS shall provide BA with the Switched Access Summary Usage
Data (category 115OXX records) on magnetic tape or via such other media as the
Parties may agree, no

                                      19
<PAGE>
 
later than ten (10) business days after the date of its rendering of the bill to
the relevant IXC, which bill shall be rendered no less frequently than monthly.

             6.3.10  Each Party shall coordinate and exchange the billing
account reference ("BAR") and billing account cross reference ("BACR") numbers
or Operating Company Name ("OCN"), as appropriate, for the MPB Service. Each
Party shall notify the other if the level of billing or other BAR/BACR elements
change, resulting in a new BAR/BACR number, or if the OCN changes.

             6.3.11. Errors may be discovered by MFS, the IXC or BA. Each Party
agrees to provide the other Party with notification of any errors it discovers
within two (2) business days of the date of such discovery. In the event of a
loss of data, both Parties shall cooperate to reconstruct the lost data and, if
such reconstruction is not possible, shall accept a reasonable estimate of the
lost data based upon prior usage data.

             6.3.12  Either Party may request a review or audit of the various
components of access recording up to a maximum of two (2) audits per calendar
year. All costs associated with each review and audit shall be borne by the
requesting Party. Such review or audit shall be conducted subject to
confidentiality protection and during regular business hours. A Party may
conduct additional audits, at its expense, upon the other Party's consent, which
consent shall not be unreasonably withheld.

             6.3.13. Nothing contained in this subsection 6.3. shall create any
liability for damages, losses, claims, costs, injuries, expenses or other
liabilities whatsoever on the part of either Party (other than as may be set
forth in MECAB or in any applicable Tariff).

             6.3.14. The Parties shall not charge one another for the services
rendered or information provided pursuant to this subsection 6.3.

             6.3.15  MPB will apply for all traffic bearing the 500, 900,
800/888 (to the extent provided by an IXC) or any other non-geographic NPA which
may be likewise designated for such traffic in the future.

             6.3.16  In the event MFS determines to offer Telephone Exchange
Services in another LATA in which BA operates an Access Tandem Switch, BA shall
permit and enable MFS to subtend the BA Access Tandem Switch(es) designated for
the BA End Offices in the area where the MFS Rating Point(s) associated with the
NPA-NXX(s) to/from which the Switched Exchange Access Services are homed. The
MPB billing percentages for each new Rating Point/BA Local Serving Wire Center
combination shall be calculated according to the following formula:

                      a / (a + b) = MFS Billing Percentage
                                      and
                      b / (a + b) = BA Billing Percentage

               where:
               ------

                                      20
<PAGE>
 
               a = the airline mileage between the Rating Point and the actual
          point of interconnection for the MPB arrangement; and

               b = the airline mileage between the BA Local Serving Wire Center
          and the actual point of interconnection for the MPB arrangement.

MFS shall inform BA of the LATA in which it intends to offer Telephone Exchange
Services and its calculation of the billing percentages which should apply for
such arrangement, as part of the notice required by subsection 4.4.1 above.
Within ten (10) business days of MFS's delivery of notice to BA, BA and MFS
shall confirm the new Rating Point/BA Local Serving Wire Center combination and
billing percentages. Nothing in this subsection 6.3.16 shall be construed to
limit MFS's ability to select to interconnect with BA in additional LATAs by
means of Interconnection at a Local Serving Wire Center, to the extent that such
Interconnection is permitted under this Agreement.

    6.4  800/888 TRAFFIC

    The following terms shall apply when either Party delivers 800/888 calls to
the other Party for completion.

         6.4.1.  When MFS delivers untranslated 800/888 calls to BA for
completion

                 (a)  to an IXC, BA shall:

                      (i)    Provide a MPB record in an industry standard format
                      to MFS; and

                      (ii)   Bill the IXC the appropriate BA query charge
                      associated with the call.

                 (b)  as an IntraLATA call to BA or another LEC in the LATA, BA
shall

                      (i)    Provide a copy record in an industry standard
                      format to MFS;

                      (ii)   Bill MFS the appropriate BA query charge associated
                      with the call; and

                      (iii)  Submit the call records to ITORP for payment by BA
                      or the LEC that is the 800/888 service provider of MFS's
                      and any intermediate LEC's Tariffed Exchange Access
                      charges and query charges.

                                      21
<PAGE>
 
          6.4.2   When BA delivers 800/888 calls originated by BA's or another
LEC's Customers to MFS for completion

                  (a)   to MFS in its capacity as an IXC, BA shall:

                        (i)    Bill MFS the appropriate BA query charge
                        associated with the call; and

                        (ii)   Bill MFS the appropriate FGD Exchange Access
                        charges associated with the call.

                  (b)   as an IntraLATA call to MFS in its capacity as a LEC,

                        (i)    BA shall submit the appropriate call records to
                        ITORP for payment by MFS of BA's (and another LEC's, if
                        appropriate) Tariffed Exchange Access charges; and

                        (ii)   MFS shall pay the originating LEC's appropriate
                        query charge associated with the call.


7.0  TRANSPORT AND TERMINATION OF OTHER TYPES OF TRAFFIC

     7.1  INFORMATION SERVICES TRAFFIC

     The following provisions shall apply only to MFS-originated Information
Services Traffic directed to an information services platform connected to BA's
network. At such time as MFS connects Information Services platforms to its
network, the Parties shall agree upon a suitable arrangement for BA-originated
Information Services Traffic.

          7.1.1  MFS shall route Information Services Traffic that originates on
its own network to the appropriate information services platform(s) connected to
BA's network. MFS will establish a dedicated trunk group to the BA information
services serving switch. This trunk group will be utilized to allow MFS to
route information service traffic originated on its network to BA.

          7.1.2  MFS shall provide an electronic file transfer or monthly
magnetic tape containing recorded call detail information to BA.

          7.1.3  BA shall provide to MFS via electronic file transfer or
magnetic tape or other means as available all necessary information to rate the
Information Services Traffic to MFS's Customers pursuant to the BA's agreements
with each information services provider. Information shall be provided in as
timely a fashion as practical in order to facilitate record review and reflect
actual prices set by the individual information services providers.

                                      22
<PAGE>
 
          7.1.4  MFS shall bill and collect such information services provider
charges and remit the amounts collected to BA less:

          (a)  The Information Services Billing and Collection fee set forth in
     Exhibit A; and

          (b)  An uncollectibles reserve calculated based on the uncollectibles
     reserve in BA's billing and collection agreement with the applicable
     information services provider; and

          (c)  Customer adjustments provided by MFS.

MFS shall provide to BA sufficient information regarding uncollectibles and
Customer adjustments to allow BA to pass through the adjustments to the
information services provider, and BA shall pass through such adjustments.
However, if the information services provider disputes such adjustments and
refuses to accept such adjustments, MFS shall reimburse BA for all such disputed
adjustments. Final resolution regarding all disputed adjustments shall be solely
between MFS and the information services provider.

          7.1.5  Nothing in this Agreement shall restrict either Party from
offering to its Telephone Exchange Service Customers the ability to block the
completion of Information Service Traffic.

          7.1.6  The Parties may agree to separate arrangements for the billing
and compensation of variable rated (e.g. 970, 540) information services.
                                    - -

          7.1.7  The Information Services Traffic addressed herein does not
include 555 traffic or similar traffic with AIN service interfaces.

     7.2  LSV/VCI TRAFFIC

          7.2.1  Each Party shall offer LSV and VCI services to enable its
Customers to verify and/or interrupt calls of the other Party's Customers. In
such instances, the other Party shall accept and respond to LSV and VCI requests
from the operator bureau of the requesting Party. Both the requesting Party
(Party A) and the responding Party (Party B) shall perform in accordance with
the terms set forth in this subsection 7.2 and pursuant to inter-Party rates to
be agreed upon between the Parties.

          7.2.2  The Party B operator shall only verify the status of the line
(LSV) or interrupt the line to inform the called party that there is a call
waiting. The Party B operator will not complete the telephone call of the
Customer initiating the LSV/VCI request. The Party B operator will only make one
LSV/VCI attempt per Customer operator bureau telephone call, and the applicable
charges apply whether or not the called party releases the line.

                                      23
<PAGE>
 
          7.2.3  Each Party's operator bureau shall accept LSV and VCI inquiries
from the operator bureau of the other Party in order to allow transparent
provision of LSV/VCI Traffic between the Parties' networks.

          7.2.4  Each Party shall route LSV/VCI Traffic inquiries over separate
direct trunks (and not the Local/IntraLATA/InterLATA Trunks) established between
the Parties' respective operator bureaus. Each Party shall offer interconnection
for LSV/VCI traffic at its Local Serving Wire Center, operator services Tandem
Office subtended by such Local Serving Wire Center, or other mutually agreed
point in the LATA. Separate LSV/VCI trunks delivered at the Local Serving Wire
Center will be directed to the operator services Tandem Office designated by
Party B. Unless otherwise mutually agreed, the Parties shall configure LSV/VCI
trunks over the Interconnection architectures in accordance with the terms of
Section 4, consistent with the Joint Grooming Plan. Party A shall outpulse the
appropriate NPA, ATC Code, and Routing Code (operator code) to Party B.

     7.3  TRANSIT SERVICE

          7.3.1  MFS shall exercise all reasonable efforts to enter into a
reciprocal local traffic exchange arrangement (either via written agreement or
mutual tariffs) with any wireless carrier, ITC, CLEC, or other LEC to which it
sends, or from which it receives, local traffic that transits BA facilities over
Traffic Exchange Trunks. If MFS fails to enter into such an arrangement as
quickly as commercially reasonable following the Effective Date and to provide
copies thereof to BA, but continues to utilize BA's Transit Service for the
exchange of local traffic with such wireless carrier, ITC, CLEC, or other LEC,
MFS shall, in addition to paying the rate set forth in Exhibit A for said
Transit Service, pay BA any charges or costs such terminating third party
carrier imposes or levies on BA for the delivery or termination of such Traffic,
including any switched access charges, plus all reasonable expenses incurred by
                                       ----
BA in delivering or terminating such Traffic and/or resulting from MFS's failure
to secure said reciprocal local traffic exchange arrangement. BA will, upon
request, provide MFS with all reasonable cooperation and assistance in obtaining
such arrangements. The Parties agree to work cooperatively in appropriate
industry fora to promote the adoption of reasonable industry guidelines relating
to Transit Traffic.

          7.3.2  Meet-Point Billing compensation arrangements as described in
subsection 6.3 shall be utilized for compensation for the joint handling of Toll
Traffic.

          7.3.3  BA expects that most networks involved in Transit Traffic will
deliver each call to each involved network with CCS and the appropriate
Transactional Capabilities Application Part ("TCAP") message to facilitate full
interoperability of those services supported by BA and billing functions. In all
cases, each Party shall follow the Exchange Message Record ("EMR") standard and
exchange records between the Parties and with the terminating carrier to
facilitate the billing process to the originating network.

                                      24
<PAGE>
 
          7.3.4  Transit Traffic shall be routed over the Traffic Exchange
Trunks described in Section 5 above.

     7.4  911/E911 ARRANGEMENTS

          7.4.1  MFS will interconnect to the BA 911/E911 selective routers or
911 Tandem Offices, where available, which serve the areas in which MFS provides
Telephone Exchange Services, for the provision of 911/E911 services and for
access to all subtending Public Safety Answering Points ("PSAP"). In such
situations, BA will provide MFS with the appropriate CLLI codes and
specifications of the Tandem Office serving area. In areas where E911 is not
available, MFS and BA will negotiate arrangements to connect MFS to the 911
service.

          7.4.2  Path and route diverse interconnections for 91l/E911 shall be
made at the M-IP, the BA-IP, or other points as necessary and mutually agreed,
and as required by law or regulation.

          7.4.3  Upon request, BA will provide MFS with the following:

          (a)    an electronic interface, when available, through which MFS
     shall input and provide a daily update of 911/E911 database information
     related to appropriate MFS Customers. Until such time as an electronic
     interface is available, MFS shall provide BA with all appropriate 911
     information such as name, address, and telephone number in writing for BA's
     entry into the 911 database system. Any 911-related data exchanged between
     the Parties shall conform to the National Emergency Number Association
     standards;

          (b)    a file containing the Master Street Address Guide ("MSAG"), as
     may be updated from time to time, for the exchanges or communities
     specified;

          (c)    a return of any MFS E911 data entry files containing errors, so
     that MFS may ensure the accuracy of the Customer records; and

          (d)    PSAP 911 Tandem information.

          7.4.4  In cases where a Customer of one Party elects to discontinue
its service and become the Customer of the other Party ("Party B") but desires
to retain its original telephone number pursuant to an INP or PNP arrangement,
Party B will outpulse the telephone number to which the call has been forwarded
(i.e. the Customer's ANI) to the 911 Tandem Office. Party B will also provide
 - -
the 911 database with both the forwarded number and the directory number, as
well as the appropriate address information of the Customer.

          7.4.5  BA and MFS will use their best efforts to facilitate the
prompt, robust, reliable and efficient interconnection of MFS systems to the 
911/E911 platforms.

                                      25
<PAGE>
 
          7.4.6  BA and MFS will work cooperatively to arrange meetings with 
PSAPs to answer any technical questions the PSAPs, or county or municipal
coordinators may have regarding the 911/E911 arrangements. BA shall assist MFS
in identifying the appropriate person in each municipality for the purpose of
obtaining the ten-digit subscriber number of each PSAP.

          7.4.7  The Parties acknowledge that the provision of INP, until PNP
with full 911 compatability is available, creates a special need to have the
Automatic Location Identification ("ALI") screen reflect two number: the "old"
number and the "new" number assigned by MFS. The Parties acknowledge further the
objective of including the five character Telephone Company Identification
("TCI") of the company that provides service to the calling line as part of the
ALI display. Until such time as TCI is operational, however, BA and MFS agree to
supply and use the three-letter Access Carrier Name Abbreviation ("ACNA") as the
carrier identifier.

          7.4.8  MFS will compensate BA for connections to its 911/E911
pursuant to Exhibit A.

          7.4.9  MFS will comply with all applicable rules and regulations
pertaining to the provision of 911/E911 services in Virginia.

     7.5  ANCILLARY TRAFFIC GENERALLY  Ancillary Traffic that may be terminated
at a BA Local Serving Wire Center pursuant to subsection 4.5 above shall be
subject to a separate transport charge for transport from the Local Serving Wire
Center to the appropriate Tandem Office, as set forth in Exhibit A.


8.0  NUMBER RESOURCES, RATE CENTERS AND RATING POINTS

     8.1  Nothing in this Agreement shall be construed to limit or otherwise
adversely affect in any manner either Party's right to employ or to request and
be assigned any Central Office (NXX) Codes pursuant to the Central Office Code
Assignment Guidelines, as may be amended from time to time, or to establish, by
Tariff or otherwise, Rate Centers and Rating Points corresponding to such NXX
codes. Until such time as number administration is provided by a third party, BA
shall provide MFS access to telephone numbers by assigning NXX codes to MFS in
accordance with such Assignment Guidelines.

     8.2  It shall be the responsibility of each Party to program and update its
own switches and network systems in accordance with the Local Exchange Routing
Guide ("LERG") in order to recognize and route traffic to the other Party's
assigned NXX codes at all times. Neither Party shall impose any fees or charges
whatsoever on the other Party for such activities, except as expressly set forth
in this Agreement.

     8.3  Unless mandated otherwise by a Commission order, the Rate Center Areas
will be the same for each Party. During the term of this Agreement, MFS shall
adopt the Rate Center Areas and Rate Center Points that the Commission has
approved for BA, in all areas where BA and

                                      26
<PAGE>
 
MFS service areas overlap, and MFS shall assign whole NPA-NXX codes to each
Rate Center unless the LEC industry adopts alternative methods of utilizing NXXs
in the manner adopted by the NANP.

     8.4  MFS will also designate a Routing Point for each assigned NXX code.
MFS shall designate one location for each Rate Center Area as the Routing Point
for the NPA-NXXs associated with that Area, and such Routing Point shall be
within the same LATA as the Rate Center Area but not necessarily within the Rate
Center Area itself.

     8.5  Notwithstanding anything to the contrary contained herein, nothing in
this Agreement is intended to, and nothing in this Agreement shall be construed
to, in any way constrain MFS's choices regarding the size of the local
calling area(s) that MFS may establish for its Customers, which local calling
areas may be larger than, smaller than, or identical to, BA's local calling
areas.


9.0  NETWORK MAINTENANCE AND MANAGEMENT; OUTAGES

     9.1  The Parties will work cooperatively to install and maintain a reliable
network. MFS and BA will exchange appropriate information (e.g., maintenance
                                                           - -
contact numbers, network information, information required to comply with law
enforcement and other security agencies of the Government) to achieve this
desired reliability. In addition, the Parties will work cooperatively to apply
sound network management principles to alleviate or to prevent congestion.

     9.2  Each Party recognizes a responsibility to follow the standards that
may be agreed to between the Parties and to employ characteristics and methods
of operation that will not interfere with or impair the service or any
facilities of the other or any third parties connected with or involved directly
in the network of the other.

     9.3  INTERFERENCE OR IMPAIRMENT

     If Party A reasonably determines that the characteristics and methods of
operation used by Party B will or may interfere with or impair its provision of
services, Party A shall have the right to discontinue Interconnection subject,
however, to the following:

          9.3.1  Party A shall have given Party B ten (10) days' prior written
notice of interference or impairment or potential interference or impairment
which specifies the time within which Party B is to correct the condition; and,

          9.3.2  Party A shall have concurrently provided a copy of the notice
provided to Party B under (a) above to the appropriate federal and/or state
regulatory bodies.

          9.3.3  Notice in accord with subsections 9.3.1 and 9.3.2 above shall
not be required in emergencies and Party A may immediately discontinue
Interconnection if reasonably necessary

                                      27
<PAGE>
 
to meet its obligations. In such case, however, Party A shall use all reasonable
means to notify Party B and the appropriate federal and/or state regulatory
bodies.

          9.3.4     Upon correction of the interference or impairment, Party A 
will promptly renew the Interconnection. During such period of discontinuance, 
there will be no compensation or credit allowance by Party A to Party B for 
interruptions.

     9.4  REPEATED OR WILLFUL NONCOMPLIANCE

          9.4.1     The Interconnection provided hereunder may be discontinued 
by either Party upon thirty (30) days written notice to the other for repeated 
or willful violation of and/or a refusal to comply with this Agreement. The 
Party discontinuing will notify the appropriate federal and/or state regulatory 
bodies concurrently with the notice to the other Party of the prospective 
discontinuance.

     9.5  OUTAGE REPAIR STANDARD

     In the event of an outage or trouble in any arrangement, facility, or 
service being provided by a Party hereunder, the providing Party will follow 
procedures for isolating and clearing the outage or trouble that are no less 
favorable than those that apply to comparable arrangements, facilities, or 
services being provided by the providing Party to any other carrier whose 
network is connected to that of the providing Party. MFS and BA may agree to 
modify those procedures from time to time based on their experience with 
comparable Interconnection arrangements with other carriers.

     9.6  NOTICE OF CHANGES -- SECTION 251(C)(5).

     If a Party makes a change in its network which it believes will materially 
affect the interoperability of its network with the other Party's network, the 
Party making the change shall provide at least ninety (90) days advance written 
notice of such change to the other Party.

10.  JOINT NETWORK RECONFIGURATION AND GROOMING PLAN; AND INSTALLATION, 
MAINTENANCE, TESTING AND REPAIR.

     10.1 JOINT NETWORK RECONFIGURATION AND GROOMING PLAN. On or before December
1, 1996, unless the Parties agree to a different date, MFS and BA shall jointly 
develop a grooming plan (the "Joint Plan") which shall define and detail, inter 
                                                                          ----- 
alia,
----

          (a)  modifications to the agreement on physical architecture 
     consistent with the guidelines defined in Section 4;

          (b)  standards to ensure that Interconnection trunk groups experience
     a grade of service, availability and quality which is comparable to that
     achieved on interoffice trunks within BA's network and in accord with all
     appropriate relevant industry-accepted

                                      28

<PAGE>
 
     quality, reliability and availability standards. Trunks provided by either 
     Party for Interconnection services will be engineered using a design 
     blocking objective of B.01;

          (c)  the respective duties and responsibilities of the Parties with
     respect to the administration and maintenance of the trunk groups,
     including, but not limited to, standards and procedures for notification
     and discoveries of trunk disconnects;

          (d)  disaster recovery provision escalations;

          (e)  migration from one-way to two-way Interconnection Trunks upon 
     mutual agreement of the Parties;

          (f)  actual meet point locations on the SONET system; and

          (g)  such other matters as the Parties may agree.

     10.2 INSTALLATION, MAINTENANCE, TESTING AND REPAIR.  BA's standard 
intervals for Feature Group D Switched Exchange Access Services will be used for
Interconnection. MFS shall meet the same intervals for comparable installations,
maintenance, joint testing, and repair of its facilities and services associated
with or used in conjunction with Interconnection or shall notify BA of its 
inability to do so and will negotiate such intervals in good faith. The Parties 
agree that the standards to be used by each Party for isolating and clearing any
disconnections and/or other outages or troubles shall be no less favorable than 
those applicable to comparable arrangements, facilities, or services being 
provided by such Party to any other carrier whose network is connected to that 
of the providing Party.

     10.3 FORECASTING REQUIREMENTS FOR TRUNK PROVISIONING.  Within sixty (60)
days of executing this Agreement, MFS shall provide BA a one (1) year traffic
forecast. This initial forecast will provide the amount of traffic to be
delivered to each of BA's End Offices affected by the exchange of traffic. The
forecast shall be updated and provided to BA on a quarterly basis, and include
Access Carrier Terminal Location (ACTL), traffic type (local/toll, operator
services, 911, etc.), code (identifies trunk group), A location/Z location (CLLI
codes), interface type (e.g., DS1), and trunks in service each year
(cumulative).

          10.3.1 Initial Forecast/Trunking Requirements. Because BA's trunking 
                 --------------------------------------
requirements will, at least during an initial period, be dependent on the 
customer segments and service segments within customer segments to whom MFS 
decides to market its services, BA will be largely dependent on MFS to provide 
accurate trunk forecasts for both inbound (from BA) and outbound (from MFS) 
traffic. BA will, as an initial matter and upon request, provide the same 
number of trunks to terminate local traffic to MFS as MFS provides to terminate 
local traffic to BA, unless MFS expressly identifies particular situations that 
are expected to produce traffic that is substantially skewed in either the 
inbound or outbound direction, in which case BA will provide the number of 
trunks MFS suggests. Upon the establishment of any new set of trunks for traffic
from BA to MFS, BA will monitor traffic for ninety (90) days, and will, as

                                      29

<PAGE>
 
necessary at the end of that period, either augment trunks or disconnect 
trunks, based on the application of reasonable engineering criteria to the 
actual traffic volume experienced. If, after such 90-day period, BA has 
determined that the trunks are not warranted by actual traffic volumes, then, on
ten (10) days' written notice, BA may hold MFS financially responsible for such 
trunks retroactive to the start of the 90-day period until such time as they are
justified by actual traffic volumes, based on the application of reasonable 
engineering criteria. To the extent that BA requires MFS to install trunks for 
delivery of traffic to BA, MFS may apply the same procedures with respect to 
BA's trucking requirements.

11.0 UNBUNDLED ACCESS - SECTION 251(C)(3).

     To the extent required of each Party by Section 251 of the Act, each Party
shall offer to the other Party nondiscriminatory access to Network Elements on
an unbundled basis at any technically feasible point. BA shall unbundle and
separately price and offer Network Elements such that MFS will be able to lease
and interconnect to whichever of the Network Elements MFS requires, and to
combine the BA-provided elements with any facilities and services that MFS may
itself provide, except that MFS shall not recombine Network Elements purchased
from BA for use as a substitute for the purchase at wholesale rates of
Telecommunications Services that BA provides unless otherwise mandated by the
FCC or the Commission or agreed to by BA with other carriers.

     11.1 UNBUNDLED LOCAL LOOP ("ULL") TRANSMISSION TYPES

     Subject to subsection 11.4, BA shall allow MFS to access the following ULL
types (in addition to those ULLs available under applicable tariffs) unbundled
from local switching and local transport in accordance with the terms and
conditions set forth in this subsection 11.1.

          11.1.1 "2-Wire Analog Voice Grade ULL" or "Analog 2W" provides an
effective 2-wire channel with 2-wire interfaces at each end that is suitable for
the transport of analog voice grade (nominal 300 to 3000 Hz) signals and loop-
start signaling. The service is more fully described in Bell Atlantic TR-72565.
If "Customer-Specified Signaling" is requested, the service will operate with
one of the following signaling types that may be specified when the service is
ordered: loop-start, ground-start, loop-reverse-battery, and no signaling. The
service is more fully described in Bell Atlantic TR-72570.

          11.1.2 "4-Wire Analog Voice Grade ULL" or "Analog 4W" provides an 
effective 4-wire channel with 4-wire interfaces at each end that is suitable for
the transport of analog voice grade (nominal 300 to 3000 Hz) signals. The
service will operate with one of the following signaling types that may be
specified when the service is ordered: loop-start, ground-start, loop-reverse-
battery, duplex, and no signaling. The service is more fully described in Bell
Atlantic TR-72570.

          11.1.3 "2-Wire ISDN Digital Grade ULL" or "BRI ISDN" provides a 
channel with 2-wire interfaces at each end that is suitable for the transport of
160 kbps digital services using the ISDN 2B1Q line code.

                                      30

<PAGE>
 
          11.1.4 "2-Wire ADSL-Compatible ULL" or "ADSL 2W" provides a channel 
with 2-wire interfaces at each end that is suitable for the transport of digital
signals up to 6Mbps toward the Customer and up to 640 kbps from the Customer. BA
will offer ADSL-Compatible ULLs only when the technology BA uses to provide such
ULLs is compatible with that of MFS. In addition, ADSL-Compatible ULLs will be
available only where existing copper facilities can meet applicable industry
standards.

          11.1.5 "2-Wire HDSL-Compatible ULL" or "HDSL 2W" provides a channel 
with 2-wire interfaces at each end that is suitable for the transport of 784 
kbps digital signals simultaneously in both directions using the 2B1Q line code.
HDSL compatible ULLs will be available only where existing copper facilities can
meet the specifications.

          11.1.6 "4-Wire HDSL-Compatible ULL" or "HDSL 4 W" provides a channel 
with 4-wire interfaces at each end. Each 2-wire channel is suitable for the 
transport of 784 kbps digital signals simultaneously in both directions using 
the 2B1Q line code. HDSL compatible ULLs will be available only where existing 
copper facilities can meet specfications.

          11.1.7 ULLs will be offered on the terms and conditions specified 
herein and on such other terms in applicable Tariffs that are not inconsistent 
with the terms and conditions set forth herein. BA shall make ULLs available to 
MFS at the rates specified by the Commission, as amended from time to time, 
subject to the provisions of subsection 11.1.8 below.

          11.1.8 BA will make Analog 2-Wire ULLs available for lease by MFS in 
accordance with the schedule set forth in Schedule 3.0. BA will make BRI ISDN 
and Analog 4W ULLs available for lease by MFS by the later of January 1, 1997, 
or the date when the ULL milestone contained in Schedule 3.0 is achieved in the 
LATA. BA will make ADSL 2W, HDSL 2W, and HDSL 4W ULLs available for lease by MFS
as soon as practicable, but in any event no later than six months, after BA 
makes the services using equivalent loop facilities commercially available to 
its own end-user Customers in Virginia. Upon request by either BA or MFS, the 
Parties shall agree upon a reasonable schedule and location for a technical and 
operational trial(s) of ADSL 2W, HDSL 2W, and/or HDSL 4W ULLs. Such trial(s) 
may, by mutual agreement, be conducted in any jurisdiction in which affiliates 
of BA and MFS both operate. Upon successful completion of such trial(s), the 
Parties shall agree upon an implementation schedule for the ULL type(s) subject 
to such trial(s), which schedule shall begin no later than ninety (90) days
after successful completion of such trial(s).

     11.2 PORT TYPES

     BA shall make available to MFS unbundled 2-wire analog line and 2-wire 
analog trunk Ports on the terms and conditions specified herein and on such 
other terms in applicable Tariffs that are not inconsistent with the terms and 
conditions set forth herein. BA will offer MFS Ports utilizing other 
technologies as they become available, upon bona fide request by MFS.
                                            ---- ----

                                      31

<PAGE>
 
     11.3  TRUNK SIDE LOCAL TRANSPORT

     BA shall provide MFS local transport from the trunk side of BA's Central 
Office Switches using private lines and special access services unbundled from 
switching and other services in accordance with the terms and conditions of BA's
existing or filed Tariffs, as referenced in Exhibit A.

     11.4  LIMITATIONS ON UNBUNDLED ACCESS

           11.4.1 Unless otherwise mandated by the FCC or the Commission or 
agreed to by BA with other carriers, MFS may not cross-connect a BA-provided ULL
to a BA-provided Port, but instead shall purchase a network access line under 
applicable tariffs.

           11.4.2 BA shall not be required to make available ULLs and Ports 
where such ULLs and Ports are available.

           11.4.3 MFS shall access BA's unbundled Network Elements specifically 
identified in this Agreement via Collocation in accordance with Section 13 at 
the BA Wire Center where those elements exist and each ULL or Port shall be 
delivered to MFS's Collocation by means of a Cross Connection.

           11.4.4 BA shall provide MFS access to its Unbundled Local Loops at
each of BA's Wire Centers for loops terminating in that Wire Center. In
addition, if MFS requests one or more ULLs provisioned via Integrated Digital
Loop Carrier or Remote Switching technology deployed as a ULL concentrator, BA
shall, where available, move the requested ULL(s) to a spare, existing physical
ULL at no additional charge to MFS.  If, however, no spare physical ULL is
available, BA shall within three (3) business days of MFS's request notify MFS
of the lack of available facilities. MFS may then at its discretion make a
Network Element Bona Fide Request to BA to provide the Unbundled Local Loop
through the demultiplexing of the integrated digitized ULL(s). MFS may also make
a Network Element Bona Fide Request for access to Unbundled Local Loops at the
ULL concentration site point. Alternatively, MFS may choose to avail itself of
BA's Special Construction services, as set forth in Exhibit A, for the
provisioning of such ULL(s). Notwithstanding anything to the contrary in this
Agreement, the provisioning intervals set forth in subsection 11.6 and the
Performance Criteria and Performance Interval Dates set forth in subsection 27.1
and Schedule 27, respectively, shall not apply to ULLs provided under this
subsection 11.4.4.

           11.4.5 If MFS orders a ULL type and the distance requested on such 
ULL exceeds the transmission characteristics in applicable technical references,
distance extensions may be required and additional rates and charges shall 
apply as set forth in Exhibit A or applicable Tariffs.

           11.4.6 BA will exercise all reasonable efforts to ensure that the 
service intervals that apply to ULLs and unbundled Ports are comparable to the 
(i) repair intervals that apply to the bundled dial tone line service, and (ii) 
installation intervals that apply to other BA-coordinated services, except as 
provided in Section 27. Although BA will make commercially

                                      32

 





<PAGE>
 
reasonable efforts to ensure that ULLs and unbundled ports meet specified or 
agreed-upon technical standards, BA makes no warranty that the ULLs or unbundled
Ports supplied by BA hereunder will be compatible with the services MFS may 
offer to its Customers if they are used in a manner not contemplated by the 
Parties.

     11.5  AVAILABILITY OF OTHER NETWORK ELEMENTS ON AN UNBUNDLED BASIS

           11.5.1 BA shall, upon request of MFS, and to the extent technically 
feasible, provide to MFS access to its Network Elements on an unbundled basis 
for the provision of MFS's Telecommunications Service. Any request by MFS for 
access to an BA Network Element that is not already available shall be treated 
as a Network Element Bona Fide Request. MFS shall provide BA access to its 
Network Elements as mutually agreed by the Parties or as required by the 
Commission or FCC.

           11.5.2 A Network Element obtained by one Party from the other Party 
under this subsection 11.5 may be used in combination with the facilities of the
requesting Party only to provide a Telecommunications Service, including
obtaining billing and collection, transmission, and routing of the
Telecommunications Service.

           11.5.3 Notwithstanding anything to the contrary in this subsection 
11.5, a Party shall not be required to provide a proprietary Network Element to
the other Party under this subsection 11.5 except as required by the Commission 
or FCC.

     11.6  PROVISIONING OF UNBUNDLED LOCAL LOOPS

     The following coordination procedures shall apply for conversions of "live"
Telephone Exchange Services to ULLs. These and other mutually agreed-upon 
procedures shall apply reciprocally for the "live" cutover of Customers from BA 
to MFS and from MFS to BA.

           11.6.1 Upon request by MFS, BA will apply the following coordination 
procedures to conversions of live Telephone Exchange Services to ULLs. 
Coordinated cutover charges will apply to any such arrangement, only to the 
extent provided by Section A.4.a of Exhibit A. If MFS elects not to request 
coordinated cutover, BA will process MFS's request in the normal course and 
subject to the normal installation intervals.

           11.6.2 MFS shall request ULLs from BA by delivering to BA a valid 
electronic transmittal service order (when available) or another mutually 
agreed-upon type of service order. Such service order shall be provided in 
accordance with industry format and specifications or such format and 
specifications as may be agreed to by the Parties. Within forty-eight (48) hours
of BA's receipt of such valid service order, BA shall provide MFS the firm order
commitment date according to the Performance Interval Dates set forth in 
Schedule 27 by which the ULLs covered by such service order will be installed. 
In addition, BA shall provide MFS with the relating ULL design information, if 
available, at least forty eight (48) hours prior to the scheduled cutover time.

                                      33
<PAGE>
 
          11.6.3    On each ULL order in a Wire Center, MFS and BA will agree on
a cutover time at least forty eight (48) hours before that cutover time. The 
cutover time will be defined as a 15-30 minute window within which both the MFS 
and BA personnel will make telephone contact to complete the cutover.

          11.6.4    Within the appointed 15-30 minute cutover time, the MFS 
person will call the BA organization designated to coordinate cross-connection
work and when the BA organization is reached in that interval such work will be
promptly performed.

          11.6.5    If MFS requires a change in scheduling, it must contact BA 
to issue a supplement to the original order. The negotiations process to 
determine the date and time of cutover will then be reinitiated as usual.

          11.6.6    If MFS person is not ready within the appointed interval and
if MFS had not called to reschedule the work at least two (2) hours prior to the
start of the interval, MFS shall be liable for the non-recurring charge for the 
unbundled elements scheduled for the missed appointment. In addition, 
non-recurring charges for the rescheduled appointment will apply.

          11.6.7    If BA is not available or not ready at any time during the 
appointed 15-30 minute interval, MFS and BA will reschedule and BA will waive 
the non-recurring charge for the unbundled elements originally scheduled for 
that interval, whenever those unbundled elements are actually cutover pursuant 
to an agreed-upon rescheduling.

          11.6.8    The standard time expected from disconnection of a live 
Telephone Exchange Service to the connection of the unbundled element to the MFS
Collocation Arrangement is fifteen (15) minutes per voice grade circuit for all 
orders consisting of fifteen (15) ULLs or less. Orders involving more than 
fifteen (15) ULLs will require a negotiated interval.

          11.6.9    If unusual or unexpected circumstances prolong or extend the
time required to accomplish the coordinated cutover, the Party responsible for 
such circumstances is responsible for the reasonable labor charges of the other 
Party. Delays caused by the Customer are the responsibility of MFS.

          11.6.10   If MFS has ordered INP as part of an ULL installation, BA 
will coordinate implementation of INP with the ULL installation. BA's provision 
of unbundled elements shall in all cases be subject to the availability of 
suitable facilities, to the extent permitted by Section 251 of the Act.

          11.6.11   If MFS requests or approves a BA technician to perform 
services on the network side of the Rate Demarcation Point beyond normal 
installation of the ULLs covered by the service order, BA may charge MFS for any
additional and reasonable labor charges to perform such services. BA may also 
charge MFS its normal overtime rates for services MFS requests to be performed 
outside of BA's normal business hours (M-F, 9 am to 5 pm, E.S.T.).

                                      34
<PAGE>
 
     11.7 MAINTENANCE OF UNBUNDLED LOCAL LOOPS

     If (i) MFS reports to BA a Customer trouble, (ii) MFS requests a dispatch,
(iii) BA dispatches a technician, and (iv) such trouble was not caused by BA's
facilities or equipment, then MFS shall pay BA a per-trip charge charge and
labor charges per quarter hour increments for time associated with said
dispatch, as set forth in Exhibit A. In addition this charge also applies in
situations when the Customer contact as designated by MFS is not available at
the appointed time. MFS accepts responsibility for initial trouble isolation and
providing BA with appropriate dispatch information based on their test results.
If, as the result of MFS instructions, BA is erroneously requested to dispatch
within the Central Office, BA may levy on MFS an appropriate charge.

     11.8 RATES AND CHARGES

     BA shall charge the non-recurring and monthly recurring rates for unbundled
Local Loops and other Network Elements set forth in Exhibit A.


12.0 RESALE -- SECTIONS 251(C)(4) AND 251(B)(1).

     12.1 AVAILABILITY OF RETAIL RATES FOR RESALE

     Each Party shall make available its Telecommunications Services for resale
at retail rates to the other Party in accordance with Section 251(b)(1) of the
Act.

     12.2 AVAILABILITY OF WHOLESALE RATES FOR RESALE

     BA shall make available to MFS for resale at wholesale rates set forth in 
Exhibit A all Telecommunications Services that BA provides at retail to 
Customers that are not Telecommunications Carriers. Such services shall be 
provided in accordance with the terms of the applicable retail services 
Tariff(s), including, without limitation, user or user group restrictions, as 
the case may be, subject to the requirement that such restrictions shall in all 
cases comply with the requirements of Section 251 of the Act regarding 
restrictions on resale. In addition, BA and MFS shall each allow the resale by 
the other of all Telecommunications Services that are offered primarily or 
entirely to other Telecommunications Carriers (e.g., Switched and special 
Exchange Access Services) at the rates already applicable to such services. BA
shall also allow the resale by MFS of such other non-Telecommunications Services
as BA, in its sole discretion, determines to provide for resale under terms and
conditions to be agreed to by the Parties. If MFS requests resale at wholesale
rates of Telecommunications Services that BA provides at retail to Customers
that are not Telecommunications Carriers before April 1, 1997, the Parties shall
negotiate and agree upon the terms and conditions for ordering, provisioning,
billing, and maintaining such resale arrangements before MFS submits any orders
for such resale, which terms and conditions are unlikely to rely on automated
interfaces. During the period before April 1, 1997, the Parties shall negotiate
and agree upon, in the form of a separate agreement to be appended hereto,
resale arrangements to apply after that date. Such arrangements shall, to the
extent feasible and

                                      35

<PAGE>
 
economically reasonable, employ automated interfaces for ordering, provisioning,
billing, and maintaining resold accounts. The Parties may also agree to 
negotiate term and/or volume discounts for resold services.


13.0 COLLOCATION - SECTION 251(c)(6).

     13.1 BA shall offer to MFS Physical Collocation of equipment necessary for 
Interconnection (pursuant to Section 4) or for access to unbundled Network 
Elements (pursuant to Section 11.0), except that BA may offer only Virtual 
Collocation if BA demonstrates to the Commission that Physical Collocation is 
not practical for technical reasons or because of space limitations, as provided
in Section 251(c)(6) of the Act. BA shall provide such Collocation solely for 
the purpose of Interconnection with facilities or services of BA or access to 
unbundled Network Elements of BA, except as otherwise mutually agreed to in 
writing by the Parties or as required by the FCC or the Commission, subject to 
applicable federal and state Tariffs.

     13.2 Although not required to do so by Section 251(c)(6) of the Act, by 
this Agreement, MFS agrees to offer to BA Collocation (at MFS's option either 
Physical or Virtual) of equipment for purposes of Interconnection (pursuant to 
Section 4) on a non-discriminatory basis and at comparable rates, terms and
conditions as MFS may provide to other third parties. MFS shall provide such
Collocation subject to applicable Tariffs.

     13.3 Where MFS is Virtually Collocated on the date hereof on a premise that
was initially prepared for Physical Collocation for MFS, MFS may elect to (i) 
retain its Virtual Collocation in that premises, and/or (ii) establish Physical 
Collocation in that premises pursuant to current procedures and applicable 
Tariffs. BA will not assess to MFS non-recurring charges for central office 
common area construction to transition existing virtual collocation arrangements
to physical collocation arrangements in offices where MFS previously paid such 
charges. BA will also waive cage construction charges for cages of the same size
originally paid for by MFS. MFS shall coordinate with BA for rearrangement of 
MFS's equipment, facilities, and circuits. All applicable Physical Collocation 
recurring charges shall apply.

     13.4 Where MFS is Virtually Collocated on the date hereof on a premise that
was initially prepared for MFS as Virtual Collocation, MFS may elect to (i) 
retain its Virtual Collocation in that premises, or (ii) unless it is not 
practical for technical reasons or because of space limitations, convert its 
Virtual Collocation at such premises to Physical Collocation, in which case MFS 
shall coordinate the construction and rearrangement with BA of its equipment, 
facilities, and circuits, and for which MFS shall pay BA at applicable Tariff
rates. In addition, all Physical Collocation recurring charges shall apply.

     13.5 For both Physical Collocation and Virtual Collocation, the Collocating
Party shall provide its own or third-party leased transport facilities and 
terminate those transport facilities in equipment located in its Physical 
Collocation space, or in its virtually collocated equipment, at the Housing 
Party's premises as described in applicable Tariffs, and purchase Cross 
Connection to services or facilities as described in applicable Tariffs.

                                      36
<PAGE>
 
     13.6  Collocation shall occur under the terms of each Party's applicable
and available Tariffs. Collocation is offered for network Interconnection
between the Parties. Unless otherwise agreed to by the Parties or either Party
is required by applicable law to permit on its collocated premises, neither
Party shall use a Collocation Arrangement to directly interconnect with a third
party's equipment or facilities collocated at the same location.


                           SECTION 251(b) PROVISIONS

14.0 NUMBER PORTABILITY -- SECTION 251(B)(2).

     14.1 SCOPE

          14.1.1  The Parties shall provide Local Telephone Number Portability
("LTNP") on a reciprocal basis to each other to the extent technically feasible,
and in accordance with rules and regulations as from time to time prescribed by
the FCC and/or the Commission.

          14.1.2  Until Permanent Number Portability is implemented by the
industry pursuant to regulations issued by the FCC and/or the Commission, the
Parties agree to reciprocally provide Interim Number Portability to each other
at the prices listed in Exhibit A. Such agreed-upon prices for INP are not
intended to reflect either Party's views on the cost recovery mechanisms being
considered by the FCC in its current proceeding on number portability issues.

          14.1.3  Upon the agreement of the Parties or issuance of applicable
FCC and/or Commission order(s) or regulations mandating the adoption of a
Permanent Number Portability ("PNP") arrangement, BA and MFS will commence
migration from INP to the agreed-upon or mandated PNP arrangement as quickly as
practically possible while minimizing interruption or degredation of service to
their respective Customers. Once PNP is implemented, either Party may withdraw,
at any time and at its sole discretion, its INP offerings, subject to advance
notice to the other Party and coordination to allow the seamless and transparent
conversion of INP Customer numbers to PNP. Upon implementation of PNP pursuant
to FCC or Commission regulation, both Parties agree to conform and provide such
PNP. To the extent PNP rates or cost recovery mechanisms are not established by
the applicable FCC or Commission order or regulation mandating the adoption of
PNP, the Parties will negotiate in good faith the charges or cost recovery
mechanism for PNP service at such time as a PNP arrangement is adopted by the
Parties.

          14.1.4  Under either an INP or PNP arrangement, MFS and BA will
implement a process to coordinate LTNP cutovers with ULL conversions (as
described in Section 11 of this Agreement).

                                      37
<PAGE>
 
     14.2 PROCEDURES FOR PROVIDING INP THROUGH REMOTE CALL FORWARDING

     MFS and BA will provide INP through Remote Call Forwarding as follows:

          14.2.1  A Customer of one Party ("Party A") elects to become a
Customer of the other Party ("Party B"). The Customer elects to utilize the
original telephone number(s) corresponding to the Telephone Exchange Service(s)
it previously received from Party A, in conjunction with the Telephone Exchange
Service(s) it will now receive from Party B. Upon receipt of a service order
from Party B requesting assignment of the number(s) to Party B, Party A will
implement an arrangement whereby all calls to the original telephone number(s)
will be forwarded to a new telephone number(s) designated by Party B, only
within the same Exchange Area as the original telephone number(s). Party A will
route the forwarded traffic to Party B over the appropriate traffic exchange
trunk groups.

          14.2.2  Party B will become the customer of record for the original 
Party A telephone number(s) subject to the INP arrangements. Upon the execution 
of an appropriate billing services agreement or such other mutually agreed-upon 
arrangement between the Parties, Party A shall use its reasonable efforts to 
consolidate into as few billing statements as possible collect, calling card, 
and third-number billed calls associated with the number(s), with sub-account 
detail by retained number.

          14.2.3  Party A will update its Line Information Database ("LIDB") 
listings for retained numbers, and restrict or cancel calling cards associated 
with those forwarded numbers as directed by Party B. In addition, Party A will 
update the retained numbers in the LIDB with the screening options provided by 
Party B on a per order basis. Party B shall determine which of the screening 
options offered by Party A should apply to the Party B Customer account.

          14.2.4  Party B will outpulse the telephone number to which the call 
has been forwarded to the 911 Tandem Office. Party B will also provide the 911 
database with both the forwarded number and the directory number, as well as the
appropriate address information of the Customer.

          14.2.5  Party A shall be permitted to cancel INP arrangements and 
reassign the telephone number(s) upon receipt of notification from Party B or a 
third party that is authorized to act on behalf of the Customer. Party A shall 
provide notification to Party B of third party orders affecting the INP service 
of a Party B customer. The Parties agree to work cooperatively to develop 
procedures or adopt industry standards or practices concerning the initiation 
and termination of INP service in a multi-carrier environment.

          14.2.6  The INP service offered herein shall not initially apply to 
NXX Codes 555, 915, 976, or 950, or for Feature Group A or coin telephone 
service. Upon request of either Party, provision of INP to these services will 
be mutually negotiated between the parties and provided to the extent feasible 
under negotiated rates, terms and conditions. INP shall not apply for any
arrangement that would render the forwarded call Toll Traffic.

                                      38




<PAGE>
 
          14.2.7  The ordering of INP arrangements and the exchange of screening
information shall be made in accordance with industry-accepted (e.g. OBF
developed) format and specifications to the extent they have been implemented by
the Parties.

     14.3  PROCEDURES FOR PROVIDING INP THROUGH DIRECT INWARD DIAL TRUNKS
(FLEXDID) Either Party may also request INP through Direct Inward Dial Trunks
pursuant to any applicable Tariffs.

     14.4  PROCEDURES FOR PROVIDING LTNP THROUGH FULL NXX CODE MIGRATION Where
either Party has activated an entire NXX for a single Customer, or activated a
substantial portion of an NXX for a single Customer, with the remaining numbers
in that NXX either reserved for future use by that Customer or otherwise unused,
if such Customer chooses to receive Telephone Exchange Service from the other
Party, the first Party shall cooperate with the second Party to have the entire
NXX reassigned in the LERG (and associated industry databases, routing tables,
etc.) to an End Office operated by the second Party. Such transfer will be
accomplished with appropriate coordination between the Parties and subject to
appropriate industry lead-times for movements of NXXs from one switch to
another. Neither Party shall charge the other in connection with this
coordinated transfer.

     14.5  RECEIPT OF TERMINATING COMPENSATION ON TRAFFIC TO INP'ED NUMBERS

     The Parties agree in principle that, under the INP arrangements described
in subsections 14.2 and 14.3 above, terminating compensation on calls to INP'ed
numbers should be received by each Customer's chosen LEC as if each call to the
Customer had been originally addressed by the caller to a telephone number
bearing an NPA-NXX directly assigned to the Customer's chosen LEC. In order to
accomplish this objective where INP is employed, the Parties shall utilize the
process set forth in this subsection 14.5 whereby terminating compensation on
calls subject to INP will be passed from the Party (the "Performing Party")
which performs the INP to the other Party (the "Receiving Party") for whose
Customer the INP is provided.

          14.5.1  The Parties shall individually and collectively make best
efforts to track and quantify INP traffic between their networks based on the
CPN of each call by identifying CPNs which are INP'ed numbers. The Receiving
Party shall charge the Performing Party for each minute of INP traffic at the
INP Traffic Rate specified in subsection 14.5.3 in lieu of any other
compensation charges for terminating such traffic, except as provided in
subsection 14.5.2.

          14.5.2  By the Interconnection Activation Date in each LATA, the
Parties shall jointly estimate for the prospective six months, based on historic
data of all traffic in the LATA, the percentages of such traffic that, if dialed
to telephone numbers bearing NPA-NXXs directly assigned to a Receiving Party (as
opposed to the INP'ed number), would have been subject to (i) Reciprocal
Compensation ("Recip Traffic"), (ii) appropriate intrastate FGD charges ("Intra
Traffic"), (iii) interstate FGD charges ("Inter Traffic"), or (iv) handling as
Transit Traffic. On the date which is six (6) months after the Interconnection
Activation Date, and thereafter on each succeeding six month anniversary of such
Interconnection Activation Date, the Parties shall establish new INP traffic
percentages to be applied in the prospectives six (6) month period based

                                      39
<PAGE>
 
on the Performing Party's choice of actual INP traffic percentages from the
preceding six (6) month period or historic data of all traffic in the LATA.

          14.5.3  The INP Traffic Rate shall be equal to the sum of:

   (Recip Traffic percentage times the Reciprocal Compensation Rate set forth in
                             -----
                                   Exhibit A)
                                      plus
                                      ----

   (Intra Traffic percentage times Receiving Party's effective intrastate FGD 
                             -----
                                     rates)                                     
                                      plus
                                      ----

   (Inter Traffic percentage times Receiving Party's effective interstate FGD
                             -----
                                    rates).

     The Receiving Party shall compensate the Performing Party for its billing
and collection of charges for the intrastate and interstate FGD access services
provided by the Receiving Party to a third party through the greater of (i) the
difference between the intrastate and interstate FGD rates of the Receiving
Party and the Performing Party, or (ii) three percent (3%) of the Performing
Party's intrastate and interstate FGD revenues for INP'ed numbers. Under no
circumstances shall the Performing Party, in performing the billing and
collections service on behalf of the Receiving Party, be obligated to pass
through more than ninety seven percent (97%) of its FGD access charge to the
Receiving Party in connection with any given INP'ed call.

     14.6  RECOVERY OF INP COSTS PURSUANT TO FCC ORDER AND RULEMAKING

     Notwithstanding anything to the contrary contained in this section 14, in
light of the FCC's First Report and Order and Further Notice of Proposed
Rulemaking, adopted June 27, 1996, in CC Docket 95-116 (the "Order"), the
Parties stipulate and agree as follows:

          14.6.1  The rates listed in Exhibit A for the provision of INP are
appropriate amounts that each Party providing INP service should recover for the
provision of those INP functionalities in BA's operating territory. For the INP
functions it provides, each Party should be allowed to recover these amounts in
a manner consistent with any final FCC and/or Commission order on INP cost
recovery (such as a state-wide fund contributed to by all telecommunications
carriers).

          14.6.2  Within three (3) weeks of the Effective Date, the Parties will
jointly seek a Commission proceeding and ruling to develop and implement an INP
cost recovery mechanism consistent with the policy described in the Order and/or
any subsequent FCC or Commission decision.

          14.6.3  Until such time as a final FCC and/or Commission order,
pursuant to subsection 14.6.2 above, is implemented, each Party will provide INP
service to the other Party at the INP rates listed in Exhibit A. All revenues
received by the providing Party from its provision of INP service to the other
Party shall be placed into an escrow fund maintained by or tracked separately by
the providing Party. Upon issuance of a final FCC and/or Commission order, and
to the extent that it permits the Party providing INP to recover the associated
costs from a state-wide fund, the providing Party shall refund to the purchasing
Party an amount equal

                                      40
<PAGE>
 
to the amount it recovers from such fund for its provision of INP service to the
purchasing Party from the Effective Date, provided that in no event shall the
refund amount exceed the aggregate amount the providing Party has received from
the purchasing Party for INP services. If no such fund is ordered or
established, the providing Party shall retain the full amount of the revenues
tracked or held in escrow by it pursuant to this subsection 14.6.3.

          14.6.4 The Parties agree that neither Party waives its rights to 
advocate its views that are consistent with this subsection 14.6 on the 
appropriate INP cost recovery mechanism, or to present such views before any 
relevant regulatory body or other agency as they relate to FCC or Commission 
actions on INP cost recovery.

15.0 DIALING PARITY -- SECTION 251(B)(3).

     BA and MFS shall each provide the other with nondiscriminatory access to 
such services and information as are necessary to allow the other Party to 
implement dialing parity for Telephone Exchange Service, operator services, 
directory assistance, and directory listing information with no unreasonable 
dialing delays, as required under Section 251(b)(3) of the Act.

16.0 ACCESS TO RIGHTS-OF-WAY -- SECTION 251(B)(4).

     Each Party shall provide the other Party access to its poles, ducts, 
rights-of-way and conduits it owns or controls in conformance with 47 U.S.C. (S)
224, as set forth in Exhibit A, where facilities are available, on terms,
conditions and prices comparable to those offered to any other entity pursuant
to each Party's applicable Tariffs. Where no such Tariffs exist, such access
shall be provided in accordance with the requirements of 47 U.S.C. (S) 224,
including any FCC regulations that may be issued. In addition, the Parties agree
to review any existing rights-of-way arrangements between them in order to bring
such arrangements into conformance with the requirements of 47 U.S.C. (S) 224
within ninety (90) days of the date hereof. In conducting such review and making
the necessary conforming changes, if any, the Parties agree to consider the
appropriateness of applying such changes on a retroactive basis to the date
hereof. If the Parties are unable to agree on the necessary changes to the
existing arrangements or the appropriateness of applying them on a retroactive
basis, the Parties may invoke the procedures set forth in subsection 29.9 below.

17.0 DATABASES AND SIGNALING.

     17.1 Each Party shall provide the other Party with access to databases and
associated signaling necessary for call routing and completion by providing SS7
Common Channel Signaling (CCS) Interconnection in accordance with existing
Tariffs, and Interconnection and access 800/888 databases, LIDB, and any other
necessary databases in accordance with existing Tariffs and/or agreements with
other unaffiliated carriers, as set forth in the Exhibit A. Alternatively,
either Party may secure CCS Interconnection from a commercial

                                      41

<PAGE>
 
SS7 hub provider, and in that case the other Party will permit the purchasing 
Party to access the same databases as would have been accessible if the 
purchasing party had connected directly to the other Party's CCS network.

     17.2 The Parties will provide CCS Signaling to one another, where and as 
available, in conjunction with all Local Traffic, Toll Traffic, Meet Point 
Billing Traffic, and Transit Traffic. The Parties will cooperate on the exchange
of TCAP messages to facilitate interoperability of CCS-based features between 
their respective networks, including all CLASS features and functions, to the 
extent each Party offers such features and functions to its Customers. All CCS 
Signaling parameters will be provided upon request (where available), including 
called party number, calling party number, originating line information, calling
party category, and charge number. All privacy indicators will be honored. The 
Parties will follow all Ordering and Billing Forum-adopted standards pertaining 
to CIC/OZZ codes. Where CCS Signaling is not available, in-band multi-frequency 
(MF) wink start signaling will be provided. Any such MF arrangement will require
a separate local trunk circuit between the Parties' respective switches. In such
an arrangement, each Party will outpulse the full ten-digit telephone number of 
the called party to the other Party.

     17.3 Each Party shall provide trunk groups, where available and upon 
reasonable request, that are configured utilizing the B8ZS ESF protocol for 64 
kbps clear channel transmission to allow for ISDN interoperability between the 
Parties' respective networks.

     17.4 The following publications describe the practices, procedures and 
specifications generally utilized by BA for signaling purposes and is listed 
herein to assist the Parties in meeting their respective Interconnection 
responsibilities related to Signaling:

          (a)  Bellcore Special Report SR-TSV-002275, BOC Notes on the LEC 
Networks - Signaling; and 

          (b)  Bell Atlantic Supplement Common Channel Signaling Network 
Interface Specification (BA-905).

     17.5 Each Party shall charge the other Party mutual and reciprocal rates 
for CCS Signaling as follows: BA shall charge MFS in accordance with Exhibit A 
hereto and applicable Tariffs; MFS shall charge BA rates equal to the rates BA 
charges MFS, unless MFS's Tariffs for CCS signaling provide for lower generally 
available rates, in which case MFS shall charge BA such lower rates.


18.0 COORDINATED SERVICE ARRANGEMENTS.

     18.1 INTERCEPT AND REFERRAL ANNOUNCEMENTS. When a Customer changes its 
service provider from BA to MFS, or from MFS to BA, and does not retain its 
original telephone number, the Party formerly providing service to such Customer
shall provide a referral announcement ("Referral Announcement") on the abandoned
telephone number which provides

                                      42
<PAGE>
 
details on the Customer's new number or provide other appropriate information to
the extent known. Referral Announcements shall be provided reciprocally, free of
charge to either the other Party or the Customer to the extent the providing
Party does not charge its own customers for such service, for a period of not
less than four (4) months after the date the Customer changes its telephone
number in the case of business Customers and not less than sixty (60) days after
the date the Customer changes its telephone number in the case of residential
Customers. However, if either Party provides Referral Announcements for
different periods than the above respective periods when its Customers change
their telephone numbers, such Party shall provide the same level of service to
Customers of the other Party.

     18.2  COORDINATED REPAIR CALLS. MFS and BA will employ the following
procedures for handling misdirected repair calls:

          18.2.1  MFS and BA will educate their respective Customers as to the
correct telephone numbers to call in order to access their respective repair
bureaus.

          18.2.2  To the extent Party A is identifiable as the correct provider
of service to Customers that make misdirected repair calls to Party B, Party B
will immediately refer the Customers to the telephone number provided by Party
A, or to an information source that can provide the telephone number of Party A,
in a courteous manner and at no charge. In responding to misdirected repair
calls, neither Party shall make disparaging remarks about the other Party, its
services, rates, or service quality.

          18.2.3  MFS and BA will provide their respective repair contact
numbers to one another on a reciprocal basis.

     18.3  CUSTOMER AUTHORIZATION. In order for either Party to order or
terminate service on behalf of the other Party's Customer, the requesting Party
must have proper written authorization from the customer in its files, and
provide a copy of such authorization to the other Party upon request. In the
event the requesting Party (i) fails to provide a copy of the Customer's proper
written authorization upon request, (ii) requests changes in the other Party's
Customer's service without having such authorization in its files, or (iii)
mistakenly changes the other Party's Customer's service, the requesting Party
shall be liable to the other Party for all charges that would be applicable to
the Customer for restoring service to the other Party.


19.0  DIRECTORY SERVICES ARRANGEMENTS

      BA will, upon request, provide the following directory services to MFS in
accordance with the terms set forth herein. In this Section 19, references to a
MFS Customer's "primary listing" shall mean such Customer's name, address, and
main telephone number, which number falls within the NXX codes directly assigned
to MFS or is retained by MFS on the Customer's behalf pursuant to LTNP
arrangements with BA or any other carrier within the geographic area covered in
the relevant BA directory.

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<PAGE>
 
     19.1   DIRECTORY LISTINGS AND DIRECTORY DISTRIBUTIONS

            19.1.1 BA will include the MFS Customer's primary listing in its
"White Pages" directory (residence and business listings) and "Yellow Pages"
directory (business listings) that cover the address of the Customer. Listings
of MFS's Customers will be interfiled with listings of BA's Customers and the
Customers of other LECs included in the BA directories. MFS will pay BA a non-
recurring charge as set forth in Exhibit A for providing such service for each
MFS Customer's primary listing. MFS will also pay BA's Tariffed charges, as the
case may be, for additional and foreign white page listings and other white
pages services for MFS's Customers. BA will not require a minimum number of
listings per order.

            19.1.2  BA will also include the MFS Customer's primary listing in
BA's directory assistance database on the same basis that BA's own Customers are
included, as well as in any electronic directories in which BA's Customers are
ordinarily included, for no charge other than the charges identified in
subsection 19.1.1.

            19.1.3  BA will distribute to MFS Customers copies of their primary
white pages and yellow pages directories at the same time and on the same basis
that BA distributes primary directories to its own Customers. BA will also
deliver a reasonable number of such directories to MFS. These distributions will
be made for no additional charge. MFS and its Customers may request additional
directories from BA's Directory Fulfillment Centers, which Centers will provide
such additional directories for the same charges applicable to comparable
requests by BA Customers.

            19.1.4  BA will include all MFS NXX codes associated with the areas
to which each directory pertains, along with BA's own NXX codes in any maps or
lists of such codes which are contained in the general reference portions of the
directories. MFS's NXX codes shall appear in such maps or lists in the same
manner as BA's NXX information.

            19.1.5  MFS shall provide BA with daily listing information on all
new MFS Customers in the format required by BA or a mutually-agreed upon
industry standard format. The information shall include the Customer's name,
address, telephone number, the delivery address and number of directories to be
delivered, and, in the case of a business listing, the primary business heading
under which the business Customer desires to be placed, and any other
information necessary for the publication and delivery of directories. MFS will
also provide BA with daily listing information showing Customers that have
disconnected or terminated their service with MFS. BA will provide MFS with
confirmation of listing order activity within forty eight (48) hours.

            19.1.6  BA will accord MFS's directory listing information the same
level of confidentiality which BA accords its own directory listing information,
and BA shall ensure that access to MFS's directory listing information will be
used solely for the purpose of providing directory services; provided, however,
that BA may use or license information contained in its directory listings for
direct marketing purposes so long as the MFS Customers are not separately
identified as such; and provided further that MFS may identify those of its
Customers that request

                                      44
<PAGE>
 
that their names not be sold for direct marketing purposes, and BA will honor 
such requests to the same extent as it does for its own Customers.

            19.1.7  BA or BA's publisher shall provide MFS with a report of all
MFS Customer listings ninety (90) days prior to directory publication in such
form and format as may be mutually agreed to by both Parties. Both Parties shall
use their best efforts to ensure the accurate listing of such information. BA
will also provide MFS, upon request, a copy of the BA listings standards and
specifications manual. In addition, BA will provide MFS with a listing of Yellow
Pages headings and directory close schedules on an ongoing basis.

            19.1.8  MFS will adhere to all practices, standards, and ethical
requirements of BA with regard to listings, and, by providing BA with listing
information, warrants to BA that MFS has the right to place such listings on
behalf of its Customers. MFS agrees that it will undertake commercially
practicable and reasonable steps to attempt to ensure that any business or
person to be listed is authorized and has the right (i) to provide the product
or service offered, and (ii) to use any personal or corporate name, trade name
or language used in the listing.

            19.1.9  BA's liability to MFS in the event of a BA error in or
omission of a listing shall be subject to the same limitations that BA's
liability to its own Customers are subject to. In addition, MFS agrees to take,
with respect to its own Customers, all reasonable steps to ensure that its and
BA's liability to MFS's Customers in the event of a BA error in or omission of a
listing shall be subject to the same limitations that BA's liability to its own
Customers are subject to.

     19.2   YELLOW PAGE MAINTENANCE. The Parties agree to work cooperatively to
ensure that Yellow Page advertisements purchased by Customers that switch their
service to MFS (including Customers utilizing MFS-assigned telephone numbers and
MFS Customers utilizing LTNP) are maintained without interruption. BA will allow
MFS Customers to purchase new Yellow Pages advertisements without
discrimination, under the identical rates, terms and conditions as apply to BA's
Customers. BA and MFS may implement a commission program whereby MFS may, at
MFS's sole discretion, act as a sales, billing and collection agent for Yellow
Pages advertisements purchased by MFS's Telephone Exchange Service Customers.

     19.3   SERVICE INFORMATION PAGES. BA will include in the "Customer Guide" 
or comparable section of the applicable white pages directories listings 
provided by MFS for MFS's installation, repair and customer service and other 
essential service oriented information, as agreed by the Parties, including 
appropriate identifying logo. Such listings shall appear in the manner agreed to
by the Parties. BA shall not charge MFS for inclusion of this essential 
service-oriented information, but reserves the right to impose charges on other 
information MFS may elect to submit and BA may elect to accept for inclusion in 
BA's white pages directories. BA will provide MFS with the annual directory 
close dates and reasonable notice of any changes in said dates.

                                      45
<PAGE>
 
     19.4 DIRECTORY ASSISTANCE (DA); CALL COMPLETION

          19.4.1   Upon request, BA will provide MFS with directory assistance 
and/or call completion services substantially in accordance with the terms set
forth in the form Directory Assistance and Call Completion Services Agreement
appended hereto as Exhibit C.

          19.4.2   Also upon request, BA will provide to MFS operator services 
trunk groups, utilizing Feature Group D type signaling, with ANI, minus OZZ, 
when interconnecting to the BA operator services network.

20.0 COORDINATION WITH TARIFF TERMS

     20.1 The Parties acknowledge that some of the services, facilities, and
arrangements described herein are or will be available under and subject to the
terms of the federal or state tariffs of the other Party applicable to such
services, facilities, and arrangements. To the extent a Tariff of the providing
Party applies to any service, facility, and arrangement described herein, the
Parties agree as follows:

          20.1.1   Those rates and charges set forth in Exhibit A for the
services, facilities, and arrangements described herein that are designated with
an asterisk shall remain fixed for the initial term of the Agreement,
notwithstanding that such rates may be different from those contained in an
effective, pending, or future Tariff of the providing Party (including any
changes to such Tariff subsequent to the Effective Date). Those rates and
charges for services, facilities, and arrangements that are not designated with
an asterisk, and reference or are identical to a rate contained in an existing
Tariff of the providing Party, shall conform with those contained in the then-
prevailing Tariff and vary in accordance with any changes that may be made to
the Tariff rates and charges subsequent to the Effective Date. Even the asterisk
fixed rates and charges shall be changed to reflect any changes in the Tariff
rates and charges they reference, however, if the Parties agree to adopt the
changed Tariff rates and charges.

     20.2 Except with respect to the rates and charges described in subsection
20.1 above, all other terms contained in an applicable Tariff of the providing
Party shall apply in connection with its provision of the particular service,
facility, and arrangement hereunder.

21.0 INSURANCE

     21.1 MFS shall maintain, during the term of this Agreement, all insurance 
and/or bonds required by law and necessary to satisfy its obligations under this
Agreement, including, without limitation, its obligations set forth in Section 
25 hereof. At a minimum and without limiting the foregoing covenant, MFS shall 
maintain the following insurance:

          (a)  Commercial General Liability Insurance, on an occurrence basis, 
     including but not limited to, premises-operations, broad form property
     damage, products/completed

                                      46


<PAGE>
 
     operations, contractual liability, independent contractors, and personal 
     injury, with limits of at least $1,000,000 combined single limit for each 
     occurrence.

          (b)  Automobile Liability, Comprehensive Form, with limits of at least
     $500,000 combined single limit for each occurrence.

          (c)  Excess Liability, in the umbrella form, with limits of at least 
     $15,000,000 combined single limit for each occurrence.

          (d)  Worker's Compensation Insurance as required by law and Employer's
     Liability Insurance with limits of not less than $1,000,000 per occurrence.

     21.2 MFS shall name BA as an additional insured on the foregoing insurance.
MFS agrees that MFS's insurer(s) and anyone claiming by, through, under or on 
behalf of MFS, shall have no claim, right of action, or right of subrogation, 
against BA,  BA's affiliated companies, or the directors, officers or employees 
of BA or BA's affiliated companies, based on any loss or liability insurable 
under the foregoing insurance.

     21.3 MFS shall, within two (2) weeks of the date hereof and on a quarterly
basis thereafter, furnish certificates or other adequate proof of the foregoing
insurance. The certificates or other proof of the foregoing insurance shall be
sent to: Bell Atlantic, Insurance Administration Group, 1320 N. Court House
Road, 4th Floor, Arlington, Virginia, 22201. In addition, MFS shall require its
agents, representatives, or contractors, if any, that may enter upon the
premises of BA or BA's affiliated companies to maintain similar and appropriate
insurance and, if requested, to furnish BA certificates or other adequate proof
of such insurance. Certificates furnished by MFS or MFS's agents,
representatives, or contractors shall contain a clause stating: "Bell Atlantic -
Virginia, Inc. shall be notified in writing at least thirty (30) days prior to
cancellation of, or any material change in, the insurance."


22.0 TERM AND TERMINATION.

     22.1 This Agreement shall be effective as of the date first above written
and continue in effect until July 1, 1999, and thereafter the Agreement shall
continue in force and effect unless and until terminated as provided herein.
Upon the expiration of the initial term, either Party may terminate this
Agreement by providing written notice of termination to the other Party, such
written notice to be provided at least ninety (90) days in advance of the date
of termination. In the event of such termination, those service arrangements
made available under this Agreement and existing at the time of termination
shall continue without interruption under (a) new agreement executed by the
Parties, (b) standard Interconnection terms and conditions approved and made
generally effective by the Commission, (c) Tariff terms and conditions generally
available to CLEC, or (d) if none of the above is available, under the terms of
this Agreement on a month-to-month basis until such time as (a), (b), or (c)
becomes available.

                                      47


<PAGE>
 
     22.2 For service arrangements made available under this Agreement and
existing at the time of termination, if the standard Interconnection terms and
conditions or Tariff terms and conditions result in the non-terminating Party
physically rearranging facilities or incurring programming expense, the 
non-terminating Party shall be entitled to recover such rearrangement or
programming costs, from the terminating Party. By mutual agreement, the Parties
may jointly petition the appropriate regulatory bodies for permission to have
this Agreement supersede any future standardized agreements or rules as such
regulators might adopt or approve.

     22.3 If either Party defaults in the payment of any amount due hereunder,
or if either Party violates any other provision of this Agreement, and such
default or violation shall continue for sixty (60) days after written notice
thereof, the other Party may terminate this Agreement and services hereunder by
written notice; provided the other Party has provided the defaulting Party and
the appropriate federal and/or state regulatory bodies with written notice at
least twenty five (25) days' prior to terminating service. Notice shall be
posted by certified mail, return receipt requested. If the defaulting Party
cures the default or violation within the twenty five (25) day period, the other
Party will not terminate service or this Agreement but shall be entitled to
recover all costs, if any, incurred by it in connection with the default or
violation, including, without limitation, costs incurred to prepare for the
termination of service.

23.0 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES.

     EXCEPT AS EXPRESSLY PROVIDED UNDER THIS AGREEMENT, NEITHER PARTY MAKES ANY
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES, FUNCTIONS AND
PRODUCTS IT PROVIDES UNDER OR CONTEMPLATED BY THIS AGREEMENT AND THE PARTIES
DISCLAIM THE IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A
PARTICULAR PURPOSE.

24.0 CANCELLATION CHARGES.

     Except as provided in this Agreement or as otherwise provided in any 
applicable Tariff, no cancellation charges shall apply.

25.0 INDEMNIFICATION.

     25.1 Each Party agrees to release, indemnify, defend and hold harmless the
other Party from and against all losses, claims, demands, damages, expenses,
suits or other actions, or any liability whatsoever, including, but not limited
to, costs and attorneys' fees (collectively, a "Loss"), (a) whether suffered,
made, instituted, or asserted by any other party or person, (i) relating to
personal injury to or death of any person, or for loss, damage to, or
destruction of real and/or personal property, whether or not owned by others,
incurred during the term of this Agreement and to the extent proximately caused
by the acts or omissions of the indemnifying Party, regardless of the form of
action, or (ii) arising out of BA's listing of the directory listing information
provided by

                                      48

<PAGE>
 
MFS pursuant to subsection 19.1, or (b) suffered, made, instituted, or asserted
by its own customer(s) against the other Party arising out the other Party's
provision of services to the indemnifying Party under this Agreement.
Notwithstanding the foregoing indemnification, nothing in this such Section 25.
shall affect or limit any claims, remedies, or other actions the indemnifying
Party may have against the indemnified Party under this Agreement, any other
contract, or any applicable Tariff(s), regulations or laws for the indemnified
Party's provision of said services.

     25.2 The indemnification provided herein shall be conditioned upon:

          (a) The indemnified Party shall promptly notify the indemnifying
     Party of any action taken against the indemnified Party relating to the
     indemnification.

          (b) The indemnifying Party shall have sole authority to defend any
     such action, including the selection of legal counsel, and the indemnified
     Party may engage separate legal counsel only at its sole cost and expense.

          (c) In no event shall the indemnifying Party settle or consent to any
     judgment pertaining to any such action without the prior written consent of
     the indemnified Party, which consent shall not be unreasonably withheld.

          (d) The indemnified Party shall, in all cases, assert any and all
     provisions in its Tariffs that limit liability to third parties as a bar to
     any recovery by the third party claimant in excess of such limitation of
     liability.

          (e) The indemnified Party shall offer the indemnifying Party all
     reasonable cooperation and assistance in the defense of any such action.

      25.3 In addition to its indemnity obligations under subsection 25.1, each
Party shall provide, in its tariffs and contracts with its Customers that relate
to any Telecommunications Service or Network Element provided or contemplated
under this Agreement, that in no case shall such Party or any of its agents,
contractors or others retained by such parties be liable to any Customer or
third party for (i) any Loss relating to or arising out of this Agreement,
whether in contract or tort, that exceeds the amount such Party would have
charged the applicable Customer for the service(s) or function(s) that gave rise
to such Loss, and (ii) any Consequential Damages (as defined in subsection 26.2
below).


26.0  LIMITATION OF LIABILITY.

      26.1 Except as may be provided pursuant to Section 27 below, the liability
of either Party to the other Party for damages arising out of failure to comply
with a direction to install, restore or terminate facilities; or out of
failures, mistakes, omissions, interruptions, delays, errors, or defects
occurring in the course of furnishing any services, arrangements, or facilities
hereunder shall be determined in accordance with the terms of the applicable
tariff(s) of the providing Party. In the event no tariff(s) apply, the providing
Party's liability shall not exceed an amount equal to the pro

                                      49
<PAGE>
 
rata monthly charge for the period in which such failures, mistakes, omissions,
interruptions, delays, errors or defects occur. Recovery of said amount shall be
the injured Party's sole and exclusive remedy against the providing Party for
such failures, mistakes, omissions, interruptions, delays, errors or defects.

     26.2 Neither Party shall be liable to the other in connection with the
provision or use of services offered under this Agreement for indirect,
incidental, consequential, reliance or special damages, including (without
limitation) damages for lost profits (collectively, "Consequential Damages"),
regardless of the form of action, whether in contract, warranty, strict
liability, or tort, including, without limitation, negligence of any kind, even
if the other Party has been advised of the possibility of such damages;
provided, that the foregoing shall not limit a Party's obligation under Section
25.

     26.3 The Parties agree that neither Party shall be liable to the customers
of the other Party in connection with its provision of services to the other
Party under this Agreement. Nothing in this Agreement shall be deemed to create
a third party beneficiary relationship between the Party providing the service
and the customers of the Party purchasing the service. In the event of a dispute
involving both Parties with a customer of one Party, both Parties shall assert
the applicability of any limitations on liability to customers that may be
contained in either Party's applicable Tariff(s).


27.0 PERFORMANCE STANDARDS FOR SPECIFIED ACTIVITIES.

     27.1 CERTAIN DEFINITIONS. When used in this Section 27, the following
terms shall have the meanings indicated:

          27.1.1  "Specified Performance Breach" means the failure by BA to meet
the Performance Criteria for any one of the three Specified Activities for a
period of three (3) consecutive calendar months.

          27.1.2  "Specified Activity" means any of the following activities:

          (a)  the installation by BA of Unbundled Local Loop Elements for MFS
     ("ULL Installation");

          (b)  BA's provision of INP to MFS or

          (c)  repair of out of service problems for MFS ("Out of Service
     Repairs").

          27.1.3  "Performance Criteria" means, with respect to any calendar
month during the term of this Agreement, the performance by BA during such month
of each Specified Activity (except Out-of-Service Repairs) shown in Schedule
27.0, within the time interval shown, in at least eighty percent (80%) of the
covered instances.  BA shall perform the Out-of-Service Repairs within the
specified time interval in at least seventy percent (70%) of the covered

                                      50
<PAGE>
 
instances. Within one week of each anniversary of the Effective Date, the 
Parties shall jointly review BA's actual network-wide monthly performance 
percentages for Out-of-Service Repairs for the preceding year and agree upon any
improvements in the seventy percent (70%) standard based on the actual 
percentages for any three consecutive month period and/or the full preceding 
year, up to and including an eighty percent (80%) standard, as the 
Out-of-Service Repairs percentage standard applicable to the following year.

     27.2  PERFORMANCE STANDARDS. BA shall exercise best efforts to meet the 
Performance Criteria for the three Specified Activities. In the event BA fails 
to meet the Performance Criteria at any time during the term of this Agreement, 
MFS shall be entitled to pursue all remedies set forth in the applicable BA 
Tariffs, except as may be agreed to by the Parties. In addition, if BA commits a
Specified Performance Breach during the term of this Agreement, the Parties 
agree to meet immediately to determine whether any liquidated damages provisions
are appropriate as an amendment hereof in light of such Breach and, if so, the 
terms therein; provide, however, that if BA commits a Specified Performance 
Breach during initial nine (9) months of this Agreement, the Parties agree to 
meet at the end of the nine-month period. If the Parties are unable to agree as 
to the appropriateness of the liquidated damages provisions and/or the terms 
therein within ninety (90) days after the date of the first meeting pursuant to 
this subsection, or if no such meeting has occurred within ninety (90) days of 
the end of the nine-month period for reasons other than the mutual agreement of 
the Parties, the Parties agree to submit to arbitration such disagreement and 
request that the arbitrators base their decision on comparable ILEC-CLEC 
interconnection agreements. Unless otherwise agreed to by the Parties, the 
arbitration shall be conducted by a panel of three (3) arbitrators, one to be 
appointed by each Party pursuant to CPR's Non-Administered Arbitration Rules and
subject to the United States Arbitration Act (9 U.S.C (S)(S) 1-16), to be
conducted in Arlington, Virginia. The Parties agree that the liquidated damages
provisions, if any, finally determined by the arbitral process shall be adopted
as an amendment to this Agreement.

     27.3  LIMITATIONS. In no event shall BA be deemed to have failed to meet 
any of the Performance Criteria if:

           27.3.1   BA's failure to meet or exceed any of the Performance 
Criteria is caused, directly or indirectly, by a Delaying Event. A "Delaying 
Event" means (a) a failure by MFS to perform any of its obligations set forth in
this Agreement (including, without limitation, the Implementation Schedule and 
the Joint Grooming Plan), (b) any delay, act or failure to act by a Customer,
agent, representative, or subcontractor of MFS or (c) any Force Majeure Event. 
If a Delaying Event prevents or delays BA from performing a Specified Activity, 
then such Specified Activity shall be excluded from the calculation of BA's 
compliance with the Performance Criteria, provided BA performs the Specified 
Activity in the course of its normal service cycle once the Delaying Event no 
longer exists; or

           27.3.2   the Parties agree to a time interval with respect to a 
particular order that exceeds the interval set forth in Schedule 27. In such 
event, the time interval for BA's performance of the Specified Activit(ies) set 
forth in the order shall be extended to such later date agreed to by the 
Parties.

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<PAGE>
 
     27.4 SERVICE QUALITY STANDARDS. MFS agrees to specific performance
standards associated with quality of service requests as specified in Schedule
27.1. Should MFS fail to meet these service quality standards, during a period
in which BA has failed to meet the Performance Criteria, BA's failure during
such time period shall be excused and not apply toward the calculation of a
Specified Performance Breach.

     27.5 RECORDS. Each Party shall maintain complete and accurate records in
the manner and format agreed to by the Parties, on a monthly basis, of BA's
performance under this Agreement of each Specified Activity and its compliance
with the Performance Criteria during the initial nine-month period. Each Party
shall provide to the other Party such records in a self-reporting format on a
monthly basis. The Parties agree that such records shall be deemed "Proprietary
Information" for purposes of subsection 29.4.


28.0 COMPLIANCE WITH LAWS; REGULATORY APPROVAL.

     28.1 Each Party represents and warrants that it is now and will remain in
compliance with all laws, regulations, and orders applicable to the performance
of its obligations hereunder (collectively, "Applicable Laws"). Each Party shall
promptly notify the other Party in writing of any governmental action that
suspends, cancels, withdraws, limits, or otherwise materially affects its
ability to perform its obligations hereunder.

     28.2 The Parties understand and agree that this Agreement will be filed
with the Commission and may thereafter be filed with the FCC. The Parties
covenant and agree that this Agreement is satisfactory to them as an agreement
under Section 251 of the Act. Each Party covenants and agrees to fully support
approval of this Agreement by the Commission or the FCC under Section 252 of the
Act without modification. The Parties, however, reserve the right to seek
regulatory relief and otherwise seek redress from each other regarding
performance and implementation of this Agreement.

     28.3 The Parties recognize that the FCC is currently promulgating
regulations implementing the Act, including, without limitation, Sections 251,
252, and 271 thereof (the "FCC Regulations"), that may affect the terms
contained in this Agreement. In the event that any one or more of the provisions
contained herein is inconsistent with any such FCC Regulations, the Parties
agree to make only the minimum revisions necessary to eliminate the
inconsistency. Such minimum changes to conform this Agreement to the FCC
Regulations shall not be considered material, and shall not require further
Commission approval (beyond any Commission approval required under Section
252(e) of the Act).

     28.4 In the event any Applicable Law other than the FCC Regulations
requires modification of any material term(s) contained in this Agreement,
either Party may require a renegotiation of the term(s) that require direct
modification as well as of any term(s) that are reasonably affected thereby. If
neither Party requests a renegotiation or if an Applicable Law requires
modification of any non-material term(s), then the Parties agree to make only 
the minimum

                                      52
<PAGE>
 
modifications necessary, and the remaining provisions of this Agreement shall
remain in full force and effect. For purposes of this subsection 28.4 and
without limitation of any other modifications required by Applicable Laws, the
Parties agree that any modification required by Applicable Laws (i) to the two-
tier Reciprocal Call Termination compensation structure for the transport and
termination of Local Traffic described in Exhibit A, or (ii) that affects either
Party's receipt of reciprocal compensation for the transport and termination of
Local Traffic, shall be deemed to be a modification of a material term that
requires immediate good faith renegotiation between the Parties. Until such
renegotiation results in a new agreement or an amendment to this Agreement
between the Parties, the Parties agree that (y) in the case of (i) above, they
will pay each other appropriate transport charges in addition to the usual call
termination charge for Local Traffic that it delivers to the other Party's Local
Serving Wire Center, provided each Party continues to offer the option of
delivering Local Traffic to another IP in the LATA at the usual call termination
charge only, and (z) in the case of (ii) above, the Party whose receipt of
reciprocal compensation is affected shall not be obligated to pay the other
Party reciprocal compensation for the other Party's transport and termination of
the same kind of Local Traffic delivered by the affected Party in excess of what
the affected Party is permitted to receive and retain.


29.0  MISCELLANEOUS.

      29.1  AUTHORIZATION.

            29.1.1  BA is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Virginia and has full power
and authority to execute and deliver this Agreement and to perform the
obligations hereunder on behalf of BA.

            29.1.2  MFS is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.

      29.2  INDEPENDENT CONTRACTOR. Each Party shall perform services hereunder
as an independent contractor and nothing herein shall be construed as creating
any other relationship between the Parties. Each Party and each Party's
contractor shall be solely responsible for the withholding or payment of all
applicable federal, state and local income taxes, social security taxes and
other payroll taxes with respect to their employees, as well as any taxes,
contributions or other obligations imposed by applicable state unemployment or
workers' compensation acts. Each Party has sole authority and responsibility to
hire, fire and otherwise control its employees.

      29.3  FORCE MAJEURE. Neither Party shall be responsible for delays or
failures in performance resulting from acts or occurrences beyond the reasonable
control of such Party, regardless of whether such delays or failures in
performance were foreseen or foreseeable as of the date of this Agreement,
including, without limitation: adverse weather conditions, fire, explosion,
power failure, acts of God, war, revolution, civil commotion, or acts of public
enemies; any law, order, regulation, ordinance or requirement of any government
or legal body; or labor unrest, including, without limitation, strikes,
slowdowns, picketing or boycotts; or delays caused by the

                                      53
<PAGE>
 
other Party or by other service or equipment vendors; or any other circumstances
beyond the Party's reasonable control. In such event, the affected Party shall,
upon giving prompt notice to the other Party, be excused from such performance
on a day-to-day basis to the extent of such interferences (and the other Party
shall likewise be excused from performance of its obligations on a day-for-day
basis to the extent such Party's obligations relate to the performance so
interfered with). The affected Party shall use its best efforts to avoid or
remove the cause(s) of non-performance and both Parties shall proceed to perform
with dispatch once the cause(s) are removed or cease.

     29.4 CONFIDENTIALITY.

          29.4.1  All information, including but not limited to specification,
microfilm, photocopies, magnetic disks, magnetic tapes, drawings, sketches,
models, samples, tools, technical information, data, employee records, maps,
financial reports, and market data, (i) furnished by one Party to the other
Party dealing with customer specific, facility specific, or usage specific
information, other than customer information communicated for the purpose of
publication or directory database inclusion, or (ii) in written, graphic,
electromagnetic, or other tangible form and marked at the time of delivery as
"Confidential" or "Proprietary," or (iii) communicated orally and declared to
the receiving Party at the time of delivery, or by written notice given to the
receiving Party within ten (10) days after delivery, to be "Confidential" or
"Proprietary" (collectively referred to as "Proprietary Information"), shall
remain the property of the disclosing Party.

          29.4.2  Each Party shall keep all of the other Party's Proprietary
Information confidential and shall use the other Party's Proprietary Information
only for performing the covenants contained in this Agreement. Neither Party
shall use the other Party's Proprietary Information for any other purpose except
upon such terms and conditions as may be agreed upon between the Parties in
writing.

          29.4.3  Unless otherwise agreed, the obligations of confidentiality
and non-use set forth in this Agreement do not apply to such Proprietary
Information that:

          (a) was, at the time of receipt, already known to the receiving Party
     free of any obligation to keep it confidential as evidenced by written
     records prepared prior to delivery by the disclosing Party; or

          (b) is or becomes publicly known through no wrongful act of the
     receiving Party; or

          (c) is rightfully received from a third person having no direct or
     indirect secrecy or confidentiality obligation to the disclosing Party with
     respect to such information; or

          (d) is independently developed by an employee, agent, or contractor of
     the receiving Party that is not involved in any manner with the provision
     of services pursuant to this Agreement and does not have any direct or
     indirect access to the Proprietary Information; or

                                      54
<PAGE>
 
          (e)     is approved for release by written authorization of the 
     disclosing Party; or

          (f)     is required to be made public by the receiving Party pursuant
     to applicable law or regulation, provided that the receiving Party shall
     give sufficient notice of the requirement to the disclosing Party to enable
     the disclosing Party to seek protective orders.

          29.4.4  Upon request by the disclosing Party, the receiving Party 
shall return all tangible copies of Proprietary Information, whether written,
graphic or otherwise, except that the receiving Party may retain one copy for
archival purposes only.

          29.4.5  Notwithstanding any other provision of this Agreement, the 
provisions of this subsection 29.4 shall apply to all Proprietary Information
furnished by either Party to the other in furtherance of the purpose of this
Agreement, even if furnished before the Effective Date.

     29.5 CHOICE OF LAW.  The construction, interpretation and performance of 
this Agreement shall be governed by and construed in accordance with the laws of
the state in which this Agreement is to be performed, except for its conflicts
of laws provisions.  In addition, insofar as and to the extent federal law may
apply, federal law will control.

     29.6 TAXES

          29.6.1. In General. With respect to any purchase hereunder of 
                  ----------
services, facilities or arrangements, if any federal, state or local tax, fee,
surcharge or other tax-like charge (a "Tax") is required or permitted by
Applicable Law (as defined in subsection 28.1) to be collected from the
purchasing Party by the providing Party, then (i) the providing Party shall
properly bill the purchasing Party for such Tax, (ii) the purchasing Party shall
timely remit such Tax to the providing Party and (iii) the providing Party shall
timely remit such collected Tax to the applicable taxing authority.

          29.6.2. Taxes Imposed on the Providing Party. With respect to any 
                  ------------------------------------  
purchase hereunder of services, facilities or arrangements, if any federal,
state or local Tax is imposed by Applicable Law on the receipts of the providing
Party, which law permits the providing Party to exclude certain receipts 
received from sales for resale to a public utility, distributor, telephone 
company ("Telecommunications Company"), such exclusion being based solely on the
fact that the purchasing Party is also subject to a tax based upon receipts
("Receipts Tax"), then the purchasing Party (i) shall provide the providing 
Party with notice in writing in accordance with subsection 29.6.6 of this 
Agreement of its intent to pay the Receipts Tax and (ii) shall timely pay the
Receipts Tax to the applicable tax authority.
 
          29.6.2. Taxes Imposed on Customers. With respect to any purchase 
                  --------------------------  
hereunder of services, facilities or arrangements that are resold to a third 
party, if any federal, state or local Tax is imposed by Applicable Law on the 
subscriber, end-user, Customer or ultimate consumer ("Subscriber") in 
connection with any such purchase, which a Telecommunications Company is

                                      55 

 

<PAGE>
 
required to impose and/or collect from a Subscriber, then the purchasing Party 
(i) shall be required to impose and/or collect such Tax from the Subscriber and 
(ii) shall timely remit such Tax to the applicable taxing authority.

               29.6.4 Liability for Uncollected Tax, Interest and Penalty. If
                      ---------------------------------------------------
the providing Party has not received an exemption certificate and fails to
collect any Tax as required by subsection 29.6.1, then, as between the providing
Party and the purchasing Party, (i) the purchasing Party shall remain liable for
such uncollected Tax and (ii) the providing Party shall be liable for any
interest assessed thereon and any penalty assessed with respect to such
uncollected Tax by such authority. If the providing Party properly bills the
purchasing Party for any Tax but the purchasing Party fails to remit such Tax to
the providing Party as required by subsection 29.6.1, then, as between the
providing Party and the purchasing Party, the purchasing Party shall be liable
for such uncollected Tax and any interest assessed thereon, as well as any
penalty assessed with respect to such uncollected Tax by the applicable taxing
authority. If the providing Party does not collect any Tax as required by
subsection 29.6.1 because the purchasing Party has provided such providing Party
with an exemption certificate that is later found to be inadequate by a taxing
authority, then, as between the providing Party and the purchasing Party, the
purchasing Party shall be liable for such uncollected Tax and any interest
assessed thereon, as well as any penalty assessed with respect to such
uncollected Tax by the applicable taxing authority. If the purchasing Party
fails to pay the Receipts Tax as required by subsection 29.6.2, then, as between
the providing Party and the purchasing Party, (x) the providing Party shall be
liable for any tax imposed on its receipts and (y) the purchasing Party shall be
liable for any interest assessed thereon and any penalty assessed upon the
providing Party with respect to such Tax by such authority. If the purchasing
party fails to impose and/or collect any Tax from Subscribers as required by
subsection 29.6.3, then, as between the providing Party and the purchasing
Party, the purchasing Party shall remain liable for such uncollected Tax and any
interest assessed thereon, as well as any penalty assessed with respect to such
uncollected Tax by the applicable taxing authority. With respect to any Tax that
the purchasing Party has agreed to pay, or is required to impose on and/or
collect from Subscribers, the purchasing Party agrees to indemnify and hold the
providing Party harmless on an after-tax basis for any costs incurred by the
providing Party as a result of actions taken by the applicable taxing authority
to recover the Tax from the providing Party due to the failure of the purchasing
Party to timely pay, or collect and timely remit, such Tax to such authority. In
the event either Party is audited by a taxing authority, the other Party agrees
to cooperate fully with the Party being audited in order to respond to any audit
inquiries in a proper and timely manner so that the audit and/or any resulting
controversy may be resolved expeditiously.

               29.6.5. Tax Exemptions and Exemption Certificates. If Applicable
                       -----------------------------------------  
Law clearly exempts a purchase hereunder from a Tax, and if such Law also
provides an exemption procedure, such as an exemption-certificate requirement,
then, if the purchasing Party complies with such procedure, the providing Party
shall not collect such Tax during the effective period of such exemption. Such
exemption shall be effective upon receipt of the exemption certificate or
affidavit in accordance with the terms set forth in subsection 29.6.6. If
Applicable Law clearly exempts a purchase hereunder from a Tax, but does not
also provide an exemption procedure, then the providing Party shall not collect
such Tax if the purchasing Party (i) furnishes the

                                      56
<PAGE>
 
providing Party with a letter signed by an officer requesting such an exemption 
and citing the provision in the Law which clearly allows such exemption and 
(ii) supplies the providing Party with an indemnification agreement, reasonably 
acceptable to the providing Party (e.g., an agreement commonly used in the 
industry), which holds the providing Party harmless on an after-tax basis with 
respect to its forbearing to collect such Tax.

          29.6.6. Notices for Purposes of this Subsection 29.6. All notices, 
                  ---------------------------------------------
affidavits, exemption-certificates or other communications required or permitted
to be given by either Party to the other, for purposes of this subsection 29.6,
shall be made in writing and shall be delivered in person or sent by certified
mail, return receipt requested, or registered mail, or a courier service
providing proof of service, and sent to the addressees set forth in subsection
29.10 as well as to the following:

     To Bell Atlantic:        Tax Administration 
                              Bell Atlantic Network Services, Inc.
                              1717 Arch Street
                              30th Floor 
                              Philadelphia, PA 19103

     To MFS:                  Corporate Tax Department
                              MFS Communications Company, Inc.
                              11808 Miracle Hills Drive
                              Omaha, Nebraska 68154

Either Party may from time to time designate another address or other addressees
by giving notice is accordance with the terms of this subsection 29.6. Any 
notice or other communication shall be deemed to be given when received.

     29.7 ASSIGNMENT. Neither Party shall assign this Agreement nor any of its 
rights or obligations hereunder without the prior written consent of the other
Party, which consent shall not be unreasonably withheld. Any assignment or
delegation in violation of this subsection 29.7 shall be void and ineffective
and constitute a default of this Agreement.

     29.8 BILLING AND PAYMENT; DISPUTED AMOUNTS.

          29.8.1 Except may otherwise be provided in this Agreement, each Party 
shall submit on a monthly basis an itemized statement of charges incurred by 
the other Party during the preceding month(s) for services rendered hereunder.
Payment of billed amounts under this Agreement, whether billed on a monthly
basis or as otherwise provided herein, shall be due, in immediately available
U.S. funds, within thirty (30) days of the date of such statement.

          29.8.2 Although it is the intent of both Parties to submit timely and 
accurate statements of charges, failure by either Party to present statements to
the other Party in a timely manner shall not constitute a breach or default, or
a waiver of the right to payment of the incurred charges, by the billing Party
under this Agreement, and the billed Party shall not be entitled to

                                      57

<PAGE>
 
dispute the billing Party' statement(s) based on such Party's failure to submit 
them in a timely fashion.

           29.8.3   If any portion of an amount due to a Party (the "Billing 
Party") under this Agreement is subject to a bona fide dispute between the 
Parties, the Party billed (the "Non-Paying Party") shall within sixty (60) days 
of its receipt of the invoice containing such disputed amount give notice to the
Billing Party of the amounts it disputes ("Disputed Amounts") and include in 
such notice the specific details and reasons for disputing each item. The 
Non-Paying Party shall pay when due (i) all undisputed amounts to the Billing 
Party and (ii) all Disputed Amounts into an interest bearing escrow account with
a third party escrow agent mutually agreed upon by the Parties.

           29.8.4   If the Parties are unable to resolve the issues related to 
the Disputed Amounts in the normal course of business within ninety (90) days 
after delivery to the Billing Party of notice of the Disputed Amounts, each of 
the Parties shall appoint a designated representative that has authority to 
settle the dispute and that is at a higher level of management than the persons 
with direct responsibility for administration of this Agreement. The designated 
representatives shall meet as often as they reasonably deem necessary in order 
to discuss the dispute and negotiate in good faith in an effort to resolve such 
dispute. The specific format for such discussions will be left to the discretion
of the designated representatives, however all reasonable requests for relevant 
information made by one Party to the other Party shall be honored.

           29.8.5   If the Parties are unable to resolve issues related to the 
Disputed Amounts within forty-five (45) days after the Parties' appointment of 
designated representatives pursuant to subsection 29.8.4, then either Party may 
file a complaint with the Commission to resolve such issues or proceed with any 
other remedy pursuant to law or equity. The Commission may direct release of any
or all funds (including any accrued interest) in the escrow account, plus 
applicable late fees, to be paid to either Party.

           29.8.6   The Parties agree that all negotiations pursuant to this 
subsection 29.8 shall remain confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence and state 
rules of evidence.

           29.8.7   Any undisputed amounts not paid when due shall accrue
interest from the date such amounts were due at the lesser of (i) one and one-
half percent (1-1/2%) per month or (ii) the highest rate of interest that may be
charged under applicable law.

     29.9  DISPUTE RESOLUTION. Any dispute between the Parties regarding the 
interpretation or enforcement of this Agreement or any of its terms shall be 
addressed by good faith negotiation between the Parties, in the first instance. 
Should such negotiations fail to resolve the dispute in a reasonable time, 
either Party may initiate an appropriate action in any regulatory or judicial 
forum of component jurisdiction.

                                      58

<PAGE>
 
     29.10   NOTICES. Notices given by one Party to the other Party under this 
Agreement shall be in writing and shall be (a) delivered personally, (b) 
delivered by express delivery service, (c) mailed, certified mail or first class
U.S. mail postage prepaid, return receipt requested, or (d) delivered by 
telecopy to the following addresses of the Parties:

             To MFS:

             MFS Intelenet of Virginia, Inc.
             33 Whitehall St.
             15th Floor
             New York, NY 10004
             Attn: Director, Regulatory Affairs - Eastern Region
             Facsimile: 212/843-3060

             To Bell Atlantic:

             Director - Interconnection Services
             Bell Atlantic Network Services, Inc.
             1320 N. Courthouse Road
             9th Floor
             Arlington, VA 22201
             Facsimile: 703/974-2183

             with a copy to:

             Vice President and General Counsel
             Bell Atlantic - Virginia, Inc.
             600 East Main Street 
             24th Floor
             Richmond, VA 23261
             Facsimile: (804) 772-2143

or to such other address as either Party shall designate by proper notice. 
Notices will be deemed given as of the earlier of (i) the date of actual receipt
(ii) the next business day when notice is sent via express mail or personal
delivery, (iii) three (3) days after mailing in the case of first class or
certified U.S. mail, or (iv) on the date set forth on the confirmation in the
case of telecopy.

     29.11   SECTION 252(I) OBLIGATIONS.

             29.11.1 If, at any time during the term of this Agreement, either 
Party enters into an agreement to provide an integrated package of services or 
arrangements substantially similar to that described herein to another CLEC (in 
the case of BA), or another incumbent LEC (in the case of MFS), operating within
the same state to which this Agreement applies, on terms significantly

                                      59
<PAGE>
 
different than those available under this Agreement (the "Other Agreement"),
then the other Party may opt to adopt, on a prospective basis only, the rates,
terms, and conditions contained in the Other Agreement (i) in its entirety, or
(ii) that relate directly to any of the following individual services, Network
Elements, or arrangements, for its own reciprocal arrangements with the first 
Party, including, without limitation, any term or volume commitments or network
architecture configurations:

          (a)   Unbundled Loop Elements - Section 251(c)(3) of the Act (Section
     11 of this Agreement); or

          (b)   Collocation - Section 251(c)(6) of the Act (Section 13 of this
     Agreement); or

          (c)   Number Portability - Section 251(b)(2) of the Act (Section 14 of
     this Agreement); or           

          (d)   Access to Rights of Way - Section 251(b)(4) of the Act (Section
     16 of this Agreement).

          (e)   transiting arrangements.

          29.11.2  To the extent the exercise of the foregoing options requires
a rearrangement of facilities by the providing Party, the opting Party shall be
liable for the non-recurring charges associated therewith.

          29.11.3  The Party electing to exercise such option shall do so by 
delivering written notice to the first Party. Upon receipt of said notice by the
first Party, the Parties shall amend this Agreement to provide the same rates, 
terms and conditions to the notifying Party for the remaining term of this 
Agreement; provided, however, that the Party exercising its option under this
subsection 29.11 must continue to provide the same services or arrangements to
the first Party as required by this Agreement, subject either to the rates,
terms, and conditions applicable to the first Party in its agreement with the
third party or to the rates, terms, and conditions of this Agreement, whichever
is more favorable to the first Party in its sole determination.

          29.11.4  BA represents and warrants that, as of the date of this 
Agreement, it has not entered into any comparable Interconnection agreement with
any other CLEC in BA's service territory that is significantly more favorable
than the terms contained herein. BA makes no warranty or representation with
respect to its Interconnection arrangements with its affiliates or ITCs.

     29.12  JOINT WORK PRODUCT.  This Agreement is the joint work product of the
Parties and has been negotiated by the Parties and their respective counsel and 
shall be fairly interpreted in accordance with its terms and, in the event of 
any ambiguities, no inferences shall be drawn against either Party.

                                      60
<PAGE>
 
     29.13  NO THIRD PARTY BENEFICIARIES; DISCLAIMER OF AGENCY. This Agreement 
is for the sole benefit of the Parties and their permitted assigns, and nothing 
herein express or implied shall create or be construed to create any third-party
beneficiary rights hereunder. Except for provisions herein expressly authorizing
a Party to act for another, nothing in this Agreement shall constitute a Party
as a legal representative or agent of the other Party, not shall a Party have
the right or authority to assume, create or incur any liability or any
obligation of any kind, express or implied, against or in the name or on behalf
of the other Party unless otherwise expressly permitted by such other Party.
Except as otherwise expressly provided in this Agreement, no Party undertakes to
perform any obligation of the other Party, whether regulatory or contractual, or
to assume any responsibility for the management of the other Party's business.

     29.14  NO LICENSE.

            29.14.1  Nothing in this Agreement shall be construed as the grant 
of a license, either express or implied, with respect to any patent, copyright, 
trademark, trade name, trade secret or any other proprietary or intellectual 
property now or hereafter owned, controlled or licensable by either Party. 
Neither Party may use any patent, copyrightable materials, trademark, trade 
name, trade secret or other intellectual property right of the other Party 
except in accordance with the terms of a separate license agreement between the 
Parties granting such rights.

            29.14.2  Neither Party shall have any obligation to defend, 
indemnify or hold harmless, or acquire any license or right for the benefit of, 
or owe any other obligation or have any liability to, the other Party or its 
customers based on or arising from any claim, demand, or proceeding by any third
party alleging or asserting that the use of any circuit, apparatus, or system, 
or the use of any software, or the performance of any service or method, or the 
provision of any facilities by either Party under this Agreement, alone or in 
combination with that of the other Party, constitutes direct, vicarious or 
contributory infringement or inducement to infringe, misuse or misappropriation 
of any patent, copyright, trademark, trade secret, or any other proprietary or 
intellectual property right of any Party or third party. Each Party, however, 
shall offer to the other reasonable cooperation and assistance in the defense of
any such claim.

            29.14.3  NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE 
PARTIES AGREE THAT NEITHER PARTY HAS MADE, AND THAT THERE DOES NOT EXIST, ANY 
WARRANTY, EXPRESS OR IMPLIED, THAT THE USE BY THE PARTIES OF THE OTHER'S 
FACILITIES, ARRANGEMENTS, OR SERVICES PROVIDED UNDER THIS AGREEMENT SHALL NOT 
GIVE RISE TO A CLAIM BY ANY THIRD PARTY OF INFRINGEMENT, MISUSE, OR 
MISAPPROPRIATION OF ANY INTELLECTUAL PROPERTY RIGHT OF SUCH THIRD PARTY.

     29.15  TECHNOLOGY UPGRADES. Nothing in this Agreement shall limit BA's 
ability to upgrade its network through the incorporation of new equipment, new 
software or otherwise. BA shall provide MFS written notice at least ninety (90) 
days prior to the incorporation of any such upgrades in BA's network that will 
materially affect MFS's service. MFS shall be solely responsible for the cost 
and effort of accommodating such changes in its own network.

                                      61

<PAGE>
 
     29.16  SURVIVAL. The Parties' obligations under this Agreement which by 
their nature are intended to continue beyond the termination or expiration of 
this Agreement shall survive the termination or expiration of this Agreement.

     29.17  ENTIRE AGREEMENT. The terms contained in this Agreement and any 
Schedules, Exhibits, tariffs and other documents or instruments referred to 
herein, which are incorporated into this Agreement by this reference, constitute
the entire agreement between the Parties with respect to the subject matter 
hereof, superseding all prior understandings, proposals and other 
communications, oral or written. Neither Party shall be bound by any preprinted 
terms additional to or different from those in this Agreement that may appear 
subsequently in the other Party's form documents, purchase orders, quotations, 
acknowledgments, invoices or other communications.

     29.18  COUNTERPARTS. This Agreement may be executed in two or more 
counterparts, each of which shall be deemed an original and all of which 
together shall constitute one and the same instrument.

     29.19  MODIFICATION, AMENDMENT, SUPPLEMENT, OR WAIVER. No modification, 
amendment, supplement to, or waiver of the Agreement or any of its provisions 
shall be effective and binding upon the Parties unless it is made in writing and
duly signed by the Parties. A failure or delay of either Party to enforce any of
the provisions hereof, to exercise any option which is herein provided, or to 
require performance of any of the provisions hereof shall in no way be construed
to be a waiver of such provisions or options.

     29.20  SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure
to the benefit of the Parties and their respective legal successors and 
permitted assigns.

     29.21  PUBLICITY. Neither Party shall use the name of the other Party in 
connection with this Agreement in a press release or statement without the prior
consent of the other Party, which consent shall not be unreasonably withheld.

                                      62

<PAGE>
 
          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to 
be executed as of this 16th day of July, 1996.


MFS INTELENET OF                             BELL ATLANTIC - 
VIRGINIA, INC.                               VIRGINIA, INC.

By:  /s/ Alex J. Harris                      By:  /s/ H.R. Stallard
   ---------------------------------------      --------------------------------
Printed: Alex J. Harris                      Printed: H.R. Stallard
        ----------------------------------           ---------------------------
Title:   Vice President Regulatory Affairs   Title:   PRES. / CEO - BA - VA
      ------------------------------------         -----------------------------

                                      63

<PAGE>
 
SCHEDULE 1.0

CERTAIN TERMS AS DEFINED IN THE ACT, AS OF JULY 16, 1996

     "Dialing Parity" means that a person that is not an affiliate of a local 
exchange carrier is able to provide Telecommunications Services in such a manner
that Customers have the ability to route automatically, without the use of any 
access code, their Telecommunications to the Telecommunications Services 
provider of the customer's designation from among two (2) or more 
Telecommunications Services providers (including such LEC).

     "Exchange Access" means the offering of access to Telephone Exchange 
Services or facilities for the purpose of the origination or termination of
Telephone Toll Services.

     "InterLATA" means Telecommunications between a point located in a local 
access and transport area and a point located outside such area.

     "Local Access and Transport Area" or "LATA" means a contiguous geographic 
area: (a) established before the date of enactment of the Act by a Bell 
operating company such that no Exchange Area includes points within more than 
one (1) metropolitan statistical area, consolidated metropolitan statistical 
area, or State, except as expressly permitted under the AT&T Consent Decree; or 
(b) established or modified by a Bell operating company after such date of 
enactment and approved by the FCC.

     "Local Exchange Carrier" means any person that is engaged in the provision 
of Telephone Exchange Service or Exchange Access.  Such term does not include a 
person insofar as such person is engaged in the provision of a commercial mobile
service under Section 332(c) of the Act, except to the extent that the FCC finds
that such service should be included in the definition of such term. 

     "Network Element" means a facility or equipment used in the provision of
a Telecommunications Service.  Such term also includes features, functions, and 
capabilities that are provided by means of such facility or equipment, including
subscriber numbers, databases, signaling systems, and information sufficient for
billing and collection or used in the transmission, routing, or other provision 
of a Telecommunications Service.

     "Number Portability" means the ability of end users of telecommunications 
services to retain, at the same location, existing telecommunications numbers 
without impairment of quality, reliability, or convenience when switching from 
one telecommunications carrier to another.

     "Telecommunications" means the transmission, between or among points 
specified by the user, of information of the user's choosing, without change in 
the form or content of the information as sent and received.
<PAGE>
 
     "Telecommunications Carrier" means any provider of Telecommunications 
Services, except that such term does not include aggregators of 
Telecommunications Services (as defined in Section 226 of the Communications 
Act).

     "Telecommunications Service" means the offering of Telecommunications for a
fee directly to the public, or to such classes of users as to be effectively
available directly to the public, regardless of the facilities used.

     "Telephone Exchange Service" means (a) service within a telephone exchange 
or within a connected system of telephone exchanges within the same exchange 
area operated to furnish subscribers intercommunicating service of the character
ordinarily furnished by a single exchange, and which is covered by the exchange 
service charge, or (b) comparable service provided through a system of switches,
transmission equipment, or other facilities (or combination thereof) by which a 
subscriber can originate and terminate a telecommunications service.
     
     "Telephone Toll Service" means telephone service between stations in 
different exchange areas for which there is made a separate charge not included 
in contracts with subscribers for exchange service.
<PAGE>
 
SCHEDULE 3.0

NETWORK IMPLEMENTATION SCHEDULE FOR VIRGINIA


     In accordance with the provisions of Section 3 of the Agreement, the 
Parties shall make their best efforts to meet the following Milestones no later 
than the listed Dates.

<TABLE> 
<CAPTION> 
======================================================================================================
LATA IN VIRGINIA         MILESTONE                                              DATE
------------------------------------------------------------------------------------------------------
<S>                      <C>                                                    <C> 
LATA 236                 LATA Start Date ("SD")                                 Effective Date
                         -----------------------------------------------------------------------------
                         SS7 Certification, Collocation, and NXX(s)             SD plus 15 days
                         Applied For 
                         -----------------------------------------------------------------------------
                         Parties Agree on Initial Network Design                SD plus 30 days
                         -----------------------------------------------------------------------------
                         Valid Access Service Request(s) ("ASRs") and           SD plus 45 days
                         Routing Information Received by BA
                         -----------------------------------------------------------------------------
                         Collocation Arrangements Complete for Trunk            SD plus 135 days
                         Interconnection and IDLC for ULLs
                         -----------------------------------------------------------------------------
                         All Trunks Tested and Turned Up; SS7 Certification     SD plus 155 days
                         Achieved; /1/ VG ULL Capability Available
                         ----------------------------------------------------------------------------- 
                         Call-through Testing Completed;                        SD plus 180 days   
                         "Interconnection Activation Date"
------------------------------------------------------------------------------------------------------
</TABLE> 

     Failure of a Party or the Parties to meet an earlier Milestone Date shall 
not relieve either Party of the responsibility to make its best efforts to meet 
subsequent Milestone Date(s) in the LATA, unless, and only to the extent that, 
the subsequent Milestone Date(s) depend on the timely completion of such earlier
Milestone Date.

     For purposes of Section 3, (i) business Telephone Exchange Service shall be
considered "fully operational" in a LATA in the Commonwealth of Virginia when
MFS has an effective Tariff for business Telephone Exchange Service in the 
Commonwealth of Virginia and has a significant number of Telephone Exchange 
Service Customer lines in service for business Telephone Exchange Service
Customers in that LATA in the Commonwealth of Virginia that are not affiliates
or employees of either BA or MFS, and (ii) residential Telephone Exchange
Service shall be considered "fully operational" in a LATA in the Commonwealth of
Virginia when MFS has an effective Tariff for residential Telephone Exchange
Service in the Commonwealth of Virginia and has a significant number of
Telephone Exchange Service Customer lines in service for residential Telephone
Exchange Service Customers in that LATA in the Commonwealth of Virginia that are
not affiliates or employees of either BA or MFS.


______________________________
/1/   SS7 certification scheduling depends on actual schedule availability at
time of request.

                                       1
<PAGE>
 
SCHEDULE 4

INTERCONNECTION POINTS IN LATA


                                   LATA 236
                                   --------

M-IP:  Reston Switch
       12379 Sunrise Valley Dr.
       Reston, VA

BA-IP  Arlington Tandem
       1025 N. Irving Street
       Arlington, VA
<PAGE>
 

                     SCHEDULE 4.2 - PHYSICAL ARCHITECTURE
                                
                                [ILLUSTRATIVE]




                             [GRAPH APPEARS HERE]


<PAGE>
 
                     SCHEDULE 4.3 - INITIAL ARCHITECTURE 

                                [ILLUSTRATIVE]


     Bell Atlantic Leases MFS-owned Facilities for Delivery of BA Traffic 
     
                           [FLOOR PLAN APPEARS HERE]
               
               MFS-owned Facilities for Delivery of MFS Traffic
<PAGE>
 
SCHEDULE 4.5

INTERCONNECTION POINTS FOR DIFFERENT TYPES OF TRAFFIC

     Each Party shall provide the other Party with Interconnection to its 
network at the following points for transmission, routing and termination. Each 
Party shall make available at its Interconnection Points facilities to route the
traffic it receives to the appropriate final destination. Interconnection at a 
BA-IP that is a Local Serving Wire Center provides access to all of the 
Interconnection Points identified below (except for paragraphs 8 through 11), 
via facilities appropriate for the traffic types and destinations identified 
below. Compensation for such facilities will be as set forth in Exhibit A or as 
provided elsewhere herein. 
 
     1.   For the termination of Local Traffic or Toll Traffic originated by 
one Party's Customer and terminated to the other Party's Customer, at the points
set forth in subsections 4.2 and/or 4.3 of the main body of the Agreement.

     2.   For the termination of Meet Point Billing Traffic Traffic from an IXC 
to:

          (a)   MFS, at the M-IP in LATA in which the Traffic is to terminate.
     
          (b)   BA, at the BA-IP in LATA in which the Traffic is to terminate.
     
     3.   For the termination of Transit Traffic from an ITC, wireless carrier,
or other CLEC to:

          (a)   MFS, at the M-IP in which the Traffic is to terminate.

          (b)   BA, at the BA-IP in LATA in which the Traffic is to terminate.

     4.   For 911/E911 traffic originated on MFS's network, at the PSAP in areas
where only Basic 911 service is available, or at the BA 911 Tandem Office 
serving the area in which the MFS Customer is located, in accordance with
applicable state laws and regulations and PSAP requirements. 

     5.   For Directory Assistance (411 or NPA-555-1212) traffic, at the 
applicable BA Local Serving Wire Center or the BA operator services Tandem 
Office subtended by such Local Serving Wire Center.

     6.   For Operator Services (call completion) traffic, at the applicable BA
Local Serving Wire Center or the BA operator services Tandem Office subtended by
such Local Serving Wire Center.

     7.   For LSV/VCI traffic, at the terminating Party's Local Serving Wire
Center or operator services Tandem Office subtended by such Local Wire Center.
 
                                      1  
 




<PAGE>
 
     8.   For SS7 signaling originated by:

          (a)  MFS, at mutally agreed-upon Signaling Point of Interconnection(s)
("SPOI") in the LATA in which the Local or Toll Traffic originates, over CCSAC
links provisioned in accordance with Bellcore GR-905 and Bell Atlantic 
Supplement Common Channel Signaling Network Interface Specification (BA_905).

          (b)  BA, at mutually agreed-upon SPOIs in the LATA in which the Local 
or Toll Traffic originates, over a CCSAC links provisioned in accordance with 
Bellcore GR-905 and BA-905.

Alternatively, either Party may elect to interconnect for SS7 signaling through 
a commercial SS7 hub provider.

     9.   For 800/888 database inquiry traffic, at any BA Signaling Transfer 
Point in the LATA in which the originating MFS Wire Center is located, over a 
CCSAC link.  Alternatively, MFS may elect to interconnect through a commercial 
SS7 hub provider.

     10.  For Line Information Database ("LIDB") inquiry traffic, at any BA
Signaling Transfer Point in the LATA in which the LIDB is located, over a CCSAC
link. Alternatively, MFS may elect to interconnect through a commercial SS7 hub
provider.

     11.  For any other type of traffic, at reasonable points to be agreed upon 
by the Parties, based on the network architecture of the terminating Party's
network.

                                       2
<PAGE>
 
SCHEDULE 6.3

RATE ELEMENTS UNDER MEET POINT BILLING

INTERSTATE ACCESS - TERMINATING TO OR ORIGINATING FROM MFS CUSTOMERS
--------------------------------------------------------------------

<TABLE> 
<CAPTION> 
<S>                                     <C>
RATE ELEMENT                            BILLING COMPANY
------------                            ---------------
Carrier Common Line                     MFS
Local Switching                         MFS
Interconnection Charge                  MFS
Local Transport Facility/               
 Tandem Switched Transport Per Mile     Based on negotiated billing percentage (BIP)
Local Transport Termination/
 Tandem Switched Transport Fixed        BA
Entrance Facility                       BA
800 Database Query                      Party that performs query
</TABLE> 

INTRASTATE ACCESS - TERMINATING TO OR ORIGINATING FROM MFS CUSTOMERS/1/
-----------------------------------------------------------------------

<TABLE> 
<CAPTION> 
<S>                                     <C> 
RATE ELEMENT                            BILLING COMPANY
------------                            ---------------
Carrier Common Line                     MFS
Local Switching                         MFS
Interconnection Charge                  MFS
Local Transport Facility/               
 Tandem Switched Transport Per Mile     Based on negotiated billing percentage (BIP)
Local Transport Termination/
 Tandem Switched Transport Fixed        BA
Entrance Facility                       BA
800 Database Query                      Party that performs query
</TABLE> 

____________________
/1/  Pending approval of the BA intrastate local transport restructure tariff, 
intrastate access services subject to the pending tariff will be charged 
pursuant to effective tariffs, as agreed by the Parties, subject to true-up at 
either Party's request.

                                       1

<PAGE>
 
SCHEDULE 27.0

PERFORMANCE INTERVAL DATES FOR SPECIFIED ACTIVITIES


--------------------------------------------------------------------------------
            SPECIFIED ACTIVITY                    PERFORMANCE INTERVAL DATE/2/
 (i)  UNBUNDLED LOCAL LOOP INSTALLATION/1/     
      ---------------------------------
--------------------------------------------------------------------------------
 1-10 Loops per service order                     6 business days from BA's 
                                                  receipt of valid service order
--------------------------------------------------------------------------------
 11-20 Loops per service order                    10 business days from BA's 
                                                  receipt of valid service order
--------------------------------------------------------------------------------
 21 + Loops per service order                     To be negotiated on order-by-
                                                  order basis
--------------------------------------------------------------------------------
 (ii) INTERIM NUMBER PORTABILITY INSTALLATION     
      ---------------------------------------
--------------------------------------------------------------------------------
 1-10 Numbers per service order                   6 business days from BA's 
                                                  receipt of valid service order
--------------------------------------------------------------------------------
 11-20 Numbers per service order                  10 days from BA's receipt of 
                                                  valid service order
--------------------------------------------------------------------------------
 21 + Numbers per service order                   To be negotiated on 
                                                  order-by-order basis
--------------------------------------------------------------------------------
 (iii) OUT-OF-SERVICE REPAIRS                     Less than 24 hours from BA's
       ----------------------
                                                  receipt of notification of 
                                                  out-of-service condition
--------------------------------------------------------------------------------



__________________________
/1/  The Unbundled Loop Installation intervals set forth in this Schedule 27.0 
apply only to ULLs offered by BA as of the date of this Agreement. Installation 
intervals for new ULLs will be developed by the Parties as such ULLs become 
available.
/2/  Unless otherwise agreed to by the Parties, in which case the Performance 
Interval Date shall be extended until the agreed-upon date. Notwithstanding the 
Performance Interval Dates contained in this Schedule 27.0, under no
circumstances will BA be obligated to extend installation, provision, or repair
intervals to MFS that are more favourable than BA extends to its own customers
for comparable services.

                                       2
<PAGE>
 
SCHEDULE 27.1

MFS SERVICE QUALITY STANDARDS


1.0   UNBUNDLED LOCAL LOOP INSTALLATION ORDERS

1.1   All order information submitted by MFS is valid (e.g. street address, 
floor/unit number, cable pair assignment, etc.).

1.2   Customer (end user) is available at appointed time and day.


2.0   "LIVE" CUTOVER UNBUNDLED LOCAL LOOP INSTALLATION ORDERS (PURSUANT TO 
SECTION 11.6)

2.1   Accurate account and end user information submitted on service request.

2.2   Accurate tie cable and pair assignment provided by MFS on service request.

                                       3

<PAGE>
 
                                                                       EXHIBIT A

                BELL ATLANTIC-VIRGINIA, INC. AND MFS INTELENET
                               OF VIRGINIA, INC.


                   DETAILED SCHEDULE OF ITEMIZED CHARGES/1/
                   ---------------------------------------- 


A.   BA SERVICES, FACILITIES, AND ARRANGEMENTS:

--------------------------------------------------------------------------------
     BA SERVICE                NON-RECURRING                 RECURRING
     ----------                -------------                 ---------
--------------------------------------------------------------------------------
1.a. Entrance facilities,      Per interstate [BA FCC #1 sec. 6.9.1.] and 
     and transport, as         (proposed) intrastate [BA-VA SCC 217 sec. 6.8.2] 
     appropriate, for          access tariffs for Feature Group D service/2/
     Interconnection at 
     BA End Office, Tandem
     Office, Serving Wire
     Center, or other Point
     of Interconnection
                               Illustrative:     

                                Interstate non-recurring: $1, plus $1 switched
                               access connection charge per trunk; DS-1 entrance
                               facility $210-212/mo.
          
                                Intrastate nonrecurring: $895 for first DS-1, 
                               $280 for additional, plus $25 switched access 
                               connection charge per trunk; DS-1 entrance
                               facility $270/mo.
--------------------------------------------------------------------------------
1.b. Collocation and related   Per interstate [BA FCC 1 sec. 19] and intrastate 
     services for              access tariffs/3/
     Interconnection at BA 
     End Office, Tandem 
     Office, or Serving Wire
     Center
--------------------------------------------------------------------------------



/1/    Rates listed herein for services, facilities, or arrangements that are
marked with an asterisk (*) are fixed pursuant to section 20 of the Agreement
for the initial term of the Agreement, as set forth in Section 22 of the
Agreement. Rates for services, facilities, or arrangements that are not marked
with an asterisk shall change in accordance with the provisions of Section 20 of
the Agreement.

/2/    Pending approval of the BA intrastate local transport restructure tariff,
intrastate access services subject to the pending tariff will be charged 
pursuant to effective tariffs, as agreed by the Parties, subject to true-up at 
either Party's request.

/3/    Pending approval of the BA intrastate collocation tariff to be filed no 
later December 31, 1996, all collocation services shall be charged at rates 
found in BA FCC 1 sec. 19.

                                       1






<PAGE>
 
<TABLE> 
<CAPTION> 
----------------------------------------------------------------------------------
      BA SERVICE                      NON-RECURRING         RECURRING
      ----------                      -------------         ---------          
----------------------------------------------------------------------------------
<S>   <C>                             <C>                   <C> 
1.C   Tandem transit arrangements     Per tariffs cited in
      (for Interconnection between    sections 1.a. and     Per interstate [BA
      MFS and carriers other than     1.b. above, as        FCC 1 sec. 6.9.1.B]
      BA)                             applicable; separate  and (proposed)
                                      trunks required for   intrastate [BA-VA
                                      IXC subtending        SCC 217 sec. 
                                      trunks/4/             6.8.2.B] for tandem
                                                            switching and tandem
                                                            switched transport,
                                                            as applicable/5/

                                                            
                                                            Illustrative:
                    
                                                             Interstate,
                                                            (proposed)
                                                            intrastate tandem
                                                            switching $.000999/mou, 
                                                            tandem switched 
                                                            transport $.000195/mou 
                                                            plus $.000045/mou/mile
----------------------------------------------------------------------------------
1.d.  911 Interconnection             Per tariffs cited in 1.a., 1.b., and 1.c.
                                      above, as applicable, for entrance
                                      facility plus applicable transport, or
                                      Collocation Arrangement at 911 tandem
----------------------------------------------------------------------------------
</TABLE> 


/4/  See note 2 above.

/5/  See note 2 above.  
 
                                       2
 
   
                                                           
<PAGE>
 
--------------------------------------------------------------------------------
       BA SERVICE                  NON-RECURRING            RECURRING
       ----------                  -------------            ---------
--------------------------------------------------------------------------------
 1.e.  Directory assistance        Intrastate per           Intrastate per
       Interconnection             (proposed) BA-VA         (proposed) BA-VA
                                   SCC 217 sec. 9.6.B       SCC 217 sec. 9.6.B;
                                   (transport)/6/
                                                            Illustrative:

                                                              Per call rate
                                                            $.000092 fixed,
                                                            $.000021 per mile,
                                                            $.000462 tandem
                                                            switching, $.003705
                                                            interconnection/7/

                                   Interstate per BA        Interstate per BA   
                                   FCC 1 sec. 9.6.B         FCC 1 sec. 9.6.B

                                                            Illustrative:

                                                              Per call rate
                                                            $.000082 fixed,
                                                            $.000019 per mile,
                                                            $.000353 tandem
                                                            switching, $.002311
                                                            interconnection
--------------------------------------------------------------------------------
 1.f.  Operator services (call     Per separate contract
       completion) Interconnection   
--------------------------------------------------------------------------------
 2.    Unbundled elements          Available as listed herein and in interstate
                                   and intrastate tariffs, and pursuant to 
                                   Section 11. of the Agreement
--------------------------------------------------------------------------------
 3.    Poles, ducts, conduits,     Per contract rates pursuant to 47 U.S.C. sec.
       ROW                         224

                                   Illustrative:

                                     Duct (Northern Virginia) $4.50/ft/yr.

                                     Pole $4.46/attachment/yr.
--------------------------------------------------------------------------------

/6/    See note 2 above.

/7/    See note 2 above.

                                       3

<PAGE>
 
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
       BA SERVICE                            NON-RECURRING                 RECURRING
       ----------                            -------------                 ---------
-----------------------------------------------------------------------------------------------------
<S>                                          <C>                           <C> 
4.a.   Local loop transmission*              Permanent rates to be         Permanent rates to be 
                                             determined by                 determined by
        Unbundled Local Loop Element         appropriate arbitral          appropriate arbitral 
                                             body. Interim rates           body. Interim rates   
        Cross Connection to POTS loop        will apply until the          will apply until the  
                                             permanent rates are           permanent rates are   
                                             determined./8/                determined./9/        
                                                                                                 


-----------------------------------------------------------------------------------------------------
 4.b.  Special construction charges          As applicable per BA-VA SCC 203 sec. 2
-----------------------------------------------------------------------------------------------------
 4.c   Central office technician charges     Per interstate [BA FCC 1 sec. 13.2 or sec.
       (during normal working hours)         19.5] tariff.

-----------------------------------------------------------------------------------------------------
 5.a.  Trunk Side local transport

        DS-1 transport                       Per interstate [BA FCC 1 sec. 6.9.1.C] and (proposed)
                                             intrastate [BA-VA SCC 217 sec. 6.8.2.C] tariffs/10/


                                             Illustrative recurring:

                                              Interstate $60/mo. fixed, $17.70/mile/mo.

                                              Intrastate $75/mo. fixed, $30/mile/mo.
-----------------------------------------------------------------------------------------------------
 5.b.   DS-3 transport                       Tariff reference see 5.a. above.


                                             Illustrative recurring:

                                              Interstate, intrastate $900/mo. fixed,
                                             $180/mile/mo.
-----------------------------------------------------------------------------------------------------
</TABLE> 

/8/    Interim rates will be based on the following order of precedence: (i)
effective tariff(s), (ii) other BA ILEC-CLEC Interconnection Agreement(s) in the
state, (iii) any Commission recommendation, or (iv) mutual agreement of the 
Parties.

/9/    See preceding note.

/10/   See note 2 above.

                                       4

<PAGE>
 
<TABLE> 
<CAPTION> 
----------------------------------------------------------------------------------------------
     BA SERVICE                       NON-RECURRING                  RECURRING
     ----------                       -------------                  ---------
----------------------------------------------------------------------------------------------
<S>  <C>                              <C>                            <C>  
6.   Local switching*                                                
                                                                     
      POTS switch Port                $6/service order plus          $1.50/mo., plus usage
                                      $6/Port                        per tariff, minus
                                                                     wholesale discount
                                                                     per section 14 below
----------------------------------------------------------------------------------------------
7.a. Operator services                                              
                                                               
      911 service (data entry;        No charge                     
     database maintenance)*                                    
----------------------------------------------------------------------------------------------
7.b.  Directory assistance            Per tariff or separate         Per tariff or separate
                                      contract; branding             contract
                                      available                     
                                                                     Illustrative tariff rates:
                                                               
                                                                     Interstate [BA FCC 1
                                                                     sec. 9.6], $.275-.288
                                                                     per call
                                                               
                                                                     Intrastate (proposed)
                                                                     [BA-VA SCC 217 sec. 
                                                                     9.6.A], $.25 per call
                                                               
                                                                     Directory transport 
                                                                     per section 1.e. above
----------------------------------------------------------------------------------------------
7.c.  Operator call completion        Per separate contract; branding available
----------------------------------------------------------------------------------------------
8.a. White pages directory listings*  $5.00 per primary              No charge
                                      listing per number            
----------------------------------------------------------------------------------------------
8.b.  Books & delivery (annual home   No charge for normal numbers of books
     area directories only)*          delivered to end users; bulk deliveries to 
                                      CLEC per separate arrangement
----------------------------------------------------------------------------------------------
</TABLE> 

                                       5
<PAGE>
 
--------------------------------------------------------------------------------
     BA SERVICE                       NON-RECURRING         RECURRING
     ----------                       -------------         ---------
--------------------------------------------------------------------------------
8.c.   Additional listings, changes   Per tariff [BA-VA     Per tariff [BA-VA
     to listing, non-listed, non-     SCC 203 sec. 4]       SCC 203 sec. 4]
     published, and other extra                           
     services                                             
                                      Illustrative:         Illustrative:

                                       Additional listing:  Additional listing:
                                      $9 residence; $17     $1.12/mo. residence,
                                      business              $1.42/mo. business

                                       Change to listing:   Non-list:
                                      $9 residence; $17     $1.06/mo. residence
                                      business              or business

                                       Non-list:            Non-published:
                                      $9 residence; $17     $1.71/mo. residence
                                      business              or business

                                       Non-published:
                                      $9 residence; $17
                                      business
--------------------------------------------------------------------------------
9.   Access to telephone numbers
     (NXX codes issued per ICCF
     Code Administrative 
     Guidelines)*                     No charge

--------------------------------------------------------------------------------
10.a SS7 Interconnection              Per interstate [BA    Per interstate [BA
                                      FCC 1 sec. 6.9.1.G]   FCC 1 sec. 6.9.1.L]
                                      and intrastate [BA-   and intrastate [BA-
                                      VA SCC 217 sec.       VA SCC 217 sec.
                                      6.8.2.C] tariff       6.8.2.G] tariff


                                                            Illustrative:

                                                             STP ports,
                                                            $900/mo.;

                                                             STP access,
                                                            $3.50/mile/mo. to
                                                            $5.72/mile/mo.
--------------------------------------------------------------------------------

                                       6
<PAGE>
 
--------------------------------------------------------------------------------
     BA SERVICE                   NON-RECURRING         RECURRING
     ----------                   -------------         ---------
--------------------------------------------------------------------------------
10.b LIDB Interconnection         Per tariff [BA FCC 1  Per tariff [BA FCC 1
                                  sec. 6.9.1M]          sec. 6.9.1M]
                                                        
                                  Illustrative:         Illustrative:
                                                        
                                   Originating point     Query validation
                                  code, $125            $.04/query
                                                        
                                                         Query transport
                                                        $.0002/query
--------------------------------------------------------------------------------
10.c 800/888 data base            No separate charge    Per interstate [BA FCC
     Interconnection              (including in FGD     1 sec. 6.9.2.A.1], and
                                  trunk and STP links)  intrastate [BA-VA SCC
                                                        217 sec. 6.8.2.K]
                                                        tariffs
                                                        
                                                        
                                                        Illustrative:
                                                        
                                                        
                                                         Interstate basic query,
                                                        $.003105/query; vertical
                                                        feature package,
                                                        $.000337/query
                                                        
                                                         Intrastate basic query,
                                                        $.003089/query; vertical
                                                        feature package, 
                                                        $.000327/query
--------------------------------------------------------------------------------
11.a Interim number portability   service order per     $3/mo. per number
     through co-carrier call      location $30          for up to 10 paths;
     forwarding                                         $.40/mo. per
                                  installation per      additional path
                                  number $35 (unless
                                  installed with
                                  unbundled loop)

                                  installation per
                                  separate path 
                                  arrangement $20
--------------------------------------------------------------------------------

                                       7
<PAGE>
 
<TABLE> 
<CAPTION> 
----------------------------------------------------------------------------------------------
     BA SERVICE                         NON-RECURRING                RECURRING
     ----------                         -------------                ---------
----------------------------------------------------------------------------------------------
<S>  <C>                                <C>                          <C> 
11.b  Access pass-through to number                                  In accordance with 
     portability purchaser*                                          section 14.5 of 
                                                                     Agreement.
----------------------------------------------------------------------------------------------
12.  Local dialing parity*              No charge
----------------------------------------------------------------------------------------------
13.a Reciprocal call termination

      Local Traffic delivered to Bell
     Atlantic Interconnection Point
     
      First year*                                                    $.009/mou
    ------------------------------------------------------------------------------------------
      After first year*                                              In accordance with note
                                                                     13 below
----------------------------------------------------------------------------------------------
13.b  Access charges for termination                                 Per interstate and 
     of intrastate and interstate                                    intrastate access 
     Toll Traffic                                                    tariffs (charged in
                                                                     conjunction with Local
                                                                     Traffic, using PLU and 
                                                                     PIU, as appropriate)
----------------------------------------------------------------------------------------------
14.a Wholesale rates for resale of      Percentage discount from retail tariff/12/ 
                                        ------------------------------------------
     telecommunications services      
     provided to end users*/11/
----------------------------------------------------------------------------------------------
14.b  Individual Case Basis services    No discount
     and similar single-customer
     serving arrangements; directory
     assistance and operator call
     completion*
----------------------------------------------------------------------------------------------
</TABLE> 


/11/      Excludes telecommunications services designed primarily for wholesale,
such as switched and special access, and, subject to Section 12 of the
Agreement, the following additional arrangements that are not subject to resale:
limited duration promotional offerings, public coin telephone service, and
technical and market trials. Taxes shall be collected and remitted by the
reseller and BA in accordance with legal requirements and as agreed between the
Parties. Surcharges (e.g., 911, telecommunications relay service, universal
service fund) shall be collected by the reseller and either remitted to the
recipient agency or NECA, or passed through to BA for remittance to the
recipient agency or NECA, as appropriate and agreed between the Parties. End
user common line charges shall be collected by the reseller and remitted to BA.

/12/      Pending establishment of mechanized billing procedures adapted to
resale, the Parties will agree upon a composite "bottom-of-the-bill" discount
that reflects the discounts and exclusions identified herein, and such other
adjustments as the Parties agree.

                                       8
<PAGE>
 
<TABLE> 
<CAPTION>  
-----------------------------------------------------------------------------------------------
          BA SERVICE                            NON-RECURRING               RECURRING         
          ----------                            -------------               ---------         
------------------------------------------------------------------------------------------------
<S>      <C>                                    <C>                         
 14.c      IntraLATA toll, including            Discount per sections 14.d. and 14.e. below   
          discount plans*                       applied to composite weighted average toll    
                                                rate per minute                               
------------------------------------------------------------------------------------------------
 14.d      Other retail residential services*   6% discount                                   
------------------------------------------------------------------------------------------------
 14.e      Other retail business services*      9% discount                                   
------------------------------------------------------------------------------------------------
</TABLE> 

                                       9

<PAGE>
 
<TABLE> 
<CAPTION>  
            B.    MFS SERVICES, FACILITIES, AND ARRANGEMENTS: 
          ----------------------------------------------------------------------------------------------------------------
                   MFS SERVICE                            NON-RECURRING               RECURRING   
                   -----------                            -------------               --------- 
          ----------------------------------------------------------------------------------------------------------------
          <S>      <C>                                    <C>                         <C>  
           1.a.    Interim Number Portability                                                          
                   through co-carrier call                                                             
                   forwarding*                                                                         

                    Number portability*                   $30/service order,          $3/mo. for ten paths
                                                          $35/number (not             per number; plus
                                                          ordered with ULL)           $.40/mo. per
                                                                                      additional path
                                                          $20 per additional
                                                          path order
          ----------------------------------------------------------------------------------------------------------------
           1.b      Access pass-though to number                                      In accordance with
                   portability purchaser*                                             sec. 14.5 of
                                                                                      Agreement
          ----------------------------------------------------------------------------------------------------------------
           2.      Local dialing parity*                  No charge
          ----------------------------------------------------------------------------------------------------------------
           3.a     Reciprocal call termination

                    Local Traffic delivered to MFS
                   Interconnection Point*

                    First year*                                                       $.009/mou
                   ---------------------------------------------------------------------------------------------------------
                    After first year*                                                 In accordance with
                                                                                      note 13 below
          ------------------------------------------------------------------------------------------------------------------
           3.b      Access charges for termination                                    Per MFS interstate
                   of intrastate and interstate Toll                                  and intrastate access
                   Traffic                                                            rates (charged in conjunction
                                                                                      with Local Traffic, using PLU
                                                                                      and PIU, as appropriate)
          ------------------------------------------------------------------------------------------------------------------
           4.      All other MFS services available       Available at MFS tariffed or otherwise         
                   to BA for purposes of                  generally available rates, not to exceed BA 
                   effectuating local exchange            rates for equivalent services available to MFS
                   competition
          ------------------------------------------------------------------------------------------------------------------
           5.       Other Services

                   Information Service billing fee        No Charge                   $.03 per call 
          ------------------------------------------------------------------------------------------------------------------
</TABLE> 

                                      10

<PAGE>
 
13   LOCAL TRAFFIC TERMINATION RATES (AFTER FIRST YEAR)

A.   Charges by BA
     -------------

     (a)  Traffic delivered to BA Local Serving Wire Center ("LSWC") or BA 
          Access Tandem: $.009 per mou

     (b)  Traffic delivered directly to terminating BA End Office: $.007 per mou

     Note: All BA-IPs identified in Schedule 4.0 as of the Effective Date are
     LSWC or Access Tandems. Therefore, Local Traffic delivered to such BA-IPs
     shall be subject to the rate of $.009 per mou.

B.   Charges by MFS
     --------------

1.   Single-tiered interconnection structure:

     MFS's rates for the termination of BA's Local Traffic under the single-
     tiered interconnection structure shall be recalculated once each year on
     each anniversary of the Effective Date (the "Rate Determination Date"). The
     initial Rate Determination Date shall be the first anniversary of the
     Effective Date. The methodology for recalculating the rates is as follows:

          LSWC/Access Tandem Minutes = Total minutes of use of Local Traffic
          delivered by MFS to the BA LSWC or BA Access Tandem for most recent
          billed month.

          End Office Minutes = Total minutes of use Local Traffic delivered by
          MFS directly to the terminating BA End Office for most recent billed
          month.

          Total Minutes = Total minutes of use of Local Traffic delivered by MFS
          to BA for most recent billed month.

          MFS Charge at the M-IP =

          (LSWC/Access Tandem Minutes x $.009) + (End Office Minutes x $.007)
          -------------------------------------------------------------------
                                 Total Minutes


2.   Multiple-tiered interconnection structure (if offered by MFS to any
     carrier)

     (a)  Local Traffic delivered to MFS LSWC or MFS Access Tandem: $.009

     (b)  Local Traffic delivered to terminating MFS End Office/node: $.007

                                      11
<PAGE>
 
C.   Miscellaneous Notes
     -------------------

1.   In the event a Party desires to deliver Local Traffic to a LSWC (i) that is
not located within 25 miles of the Tandem Office to which it is subtended, and/
or (ii) where the Tandem Office that it subtends is not located within 25 miles
of the Tandem Office that is subtended by the terminating End Office, then such
Party shall (x) in addition to paying the LSWC/Access Tandem termination rate
described above, purchase the necessary facilities from the terminating Party to
transport such traffic to a qualifying LSWC or Access Tandem that is not subject
to either conditions (i) or (ii) above, (y) purchase such other service(s) as
the terminating Party may offer under applicable tariff to remedy such
condition(s), or (z) enter into a new compensation arrangement as the Parties
may agree. Notwithstanding the foregoing, nothing in this Agreement shall
obligate BA to provide switching services at a LSWC when it functions as such.

2.   In the event the two-tiered rate structure described above is modified 
pursuant to Applicable Law to a single rate structure, BA and MFS (to the extent
MFS is offering a multiple-tiered interconnection structure) shall each have the
right to apply its tariffed switched access transport charges for transporting 
Local Traffic it receives at its LSWC to the first point of switching in its 
network in the LATA.

3.   The MFS termination rate under the single-tiered interconnection structure 
set forth above is intended by the Parties to be a Local Traffic termination 
rate for Interconnection to the M-IP within each LATA that is reciprocal and 
equal to the actual rates that will be charged by BA to MFS under the 
two-tiered Local Traffic termination rate structure described above that will 
apply after the first anniversary of the Effective Date. The single MFS 
termination rate is also intended to provide financial incentives to MFS to 
deliver traffic directly to BA's terminating End Offices once MFS's traffic 
volumes reach an appropriate threshold. The Parties agree that the Reciprocal 
Compensation rate(s) set forth herein recover a reasonable approximation of each
Party's additional costs of terminating calls that originate on the network 
facilities of the other Party.

                                      12
<PAGE>
 
EXHIBIT B

                       NETWORK ELEMENT BONA FIDE REQUEST


     1.  Each Party shall promptly consider and analyze access to a new
unbundled Network Element with the submission of a Network Element Bona Fide
Request hereunder. The Network Element Bona Fide Request process set forth
herein does not apply to those services requested pursuant to Report & Order and
Notice of Proposed Rulemaking 91-141 (rel. October 19, 1992), Paragraph 259 and
Footnote 603 or subsequent orders.

     2.  A Network Element Bona Fide Request shall be submitted in writing and
shall include a technical description of each requested Network Element, the
telecommunications service(s) to be provided by the requesting Party using the
requested Network Element(s), the means of Interconnection, the number or volume
requested, the locations, and the date(s) such Network Elements are desired. The
requesting Party shall either make a binding commitment to order the Network
Elements requested in the quantity and within the time frame requested or to pay
the requested Party the costs of processing the Requests.

     3.  The requesting Party may cancel a Network Element Bona Fide Request at
any time, but shall pay the other Party's reasonable and demonstrable costs of
processing and/or implementing the Network Element Bona Fide Request up to the
date of cancellation.

     4.  Within ten (10) business days of its receipt, the receiving Party shall
acknowledge receipt of the Network Element Bona Fide Request.

     5.  Except under extraordinary circumstances, within thirty (30) days of
its receipt of a Network Element Bona Fide Request, the receiving Party shall
provide to the requesting Party a preliminary analysis of such Network Element
Bona Fide Request. The preliminary analysis shall confirm that the receiving
Party will offer access to the Network Element or will provide a detailed
explanation that access to the Network Element is not technically feasible
and/or that the request does not qualify as a Network Element that is required
to be provided under the Act.

     6.  If the receiving Party determines that the Network Element Bona Fide
Request is technically feasible and otherwise qualifies under the Act, it shall
promptly proceed with developing the requested Network Element upon receipt of
written authorization from the requesting Party. When it receives such
authorization, the receiving Party shall promptly develop the requested
services, determine their availability, calculate the applicable prices and
establish installation intervals.

     7.  Unless the Parties otherwise agree, the requested Network Element must
be priced in accordance with Section 252(d)(l) of the Act.

                                       1
<PAGE>
 
     8.  As soon as feasible, but not more than ninety (90) days after its
receipt of authorization to proceed with developing the requested Network
Element, the receiving Party shall provide to the requesting Party a Network
Element Bona Fide Request quote which will include, at a minimum, a description
of each Network Element, the availability, the applicable rates and the
installation intervals.

     9.  Within thirty (30) days of its receipt of the Network Element Bona Fide
Request quote, the requesting Party must either confirm its order for the
requested Network Element pursuant to the Network Element Bona Fide Request
quote or seek arbitration by the Commission pursuant to Section 252 of the Act.

     10.  If a Party to a Network Element Bona Fide Request believes that the
other Party is not requesting, negotiating or processing the Network Element
Bona Fide Request in good faith, or disputes a determination, or price or cost
quote, or is failing to act in accordance with section 251 of the Act, such
Party may seek mediation or arbitration by the Commission pursuant to Section
252 of the Act.

                                       2
<PAGE>
 
EXHIBIT C

                   DIRECTORY ASSISTANCE AND CALL COMPLETION
                              SERVICES AGREEMENT


     THIS AGREEMENT is made, effective this ________ day of _________,1996,
by and between BELL ATLANTIC NETWORK SERVICES, INC. (hereinafter referred to 
as "Bell Atlantic"), a Delaware corporation with offices at 13100 Columbia 
Pike, Silver Spring, MD 20904, and ________________, (hereinafter referred to 
as "Carrier"), a ______________ corporation with offices at _________________
_______________________.


1.   SCOPE AND TERM OF AGREEMENT
     ---------------------------

1.1  SCOPE This Agreement sets forth the terms and conditions which shall govern
the use of payment for Directory Assistance (DA) Service and  IntraLATA Call 
Completion Service (hereinafter collectively referred to as "Services") to be 
provided by Bell Atlantic, or its affiliated companies, to Carrier. Carrier 
shall subscribe to and pay for Services for Carrier's local exchange customers
in the _____________ LATAs.

1.2  TERM The initial term of this Agreement shall commence as of 12:01 a.m. on
the date first written above and shall expire upon the conclusion of the 
subscription period selected by Carrier in Appendix A. At the end of this 
initial term, this Agreement, including Carrier's subscription to Services, 
shall automatically renew for the same length of time as the initial 
subscription period unless either party provides written notice to the other of
its intent to terminate at least three (3) months prior to the expiration of 
the current term.

2.   DESCRIPTION OF SERVICES
     -----------------------

2.1  DIRECTORY ASSISTANCE (DA) SERVICE

     a. Directory Assistance Service shall consist of 1) directory transport by
Bell Atlantic from the point of Bell Atlantic's interconnection with Carrier's
trunks to Bell Atlantic's designated DA locations, and 2) the provision of
telephone number listings by Bell Atlantic Carrier Call Representatives (CCRs)
in response to calls from Carrier's local exchange customers located in the
LATAs designated in Section 1.1, at the rates specified in Appendix A.   

                                       1
 
        This information is Bell Atlantic Proprietary and Confidential
<PAGE>
 
     b.   A maximum of two requests for telephone numbers will be accepted per 
DA call. A "DA call" as used in this Agreement shall mean a call answered by or 
forwarded to Bell Atlantic, regardless of whether a telephone number is 
requested, provided or available. The listings that will be available to 
Carrier's customers are those telephone numbers that are listed in Bell 
Atlantic's DA records for the LATAs or NPAs designated in Section 1.1.

2.2  CONNECT REQUEST(SM) SERVICE

     a)   Connect ReQuest(SM) Service is an optional DA call completion service.
It provides Directory Assistance end users the option of placing a call to a
requested DA listing without having to hang up and redial. If a caller requests
two numbers on a DA call, only the second number will be completed using
Connect ReQuest(SM).

     b)   Connect ReQuest(SM) requires that the Carrier meet switching,
facility, and other technical standards as required by Bell Atlantic to provide
this Service. Bell Atlantic will deliver all Connect ReQuest(SM) calls back to
the Carrier for completion.

2.3  INTRALATA CALL COMPLETION SERVICE

     a)   IntraLATA Call Completion Service consists of the live and automated 
call completion services specified in Appendix B, including the completion of 
collect, card and bill-to-third party calls; busy line verification; customer 
requested interrupt; and other assistance to callers. IntraLATA Call Completion 
Service includes the support of the Bell Atlantic carrier call centers and call 
completion facilities used to provide such services to Carrier.

     b)   Bell Atlantic will provide Carrier with unrated records for the call 
completion services provided by Bell Atlantic on behalf of Carrier. The rating, 
billing, and settlement of end-user charges for the calls are the responsibility
of Carrier.

2.4  BRANDING   Branding is a service option that permits the Carrier to deliver
a customized front end announcement to its callers, identifying the Carrier as
the customer service provider. Branding is available for DA as well as Call
Completion Services. Carrier shall provide the information required by Bell
Atlantic to create this announcement. Branding also requires that the Carrier
maintain dedicated trunking arrangements to the designated Bell Atlantic DA or
operator switch location.

2.5  CARRIER SUBSCRIPTION SELECTION FORM   The specific Services to which
Carrier shall subscribe and the applicable service subscription periods are
contained in Appendix A ("Carrier Subscription Selection Form").

3.   COMMENCEMENT AND IMPLEMENTATION OF SERVICE
     ------------------------------------------

                                       2

        This information is Bell Altantic Proprietary and Confidential
<PAGE>
 
3.1  TECHNICAL QUESTIONNAIRE  Each party shall make good-faith efforts to carry 
out its respective responsibilities in meeting a jointly established schedule 
for implementation. All records and other required information specified in 
Appendix C will be furnished by Carrier at least sixty (60) days prior to the 
commencement of Services (i.e., the cutover date described in Section 3.2.) 
Notices of any changes, additions, or deletions to such records and information 
shall be provided promptly in writing by Carrier to Bell Atlantic.

3.2  CUTOVER  The cutover date for a selected Services shall be the date on 
which such Service shall be available to all of Carrier's local exchange 
customers in the LATAs designated in Section 1.1.  The subscription term set 
forth in Appendix A for such Services shall commence on the cutover date.

3.3  SERVICE REVIEW MEETINGS  Bell Atlantic will meet and confer with Carrier 
during the term of this Agreement to review and discuss the Services provided 
under this Agreement. The times for meetings will be established by mutual 
agreement of the parties.


4.   EQUIPMENT AND FACILITIES
     ------------------------

4.1  BELL ATLANTIC  will establish and maintain such access equipment and
related facilities for its Carrier Call Centers as may be necessary to perform
the Services specified in Appendix A, provided that Carrier furnishes Bell
Atlantic the information specified in Appendix C and any changes in such
information in a timely and accurate manner. Any additional Services that
Carrier seeks during the term of this Agreement will be subject to mutual
agreement and the availability of facilities and equipment.

4.2  CARRIER  will provide and maintain such equipment within its premises as is
necessary to permit the Bell Atlantic to perform the agreed upon Services in
accordance with Bell Atlantic standard equipment operation and traffic operation
procedures.

4.3  CARRIER TRANSPORT AND SWITCHED ACCESS CONNECTION

     a)   Carrier shall, at its expense, arrange for and establish the trunking 
and other transport, interface, and signaling arrangements required for Bell 
Atlantic to provide Services to Carrier. Separate dedicated trunks for each NPA 
or LATA may be required. Any trunks or other transport and access that Carrier 
obtains from Bell Atlantic to deliver Carrier's call to Bell Atlantic shall be 
provided pursuant to the applicable tariffs, and not under this Agreement. Bell 
Atlantic agrees to coordinate the scheduling of Services to be provided under 
this Agreement with the scheduling of any trunking or related services, 
provisioned by Bell Atlantic under the tariffs.

                                       3

        This information is Bell Atlantic Proprietary and Confidential

<PAGE>
 
     b)   Carrier shall specify the number of trunks required for Services. For 
Directory Assistance Service, Carrier must provide Feature Group D (FGD) trunks 
directly to the location designated by Bell Atlantic. For IntraLATA Call 
Completion Service, Carrier must provide trunks with operator services signaling
directly to the location designated by Bell Atlantic. Bell Atlantic shall 
provide Carrier at least three (3) months advance notice in the event of any 
change in designated locations.

5.   PAYMENT FOR SERVICES
     --------------------

5.1  RATES  Carrier agrees to pay for Services at the rates contained in 
Appendix A.

5.2  SETTLEMENTS  Carrier shall render payment to Bell Atlantic net thirty (30) 
calendar days from the date of delivery of the Service or from the date of 
billing for the Service, whichever occurs later. Carrier shall pay interest on 
any amount overdue at the rate of fifteen (15) percent per annum.

5.3  TAXES  The rates specified in this Agreement and Appendices are exclusive 
of all taxes, duties or similar charges imposed by law. Carrier shall be liable 
for and shall reimburse Bell Atlantic for any sales, use, excise or other taxes 
applicable to the services performed under this Agreement.

5.4  LIQUIDATED DAMAGES  In the event that Carrier discontinues using Bell 
Atlantic's Services in whole or in part, or terminates this agreement prior to 
the expiration of the subscription term, the parties agree that Bell Atlantic   
will incur expenses and damages that will be difficult to calculate. Therefore, 
the parties agree that in the event of such discontinuance or termination, 
Carrier shall pay an amount equal to the charges billed for the month in which 
the highest usage of Services occurred, multiplied by the number of months 
remaining in the then-current term, or b) the sum of $100,000, whichever is 
greater. If Carrier causes this Agreement to terminate before the commencement 
of any Service selected in Appendix A, Carrier shall pay for all costs already 
incurred by Bell Atlantic in establishing and preparing for the commencement of 
such Service or the sum of $100,000, whichever is greater.

5.5  CARRIER'S CUSTOMERS  Carrier shall be responsible for all contacts and 
arrangements with its customers concerning the provision and maintenance, and 
the billing and collection, of charges for Services furnished to Carrier's 
customers.

6.   LIMITATION OF LIABILITY
     -----------------------

6.1  DIRECT DAMAGES  In the event that Bell Atlantic, through negligence or 
willful misconduct, fails to provide the Services selected and contracted for 
under this Agreement, Bell Atlantic shall be liable to Carrier for Carrier's 
direct damages resulting from such failure, up to an amount not to exceed the 
payment of charges under this Agreement for the Services affected.


                                       4

        This information is Bell Atlantic Proprietary and Confidential
<PAGE>
 
6.2   OTHER REMEDIES   THE EXTENT OF BELL ATLANTIC'S LIABILITY ARISING UNDER
THIS AGREEMENT SHALL BE LIMITED AS DESCRIBED IN PARAGRAPH 6.1 ABOVE. IN NO EVENT
SHALL BELL ATLANTIC BE LIABLE FOR ANY OTHER LOSS, COST, CLAIM, INJURY,
LIABILITY, OR EXPENSE RELATED TO OR ARISING OUT OF THIS AGREEMENT OR THE
SERVICES PROVIDED HEREUNDER INCLUDING, BUT NOT LIMITED TO, ANY INCIDENTAL,
SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS
OF REVENUE OR PROFIT, WHETHER RECOVERY IS SOUGHT IN TORT, CONTRACT, OR
OTHERWISE, EVEN IF BELL ATLANTIC HAD NOTICE OF SUCH DAMAGES.


7.   DEFAULTS AND TERMINATION
     ------------------------ 

7.1  DEFAULTS OR VIOLATIONS  If Carrier defaults in the payment of any amount 
due hereunder, or if Bell Atlantic fails to provide Services as agreed 
hereunder, and such default or failure shall continue for thirty (30) days after
written notice thereof, the other company may terminate this agreement with (7) 
days written notice.

8.   CONFIDENTIAL INFORMATION
     ------------------------

8.1  CONFIDENTIALITY  The parties agree that all confidential and proprietary 
information that is marked as specified in Section 8.2 and that is disclosed by 
either party to the other party for the purposes of this Agreement, including 
rates and terms, shall be treated as confidential unless a) such information was
previously or becomes known to the receiving party free of any obligation to 
keep it confidential, b) has been or is subsequently made public by the 
disclosing party, or c) is required to be disclosed by law. The receiving party 
shall not, except in the performance of the Services under this Agreement or 
with the express prior written consent of the other party, disclose or permit 
access to any confidential information to any other parties. The parties agree 
to advise their respective employees, agents and representatives to take such 
action as may be advisable to preserve and protect the confidentiality of such 
information.

8.2  MARKETING OF CONFIDENTIAL INFORMATION  All information the disclosing party
considers proprietary or confidential, if in writing or other tangible form, 
shall be conspicuously labeled or marked as "Proprietary" or "Confidential" and,
if oral, shall be identified as proprietary at the time of disclosure and 
promptly confirmed in writing. Either party shall have the right to correct any 
inadvertent failure to designate information as proprietary by written 
notification within ten (10) days following disclosure.


9.   RELATIONSHIP OF THE PARTIES
     ---------------------------

9.1  INDEPENDENT CONTRACTORS   Bell Atlantic and Carrier shall be independent 
contractors under this Agreement and all services under this Agreement shall be 
performed by Bell Atlantic as an independent contractor and not as an agent of 
Carrier.

                                       5

        This information is Bell Atlantic Proprietary and Confidential
<PAGE>
 
9.2  RESPONSIBILITY FOR EMPLOYEES AND AGENTS   All persons furnished by Bell 
Atlantic shall be considered solely Bell Atlantic's employees or agents, and 
Bell Atlantic shall be responsible for compliance with all laws, rules, and 
regulations relating to such persons including, but not limited to, hours of 
labor, working conditions, workers' compensation, payment of wages, benefits, 
unemployment, social security and other payroll taxes. Each party's employees 
and agents, while on premises of the other, shall comply with all rules and 
regulations, including any applicable security procedures and safeguarding of 
confidential data.

10.  GENERAL CONDITIONS
     ------------------

10.1 ASSIGNMENT  Neither party may assign or delegate its rights and obligations
under this Agreement without the prior written consent of the other party except
that Bell Atlantic may assign this Agreement to an affiliate or subsidiary
without such consent.

10.2 CHOICE OF LAW  The validity, construction and performance of this Agreement
shall be governed by the laws of ____________________.

10.3 COMPLIANCE WITH LAWS  Each party shall comply with all applicable federal,
state, county and local laws, ordinances, regulation, rules and codes in the 
performance of this Agreement. Neither party shall be liable to the other for 
termination of this Agreement or any services to be provided hereunder 
necessitated by compliance with any law, rule, regulation or court order of a 
duly authorized governmental body.

10.4 CONTINGENCY  Neither party shall be held responsible or liable to the other
for any delay or failure in performance caused by fires, strikes, embargoes, 
requirements imposed by Government regulation, civil or military authorities, 
act of God or by the public enemy, or other causes beyond the control of Carrier
or Bell Atlantic. If such a contingency occurs, the party injured by the other's
inability to perform may: a) terminate the affected services or part thereof not
already rendered; or b) suspend the affected services or part thereof for the 
duration of the delaying cause and resume performance once the delaying causes 
cease.

10.5 LICENSES  No licenses, expressed or implied, under any patents, copyrights,
trademarks or other intellectual property rights are granted by Bell Atlantic to
Carrier under this Agreement.

10.6 NOTICES  Except as otherwise specified in this Agreement, any notice 
required or permitted under this Agreement shall be in writing and shall be 
given to the other party at the address designated below by hand delivery, 
registered return-receipt requested mail, confirmed facsimile, or nationally 
recognized courier service;

                                       6

        This information is Bell Atlantic Proprietary and Confidential
<PAGE>
 
               For Bell Atlantic:  Bell Atlantic Network Services, Inc.
                                   13100 Columbia Pike, D39
                                   Silver Spring, MD 20904
                                   Attn:___________, Product Manager

               For Carrier:


The above addresses may be changed by giving thirty (30) calendar days prior 
written notice as prescribed above. Notice shall be deemed to have been given or
made on the date of delivery if received by hand, facsimile or express courier, 
and three days after delivery to the U.S. Postal Service, if mailed.

10.7   PUBLICITY  Bell Atlantic and Carrier agree to submit to each other prior
to publication all advertising, sales promotions, press releases and other
publicity matters containing or mentioning a) the services performed by Bell
Atlantic under this Agreement, b) either party's name or marks, or c) language
from which either Party's names or marks may be inferred or implied. Bell
Atlantic and Carrier further agree not to publish or use any such advertising,
sales promotion, press releases, or publicity matters unless it obtains the
other party's prior written consent.

10.8   SEVERABILITY  If any provision of this Agreement or the application of
any provision shall be held by a tribunal of competent jurisdiction to be
contrary to law or unenforceable, the remaining provisions of this Agreement
shall continue in full force and effect.

10.9   SURVIVAL  All obligations hereunder, incurred by either Bell Atlantic or 
Carrier prior to the cancellation, termination or expiration of this Agreement 
shall survive such cancellation, termination or expiration.

10.10  CAPTIONS AND SECTION HEADINGS  The captions and section headings in this 
Agreement are for convenience only and do not affect the meaning or 
interpretation of this Agreement.

10.11  DUPLICATE ORIGINALS  This Agreement may be executed separately by the 
parties in one or more counterparts. Each duplicate executed shall be deemed an 
original, and all together shall constitute one and the same document.

10.12  NONDISCLOSURE OF AGREEMENT  Each party agrees not to disclose the terms 
and conditions of this Agreement to any third party, except that it shall not be
deemed a breach of this provision for the parties to disclose the terms and 
conditions of this

                                       7

<PAGE>
 
Agreement to their respective subsidiaries and affiliated companies or to any 
duly constituted governmental body which requires disclosure.

10.13 ENTIRE AGREEMENT  The terms and conditions of this Agreement, including 
Appendices A, B, and C attached to this Agreement, constitute the entire 
Agreement between Bell Atlantic and Carrier relating to the subject matter of 
this Agreement, and supersede any and all prior or contemporaneous 
understandings, promises or representations, whether written or oral, between 
the parties relating to the subject matter of this Agreement. Any waiver, 
modification or amendment of any provision of this Agreement, or of any right or
remedy hereunder, shall not be effective unless made in writing and signed by 
both parties.

IN WITNESS WHEREOF, the parities agree that the effective date of this 
Agreement is the date first written above, and each party warrants that it has 
caused this Agreement to be signed and delivered by its duly authorized 
representative.


BELL ATLANTIC
NETWORK SERVICES, INC.


NAME:__________________________         NAME:____________________________

TITLE:_________________________         TITLE:___________________________

SIGNATURE:_____________________         SIGNATURE:_______________________

DATE:__________________________         DATE:____________________________

                                       8

        This information is Bell Atlantic Proprietary and Confidential
<PAGE>
 
                                                                      APPENDIX A

                     CARRIER SUBSCRIPTION SELECTION FORM
                     -----------------------------------

--------------------------------------------------------------------------------
 CONTRACT DA SERVICE                      SUBSCRIPTION         RATE PER
 SELECTED                                 PERIOD               CALL
--------------------------------------------------------------------------------
 DIRECTORY ASSISTANCE - STANDARD                YEAR(S)                
--------------------------------------------------------------------------------
 DIRECTORY ASSISTANCE - STANDARD WITH 
 FRONT END BRANDING*                            YEAR(S)
--------------------------------------------------------------------------------
 DIRECTORY ASSISTANCE - LIVE RESPONSE           YEAR(S)
--------------------------------------------------------------------------------
 DIRECTORY ASSISTANCE - LIVE RESPONSE
 WITH FRONT END BRANDING*                       YEAR(S)
--------------------------------------------------------------------------------
 DIRECTORY ASSISTANCE CALL COMPLETION           YEAR(S)
--------------------------------------------------------------------------------
 INTRALATA CALL COMPLETION                      YEAR(S)        SEE RATES BELOW 
--------------------------------------------------------------------------------
 BRANDED INTRALATA CALL COMPLETION*             YEAR(S)        SEE RATES BELOW
--------------------------------------------------------------------------------
 * PLUS NONRECURRING BRANDING FEE OF $ _________.

 For informational purposes, the following are the charges for Directory 
 Transport to be provided under the applicable tariffs. (Call miles are measured
 from the BA Wire Center serving Carrier's premises to the DA location):

     Call Miles                                    Rate Per Call
     ----------                                    -------------
     0 to 1 mile ............................... $ 0.0014
     * 1 to 4 miles ............................   0.0015
     * 4 to 8 miles ............................   0.0016
     * 8 to 16 miles ...........................   0.0018
     * 16 to 25 miles ..........................   0.0018
     * 25 to 50 miles ..........................   0.0019
     * 50 to 200 miles .........................   0.0020

--------------------------------------------------------------------------------
                             CALL COMPLETION RATES
--------------------------------------------------------------------------------
 TOTAL ANNUAL CALL VOLUME    AUTO       AUTO COLLECT/      LIVE CCR HANDLED
 (ALL CALLS)                PER CALL    THIRD (PER CALL)   PER CCR WORK SECOND
--------------------------------------------------------------------------------
 0 - 20,000          
--------------------------------------------------------------------------------
 20,001 - 100,000
--------------------------------------------------------------------------------
 100,001 +
--------------------------------------------------------------------------------
 Notes: 1) Trunking and switched access costs are not included in the above DA 
 ------    
           and Call Completion rates.

        2) Rates for automated IntraLATA Call Completion calls are based on call
           attempts.

*  Greater Than

_________________________________                 ______________________________
SIGNATURE (BELL ATLANTIC)                         SIGNATURE (CARRIER)

                                       9

        This information is Bell Atlantic Proprietary and Confidential
<PAGE>
 
                           BELL ATLANTIC RATE SHEET

             VIRGINIA LOCAL EXCHANGE CARRIER DIRECTORY ASSISTANCE


   DIRECTORY ASSISTANCE CALL CHARGE (PER CALL, BASED ON LENGTH OF CONTRACT)

 Type of Service                     Month-to Month        1-year      3-year
 ---------------                    ----------------      --------    --------

--------------------------------------------------------------------------------
 Standard                           $.275             $.25          $.23
--------------------------------------------------------------------------------
 Standard w/Customized Branding*     .278              .253          .233
--------------------------------------------------------------------------------
 Live Carrier Call Representative 
 (CCR)                               .285              .26           .24   
--------------------------------------------------------------------------------
 Live CCR w/Customized Branding*     .288              .263          .243
--------------------------------------------------------------------------------

 * Customized branding fee (non-recurring charge): $6,000


       CONNECT REQUEST(TM) DIRECTORY ASSISTANCE CALL COMPLETION (OPTIONAL)

--------------------------------------------------------------------------------
 Charge per Request (in addition 
 to above charges)                  $.27              $.25          $.22
--------------------------------------------------------------------------------



                          DIRECTORY TRANSPORT CHARGE

 (For each call to Directory Assistance service; call miles measured from the 
 wire center serving the customer's premises to the DA location).

     Call Miles                                 Rate Per Call
     ----------                                 -------------

     0 to 8 ................................. $ 0.0037
     * 8 to 13 ..............................   0.0062
     * 13 to 18 .............................   0.0076
     * 18 to 23 .............................   0.0089
     * 23 to 28 .............................   0.0137
     * 28 miles .............................   0.0223


 Trunk installation charges are not included.
 
*  Greater than
 
<PAGE>
 
                                                         [LOGO OF BELL ATLANTIC]

<TABLE> 
<CAPTION> 
                                                      PROPOSED PRICING TERMS

                                                INTRALATA CALL COMPLETION SERVICES

                                                COMPETITIVE LOCAL EXCHANGE CARRIERS

                                                  (Prices effective June 1, 1996)

---------------------------------------------------------------------------------------------------------------------------------- 
                            TWO YEAR TERM                       THREE YEAR TERM                        FIVE YEAR TERM
---------------------------------------------------------------------------------------------------------------------------------- 
TOTAL ANNUAL        Auto        Auto        Operator      Auto        Auto        Operator      Auto        Auto        Operator  
CALL VOLUME         Card        Collect/    Handled       Card        Collect/    Handled       Card        Collect/    Handled
(all calls)         (per call)  Third       (per OWS)     (per call)  Third       (per OWS)     (per call)  Third       (per OWS)  
                                (per call)                            (per call)                            (per call)  
---------------------------------------------------------------------------------------------------------------------------------- 
<S>                 <C>         <C>         <C>           <C>         <C>         <C>           <C>         <C>         <C> 
0 - 20,000           $0.15       $0.20       $0.0145       $0.14       $0.19       $0.0141       $0.13       $0.18       $0.0136
---------------------------------------------------------------------------------------------------------------------------------- 
20,001 - 100,000     $0.14       $0.19       $0.0141       $0.13       $0.18       $0.0136       $0.12       $0.17       $0.0131
---------------------------------------------------------------------------------------------------------------------------------- 
100,000 +            $0.13       $0.18       $0.0136       $0.12       $0.17       $0.0131       $0.11       $0.16       $0.0126
---------------------------------------------------------------------------------------------------------------------------------- 
</TABLE> 


Notes:    Trunking costs are not included in the above rates.
          The rates quoted above for automated calls are based on call attempts.
          All prices include company specific branding.



                            PROPRIETARY INFORMATION
                NOT FOR USE OR DISCLOSURE OUTSIDE BELL ATLANTIC
                        EXCEPT UNDER WRITTEN AGREEMENT.

<PAGE>

                                                                      APPENDIX B
 
                      INTRALATA CALL COMPLETION SERVICES
                      ----------------------------------
A.   Calling Card
     ------------
     Bell Atlantic Carrier Call Representative keys the calling card number and 
     call details into the system, secures validation, and releases the call 
     into the network.

B.   Collect
     -------
     Bell Atlantic Carrier Call Representative obtains the calling party's name,
     keys the call details if necessary, announces the call to the called party,
     waits for acceptance, and releases the call into the network.

C.   Billed To A Third Party
     -----------------------   
     Bell Atlantic Carrier Call Representative requests the calling party's 
     name, keys the call details if necessary, calls the third party to verify
     acceptance of billing, and releases the call once acceptance is given.

D.   Assistance - Other
     ------------------
     Bell Atlantic Carrier Call Representative will dial a called number for the
     customer for any of the following reasons:

     1. Customer encounters trouble such as wrong number, poor transmission or
     cutoff, and requests a credit or reconnection.

     2. Customer desires time and charges at the end of conversation.

     3. Customer requires dialing assistance due to a disability.

     4. Customer is unwilling to dial call.

E.   Person-to-Person
     ----------------
     Bell Atlantic Carrier Call Representative requests the person or department
     the calling party has specified, ensures appropriate party has been reached
     (person or department), and releases call.

F.   Busy-Line Verification
     ----------------------
     Bell Atlantic Carrier Call Representative determines if the number
     specified by the customer is in use, idle, or out of order.

G.   Customer-Requested Interrupt
     ----------------------------

                                      10

        This information is Bell Atlantic Proprietary and Confidential

<PAGE>
 
     At the customer's request, Bell Atlantic Carrier Call Representative will 
     interrupt conversation in progress on a line that has been verified in use.
                                                             APPENDIX B (CONT'D)

H.   Assistance (0-)
     ---------------
     Bell Atlantic Carrier Call Representative will provide customer dialing
     instructions, assistance with emergency calls, area code information, and
     business office or repair service.

I.   Validation Services
     -------------------
     Bell Atlantic will launch a query for the validation of all calling card
     calls, collect calls, billed-to-third number calls and public telephone
     checks to a Line Information Data Base (LIDB). The query costs for query of
     the Bell Atlantic LIDB are included in Bell Atlantic Carrier Call
     Representative (CCR) Work Second or Automated call rate specified in
     Appendix A. Bell Atlantic will also launch queries as stated for
     validations to other companies' LIDBs.

                                      11

        This information is Bell Atlantic Proprietary and Confidential

<PAGE>
 
                                                                      APPENDIX C


                            EXCHANGE OF INFORMATION
                            -----------------------


Technical information will be furnished via the use of a Technical Questionnaire
to be provided by Bell Atlantic.  Such information will include, but not be 
limited to, the following:


1.   Central Office Exchange Names
2.   Usage Forecasts
3.   Local Central Office Characteristics
4.   Trunking Arrangements and Trunk Group Types
5.   Emergency Reporting System and Procedures
6.   Business Office Information
7.   Repair Service Information
8.   Name and Address Request Information
9.   Tariffs and Rate Information
10.  Customer Dialing Capabilities
11.  Access to EMI Records

                                      12

        This information is Bell Atlantic Proprietary and Confidential


<PAGE>
 
                                AMENDMENT NO. 2

                                    to the

                           INTERCONNECTION AGREEMENT

                                    between

                         BELL ATLANTIC-VIRGINIA, INC.

                                      and

                        MFS INTELENET OF VIRGINIA, INC.




     This Amendment No. 2 is made this 29th day of July, 1997, by and between 
Bell Atlantic-Virginia, Inc. ("BA"), a Virginia corporation with offices at 600 
East Main Street, Richmond, Virginia 23219, and MFS Intelenet of Virginia, Inc. 
("MFS"), a Delaware corporation with offices at 33 Whitehall Street, 15th Floor,
New York, New York 10004. (BA and MFS may be referred to individually as a 
"Party" and collectively as the "Parties").

                                  WITNESSETH:
                                  ----------

     WHEREAS, BA and MFS are Parties to an Interconnection Agreement under 
Sections 251 and 252 of the Telecommunications Act of 1996 dated effective as of
July 16, 1996 (the "Agreement"); and

     WHEREAS, the Parties now desire to amend the Agreement to reflect the 
agreement between the Parties to permit MFS, pursuant to Section 251(c)(4) of 
the Communications Act of 1934, to purchase retail telecommunications services 
from BA for resale by MFS in the State of Virginia;

     NOW, THEREFORE, in consideration of the promises and mutual agreements 
herein contained, the Parties agree to amend the Agreement as follows:

     1. Remove the existing cover page through page 64 of the Agreement and
     insert the attached revised cover page through page 63 of the Agreement,
     which includes deletion of the existing Section 12.0, Resale, in its
     entirety, and insertion of a revised Section 12.0, Resale, in its entirety.

     2. Insert a new Schedule 12.3, Support Services for Resale, as attached 
     hereto.
<PAGE>
 
     3.   Delete the existing Exhibit A and insert the revised Exhibit A, as 
     attached hereto.

     4.   Except for the foregoing, the substantive terms and provisions 
     contained in the Agreement shall remain in full force and effect.
     
     This Amendment may be executed in counterparts, each of which shall be 
deemed an original and all of which together shall constitute one and the same 
instrument.

                          [Intentionally Left Blank]

<PAGE>
 
     IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be 
duly executed as of the date first set forth above.





MFS INTELENET OF                             BELL ATLANTIC-
 VIRGINIA, INC.                               VIRGINIA, INC.


By: /s/ Kevin J. Dundon                      By: ___________________
    ----------------------------

Printed: Kevin J. Dundon                     Printed:_______________   
         -----------------------


Title:  Vice President -                     Title:_________________
       -------------------------                   
       Local Network Development
<PAGE>
 
     IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be 
duly executed as of the date first set forth above.





MFS INTELENET OF                         BELL ATLANTIC-
 VIRGINIA, INC.                           VIRGINIA, INC.



By:________________________              By:  /s/ H. R. Stallard
                                             --------------------------
Printed:___________________              Printed: H. R. Stallard
                                                 ----------------------
Title:_____________________              Title:   President and CEO  
                                               ------------------------

                                       3
<PAGE>
 
          INTERCONNECTION AGREEMENT UNDER SECTIONS 251 AND 252 OF THE
                        TELECOMMUNICATIONS ACT OF 1996

                           Dated as of July 16, 1996



                                by and between


                         BELL ATLANTIC-VIRGINIA, INC.

                                      and

                        MFS INTELENET OF VIRGINIA, INC.
<PAGE>
 
                               TABLE OF CONTENTS
                               -----------------

<TABLE> 
<CAPTION> 
                                                                            Page
                                                                            ----
<S>                                                                         <C> 
1.0  DEFINITIONS                                                              2 

2.0  INTERPRETATION AND CONSTRUCTION                                         10

3.0  INTERCONNECTION ACTIVATION DATES AND IMPLEMENTATION
     SCHEDULE                                                                11

4.0  INTERCONNECTION PURSUANT TO SECTION 251(c)(2)                           11
4.1  Scope                                                                   12 
4.2  Physical Architecture                                                   13
4.3  Initial Architecture                                                    13
4.4  Interconnection in Additional LATAs                                     14 
4.5  Interconnection Points for Different Types of Traffic                   15

5.0  TRANSMISSION AND ROUTING OF TELEPHONE EXCHANGE SERVICE 
     TRAFFIC PURSUANT TO SECTION 251(c)(2)                                   15
5.1  Scope of Traffic                                                        15
5.2  Trunk Group Connections and Ordering                                    15
5.3  Additional Switching System Hierarchy and Trunking Requirements         15
5.4  Signaling                                                               16
5.5  Grades of Service                                                       16
5.6  Measurement and Billing                                                 16
5.7  Reciprocal Compensation Arrangements--Section 251(b)(5)                 17

6.0  TRANSMISSION AND ROUTING OF EXCHANGE ACCESS TRAFFIC 
     PURSUANT TO 251(c)(2)                                                   18
6.1  Scope of Traffic                                                        18
6.2  Trunk Group Architecture and Traffic Routing                            18
6.3  Meet-Point Billing Arrangements                                         19
6.4  800/888 Traffic                                                         21

7.0  TRANSPORT AND TERMINATION OF OTHER TYPES OF TRAFFIC                     22
7.1  Information Services Traffic                                            22
7.2  LSV/VCI Traffic                                                         23
7.3  Transit Service                                                         24
7.4  911 E911 Arrangements                                                   25
7.5  Ancillary Traffic Generally                                             26

8.0  NUMBER RESOURCES, RATE CENTERS, AND RATING POINTS                       26
</TABLE> 
                                       i
<PAGE>
 
<TABLE> 
<S>                                                                         <C> 
9.0  NETWORK MAINTENANCE AND MANAGEMENT OUTAGES                             26

9.3  Interference or Impairment                                             28
9.4  Repeated or Willful Noncompliance                                      28
9.5  Outage Repair Standard                                                 28
9.6  Notice of Changes -- Section 251(c)(5)                                 28

10.0 JOINT NETWORK RECONFIGURATION AND GROOMING PLAN AND
     INSTALLATION, MAINTENANCE, TESTING AND REPAIR                          28
10.1 Joint Network Reconfiguration and Grooming Plan                        28
10.2 Installation, Maintenance, Testing and Repair                          29 
10.3 Forecasting Requirements for Trunk Provisioning                        29 

11.0 UNBUNDLED ACCESS -- SECTION 251(c)(3)                                  30
11.1 Unbundled Local Loop(ULL) Transmission Types                           30 
11.2 Port Types                                                             31 
11.3 Trunk Side Local Transport                                             32
11.4 Limitations on unbundled Access                                        32  
11.5 Availability of Other Network Elements on an Unbundled Basis           33
11.6 Provisioning of Unbundled Local Loops                                  33
11.7 Maintenance of Unbundled Local Loops                                   35
11.8 Rates and Charges                                                      35  

12.0 RESALE -- SECTIONS 251(c)(4) and 251(b)(1)                             35
12.1 Availability of Retail Rates for Resale                                35
12.2 Availability of Wholesale Rates for Resale                             35
12.3 Availability of Support Services and Branding for Resale               35
12.4 Additional Terms Governing Resale and Use of BA Services               35

13.0 COLLOCATION -- SECTION 251(c)(6)                                       36

14.0 NUMBER PORTABILITY -- SECTION 251(b)(2)                                37
14.1 Scope                                                                  37
14.2 Procedures for Providing INP Through Remote Call Forwarding            38
14.3 Procedures for Providing INP Through Direct Call Inward Dial
     Trunks(Flex-DID)                                                       39
14.4 Procedures for Providing LTNP Through Full NXX Code Migration          39 
14.5 Receipt of Terminating Compensation on Traffic to INP'ed Numbers       39
14.6 Recovery of INP Costs Pursuant to FCC Order and Rulemaking             40  


15.0 DIALING PARITY -- SECTION 251(b)(3)                                    41 


16.0 ACCESS TO RIGHTS-OF-WAY -- SECTION 251(b)(4)                           41
</TABLE> 

                                      ii

<PAGE>
 
<TABLE> 
<S>                                                                      <C> 
17.0 DATABASES AND SIGNALING                                             41

18.0 COORDINATED SERVICE ARRANGEMENTS                                    42
18.1 Intercept and Referral Announcements                                42 
18.2 Coordinated Repair Calls                                            43
18.3 Customer Authorization                                              43

19.0 DIRECTORY SERVICES ARRANGEMENTS                                     43
19.1 Directory Listings and Directory Distributions                      44
19.2 Yellow Page Maintenance                                             45
19.3 Service Information Pages                                           45
19.4 Directory Assistance (DA): Call Completion                          46

20.0 COORDINATION WITH TARIFF TERMS                                      45

21.0 INSURANCE                                                           46

22.0 TERM AND TERMINATION                                                47

23.0 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES                        48 

24.0 CANCELLATION CHARGES                                                48

25.0 INDEMNIFICATION                                                     48

26.0 LIMITATION OF LIABILITY                                             49 

27.0 PERFORMANCE STANDARDS FOR SPECIFIED ACTIVITIES                      50
27.1 Certain Definitions                                                 50
27.2 Performance Standards                                               51  
27.3 Limitations                                                         51
27.4 Service Quality Standards                                           52
27.5 Records                                                             52 

28.0 COMPLIANCE WITH LAWS; REGULATORY APPROVAL                           52

29.0 MISCELLANEOUS                                                       53
29.1 Authorization                                                       53
29.2 Independent Contractor                                              53
29.3 Force Majeure                                                       53
29.4 Confidentiality                                                     54
29.5 Choice of Law                                                       55
29.6 Taxes                                                               55
29.7 Assignment                                                          57
29.8 Billing and Payment; Disputed Amounts                               57
</TABLE> 

                                      iii

<PAGE>
 
<TABLE> 
<S>                                                                        <C> 
29.9   Dispute Resolution                                                  58
29.10  Notices                                                             59
29.11  Section 252(i) Obligations                                          59
29.12  Joint Work Product                                                  60
29.13  No Third Party Beneficiaries; Disclaimer of Agency                  61
29.14  No License                                                          61
29.15  Technology Upgrades                                                 61
29.16  Survival                                                            62 
29.17  Entire Agreement                                                    62
29.18  Counterparts                                                        62 
29.19  Modification, Amendment, Supplement or Waiver                       62
29.20  Successors and Assigns                                              62
29.21  Publicity                                                           62 
</TABLE> 

                        LIST OF SCHEDULES AND EXHIBITS
                        ------------------------------


Schedules
---------

Schedule 1.0    Certain Terms As Defined in the Act, As of July 16, 1996       
Schedule 3.0    Implementation Schedule     
Schedule 4.0    Interconnection Points in LATA
Schedule 4.2    Physical Architecture Diagram
Schedule 4.3    Initial Architecture Diagram  
Schedule 4.5    Interconnection Points for Different Types of Traffic
Schedule 6.3    Rate Elements Under Meet Point Billing
Schedule 12.3   Support Services for Resale
Schedule 27.0   Performance Interval Dates for Specified Activities
Schedule 27.1   MFS Service Quality Standards 


Exhibits
--------

Exhibit A       Detailed Schedule of Itemized Charges
Exhibit B       Network Element Bona Fide Request
Exhibit C       Directory Assistance and Call Completion Services Agreement

                                      iv

<PAGE>
 
          INTERCONNECTION AGREEMENT UNDER SECTIONS 251 AND 252 OF THE
                        TELECOMMUNICATIONS ACT OF 1996

     This Interconnection Agreement under Sections 251 and 252 of the 
Telecommunications Act of 1996, is effective as of the 16th day of July, 1996 
(the "Effective Date"), by and between Bell Atlantic-Virginia, Inc. ("BA"), a 
Virginia corporation with offices at 600 East Main Street, Richmond, Virginia 
23219, and MFS Intelenet of Virginia, Inc. ("MFS"), a Delaware corporation with 
offices at 33 Whitehall Street, 15th Floor, New York, New York 10004.

     WHEREAS, the Parties want to interconnect their networks at mutually agreed
upon points of interconnection to provide Telephone Exchange Services. Switched 
Exchange Access Services, and other Telecommunication Services (all as defined 
below) to their respective customers;

     WHEREAS, the Parties are entering into this Agreement to set forth the 
respective obligations of the Parties and the terms and conditions under which 
the Parties will interconnect their networks and provide other services as 
required by the Act (as defined below) and additional services as set forth 
herein; and

     WHEREAS, Sections 251, 252, and 271 of the Telecommunications Act of 1996 
have specific requirements for interconnection, unbundling, and service resale, 
commonly referred to as the "Checklist", and the Parties intend that this 
Agreement meet those Checklist requirements.

     NOW, THEREFORE, in consideration of the mutual provisions contained herein 
and other good and valuable consideration, the receipt and sufficiency of which 
are hereby acknowledged, MFS and BA hereby agree as follows:

     This Agreement sets forth the terms, conditions and pricing under which BA 
and MFS (individually, a "Party" and collectively, the "Parties") will offer and
provide to each other network Interconnection, access to Network Elements, 
ancillary services, and wholesale Telecommunications Services available for 
resale within each LATA in which they both operate within Virginia. As such, 
this Agreement is an integrated package that reflects a balancing of interests 
critical to the Parties. It will be submitted to the Virginia State Corporation 
Commission and the Parties will specifically request that the Commission refrain
from taking any action to change, suspend or otherwise delay implementation of 
the Agreement. So long as the Agreement remains in effect, neither Party shall 
advocate before any legislative, regulatory, or other public forum that any 
term of this Agreement be modified or eliminated, unless otherwise mutually 
agreed by the Parties.

                                       1
<PAGE>
 
1.0  DEFINITIONS.

     As used in this Agreement, the following terms shall have the meanings 
specified below in this Section 1.0. For convenience of reference only, the
definitions of certain terms that are As Defined in the Act (as defined below)
are set forth on Schedule 1.0.

     1.1       "Act" means the Communications Act of 1934 (47 U.S.C. 151 et.
                                                                         --
seq.), as amended by the Telecommunications Act of 1996, and as from time to
---
time interpreted in the duly authorized rules and regulations of the FCC or the
Commission.

     1.2       "ADSL" or "Asymmetrical Digital Subscriber Line" means a
transmission technology which transmits an asymmetrical digital signal of up to
6 mbps to the Customer and to 640 kbps from the Customer.

     1.3       [Reserved]

     1.4       "Agreement" means this Interconnection Agreement under sections
251 and 252 of the Act and all Exhibits and Schedules appended hereto.

     1.5       "Ancillary Traffic," means all traffic that is destined for
ancillary services, or that may have special billing requirements, including but
not limited to the following: LSV/VCI, Directory Assistance, 911/E911, Operator
Services (call completion), 800/888 database query, LIDB, and information
services requiring special billing.

     1.6       "As Defined in the Act" means as specifically defined by the Act
and as from time to time interpreted in the duly authorized rules and
regulations of the FCC or the Commission.

     1.7       "As Described in the Act" means as described in or required by
the Act and as from time to time interpreted in the duly authorized rules and
regulations of the FCC or the Commission.

     1.8       "Automatic Number Identification" or "ANI" means a Feature Group
D signaling parameter which refers to the number transmitted through a network
identifying the billing number of the calling party.

     1.9       "Calling Party Number" or "CPN" is a Common Channel Signaling 
("CCS") parameter which refers to the number transmitted through a network 
identifying the calling party.

     1.10      "Central Office Switch" means a switch used to provide 
Telecommunications Services, including, but not limited to:

               (a)  "End Office Switch" or "End Office" which is used to 
terminate Customer station Loops for the purpose of interconnection to each 
other and to trunks; and

                                       2

<PAGE>
 
               (b)  "Tandem Switch" or "Tandem Office" which is a switching 
entity that is used to connect and switch truck circuits between and among End 
Office Switches and between and among End Office Switches and carriers' 
aggregation points, points of termination, or points of presence. An "Access 
Tandem Office" or "Access Tandem" is a Tandem Office with billing and recording 
capabilities that is used to provide Switched Exchange Access Services.

     A Central Office Switch may also be employed as a combination End 
Office/Tandem Office Switch.

     1.11      [Reserved]

     1.12      "CLASS Features" means certain CCS-based features available to 
Customers including, but not limited to; Automatic Call Back; Call Trace; Caller
Identification, and future offerings.

     1.13      "Collocation" means an arrangement whereby one Party's (the 
"Collocating Party") facilities are terminated in equipment necessary for 
Interconnection or for access to Network Elements offered by the second Party on
an unbundled basis that has been installed and maintained at the premises of a 
second Party (the "Housing Party"). For purposes of Collocation, the "premises" 
of a Housing Party is limited to a Housing Party Wire Center, other mutually 
agreed-upon locations of the Housing Party, or any other location for which 
Collocation has been ordered by the FCC or Commission. Collocation may be 
"physical" or "virtual". In "Physical Collocation," the Collocating Party 
installs and maintains its own equipment in the Housing Party's premises. In 
"Virtual Collocation," the Housing Party owns, installs, and maintains equipment
dedicated to use by the Collocating Party in the Housing Party's premises. BA 
currently provides Collocation under terms, rates, and conditions as described 
in tariffs on file or soon to be filed with the FCC and the Commission. Upon 
request by either Party, BA and MFS will address the provision of additional 
types of Collocation arrangements, including additional physical locations and 
alternative utilizations of space and facilities.

     1.14      "Commission" means the Virginia State Corporation Commission.

     1.15      "Common Channel Signaling" or "CCS" means a method of 
transmitting call set-up and network control data over a digital signaling 
network separate from the public switched telephone network facilities that 
carry the actual voice or data traffic of the call. "SS7" means the common 
channel out of band signaling protocol developed by the Consultative Committee 
for International Telephone and Telegraph ("CCITT") and the American National 
Standards Institute ("ANSI"). BA and MFS currently utilized this out-of-band 
signaling protocol. "CCSAC" or "CCSAS" means the common channel signaling access
connection or service, respectively, which connects one Party's signaling point 
of interconnection ("SPOI") to the other Party's STP for the exchange of SS7 
messages.

                                       3
               
<PAGE>
 
     1.16 "Competing Local Exchange Carrier" or "CLEC" means any Local Exchange 
Carrier other than BA, operating as such in BA's certificated territory in 
Virginia. MFS is or will shortly become a CLEC.

     1.17 "Cross Connection" means a jumper cable or similar connection provided
pursuant to Collocation at the digital signal cross connect, Main Distribution 
Frame or other suitable frame or panel between (i) the Collocating Party's 
equipment and (ii) the equipment or facilities of the Housing Party.

     1.18 "Customer" means a third-party residence or business subscriber to 
Telecommunications Services provided by either of the Parties.

     1.19 "Dialing Parity" is As Defined in the Act.

     1.20 "Digital Signal Level" means one of several transmission rates in the
time-division multiplex hierarchy.

     1.21 "Digital Signal Level 0" or "DS0" means the 64 Kbps zero-level signal 
in the time-division multiplex hierarchy.

     1.22 "Digital Signal Level 1" or "DS1" means the 1.544 Mbps first-level 
signal in the time-division multiplex hierarchy. In the time-division 
multiplexing hierarchy of the telephone network, DS1 is the initial level of 
multiplexing.

     1.23 "Digital Signal Level 3" or "DS3" means the 44.736 Mbps third-level in
the time-division multiplex hierarchy. In the time-division multiplexing 
hierarchy of the telephone network, DS3 is defined as the third level of 
multiplexing.

     1.24 "Exchange Access" is As Defined in the Act.

     1.25 "Exchange Message Record" or "EMR" means the standard used for 
exchange of telecommunications message information among Local Exchange Carriers
for billable, non-billable, sample, settlement, and study data. EMR format is
contained in BR-010-200-010 CRIS Exchange Message Record, a Bell Communications
Research, Inc. ("Bellcore") document that defines industry standards for
Exchange Message Records.

     1.26 [Reserved]

     1.27 "FCC"means the Federal Communications Commission.

     1.28 "HDSL" or "High-Bit Rate Digital Subscriber Line" means a transmission
technology which transmits up to 784 Kbps simultaneously in both directions on a
two-wire channel using a 2 Binary / 1 Quartenary ("2B1Q") line code.

                                       4

<PAGE>
 
     1.29      "Independent Telephone Company" or "ITC" means any entity other 
than BA which, with respect to its operations within Virginia, is an "Incumbent 
Local Exchange Carrier" As Described in the Act.

     1.30      "Information Service Traffic" means Local Traffic or IntraLATA 
Toll Traffic which originates on a Telephone Exchange Service line and which is 
addressed to an information service provided over a Party's information services
platform.

     1.31      "Integrated Digital Loop Carrier" means a subscriber loop carrier
system which integrates within the switch at a DS1 level that is twenty-four
(24) loop transmission paths combined into a 1.544 Mbps digital signal.

     1.32      "Integrated Services Digital Network" or "ISDN" means a switched 
network service providing end-to-end digital connectivity for the simultaneous 
transmission of voice and data. Basic Rate Interface-ISDN ("BRI-ISDN'") provides
for digital transmission of two 64 kbps bearer channels and one 16 kbps data and
signaling channel (2B-D). Primary Rate Interface-ISDN ("PRI-ISDN") provides for 
digital transmission of twenty three (23) 64 kbps bearer channels and one 16 
kbps data and signaling channel (23 B+D).

     1.33      "Interconnection" is as Described in the Act, and means the 
connection of separate pieces of equipment or transmission facilities within, 
between, or among networks. The architecture of Interconnection may include, but
is not limited to, Collocation Arrangements, entrance facilities, and Mid-Span 
Meet arrangements.

     1.34      "Interexchange Carrier" or "IXC" means a carrier that provides, 
directly or indirectly, interLATA or intraLATA Telephone Toll Services.

     1.35      "Interim Number Portability" or "INP" means the use of existing 
and available call routing, forwarding, and addressing capabilities (e.g. remote
call forwarding) to enable a Customer to receive Telephone Exchange Service 
provided by any Local Exchange Carrier operating within the exchange area with 
which the Customer's telephone number(s) is associated, without having to change
the telephone number presently assigned to the Customer and regardless of 
whether the Customer's chosen Local Exchange Carrier is the carrier that 
originally assigned the number to the Customer.

     1.36      "InterLATA" is As Defined in the Act.

     1.37      "IntraLATA Toll Traffic" means those intraLATA calls that are not
defined as Local Traffic in this Agreement.

     1.38      "Line Side" means an End Office Switch connection that provides 
transmission, switching and optional features suitable for Customer connection 
to the public switched network, including loop start supervision, ground start 
supervision, and signaling for basic rate ISDN service.

                                       5
<PAGE>
 
     1.39      "Line Status Verification" or "LSV" means an operator request for
a status check on the line of a called party. The request is made by one Party's
operator to an operator of the other Party. The verification of the status check
is provided to the requesting operator.

     1.40      "Local Access and Transport Area" or "LATA" is As Defined in the 
Act.
     
     1.41      "Local Exchange Carrier" or "LEC" is As Defined in the Act. The 
Parties to this Agreement are or will shortly become Local Exchange Carriers.

     1.42      "Local Serving Wire Center" means a Wire Center that (i) serves 
the area in which the other Party's or a third party's Wire Center, aggregation 
point, point of termination, or point of presence is located, or any Wire Center
in the LATA in which the other Party's Wire Center, aggregation point, point of 
termination or point of presence is located in which the other Party has 
established a Collocation Arrangement or is purchasing an entrance facility, and
(ii) has the necessary multiplexing capabilities for providing transport
services.

     1.43      "Local Telephone Number Portability" or "LTNP" means "number 
portability" As Defined in the Act.

     1.44      "Local Traffic," means traffic that is originated by a Customer 
of one Party on that Party's network and terminates to a Customer of the other 
Party's network, within a given local calling area, or expanded area service 
("EAS") area, as defined in BA's effective Customer tariffs. Local Traffic does 
not include traffic originated or terminated by a commercial mobile radio 
service carrier.

     1.45      "Main Distribution Frame" or "MDF" means the primary point at 
which outside plant facilities terminate within a Wire Center, for 
interconnection to other telecommunications facilities within the Wire Center.

     1.46      "MECAB" means the Multiple Exchange Carrier Access Billing 
(MECAB) document prepared by the Billing Committee of the Ordering and Billing 
Forum ("OBF"), which functions under the auspices of the Carrier Liaison 
Committee ("CLC") of the Alliance for Telecommunications Industry Solutions 
("ATIS"). The MECAB document, published by Bellcore as Special Report 
SR-BDS-000983, contains the recommended guidelines for the billing of an 
Exchange Access service provided by two or more LECs, or by one LEC in two or 
more states, within a singe LATA.

     1.47      "MECOD" means the Multiple Exchange Carrier Ordering and Design 
(MECOD) Guidelines for Access Services - Industry Support Interface, a document 
developed by the Ordering/Provisioning Committee under the auspices of OBF. The
MECOD document, published by Bellcore as Special Report SR-STS-002643,
establishes methods for processing orders for Exchange Access service which is
to be provided by two or more LECs.

     1.48      "Meet-Point Billing" or "MPB" means an arrangement whereby two or
more LECs jointly provide to a third party the transport element of a Switched 
Exchange Access Service to one

                                       6
<PAGE>
 
of the LECs' End Office Switches, with each LEC receiving an appropriate share 
of the transport element revenues as defined by their effective Exchange Access 
tariffs. "Meet-Point Billing Traffic" means traffic that is subject to an 
effective Meet-Point Billing arrangement.

     1.49      "Mid-Span Meet" means an Interconnection architecture whereby two
carriers' fiber transmission facilities meet at a mutually agreed-upon 
Interconnection point.

     1.50      "Multiple Bill/Single Tariff" or "Multiple Bill/Multiple Tariff" 
means the MPB method whereby each LEC prepares and renders its own meet point 
bill in accordance with its own Tariff(s) for the portion of the 
jointly-provided Switched Exchange Access Service which the LEC provides.

     1.51      "Network Element" is As Defined in the Act.

     1.52      "Network Element Bona Fide Request" means the process described 
on Exhibit B that prescribes the terms and conditions relating to a Party's 
request that the other Party provide a Network Element not otherwise provided by
the terms of this Agreement.

     1.53      "North American Numbering Plan" or "NANP" means the numbering 
plan used in the United States that also serves Canada, Bermuda, Puerto Rico and
certain Caribbean Islands. The NANP format is a 10-digit number that consists of
a 3-digit NPA code (commonly referred to as the area code), followed by a 
3-digit NXX code and 4-digit line number.

     1.54      "Numbering Plan Area" or "NPA" is also sometimes referred to as 
an area code. There are two general categories of NPAs, "Geographic NPAs" and
"Non-Geographic NPAs." A Geographic NPA is associated with a defined geographic
area, and all telephone numbers bearing such NPA are associated with services
provided within that geographic area. A Non-Geographic NPA, also known as a
"Service Access Code" or "SAC Code," is typically associated with a specialized
telecommunications service which may be provided across multiple geographic NPA
area; 800, 900, 700, 500 and 888 are examples of Non-Geographic NPAs.

     1.55      "NXX," "NXX Code," or "End Office Code" means the three digit 
switch entity indicator (i.e. the first three digits of a seven digit telephone 
                         - -
number).

     1.56      "Permanent Number Portability" or "PNP" means the use of a 
database or other technical solution that comports with regulations issued by 
the FCC to provided LTNP for all customers and service providers.

     1.57      "Port Element" or "Port" means a line card (or equivalent) and 
associated peripheral equipment on and End Office Switch which serves as the 
Interconnection between individual loops or individual Customer trunks and the 
switching components of an End Office Switch and the associated switching 
functionality in that End Office Switch. Each Port is typically associated with 
one (or more) telephone number(s) which serves as the Customer's network 
address.

                                       7
<PAGE>
 
     1.58 "Rate Center Area" or "Exchange Area" means the specific geographic 
point and corresponding geographic area which has been identified by a given
LEC as being associated with a particular NPA-NXX code assigned to the LEC for
its provisions of Telephone Exchange Services. The Rate Center Area is the
exclusive geographic area which the LEC has identified as the area within which 
it will provide Telephone Exchange Services bearing the particular NPA-NXX 
designation associated with the specific Rate Center Area. A "Rate Center 
Point" is a specific geographic point, defined by a V&H coordinate, located
within the Rate Center Area and used to measure distance for the purpose of
billing Customers for distance-sensitive Telephone Exchange Services and Toll 
Traffic.

     1.59 "Rate Demarcation Point" means the point of minimum penetration at the
Customer's premises or other point, as defined in a Party's Tariffs, where 
network access recurring charges and LEC responsibility ends and beyond which 
Customer responsibility begins.

     1.60 "Rating Point" or "Routing Point" means a specific geographic point
identified by a specific V&H coordinate. The Rating Point is used to route in
bound traffic to specified NPA-NXXs and to calculate mileage measurements for
distance-sensitive transport charges of switched access services. Pursuant to
Bellcore Practice BR-795-100-100, the Rating Point may be an End Office
location, or a "LEC Consortium Point of Interconnection." Pursuant to that same
Bellcore Practice, examples of the latter shall be designated by a common
language location identifier (CLLI) code with (x)KD in positions 9, 10, 11,
where (x) may be any alphanumeric A-Z or 0-9. The Rating Point/Routing Point
must be located within the LATA in which the corresponding NPA-NXX is located.
However, the Rating Point Routing Point associated with each NPA-NXX need not be
the same as the corresponding Rate Center Point, nor must it be located within
the corresponding Rate Center Area, nor must there be a unique and separate
Rating Point Corresponding to each unique and separate Rate Center.

     1.61 "Reciprocal Compensation" is As Described in the Act, and refers to
the payment arrangements that recover costs incurred for the transport and 
termination of Local Traffic originating on one Party's network and terminating
on the other Party's network.

     1.62 "Service Control Point" or "SCP" means the node in the common channel
signaling network to which informational requests for service handling, such as 
routing, are directed and processed.  The SCP is a real time database system 
that, based on a query from a service switching point and via a Signaling
Transfer Point, performs subscriber or application-specific service logic,and
then sends instructions back to the SSP on how to continue call processing.

     1.63 "Signaling Transfer Point" or "STP" means a specialized switch that
provides SS7 network access and performs SS7 message routing and screening.

     1.64 "Switched Access Detail Usage Data" means a category 1101XX record as 
defined in the EMR Bellcore Practice BR-010-200-010.

     1.65 "Switched Access Summary Usage Data" means a category 1150XX record as
defined in the EMR Bellcore Practice BR-010-200-010.

                                      8
 
 

 


 





 


<PAGE>
 
     1.66 "Switched Exchange Access Service" means the offering of transmission
and switching services for the purpose of the origination or termination of Toll
Traffic.  Switched Exchange Access Service include but may not be limited to:
Feature Group A, Feature Group B, Feature Group D, 700 access, 800 access, 888 
access and 900 access.

     1.67 "Synchronous Optical Network" or SONET" means an optical interface 
standard that allows inter-networking of transmission products from multiple
vendors.  The base rate is 51.84 Mbps (OC-1/STS-1) and higher rates are direct
multiples of the base rate, up to 13.22 Gpbs.

     1.68 "Tariff" means any applicable federal or state Tariff of a Party, or
standard agreement or other document that sets forth the generally available 
terms and conditions under which a Party offers a particular service, facility, 
or arrangement.

     1.69 "Technically Feasible Point" is As Described in the Act.

     1.70 "Telecommunications" is As Defined in the Act.

     1.71 "Telecommunications Act" means the Telecommunications Act of 1996 and
any rules regulations promulgated thereunder.

     1.72 "Telecommunications Carrier" is As Defined in the Act.

     1.73 "Telecommunications Service" is As Defined in the Act.

     1.74 "Telephone Exchange Service," sometimes also referred to as "Exchange
Service," is As Defined in the Act.  Telephone Exchange Service generally 
provides the Customer with a telephonic connection to, and a unique telephone 
number address on, the public switched telecommunications network, and enables 
such Customer to place or receive calls to all other stations on the public 
switched telecommunications network.

     1.75 "Toll Traffic" means traffic that is originated by a Customer of one
Party on that Party's network and terminates to a Customer of the other Party on
that Party's network and is not Local Traffic or Ancillary Traffic.  Toll 
Traffic may be either "IntraLATA Toll Traffic" or "InterLATA Toll Traffic," 
depending on whether the originating and terminating points are within the same 
LATA.

     1.76 "Transit Traffic" means any traffic that originates from or terminates
at MFS's network, "transits" BA's network substantially unchanged, and
terminates to or originates from a third carrier's network, as the case may be.
"Transit Traffic Service" provides MFS with the ability to use its connection to
a BA Access Tandem Switch for the delivery of calls which originate or
terminate with MFS and terminate to or originate from a carrier other than
BA, such as another CLEC, a LEC other than BA, or a wireless carrier. In these
cases, neither the originating nor terminating Customer is a Customer of BA.
This service is provided through BA's Access Tandem

                                       9



<PAGE>
 
Switches. "Transit Traffic" and "Transit Traffic Service" do not include or 
apply to traffic that is subject to an effective Meet-Point Billing arrangement.

     1.77      "Trunk Side" means a Central Office Switch connection that is 
capable of, and has been programmed to treat the circuit as, connecting to 
another switching entity (e.g. another carrier's network). Truck Side 
                          - -
connections offer those transmission and signaling features appropriate for the 
connection of switching entities.

     1.78      "Unbundled Local Loop Element" or "ULL" means a transmission path
that extends from a Main Distribution Frame, DSX-panel, or functionally
comparable piece of equipment in the Customer's serving End office to the Rate
Demarcation Point (or network interface device (NID) if installed) in or at a
Customer's premises. The actual loop transmission facilities used to provide an
ULL may utilize any of several technologies.

     1.79      "Verification with Call Interruption" or "VCI" means a service 
that may be requested and provided when Line Status Verification has determined 
that a line is busy due to an ongoing call. VCI is an operator interruption of 
that ongoing call to inform the called party that a calling party is seeking to 
complete his or her call to the called party.

     1.80      "Voice Grade" means either an analog signal of 300 to 3000 Hz or 
a digital signal of 56/64 kilobits per second. When referring to digital voice 
grade service (a 56/64 kbps channel), the terms "DS-O" or "sub-DS-1" may also be
used.

     1.81      "Wire Center" means a building or portion thereof in which a 
Party has the exclusive right of occupancy and which serves as a Routing Point 
for Switched Exchange Access Service.

2.0  INTERPRETATION AND CONSTRUCTION.

     2.1       All references to Sections, Exhibits and Schedules shall be 
deemed to be references to Sections of, and  Exhibits and Schedules to, this 
Agreement unless the context shall otherwise require. The headings used in this 
Agreement are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning of this Agreement. Unless the context 
shall otherwise require, any reference to any agreement, other instrument 
(including BA or other third party offerings, guides or practices), statue, 
regulation, rule or tariff is to such agreement, instrument, statute, 
regulation, or rule or tariff as amended and supplemented from time to time 
(and, in the case of a statute, regulation, rule or tariff, to any successor 
provision).

     2.2       Subject to the terms set forth in Section 20, each Party hereby 
incorporates by reference those provisions of its tariffs that govern the 
provision of any of the services or facilities provided hereunder. If any 
provision of this Agreement and an applicable tariff cannot be reasonably 
construed or interpreted to avoid conflict, the Parties agree to negotiate in 
good faith to reconcile and resolve such conflict. If any provision contained in
this main body of the Agreement and any Exhibit hereto cannot be reasonably
construed or interpreted to avoid conflict, the

                                      10

<PAGE>
 
provision contained in this main body of the Agreement shall prevail. The fact 
that a condition, right, obligation, or other term appears in this Agreement but
not in any such tariff shall not be interpreted as, or be deemed grounds for 
finding, a conflict for purposes of this Section 2.

3.0  INTERCONNECTION ACTIVATION DATES AND IMPLEMENTATION SCHEDULE.

     3.1       Subject to the terms and conditions of this Agreement, each Party
shall exercise its best efforts to adhere to the Interconnection Activation
Dates and Network Implementation Schedule set forth in Schedule 3.0, and to
provide fully operational service predominantly over its own Telephone Exchange
Service facilities to business and residential Customers upon the achievement of
the milestones in said Schedule for each listed LATA in Virginia. For purposes
of this Agreement, MFS's service in Virginia shall be considered provided
"predominantly over its own Telephone Exchange Service facilities" if MFS uses
its own Central Office Switch(es) (as opposed to resale of another carrier's
Telephone Exchange Service or Ports) to serve the majority of its Telephone
Exchange Service Customers, its own interoffice transport facilities for the
majority of its interoffice transport needs, and its own local loops (or
functional equivalent), in addition to resale of other carriers' Telephone
Exchange Service or ULLs, to serve its Telephone Exchange Service Customers.

     3.2       Schedule 3.0 may be revised and supplemented from time to time 
upon the mutual agreement of the Parties to reflect the intention of the Parties
to interconnect in additional LATAs pursuant to subsection 4.4 by attaching one 
or more supplementary schedules to Schedule 3.0. The Parties stipulate and agree
that the performance of the terms of this Agreement will satisfy BA's obligation
to provide Interconnection under Section 251 of the Act, and the requirements 
of the Competitive Checklist, under Section 271 of the Act. MFS represents that 
it is, or intends to become, a provider of Telephone Exchange Service to 
residential and business subscribers offered exclusively over its own Telephone 
Exchange Service facilities or predominantly over its own Telephone Exchange 
Service facilities in combination with the resale of the Telecommunications 
Services of other carriers.

4.0  INTERCONNECTION PURSUANT TO SECTION 251(c)(2)

     The types of Traffic to be exchanged under this Agreement shall be Local 
Traffic, IntraLATA Toll (and InterLATA Toll, as applicable) Traffic, Transit 
Traffic, Meeting Point Billing Traffic, and Ancillary Traffic. Subject to the 
terms and conditions of this Agreement, Interconnection of the Parties 
facilities and equipment for the transmission and routing of Local Traffic and 
Toll Traffic pursuant to this Section 4 shall be established on or before the 
corresponding "Interconnection Activation Date" shown for each such LATA within 
Virginia on Schedule 3.0. Both Schedule 3.0 and Schedule 4.0 may be revised and 
supplemented from time to time upon the mutual agreement of the Parties to 
reflect Interconnection in additional LATAs in Virginia pursuant to subsection 
4.4 by attaching one or more supplementary addenda to such Schedules.

                                      11
<PAGE>
 
     4.1  SCOPE

          4.1.1   Section 4 describes the architecture for Interconnection of 
the Parties' facilities and equipment over which the Parties shall configure the
following separate and distinct truck groups:

          Traffic Exchange Trunks for the transmission and routing of
          ----------------------- 
          terminating Local Traffic and IntraLATA Toll Traffic between their
          respective Telephone Exchange Service customers pursuant to Section
          251 (c)(2) of the Act, in accordance with Section 5 below;

          Access Toll Connecting Trunks for the transmission and routing of
          -----------------------------
          Exchange Access traffic between MFS Telephone Exchange Service
          customers and purchasers of BA's Switched Exchange Access Service via
          a BA Access Tandem, pursuant to Section 251 (c)(2) of the Act, in
          accordance with Section 6 below;

          Information Services Trunks for the transmission and routing of
          ---------------------------
          terminating Information Services Traffic in accordance with Section 7
          below;

          LSV/VCI Trunks for the transmission and routing of termination LSV/VCI
          --------------
          traffic, in accordance with Section 7 below;

          911/E911 Trunks for the transmission and routing of terminating
          ---------------
          E911/911 traffic, in accordance with Section 7 below;

          Directory Assistance Trunks for the transmission and routing of
          ---------------------------
          terminating directory assistance traffic, in accordance with
          subsection 19.4 below; and

          Operator service (call completion) Trunks for the transmission and
          -----------------------------------------
          routing of terminating call completion traffic, in accordance with
          subsection 19.4 below.

          4.1.2   The SONET interconnection arrangement described in subsection
4.2 shall be (i) used only for the termination of Local Traffic and IntraLATA
Toll Traffic until such time as the Parties have agreed to appropriate
compensation arrangements relating to the exchange of other types of traffic
over such system, and (ii) subject to the Parties' reaching agreement on an
appropriate compensation arrangement in the event either Party will be providing
or utilizing (in terms of minutes of use) significantly more than one-half of
the SONET facility. Unless otherwise agreed to by the Parties, the SONET system
described herein shall not be used to exchange InterLATA Toll Traffic. Until the
SONET system has been established by the Parties in accordance with subsection
4.3 and this subsection 4.1.2, the Parties agree to adopt an initial
interconnection architection for the exchange of Local Traffic and Toll
(IntraLATA and InterLATA) Traffic.

                                      12
     
<PAGE>
 
          4.1.3     To the extent required by Section 251 of the Act, the 
Parties represent that the arrangements provided in subsections 4.2 and 4.3 of 
this Agreement provide for Interconnection to each other's networks at any 
technically feasible point. For the purposes of this Agreement, the Parties 
agree that Interconnection for the transport and termination of traffic may take
place, in the case of BA, at a terminating End Office, an Access Tandem, a Local
Serving Wire Center and/or other points as specified herein, and, in the case of
MFS, at a node or Central Office and/or other points as specified herein 
(collectively, the "Interconnection Points" or "IPs").

          4.1.4     The Parties shall establish physical interconnection points 
at the available IPs at the locations designated in Schedule 4.0. The mutually 
agreed-upon IPs on the MFS network at which MFS will provide transport and 
termination of traffic shall be designated as the MFS Interconnection Points 
("M-IPs"); the mutually agreed-upon IPs on the BA network shall be designated as
the BA Interconnection Points ("BA-IPs"), provided that, for the purpose of
charging for the transport of traffic from the BA-IP to the M-IP in any given
LATA, the M-IP shall be no further than an entrance facility away from the BA-IP
in such LATA. The Parties may by mutual agreement establish additional
interconnection points at any technically feasible points consistent with the
Act.

     4.2  PHYSICAL ARCHITECTURE. In each LATA identified on Schedule 4.0, MFS
and Bell Atlantic shall jointly engineer and operate a diverse Synchronous 
Optical Network ("SONET") transmission system by which they shall interconnect 
their networks pursuant to the joint network reconfiguration and grooming plan 
specified in subsection 10.1 ("Joint Grooming Plan"), and according to the 
following specifications:

          4.2.1     The SONET system shall be used to deliver appropriate 
traffic to a mutually agreed-upon Interconnection Point on each Party's network.

          4.2.2     The SONET transmission system in each LATA shall be 
configured substantially as illustrated in Schedule 4.2 and pursuant to the 
Joint Grooming Plan, or as otherwise mutually agreed. The Parties shall agree
upon which Party or Parties shall be responsible for procuring, installing, and
maintaining the agreed-upon Optical Line Terminating Multiplexor ("OLTM")
equipment, fiber optic facilities and other equipment pursuant to the Joint
Grooming Plan, as illustrated in that Schedule.

          4.2.3     The physical interface of MFS's and BA's facilities 
necessary to effect SONET transmission shall be at the optical level via a 
Mid-Span Meet or other comparable means, or as otherwise mutually agreed.

     4.3  INITIAL ARCHITECTURE

          4.3.1     The Parties agree to provide initial interconnection 
arrangements utilizing electrical handoff, substantially as illustrated in 
Schedule 4.3, for a period of no more than eighteen (18) months after the later 
of the Effective Date and the LATA Start Date set forth for the LATA in Schedule
3.0; provided, however, that such initial interconnection arrangements

                                      13
<PAGE>
 
shall continue until (i) facilities suitable for the SONET arrangements 
described in subsection 4.2 are established by each of the Parties in its own 
sole discretion in the LATA at the mutually agreed-upon SONET meet points and 
made available, and (ii) the Parties have agreed upon fully compatible OLTM 
equipment for use with such facilities.

          4.3.2  The Parties agree to utilize the M-IP and BA-IP in each LATA as
designated in Schedule 4.0 as the points from which each Party will provide the
transport and termination of traffic.

          4.3.3  MFS shall provide its own facilities for the delivery of
traffic to a collocation arrangement established at the BA-IP pursuant to
Section 13. Bell Atlantic shall provide transport and termination of the traffic
beyond the BA-IP.

          4.3.4  BA shall purchase an MFS entrance facility (and any necessary 
multiplexing) from the BA-IP to the M-IP for the delivery of traffic to the 
M-IP. Alternatively, BA may choose to provide its own facilities to a 
collocation arrangement established at the M-IP pursuant to Section 13. MFS 
shall provide transport and termination of the traffic beyond the M-IP.

          4.3.5  Under this initial architecture described in this subsection
4.3, either Party may utilize the Traffic Exchange Trunks for the termination of
its InterLATA Toll Traffic in accordance with the terms contained in Section 5
below and pursuant to the other Party's Switched Exchange Access Service
tariffs. The other Party's Switched Exchange Access Service rates shall apply to
such Traffic. Such InterLATA Toll Traffic may not be routed over the trunk
groups under the SONET architecture described in subsection 4.2, however, unless
specifically agreed to by the Parties.

     4.4  INTERCONNECTION IN ADDITIONAL LATAs

          4.4.1  If MFS determines to offer Telephone Exchange Services in any
LATA not listed in Schedule 3.0 in which BA also offers Telephone Exchange
Services, MFS shall provide written notice to BA of the need establish
Interconnection in such LATA pursuant to this Agreement.

          4.4.2  The notice provided in subsection 4.4.1 shall include (i) the
initial Routing Point MFS has designated in the new LATA; (ii) MFS's requested
Interconnection Activation Date (and related milestone dates in accordance with
the format in Schedule 3.0); and (iii) a non-binding forecast of MFS's trunking
requirements.

          4.4.3  Unless otherwise agreed to by the Parties, the Parties shall
designate the Wire Center MFS has identified as its initial Routing Point in the
LATA as the M-IP in that LATA and shall designate a mutually agreed BA Local
Serving Wire Center that houses an Access Tandem Office within the LATA nearest
to the M-IP (as measured in airline miles utilizing the V&H coordinates method)
as the BA-IP in that LATA, provided that, for the

                                      14

<PAGE>
 
purpose of charging for the transport of traffic from the BA-IP to the M-IP, 
the M-IP shall be no further than an entrance facility away from the BA-IP.

          4.4.4  The Parties shall agree upon an addendum to Schedule 3.0 to
reflect the schedule applicable to each new LATA requested by MFS; provided,
however, that unless agreed by the Parties, the Interconnection Activation Date
in a new LATA shall not be earlier than forty-five (45) days after receipt by BA
of all complete and accurate trunk orders and routing information. Within ten
(10) business days of BA's receipt of MFS's notice, BA and MFS shall confirm the
BA-IP, the M-IP and the Interconnection Activation Date for the new LATA by
attaching an addendum to Schedule 3.0.

     4.5  INTERCONNECTION POINTS FOR DIFFERENT TYPES OF TRAFFIC. Each Party
shall make available Interconnection Points and facilities for routing of
traffic from those Interconnection Points as designated in Schedule 4.5. Any
additional traffic that is not covered in Schedule 4.5 shall be subject to
separate negotiations between the Parties, except that (i) either Party may
deliver traffic of any type or character to the other Party for termination as
long as the delivering Party pays the receiving Party's then current Switched
Exchange Access rates for such traffic, and (ii) upon a bona fide request from
                                                        ---- ----
either Party, the Parties will exercise all reasonable efforts to conclude an
agreement covering the exchange of such traffic.

5.0  TRANSMISSION AND ROUTING OF TELEPHONE EXCHANGE SERVICE TRAFFIC PURSUANT TO 
SECTION 251(C)(2)

     5.1  SCOPE OF TRAFFIC. Section 5 prescribes parameters for trunk groups
(the "Traffic Exchange Trunks") to be effected over the Interconnections
specified in Section 4.0 for the transmission and routing of Local Traffic and
IntraLATA Toll Traffic between the Parties' respective Telephone Exchange
Service Customers.

     5.2  TRUNK GROUP CONNECTIONS AND ORDERING

          5.2.1  Trunk group connections will be made at a DS-1 level or higher
for exchange of Local and Toll Traffic. Higher speed connections shall be made,
when and where available, in accordance with the Joint Grooming Plan prescribed
in Section 10. Ancillary Traffic trunk groups may be made below a DS-1 level, as
may be agreed to by the Parties.

          5.2.2  Each Party will identify its Carrier Identification Code, a
three or four digit numeric obtained from Bellcore, to the other Party when
ordering a trunk group.

     5.3  ADDITIONAL SWITCHING SYSTEM HIERARCHY AND TRUNKING REQUIREMENTS

          5.3.1  For purposes of routing MFS traffic to BA, the subtending
arrangements between BA Access Tandem Switches and BA End Office Switches shall
be the same as the Access Tandem/End Office subtending arrangements BA maintains
for the routing of its own' or other carriers' traffic. For purposes of routing
BA traffic to MFS, the subtending arrangements.

                                      15

<PAGE>
 
between MFS Access Tandem Switches (or functional equivalent) and MFS End Office
Switches (or functional equivalent) shall be the same as the Access Tandem/End
Office subtending arrangements (or functional equivalent) which MFS maintains
for the routing of its own or other carriers' traffic.

     5.4  SIGNALING

     Each Party will provide the other Party with access to its databases and
associated signaling necessary for the routing and completion of the other
Party's traffic in accordance with the provisions contained in Section 17 below.

     5.5  GRADES OF SERVICE

     The Parties shall initially engineer and shall jointly monitor and enhance
all trunk groups consistent with the Joint Grooming Plan as set forth in Section
10.

     5.6  MEASUREMENT AND BILLING

       5.6.1  For billing purposes, each Party shall pass Calling Party Number
("CPN") information on each call carried over the Traffic Exchange Trunks,
wherever technically feasible. At such time as either Party has the ability, as
the Party receiving the traffic, to use such CPN information to classify on an
automated basis traffic delivered by the other Party as either Local Traffic or
Toll Traffic, such receiving Party shall bill the originating Party the Local
Traffic termination rates, Intrastate Exchange Access rates, or Interstate
Exchange Access rates applicable to each minute of Traffic for which CPN is
passed, as provided in Exhibit A and applicable Tariffs.

       5.6.2  If, under the circumstances set forth in subsection 5.6.1, it is
not technically feasible for the originating Party to pass CPN on up to ten
percent (10%) of calls, the receiving Party shall bill the originating Party the
Local Traffic termination rates, Intrastate Exchange Access rates, or Interstate
Exchange Access rates applicable to each minute of traffic, as provided in
Exhibit A and applicable Tariffs, for which CPN is passed. For the remaining up
to ten percent (10%) of calls without CPN information, the receiving Party shall
bill the originating Party for such traffic as Local Traffic termination rates.
Intrastate Exchange Access rates, or Interstate Exchange Access rates applicable
to each minute of traffic, as provided in Exhibit A and applicable Tariffs, in
direct proportion to the minutes of use of calls passed with CPN information.

       5.6.3  If it is not technically feasible for the originating Party to
pass CPN on more than ten percent (10%) of calls, or if the receiving Party
lacks the ability to use CPN information to classify on an automated basis
traffic delivered by the other Party as either Local Traffic or Toll Traffic,
and the originating Party chooses to combine Local and Toll Traffic on the same
trunk group, it will supply an auditable Percent Local Use ("PLU") report
quarterly, based on the previous three months' traffic, and applicable to the
following three months. If the originating Party also chooses to combine
Interstate and Intrastate Toll Traffic on the same trunk

                                      16

<PAGE>
 
group, it will supply an auditable Percent Interstate Use ("PIU") report 
quarterly, based on the previous three months' terminating traffic, and 
applicable to the following three months. In lieu of the foregoing PLU and/or 
PIU reports, the Parties may agree to provide and accept reasonable surrogate 
measures for an agreed-upon interim period.

          5.6.4  Measurement of billing minutes for purposes of determining 
terminating compensation shall be in conversation seconds.

     5.7  RECIPROCAL COMPENSATION ARRANGEMENTS -- SECTION 251(B)(5).

     Reciprocal Compensation arrangements address the transport and termination 
of Local Traffic.  BA's delivery of Traffic to MFS that originated with a third 
carrier is addressed in subsection 7.3.  Where MFS delivers Traffic (other than
Local Traffic) to BA, except as may be set forth herein or subsequently agreed
to by the Parties, MFS shall pay BA the same amount that such carrier would have
paid BA for termination of that Traffic at the location the Traffic is delivered
to BA by MFS. Compensation for the transport and termination of traffic not
specifically addressed in this subsection 5.7 shall be as provided elsewhere in
this Agreement, or if not so provided, as required by the Tariffs of the Party
transporting and/or terminating the traffic.

          5.7.1  Nothing in this Agreement shall be construed to limit either 
Party's ability to designate the areas within which that Party's Customers may 
make calls which that Party rates as "local" in its Customer Tariffs.

          5.7.2  The Parties shall compensate each other for transport and 
termination of Local Traffic in an equal and symmetrical manner at the rates 
provided in the Detailed Schedule of Itemized Charges (Exhibit A hereto) or, if 
not set forth therein, in the applicable Tariff(s) of the terminating Party, as 
the case may be. These rates are to be applied at the M-IP for traffic delivered
by BA, and at the BA-IP for traffic delivered by MFS. No additional charges,
including port or transport charges, shall apply for the termination of Local
Traffic delivered to the BA-IP or the M-IP, except as set forth in Exhibit A.  
When Local Traffic is terminated over the same trunks as Toll Traffic, any port
or transport or other applicable access charges related to the Toll Traffic
shall be prorated to be applied only to the Toll Traffic.

          5.7.3  The Reciprocal Compensation arrangements set forth in this 
Agreement are not applicable to Switched Exchange Access Service. All Switched
Exchange Access Service and all Toll Traffic shall continue to be governed by
the terms and conditions of the applicable federal and state Tariffs.

          5.7.4  Compensation for transport and termination of all Traffic which
has been subject to performance of INP by one Party for the other Party pursuant
to Section 14 shall be as specified in subsection 14.5.

          5.7.5  The designation of Traffic as Local or Toll for purposes of 
compensation shall be based on the actual originating and terminating points of 
the complete end-to-end call, regardless of the carrier(s) involved in carrying 
any segment of the call.

                                      17
 
<PAGE>
 
          5.7.6  Each Party reserves the right to measure and audit all Traffic 
to ensure that proper rates are being applied appropriately. Each Party agrees 
to provide the necessary Traffic data or permit the other Party's recording 
equipment to be installed for sampling purposes in conjunction with any such 
audit.

          5.7.7  The Parties will engage in settlements of alternate-billed 
calls (e.g. collect, calling card, and third-party billed calls) originated or 
       - -
authorized by their respective Customers in Virginia in accordance with the 
terms of an appropriate billing services agreement for intraLATA intrastate 
alternate-billed calls or such other arrangement as may be agreed to by the 
Parties.

6.0  TRANSMISSION AND ROUTING OF EXCHANGE ACCESS TRAFFIC PURSUANT TO 251(C)(2).

     6.1  SCOPE OF TRAFFIC

     Section 6 prescribes parameters for certain trunks to be established over 
the Interconnections specified in Section 4 for the transmission and routing of 
traffic between MFS Telephone Exchange Service Customers and Interexchange 
Carriers ("Access Toll Connecting Trunks"). This includes casually-dialed (10XXX
and 101XXXX) traffic.

     6.2  TRUNK GROUP ARCHITECTURE AND TRAFFIC ROUTING

        6.2.1  MFS shall establish Access Toll Connecting Trunks by which it
will provide tandem-transported Switched Exchange Access Services to
Interexchange Carriers to enable such Interexchange Carriers to originate and
terminate traffic to and from MFS's Customers.

        6.2.2  Access Toll Connecting Trunks shall be used solely for the 
transmission and routing of Exchange Access to allow MFS's Customers to connect 
to or be connected to the interexchange trunks of any Interexchange Carrier
which is connected to an BA Access Tandem.

        6.2.3  The Access Toll Connecting Trunks shall be two-way trunks 
connecting an End Office Switch MFS utilizes to provide Telephone Exchange 
Service and Switched Exchange Access in a given LATA to an Access Tandem BA 
utilizes to provide Exchange Access in such LATA.

        6.2.4  The Parties shall jointly determine which BA Access Tandem(s) 
will be subtended by each MFS End Office Switch.  MFS's End Office switch shall
subtend the BA Access Tandem that would have served the same rate center on BA's
network.  Alternative configurations will be discussed as part of the Joint 
Plan.

     6.3  MEET-POINT BILLING ARRANGEMENTS

                                      18

<PAGE>
 
          6.3.1  MFS and BA will establish Meet-Point Billing arrangements in 
order to provide a common transport option to Switched Access Services Customers
via an Access Tandem Switch in accordance with the Meet-Point Billing guidelines
contained in the OBF's MECAB and MECOD documents, except as modified herein, and
BA's Virginia Tariff Number 217, Section 2.4.8.  The arrangements described in 
this Section 6 are intended to be used to provide Switched Exchange Access 
Service that originates and/or terminates on a Telephone Exchange Service that 
is provided by either Party, where the transport component of the Switched 
Exchange Access Service is routed through a Tandem Switch that is provided by 
BA.

          6.3.2  In each LATA, the Parties shall establish MPB arrangements 
between the applicable Rating Point/BA Local Serving Wire Center combinations.

          6.3.3  Interconnection for the MPB arrangement shall occur at the 
BA-IP in the LATA, unless otherwise agreed to by the Parties.

          6.3.4  MFS and BA will use reasonable efforts, individually and 
collectively, to maintain provisions in their respective state access tariffs, 
and or provisions within the National Exchange Carrier Association ("NECA") 
tariff No. 4, or any successor Tariff sufficient to reflect the MPB arrangements
established pursuant to this Agreement.

          6.3.5  Each Party shall implement the "Multiple Bill/Single Tariff" or
"Multiple Bill/Multiple Tariff" option, as appropriate, in order to bill an IXC 
for the portion of the jointly provided telecommunications service provided by 
that Party.

          6.3.6  The rate elements to be billed by each Party are as set forth 
in Schedule 6.3.  The actual rate values for each Party's affected access 
service rate element shall be the rates contained in that Party's own effective 
federal and state access tariffs, or other document that contains the terms 
under which that Party's access services are offered.  The MPB billing 
percentages for each Rating Point/BA Local Serving Wire Center combination shall
be calculated in accordance with the formula set forth in subsection 6.3.16 
below.

          6.3.7  Each Party shall provide the other Party with the billing name,
billing address, and Carrier Identification Code ("CIC") of the IXC, and 
Identification of the IXC's Local Serving Wire Center in order to comply with 
the MPB notification process as outlined in the MECAB document via facsimile or 
such other media as the Parties may agree to.

          6.3.8  BA shall provide MFS with the Switched Access Detail Usage Data
(category 1101XX records) on magnetic tape or via such other media as the 
Parties may agree to, no later than ten (10) business days after the date the 
usage occurred.

          6.3.9  MFS shall provide BA with the Switched Access Summary Usage 
Data (category 1150XX records) on magnetic tape or via such other media as the 
Parties may agree, no later than ten (10) business days after the date of its 
rendering of the bill to the relevant IXC, which bill shall be rendered no less 
frequently than monthly.

                                      19

<PAGE>
 
          6.3.10  Each Party shall coordinate and exchange the billing account 
reference ("BAR") and billing account cross reference ("BACR") numbers or 
Operating Company Name ("OCN"), as appropriate, for the MPB Service. Each Party 
shall notify the other if the level of billing or other BAR/BACR elements 
change, resulting in a new BAR/BACR number, or if the OCN changes.

          6.3.11. Errors may be discovered by MFS, the IXC or BA. Each Party 
agrees to provide the other Party with notification of any errors it discovers 
within two (2) business days of the date of such discovery. In the event of a 
loss of data, both Parties shall cooperate to reconstruct the lost data and, if 
such reconstruction is not possible, shall accept a reasonable estimate of the 
lost data based upon prior usage data.

          6.3.12  Either Party may request a review or audit of the various
components of access recording up to a maximum of two (2) audits per calender
year. All costs associated with each review and audit shall be borne by the
requesting Party. Such review or audit shall be conducted subject to
confidentiality protection and during regular business hours. A Party may
conduct additional audits, at its expense, upon the other Party's consent, which
consent shall not be unreasonably withheld.

          6.3.13. Nothing contained in this subsection 6.3, shall create any 
liability for damages, losses, claims, costs, injuries, expenses or other 
liabilities whatsoever on the part of either Party (other than as may be set 
forth in MECAB or in any applicable Tariff).

          6.3.14. The Parties shall not charge one another for the services 
rendered or information provided pursuant to this subsection 6.3.

          6.3.15  MPB will apply for all traffic bearing the 500, 900, 800/888 
(to the extent provided by an IXC) or any other non-geographic NPA which may be 
likewise designated for such traffic in the future.

          6.3.16  In the event MFS determines to offer Telephone Exchange 
Services in another LATA in which BA operates an Access Tandem Switch, BA shall 
permit and enable MFS to subtend the BA Access Tandem Switch(es) designated for 
the BA End Offices in the area where the MFS Rating Point(s) associated with 
the NPA-NXX(s) to from which the Switched Exchange Access Services are homed. 
The MPB billing percentages for each new Rating Point/BA Local Serving Wire 
Center combination shall be calculated according to the following formula:

                      a/(a + b) = MFS Billing Percentage
                                      and
                      b/(a + b) = BA Billing Percentage

                  where:
                  -----

                  a = the airline mileage between the Rating Point and the 
             actual point of interconnection for the MPB arrangement: and

                                      20
<PAGE>
 
               b = the airline mileage between the BA Local Serving Wire Center 
          and the actual point of interconnection for the MPB arrangement.

MFS shall inform BA of the LATA in which it intends to offer Telephone Exchange 
Services and its calculation of the billing percentages which should apply for 
such arrangement, as part of the notice required by subsection 4.4.1 above. 
Within ten (10) business days of MFS's delivery of notice to BA, BA and MFS 
shall confirm the new Rating Point/BA Local Serving Wire Center combination and 
billing percentages. Nothing in this subsection 6.3.16 shall be construed to 
limit MFS"S ability to select to interconnect with BA in additional LATAs by
means of Interconnection at a Local Serving Wire Center, to the extent that such
Interconnection is permitted under this Agreement.

     6.4  800/888 TRAFFIC

     The following terms shall apply when either Party delivers 800/888 calls to
the other Party for completion.

          6.4.1.  When MFS delivers untranslated 800/888 calls to BA for
completion

                  (a)  to an IXC, BA shall: 

                       (i)   Provide a MPB record in an industry standard format
                       to MFS; and
 
                       (ii)  Bill the IXC the appropriate BA query charge
                       associated with the call.

                  (b)  as an IntraLATA call to BA or another LEC in the LATA, BA
shall  

                       (i)   Provide a copy record in an industry standard
                       format to MFS:

                       (ii)  Bill MFS the appropriate BA query charge associated
                       with the call; and        

                       (iii) Submit the call records to ITORP for payment by BA
                       or the LEC that is the 800/888 service provider of MFS's
                       and any intermediate LEC's Tariffed Exchange Access 
                       charges and query charges.

          6.4.2   When BA delivers 800/888 calls originated by BA's or another
LEC's Customers to MFS for completion

                                      21
<PAGE>
 
                    (a)  to MFS in its capacity as an IXC. BA shall:
                         
                         (i)     Bill MFS the appropriate BA query charge
                         associated with the call; and

                         (ii)    Bill MFS the appropriate FGD Exchange Access 
                         charges associated with the call.

                    (b)  as an IntraLATA call to MFS in its capacity as a LEC.
 
                         (i)     BA shall submit the appropriate call records to
                         ITORP for payment by MFS of BA's (and another LEC's, if
                         appropriate) Tariffed Exchange Access charges; and

                         (ii)    MFS shall pay the originating LEC's appropriate
                         query charge associated with the call.


7.0  TRANSPORT AND TERMINATION OF OTHER TYPES OF TRAFFIC

     7.1  INFORMATION SERVICES TRAFFIC

     The following provisions shall apply only to MFS-originated Information
Services Traffic directed to an information services platform connected to BA's
network. At such time as MFS connects Information Services platforms to its
network, the Parties shall agree upon a suitable arrangement for BA-originated
Information Services Traffic.

          7.1.1     MFS shall route Information Services Traffic that 
originates on its own network to the appropriate information services 
platform(s) connected to BA's network. MFS will establish a dedicated trunk 
group to the BA information services serving switch. This trunk group will be 
utilized to allow MFS to route information service traffic originated on its 
network to BA.

          7.1.2     MFS shall provide an electronic file transfer or monthly 
magnetic tape containing recorded call detail information to BA.

          7.1.3     BA shall provide to MFS via electronic file transfer or
magnetic tape or other means as available all necessary information to rate the 
Information Services Traffic to MFS's Customers pursuant to the BA's agreements 
with each information services provider. Information shall be provided in as 
timely a fashion as practical in order to facilitate record review and reflect 
actual prices set by the individual information services providers.

          7.1.4     MFS shall bill and collect such information services 
provider charges and remit the amounts collected to BA less:

                                      22
<PAGE>
 
          (a)       The Information Services Billing and Collection fee set 
     forth in Exhibit A; and

          (b)       An uncollectibles reserve calculated based on the 
     uncollectibles reserve in BA's billing and collection agreement with the 
     applicable information services provider; and

          (c)       Customer adjustments provided by MFS.

MFS shall provide to BA sufficient information regarding uncollectibles and 
Customer adjustments to allow BA to pass through the adjustments to the 
information services provider, and BA shall pass through such adjustments. 
However, if the information services provider disputes such adjustments and 
refuses to accept such adjustments, MFS shall reimburse BA for all such disputed
adjustments. Final resolution regarding all disputed adjustments shall be solely
between MFS and the information services provider.

          7.1.5     Nothing in this Agreement shall restrict either Party from 
offering to its Telephone Exchange Service Customers the ability to block the 
completion of Information Service Traffic.

          7.1.6     The Parties may agree to separate arrangements for the 
billing and compensation of variable rated (e.g. 970, 540) information services.
                                            -

          7.1.7     The Information Services Traffic addressed herein does not 
include 555 traffic or similar traffic with AIN service interfaces.

     7.2  LSV/VCI TRAFFIC

          7.2.1     Each Party shall offer LSV and VCI services to enable its 
Customers to verify and/or interrupt calls of the other Party's Customers. In 
such instances, the other Party shall accept and respond to LSV and VCI requests
from the operator bureau of the requesting Party. Both the requesting Party 
(Party A) and the responding Party (Party B) shall perform in accordance with 
the terms set forth in this subsection 7.2 and pursuant to inter-Party rates to 
be agreed upon between the Parties.

          7.2.2     The Party B operator shall only verify the status of the 
line (LSV) or interrupt the line to inform the called party that there is a call
waiting. The Party B operator will not complete the telephone call of the
Customer initiating the LSV VCI request. The Party B operator will only make one
LSV/VCI attempt per Customer operator bureau telephone call, and the applicable
charges apply whether or not the called party releases the line.

          7.2.3.    Each Party's operator bureau shall accept LSV and VCI 
inquiries from the operator bureau of the other Party in order to allow 
transparent provision of LSV/VCI Traffic between the Parties' networks.

                                      23
<PAGE>
 
          7.2.4  Each Party shall route LSV/VCI Traffic inquires over separate 
direct trunks (and not the Local/IntraLATA/InterLATA Trunks) established 
between the Parties' respective operator bureaus. Each Party shall offer 
interconnection for LSV/VCI traffic at its Local Serving Wire Center, operator 
services Tandem Office subtended by such Local Serving Wire Center, or other 
mutually agreed point in the LATA. Separate LSV/VCI trunks delivered at the 
Local Serving Wire Center will be directed to the operator services Tandem 
Office designated by Party B. Unless otherwise mutually agreed, the Parties 
shall configure LSV/VCI trunks over the Interconnection architectures in 
accordance with the terms of Section 4, consistent with the Joint Grooming Plan.
Party A shall outpulse the appropriate NPA, ATC Code, and Routing Code (operator
code) to Party B.

     7.3  TRANSIT SERVICE

          7.3.1  MFS shall exercise all reasonable efforts to enter into a 
reciprocal local traffic exchange arrangement (either via written agreement or 
mutual tariffs) with any wireless carrier, ITC, CLEC, or other LEC to which it 
sends, or from which it receives, local traffic that transits BA facilities over
Traffic Exchange Trunks. If MFS fails to enter into such an arrangement as 
quickly as commercially reasonable following the Effective Date and to provide 
copies thereof to BA, but continues to utilize BA's Transit Service for the 
exchange of local traffic with such wireless carrier, ITC, CLEC, or other LEC, 
MFS shall, in addition to paying the rate set forth in Exhibit A for said 
Transit Service, pay BA any charges or costs such terminating third party 
carrier imposes or levies on BA for the delivery or termination of such Traffic,
including any switched access charges, plus all reasonable expenses incurred by 
                                       ----
BA in delivering or terminating such Traffic and/or resulting from MFS's failure
to secure said reciprocal local traffic exchange arrangement. BA will, upon 
request, provide MFS with all reasonable cooperation and assistance in obtaining
such arrangements. The Parties agree to work cooperatively in appropriate 
industry fora to promote the adoption of reasonable industry guidelines relating
to Transit Traffic.

          7.3.2  Meet-Point Billing compensation arrangements as described in 
subsection 6.3 shall be utilized for compensation for the joint handling of Toll
Traffic.

          7.3.3  BA expects that most networks involved in Transit Traffic will 
deliver each call to each involved network with CCS and the appropriate 
Transactional Capabilities Application Part ("TCAP") message to facilitate full 
interoperability of those services supported by BA and billing functions. In all
cases, each Party shall follow the Exchange Message Record ("EMR") standard and 
exchange records between the Parties and with the terminating carrier to 
facilitate the billing process to the original network.

          7.3.4  Transit Traffic shall be routed over the Traffic Exchange 
Trunks described in Section 5 above.

     7.4  911/E911 ARRANGEMENTS

                                      24

<PAGE>
 
          7.4.1   MFS will interconnect to the BA 911 E911 selective routers or 
911 Tandem Offices, where available, which serve the areas in which MFS provides
Telephone Exchange Services, for the provision of 911 E911 services and for 
access to all subtending Public Safety Answering Points ("PSAP"). In such 
situations, BA will provide MFS with the appropriate CLLI codes and 
specifications of the Tandem Office serving area. In areas where E911 is not 
available, MFS and BA will negotiate arrangements to connect MFS to the 911 
service.

          7.4.2   Path and route diverse interconnections for 911 E911 shall be 
made at the M-IP, the BA-IP, or other points as necessary and mutually agreed, 
and as required by law or regulation.

          7.4.3   Upon request, BA will provide MFS with the following:

          (a)     an electronic interface, when available, through which MFS
     shall input and provide a daily update of 911/E911 database information
     related to appropriate MFS Customers. Until such time as an electronic
     interface is available, MFS shall provide BA with all appropriate 911
     information such as name, address, and telephone number in writing for BA's
     entry into the 911 database system. Any 911-related data exchanged between
     the Parties shall conform to the National Emergency Number Association
     standards:

          (b)     a file containing the Master Street Address Guide ("MSAG"), as
     may be updated from time to time, for the exchanges or communities
     specified;

          (c)     a return of any MFS E911 data entry files containing errors, 
     so that MFS may ensure the accuracy of the Customer records; and

          (d)     PSAP 911 Tandem information.

          7.4.4   In cases where a Customer of one Party elects to discontinue
     its service and become the Customer of the other Party ("Party B") but
     desires to retain its original telephone number pursuant to an INP or PNP
     arrangement, Party B will outpulse the telephone number to which the call
     has been forwarded (i.e. the Customer's ANI) to the 911 Tandem Office.
                         - -
     Party B will also provide the 911 database with both the forwarded number
     and the directory number, as well as the appropriate address information of
     the Customer.

          7.4.5   BA and MFS will use their best efforts to facilitate the
     prompt, robust, reliable and efficient interconnection of MFS systems to
     the 911/E911 platforms.

          7.4.6   BA and MFS will work cooperatively to arrange meetings with 
PSAPs to answer any technical questions the PSAPs, or county or municipal 
coordinators may have regarding the 911/E911 arrangements. BA shall assist MFS 
in identifying the appropriate person in each municipality for the purpose of 
obtaining the ten-digit subscriber number of each PSAP.

                                      25

<PAGE>
 
          7.4.7   The Parties acknowledge that the provision of INP, until PNP 
with full 911 compatability is available, creates a special need to have the 
Automatic Location Identification ("ALI") screen reflect two number: the "old" 
number and the "new" number assigned by MFS. The Parties acknowledge further the
objective of including the five character Telephone Company Identification 
("TCI") of the company that provides service to the calling line as part of the 
ALI display. Until such time as TCI is operational, however, BA and MFS agree to
supply and use the three-letter Access Carrier Name Abbreviation ("ACNA") as the
carrier identifier.

          7.4.8   MFS will compensate BA for connections to its 911/E911 
pursuant to Exhibit A.

          7.4.9   MFS will comply with all applicable rules and regulations 
pertaining to the provision of 911/E911 services in Virginia.

     7.5  ANCILLARY TRAFFIC GENERALLY  Ancillary Traffic that may be terminated
at a BA Local Serving Wire Center pursuant to subsection 4.5 above shall be 
subject to a separate transport charge for transport from the Local Serving Wire
Center to the appropriate Tandem Office, as set forth in Exhibit A.


8.0  NUMBER RESOURCES, RATE CENTERS AND RATING POINTS

     8.1  Nothing in this Agreement shall be construed to limit or otherwise 
adversely affect in any manner either Party's right to employ or to request and 
be assigned any Central Office (NXX) Codes pursuant to the Central Office Code 
Assignment Guidelines, as may be amended from time to time, or to establish, by 
Tariff or otherwise, Rate Centers and Rating Points corresponding to such NXX 
codes. Until such time as number administration is provided by a third party, BA
shall provide MFS access to telephone numbers by assigning NXX codes to MFS in 
accordance with such Assignment Guidelines.


     8.2  It shall be the responsibility of each Party to program and update its
own switches and network systems in accordance with the Local Exchange Routing 
Guide ("LERG") in order to recognize and route traffic to the other Party's 
assigned NXX codes at all times. Neither Party shall impose any fees or charges 
whatsoever on the other Party for such activities, except as expressly set forth
in this Agreement.

     8.3  Unless mandated otherwise by a Commission order, the Rate Center Areas
will be the same for each Party. During the term of this Agreement, MFS shall 
adopt the Rate Center Areas and Rate Center Points that the Commission has 
approved for BA, in all areas where BA and MFS service areas overlap, and MFS 
shall assign whole NPA-NXX codes to each Rate Center unless the LEC industry 
adopts alternative methods of utilizing NXX in the manner adopted by the NANP.

                                      26

<PAGE>
 
     8.4  MFS will also designate a Routing Point for each assigned NXX code. 
MFS shall designate one location for each Rate Center Area as the Routing Point 
for the NPA-NXXs associated with that Area, and such Routing Point shall be 
within the same LATA as the Rate Center Area but not necessarily within the Rate
Center Area itself.

     8.5  Notwithstanding anything to the contrary contained herein, nothing in 
this Agreement is intended to, and nothing in this Agreement shall be construed 
to, in any way constrain MFS's choices regarding the size of the local calling 
area(s) that MFS may establish for its Customers, which local calling areas may 
be larger than, smaller than, or identical to, BA's local calling areas.


9.0  NETWORK MAINTENANCE AND MANAGEMENT: OUTAGES

     9.1  The Parties will work cooperatively to install and maintain a reliable
network. MFS and BA will exchange appropriate information (e.g., maintenance 
                                                           - -
contact numbers, network information, information required to comply with law 
enforcement and other security agencies of the Government) to achieve this 
desired reliability. In addition, the Parties will work cooperatively to apply 
sound network management principles to alleviate or to prevent congestion.

     9.2  Each Party recognizes a responsibility to follow the standards that 
may be agreed to between the Parties and to employ characteristics and methods 
of operation that will not interfere with or impair the service or any 
facilities of the other or any third parties connected with or involved directly
in the network of the other.

     9.3  INTERFERENCE OR IMPAIRMENT

     If Party A reasonably determines that the characteristics and methods of 
operation used by Party B will or may interfere with or impair its provision of 
services. Party A shall have the right to discontinue Interconnection subject, 
however, to the following:

          9.3.1  Party A shall have given Party B ten (10) days' prior written 
notice of interference or impairment or potential interference or impairment 
which specifies the time within which Party B is to correct the condition; and,

          9.3.2  Party A shall have concurrently provided a copy of the notice 
provided to Party B under (a) above to the appropriate federal and/or state 
regulatory bodies.

          9.3.3  Notice in accord with subsections 9.3.1 and 9.3.2 above shall 
not be required in emergencies and Party A may immediately discontinue 
Interconnection if reasonably necessary to meet its obligations. In such case, 
however, Party A shall use all reasonable means to notify Party B and the 
appropriate federal and or state regulatory bodies.

                                      27

<PAGE>
 
          9.3.4     Upon correction of the interference or impairment, Party A 
will promptly renew the Interconnection. During such period of discontinuance, 
there will be no compensation or credit allowance by Party A to Party B for 
interruptions.

     9.4  REPEATED OR WILLFUL NONCOMPLIANCE

          9.4.1     The Interconnection provided hereunder may be discontinued
by either Party upon thirty (30) days written notice to the other for repeated
or willful violation of and/or a refusal to comply with this Agreement. The
Party discontinuing will notify the appropriate federal and/or state regulatory
bodies concurrently with the notice to the other Party of the prospective
discontinuance.

     9.5  OUTAGE REPAIR STANDARD

     In the event of an outage or trouble in any arrangement, facility, or 
service being provided by a Party hereunder, the providing Party will follow 
procedures for isolating and clearing the outage or trouble that are no less 
favorable than those that apply to comparable arrangements, facilities, or 
services being provided by the providing Party to any other carrier whose 
network is connected to that of the providing Party. MFS and BA may agree to 
modify those procedures from time to time based on their experience with 
comparable Interconnection arrangements with other carriers.

     9.6  NOTICE OF CHANGES--SECTION 251(C)(5).

     If a Party makes a change in its network which it believes will materially 
affect the interoperability of its network with the other Party's network, the 
Party making the change shall provide at least ninety (90) days advance written 
notice of such change to the other Party.

10.  JOINT NETWORK RECONFIGURATION AND GROOMING PLAN; AND INSTALLATION, 
MAINTENANCE, TESTING AND REPAIR.

     10.1 JOINT NETWORK RECONFIGURATION AND GROOMING PLAN. On or before December
1, 1996, unless the Parties agree to a different date, MFS and BA shall jointly 
develop a grooming plan (the "Joint Plan") which shall define and detail, inter 
                                                                          -----
alia.
----

          (a)  modifications to the agreement on physical architecture 
     consistent with the guidelines defined in Section 4;

          (b)  standards to ensure that Interconnection trunk groups experience 
a grade of service, availability and quality which is comparable to that 
achieved on interoffice trunks within BA's network and in accord with all 
appropriate relevant industry-accepted quality, reliability and availability 
standards. Trunks provided by either Party for Interconnection services will be 
engineered using a design blocking objective of B.01;

                                      28
<PAGE>
 
             (c)  the respective duties and responsibilities of the Parties with
     respect to the administration and maintenance of the trunk groups,
     including, but not limited to, standards and procedures for notification
     and discoveries of trunk disconnects;

             (d)  disaster recovery provision escalations;

             (e)  migration from one-way to two-way Interconnection Trunks upon 
     mutual agreement of the Parties;

             (f)  actual meet point locations on the SONET system; and

             (g)  such other matters as the Parties may agree.

     10.2    INSTALLATION, MAINTENANCE, TESTING AND REPAIR. BA's standard 
intervals for Feature Group D Switched Exchange Access Services will be used for
Interconnection. MFS shall meet the same intervals for comparable installations,
maintenance, joint testing, and repair of its facilities and services associated
with or used in conjunction with Interconnection or shall notify BA of its 
inability to do so and will negotiate such intervals in good faith. The Parties 
agree that the standards to be used by each Party for isolating and clearing any
disconnections and/or other outages or troubles shall be no less favorable than 
those applicable to comparable arrangements, facilities, or services being 
provided by such Party to any other carrier whose network is connected to that 
of the providing Party.

     10.3    FORECASTING REQUIREMENTS FOR TRUNK PROVISIONING. Within sixty (60) 
days of executing this Agreement, MFS shall provide BA a one (1) year traffic 
forecast. This initial forecast will provide the amount of traffic to be 
delivered to each of BA's End Offices affected by the exchange of traffic. The 
forecast shall be updated and provided to BA on a quarterly basis, and include 
Access Carrier Terminal Location (ACTL), traffic type (local/toll, operator 
services, 911, etc.), code (identifies trunk group), A location/Z location (CLLI
codes), interface type (e.g., DS1), and trunks in service each year
(cumulative).

             10.3.1    Initial Forecasts/Trunking Requirements. Because BA's
                       ---------------------------------------
trunking requirements will, at least during an initial period, be dependent on 
the customer segments and service segments within customer segments to whom MFS 
decides to market its services. BA will be largely dependent on MFS to provide 
accurate trunk forecasts for both inbound (from BA) and outbound (from MFS) 
traffic. BA will, as an initial matter and upon request, provide the same number
of trunks to terminate local traffic to MFS as MFS provides to terminate local 
traffic to BA, unless MFS expressly identifies particular situations that are 
expected to produce traffic that is substantially skewed in either the inbound
or outbound direction, in which case BA will provide the number of trunks MFS
suggests. Upon the establishment of any new set of trunks for traffic from BA to
MFS, BA will monitor traffic for ninety (90) days, and will, as necessary at the
end of that period, either augment trunks or disconnect trunks, based on the
application of reasonable engineering criteria to the actual traffic volume
experienced. If, after such 90-day period, BA has determined that the trunks are
not warranted by actual traffic volumes, then, on ten (10) days' written notice,
BA may hold MFS financially responsible for

                                      29



 
<PAGE>
 
such trunks retroactive to the start of the 90-day period until such time as
they are justified by actual traffic volumes, based on the application of
reasonable engineering criteria. To the extent that BA requires MFS to install
trunks for delivery of traffic to BA. MFS may apply the same procedures with
respect to BA's trunking requirements.

11.0 UNBUNDLED ACCESS -- SECTION 251(C)(3).

     To the extent required of each Party by Section 251 of the Act, each Party 
shall offer to the other Party nondiscriminatory access to Network Elements on 
an unbundled basis at any technically feasible point. BA shall unbundle and 
separately price and offer Network Elements such that MFS will be able to lease 
and interconnect to whichever of the Network Elements MFS requires, and to 
combine the BA-provided elements with any facilities and services that MFS may 
itself provide, except that MFS shall not recombine Network Elements purchased 
from BA for use as a substitute for the purchase at wholesale rates of 
Telecommunications Services that BA provides unless otherwise mandated by the 
FCC or the Commission or agreed to by BA with other carriers.

     11.1 UNBUNDLED LOCAL LOOP ("ULL") TRANSMISSION TYPES

     Subject to subsection 11.4, BA shall allow MFS to access the following ULL 
types (in addition to those ULLs available under applicable tariffs) unbundled 
from local switching and local transport in accordance with the terms and 
conditions set forth in this subsection 11.1.

          11.1.1    "2-Wire Analog Voice Grade ULL" or "Analog 2W" provides an 
effective 2-wire channel with 2-wire interfaces at each end that is suitable for
the transport of analog voice grade (nominal 300 to 3000 Hz) signals and 
loop-start signaling. The service is more fully described in Bell Atlantic 
TR-72565. If "Customer-Specified Signaling" is requested, the service will 
operate with one of the following signaling types that may be specified when the
service is ordered: loop-start, ground-start, loop-reverse-battery, and no 
signaling. The service is more fully described in Bell Atlantic TR-72570.

          11.1.2    "4-Wire Analog Voice Grade ULL" or "Analog 4W" provides an 
effective 4-wire channel with 4-wire interfaces at each end that is suitable for
the transport of analog voice grade (nominal 300 to 3000 Hz) signals. The
service will operate with one of the following signaling types that may be
specified when the service is ordered: loop-start, ground-start, loop-reverse-
battery, duplex, and no signaling. The service is more fully described in Bell
Atlantic TR-72570.

          11.1.3    "2-Wire ISDN Digital Grade ULL" or "BRI ISDN" provides a 
channel with 2-wire interfaces at each end that is suitable for the transport of
160 kbps digital services using the ISDN 2B1Q line code.

          11.1.4    "2-Wire ADSL-Compatible ULL" or "ADSL 2W" provides a channel
with 2-wire interfaces at each end that is suitable for the transport of digital
signals up to 6 Mbps toward the Customer and up to 640 kbps from the Customer.
BA will offer ADSL-Compatible

                                      30
<PAGE>
 
ULLs only when the technology BA uses to provide such ULLs is compatible with 
that of MFS. In addition, ADSL-Compatible ULLs will be available only where 
existing copper facilities can meet applicable industry standards.

             11.1.5    "2-Wire HDSL-Compatible ULL" or "HDSL 2W" provides a
channel with 2-wire interfaces at each end that is suitable for the transport of
784 kbps digital signals simultaneously in both directions using the 2B1Q line
code. HDSL compatible ULLs will be available only where existing copper 
facilities can meet the specifications.

             11.1.6    "4-Wire HDSL-Compatible ULL" or "HDSL 4W" provides a
channel with 4-wire interfaces at each end. Each 2-wire channel is suitable for
the transport of 784 kbps digital signals simultaneously in both directions
using the 2B1Q line code. HDSL compatible ULLs will be available only where
existing copper facilities can meet the specifications.

             11.1.7    ULLs will be offered on the terms and conditions
specified herein and on such other terms in applicable Tariffs that are not
inconsistent with the terms and conditions set forth herein. BA shall make ULLs
available to MFS at the rates specified by the Commission, as amended from time
to time, subject to the provisions of subsection 11.1.8 below.

             11.1.8    BA will make Analog 2-Wire ULLs available for lease by
MFS in accordance with the schedule set forth in Schedule 3.0. BA will make BRI
ISDN and Analog 4W ULLs available for lease by MFS by the later of January 1,
1997, or the date when the ULL milestone contained in Schedule 3.0 is achieved
in the LATA. BA will make ADSL 2W, HDSL 2W, and HDSL 4W ULLs available for lease
by MFS as soon as practicable, but in any event no later than six months, after
BA makes the services using equivalent loop facilities commercially available to
its own end-user Customers in Virginia. Upon request by either BA or MFS, the
Parties shall agree upon a reasonable schedule and location for a technical and
operational trial(s) of ADSL 2W, HDSL 2W, and/or HDSL 4W ULLs. Such trial(s)
may, by mutual agreement, be conducted in any jurisdiction in which affiliates
of BA and MFS both operate. Upon successful completion of such trial(s), the
Parties shall agree upon an implementation schedule for the ULL type(s) subject
to such trial(s), which schedule shall begin no later than ninety (90) days
after successful completion of such trial(s).

     11.2    PORT TYPES

     BA shall make available to MFS unbundled 2-wire analog line and 2-wire 
analog trunk Ports on the terms and conditions specified herein and on such 
other terms in applicable Tariffs that are not inconsistent with the terms and 
conditions set forth herein. BA will offer MFS Ports utilizing other 
technologies as they become available, upon bona fide request by MFS.
                                            ---- ----

                                   31      
<PAGE>
 
     11.3    TRUNK SIDE LOCAL TRANSPORT

     BA shall provide MFS local transport from the trunk side of BA's Central 
Office Switches using private lines and special access services unbundled from 
switching and other services in accordance with the terms and conditions of BA's
existing or filed Tariffs, as referenced in Exhibit A.

     11.4    LIMITATIONS ON UNBUNDLED ACCESS

             11.4.1    Unless otherwise mandated by the FCC or the Commission or
agreed to by BA with other carriers, MFS may not cross-connect a BA-provided ULL
to a BA-provided Port, but instead shall purchase a network access line under 
applicable tariffs.

             11.4.2    BA shall only be required to make available ULLs and
Ports where such ULLs and Ports are available.

             11.4.3    MFS shall access BA's unbundled Network Elements
specifically identified in this Agreement via Collocation in accordance with 
Section 13 at the BA Wire Center where those elements exist and each ULL or Port
shall be delivered to MFS's Collocation by means of a Cross Connection.

             11.4.4    BA shall provide MFS access to its Unbundled Local Loops 
at each of BA's Wire Centers for loops terminating in that Wire Center. In 
addition, if MFS requests one or more ULLs provisioned via Integrated Digital 
Loop Carrier or Remote Switching technology deployed as a ULL concentrator, BA 
shall, where available, move the requested ULL(s) to a spare, existing physical 
ULL at no additional charge to MFS. If, however, no spare physical ULL is 
available, BA shall within three (3) business days of MFS's request notify MFS 
of the lack of available facilities. MFS may then at its discretion make a 
Network Element Bona Fide Request to BA to provide the Unbundled Local Loop 
through the demultiplexing of the integrated digitized ULL(s). MFS may also make
a Network Element Bona Fide Request for access to Unbundled Local Loops at the 
ULL concentration site point. Alternatively, MFS may choose to avail itself of 
BA's Special Construction services, as set forth in Exhibit A, for the 
provisioning of such ULL(s). Notwithstanding anything to the contrary in this 
Agreement, the provisioning intervals set forth in subsection 11.6 and the 
Performance Criteria and Performance Interval Dates set forth in subsection 27.1
and Schedule 27, respectively, shall not apply to ULLs provided under this 
subsection 11.4.4.

             11.4.5    If MFS orders a ULL type and the distance requested on 
such ULL exceeds the transmission characteristics in applicable technical 
references, distance extensions may be required and additional rates and charges
shall apply as set forth in Exhibit A or applicable Tariffs.

             11.4.6    BA will exercise all reasonable efforts to ensure that 
the service intervals that apply to ULLs and unbundled Ports are comparable to 
the (i) repair intervals that apply to the bundled dial tone line service, and 
(ii) installation intervals that apply to other BA

                                      32




 
<PAGE>
 
coordinated services, except as provided in Section 27. Although BA will make 
commercially reasonable efforts to ensure that ULLs and unbundled ports meet 
specified or agreed-upon technical standards. BA makes no warranty that the ULLs
or unbundled Ports supplied by BA hereunder will be compatible with the services
MFS may offer to its Customers if they are used in a manner not contemplated by 
the Parties.

     11.5    AVAILABILITY OF OTHER NETWORK ELEMENTS ON AN UNBUNDLED BASIS

             11.5.1    BA shall, upon request of MFS, and to the extent 
technically feasible, provide to MFS access to its Network Elements on an 
unbundled basis for the provision of MFS's Telecommunications Service. Any 
request by MFS for access to an BA Network Element that is not already available
shall be treated as a Network Element Bona Fide Request. MFS shall provide BA 
access to its Network Elements as mutually agreed by the Parties or as required 
by the Commission or FCC.

             11.5.2    A Network Element obtained by one Party from the other 
Party under this subsection 11.5 may be used in combination with the facilities 
of the requesting Party only to provide a Telecommunications Service, including 
obtaining billing and collection, transmission, and routing of the 
Telecommunications Service.

             11.5.3    Notwithstanding anything to the contrary in this 
subsection 11.5, a Party shall not be required to provide a proprietary Network 
Element to the other Party under this subsection 11.5 except as required by the 
Commission or FCC.

     11.6    PROVISIONING OF UNBUNDLED LOCAL LOOPS

     The following coordination procedures shall apply for conversions of "live"
Telephone Exchange Services to ULLs. These and other mutually agreed-upon 
procedures shall apply reciprocally for the "live" cutover of Customers from BA 
to MFS and from MFS to BA.

             11.6.1    Upon request by MFS, BA will apply the following 
coordination procedures to conversions of live Telephone Exchange Services to 
ULLs. Coordinated cutover charges will apply to any such arrangement, only to 
the extent provided by Section A.4.a of Exhibit A. If MFS elects not to request 
coordinated cutover, BA will process MFS's request in the normal course and 
subject to the normal installation intervals.

             11.6.2    MFS shall request ULLs from BA by delivering to BA a 
valid electronic transmittal service order (when available) or another mutually 
agreed-upon type of service order. Such service order shall be provided in 
accordance with industry format and specifications or such format and 
specifications as may be agreed to by the Parties. Within forty-eight (48) hours
of BA's receipt of such valid service order, BA shall provide MFS the firm order
commitment date according to the Performance Interval Dates as set forth in 
Schedule 27 by which the ULLs covered by such service order will be installed. 
In addition, BA shall provide MFS with the related ULL design information, if 
available, at least forty-eight (48) hours prior to the scheduled cutover time.

                                      33
<PAGE>
 
             11.6.3    On each ULL order in a Wire Center, MFS and BA will agree
on a cutover time at least forty-eight (48) hours before that cutover time. The 
cutover time will be defined as a 15-30 minute window within which both the MFS 
and BA personnel will make telephone contact to complete the cutover.

             11.6.4    Within the appointed 15-30 minute cutover time, the MFS 
person will call the BA organization designated to coordinate cross-connection 
work and when the BA organization is reached in that interval such work will be 
promptly performed.

             11.6.5    If MFS requires a change in scheduling, it must contact 
BA to issue a supplement to the original order. The negotiations process to 
determine the date and time of cutover will then be reinitiated as usual.

             11.6.6    If the MFS person is not ready within the appointed 
interval and if MFS had not called to reschedule the work at least two (2) hours
prior to the start of the interval, MFS shall be liable for the non-recurring 
charge for the unbundled elements scheduled for the missed appointment. In 
addition, non-recurring charges for the rescheduled appointment will apply.

             11.6.7    If BA is not available or not ready at any time during 
the appointed 15-30 minute interval, MFS and BA will reschedule and BA will 
waive the non-recurring charge for the unbundled elements originally scheduled 
for that interval, whenever those unbundled elements are actually cut over 
pursuant to an agreed-upon rescheduling.

             11.6.8    The standard time expected from disconnection of a live 
Telephone Exchange Service to the connection of the unbundled element to the MFS
Collocation Arrangement is fifteen (15) minutes per voice grade circuit for all 
orders consisting of fifteen (15) ULLs or less. Orders involving more than 
fifteen (15) ULLs will require a negotiated interval.

             11.6.9    If unusual or unexpected circumstances prolong or extend 
the time required to accomplish the coordinated cutover, the Party responsible 
for such circumstances is responsible for the reasonable labor charges of the 
other Party. Delays caused by the Customer are the responsibility of MFS.

             11.6.10   If MFS has ordered INP as part of an ULL installation, BA
will coordinate implementation of INP with the ULL installation. BA's provision 
of unbundled elements shall in all cases be subject to the availability of 
suitable facilities, to the extent permitted by Section 251 of the Act.

             11.6.11   If MFS requests or approves a BA technician to perform 
services on the network side of the Rate Demarcation Point beyond normal 
installation of the ULLs covered by the service order, BA may charge MFS for any
additional and reasonable labor charges to perform such services. BA may also 
charge MFS its normal overtime rates for services MFS requests to be performed 
outside of BA's normal business hours (M-F 9am to 5pm, E.S.T.).

                                      34
<PAGE>
 
         11.7    MAINTENANCE OF UNBUNDLED LOCAL LOOPS

         If (i) MFS reports to BA a Customer trouble, (ii) MFS requests a
dispatch, (iii) BA dispatches a technician, and (iv) such trouble was not caused
by BA's facilities or equipment, then MFS shall pay BA a per-trip charge charge
and labor charges per quarter hour increments for time associated with said
dispatch, as set forth in Exhibit A. In addition, this charge also applies in
situations when the Customer contact as designated by MFS is not available at
the appointed time. MFS accepts responsibility for initial trouble isolation and
providing BA appropriate dispatch information based on their test results. If,
as the result of MFS instructions, BA is erroneously requested to dispatch
within the Central Office, BA may levy on MFS an appropriate charge.

         11.8    RATES AND CHARGES

         BA shall charge the non-recurring and monthly recurring rates for
unbundled Local Loops and other Network Elements set forth in Exhibit A.

12.0     RESALE -- SECTIONS 251(C)(4) AND 251(B)(1).

         12.1    AVAILABILITY OF RETAIL RATES FOR RESALE

         Each Party shall make available its Telecommunications Services for 
resale at the retail rates set forth in its Tariffs to the other Party in 
accordance with Section 251(b)(1) of the Act. In addition, BA and MFS shall each
allow the resale by the other of all Telecommunications Services that are 
offered primarily or entirely to other Telecommunications Carriers (e.g., 
                                                                    - - 
Switched and special Exchange Access Services) at the rates already applicable 
to such services. BA shall also allow the resale by MFS of such other 
non-Telecommunications Services as BA, in its sole discretion, determines to 
provide for resale under terms and conditions to be agreed to by the Parties.

         12.2    AVAILABILITY OF WHOLESALE RATES FOR RESALE

         BA shall make available to MFS for resale all Telecommunications 
Services that BA provides at retail to Customers that are not Telecommunications
Carriers at the retail prices set forth in BA's Tariffs less the wholesale 
discount set forth in Exhibit A in accordance with Section 251(c)(4) of the Act.
Such services shall be provided in accordance with the terms of the applicable 
retail services Tariff(s), including, without limitation, user or user group 
restrictions, as the case may be, subject to the requirement that such 
restrictions shall in all cases comply with the requirements of Section 251 of 
the Act and the FCC Regulations regarding restrictions on resale. The Parties 
may also agree to negotiate term and or volume discounts for resold services.

         12.3    AVAILABILITY OF SUPPORT SERVICES AND BRANDING FOR RESALE 

                                      35
<PAGE>
 
     BA shall make available to MFS the various support services for resale 
described in Schedule 12.3 hereto in accordance with the terms set forth 
therein. In addition, to the extent required by Applicable Laws, upon request 
by MFS and at prices, terms and conditions to be negotiated by MFS and BA. BA 
shall provide BA Retail Telecommunications Services (as defined in Schedule 
12.3) that are identified by MFS's trade name, or that are not identified by 
trade name, trademark or service mark.

     12.4    ADDITIONAL TERMS GOVERNING RESALE AND USE OF BA SERVICES

             12.4.1    MFS shall comply with the provisions of this Agreement 
(including, but not limited to, all applicable BA Tariffs) regarding resale or 
use of BA services. In addition, MFS shall make reasonable efforts in good faith
to ensure that its Customers comply with the provisions of BA's Tariffs 
applicable to their use of BA's Telecommunications Services.

             12.4.2    Without in any way limiting subsection 12.4.1, MFS shall 
not resell (a) residential service to business or other nonresidential Customers
of MFS, (b) Lifeline or other means-tested service offerings, or grandfathered 
service offerings, to persons not eligible to subscribe to such service 
offerings from BA, or (c) any other BA service in violation of any user or user 
group restriction that may be contained in the BA Tariff applicable to such 
service to the extent such restriction is not prohibited by Applicable Laws. In 
addition, MFS shall be subject to the same limitations that BA's own retail 
Customers may be subject to with respect to any Telecommunications Service 
that BA may, in its discretion and to the extent not prohibited by Applicable 
Laws, discontinue offering. Except as otherwise provided by this Agreement or 
Applicable Laws, BA will give MFS notice in writing or electronically (which may
be by giving MFS access to a database or an Internet site that contains the 
applicable information, or by other electronic means) of material modification 
of the operation, or discontinuance, of BA Retail Telecommunications Services
(as defined in Schedule 12.3) furnished under this Agreement for resale at least
60 days prior to the time the material modification or discontinuance becomes 
effective.

             12.4.3    BA shall not be obligated to offer to MFS at a wholesale 
discount Telecommunications Services that BA offers at a special promotional 
rate if such promotions are for a limited duration of ninety (90) days or less.

             12.4.4    MFS shall provide to BA, in accordance with BA's Tariffs,
adequate assurance of payment of charges due to BA in connection with MFS's 
purchase of BA Telecommunications Services for resale. For the purposes of 
providing such adequate assurance of payment, MFS shall be deemed to be a 
business customer, even if MFS is purchasing Telecommunications Services for 
resale to residential customers.

             12.4.5    MFS shall not be eligible to participate in any BA plan 
or program under which BA end user retail Customers may obtain products or 
merchandise, or services which are not Bell Atlantic Retail Telecommunications 
Services (as defined in Schedule 12.3), in return for trying, agreeing to 
purchase, purchasing, or using Bell Atlantic Retail Telecommunications Services.

                                      36
<PAGE>
 
13.0    COLLOCATION -- SECTION 251(c)(6).

        13.1   BA shall offer to MFS Physical Collocation of equipment necessary
for Interconnection (pursuant to Section 4) or for access to unbundled Network
Elements (pursuant to Section 11.0), except that BA may offer only Virtual
Collocation if BA demonstrates to the Commission that Physical Collocation is
not practical for technical reasons or because of space limitations, as provided
in Section 251(c)(6) of the Act. BA shall provide such Collocation solely for
the purpose of Interconnection with facilities or services of BA or access to
unbundled Network Elements of BA, except as otherwise mutually agreed to in
writing by the Parties or as required by the FCC or the Commission, subject to
applicable federal and state Tariffs.

        13.2   Although not required to do so by Section 251(c)(6) of the Act,
by this Agreement, MFS agrees to offer to BA Collocation (at MFS's option either
Physical or Virtual) of equipment for purposes of Interconnection (pursuant to 
Section 4) on a non-discriminatory basis and at comparable rates, terms and 
conditions as MFS may provide to other third parties. MFS shall provide such 
Collocation subject to applicable Tariffs.

        13.3   Where MFS is Virtually Collocated on the date hereof on a premise
that was initially prepared for Physical Collocation for MFS. MFS may elect to
(i) retain its Virtual Collocation in that premises, and/or (ii) establish
Physical Collocation in that premises pursuant to current procedures and
applicable Tariffs. BA will not assess to MFS non-recurring charges for central
office common area construction to transition existing virtual collocation
arrangements to physical collocation arrangements in offices where MFS
previously paid such charges. BA will also waive cage construction charges for
cages of the same size originally paid for by MFS. MFS shall coordinate with BA
for rearrangement of MFS's equipment, facilities, and circuits. All applicable
Physical Collocation recurring charges shall apply.

        13.4   Where MFS is Virtually Collocated on the date hereof on a premise
that was initially prepared for MFS as Virtual Collocation. MFS may elect to (i)
retain its Virtual Collocation in that premises, or (ii) unless it is not 
practical for technical reasons or because of space limitations, convert its 
Virtual Collocation at such premises to Physical Collocation, in which case MFS 
shall coordinate the construction and rearrangement with BA of its equipment, 
facilities, and circuits, and for which MFS shall pay BA at applicable Tariff 
rates. In addition, all Physical Collocation recurring charges shall apply.

        13.5   For both Physical Collocation and Virtual Collocation, the 
Collocating Party shall provide its own or third-party leased transport 
facilities and terminate those transport facilities in equipment located in its 
Physical Collocation space, or in its virtually collocated equipment, at the 
Housing Party's premises as described in applicable Tariffs, and purchase Cross 
Connection to services or facilities as described in applicable Tariffs.

        13.6   Collocation shall occur under the terms of each Party's 
applicable and available Tariffs. Collocation is offered for network 
Interconnection between the Parties. Unless otherwise agreed to by the Parties 
or either Party is required by applicable law to permit on its collocated

                                      37
<PAGE>
 
premises, neither Party shall use a Collocation Arrangement to directly 
interconnect with a third party's equipment or facilities collocated at the same
location.

                           SECTION 251(B) PROVISIONS

14.0 NUMBER PORTABILITY -- SECTION 251(B)(2).

     14.1 SCOPE

          14.1.1  The Parties shall provide Local Telephone Number Portability
("LTNP") on a reciprocal basis to each other to the extent technically feasible,
and in accordance with rules and regulations as from time to time prescribed by
the FCC and or the Commission.

          14.1.2  Until Permanent Number Portability is implemented by the 
industry pursuant to regulations issued by the FCC and/or the Commission, the 
Parties agree to reciprocally provide Interim Number Portability to each other 
at the prices listed in Exhibit A. Such agreed-upon prices for INP are not 
intended to reflect either Party's views on the cost recovery mechanisms being 
considered by the FCC in its current proceeding on number portability issues.

          14.1.3  Upon the agreement of the Parties or issuance of applicable 
FCC and/or Commission order(s) or regulations mandating the adoption of a 
Permanent Number Portability ("PNP") arrangement, BA and MFS will commence 
migration from INP to the agreed-upon or mandated PNP arrangement as quickly as 
practically possible while minimizing interruption or degradation of service to 
their respective Customers. Once PNP is implemented, either Party may withdraw, 
at any time and at its sole discretion, its INP offerings, subject to advance 
notice to the other Party and coordination to allow the seamless and transparent
conversion of INP Customer numbers to PNP. Upon implementation of PNP pursuant 
to FCC or Commission regulation, both Parties agree to conform and provide such 
PNP. To the extent PNP rates or cost recovery mechanisms are not established by 
the applicable FCC or Commission order or regulation mandating the adoption of 
PNP, the Parties will negotiate in good faith the charges or cost recovery 
mechanism for PNP service at such time as a PNP arrangement is adopted by the 
Parties.

          14.1.4  Under either an INP or PNP arrangement, MFS and BA will 
implement a process to coordinate LTNP cutovers with ULL conversions (as 
described in Section 11 of this Agreement).

     14.2 PROCEDURES FOR PROVIDING INP THROUGH REMOTE CALL FORWARDING

     MFS and BA will provide INP through Remote Call Forwarding as follows:

          14.2.1  A Customer of one Party ("Party A") elects to become a 
Customer of the other Party ("Party B"). The Customer elects to utilize the 
original telephone number(s)

                                      38
<PAGE>
 
corresponding to the Telephone Exchange Service(s) it previously received from 
Party A, in conjunction with the Telephone Exchange Service(s) it will now 
receive from Party B. Upon receipt of a service order from Party B requesting 
assignment of the number(s) to Party B. Party A will implement an arrangement 
whereby all calls to the original telephone number(s) will be forwarded to a new
telephone number(s) designated by Party B, only within the same Exchange Area as
the original telephone number(s). Party A will route the forwarded traffic to 
Party B over the appropriate traffic exchange trunk groups.

          14.2.2 Party B will become the customer of record for the original 
Party A telephone number(s) subject to the INP arrangements. Upon the execution 
of an appropriate billing services agreement or such other mutually agreed-upon 
arrangement between the Parties. Party A shall use its reasonable efforts to 
consolidate into as few billing statements as possible collect, calling card, 
and third-number billed calls associated with the number(s), with sub-account 
detail by retained number.

          14.2.3 Party A will update its Line Information Database ("LIDB") 
listings for retained numbers, and restrict or cancel calling cards associated 
with those forwarded numbers as directed by Party B. In addition, Party A  will 
update the retained numbers in the LIDB with the screening options provided by 
Party B on a per order basis. Party B shall determine which of the screening 
options offered by Party A should apply to the Party B Customer account.

          14.2.4 Party B will outpulse the telephone number to which the call 
has been forwarded to the 911 Tandem Office. Party B will also provide the 911 
database with both the forwarded number and the directory number, as well as 
the appropriate address information of the Customer.

          14.2.5 Party A shall be permitted to cancel INP arrangements and 
reassign the telephone number(s) upon receipt of notification from Party B or a
third party that is authorized to act on behalf of the Customer. Party A shall
provide notification to Party B of third party orders affecting the INP service
of a Party B customer. The Parties agree to work cooperatively to develop
procedures or adopt industry standards or practices concerning the initiation
and termination of INP services in a multi-carrier environment.

          14.2.6 The INP service offered herein shall not initially apply to NXX
Codes 555, 915, 976, or 950, or for Feature Group A or coin telephone service. 
Upon request of either Party, provision of INP to these services will be 
mutually negotiated between the parties and provided to the extent feasible 
under negotiated rates, terms and conditions. INP shall not apply for any 
arrangement that would render the forwarded call Toll Traffic.

          14.2.7 The ordering of INP arrangements and the exchange of screening 
information shall be made in accordance with industry-accepted (e.g. OBF 
                                                                - - 
developed) format and specifications to the extent they have been implemented by
the Parties.

                                      39
<PAGE>
 
     14.3 PROCEDURES FOR PROVIDING INP THROUGH DIRECT INWARD DIAL TRUNKS 
(FLEX-DID)  Either Party may also request INP through Direct Inward Dial Trunks 
pursuant to any applicable Tariffs.

     14.4 PROCEDURES FOR PROVIDING LTNP THROUGH FULL NXX CODE MIGRATION  Where 
either Party has activated an entire NXX for a single Customer, or activated a 
substantial portion of an NXX for a single Customer, with the remaining numbers 
in that NXX either reserved for future use by that Customer or otherwise unused,
if such Customer chooses to receive Telephone Exchange Service from the other 
Party, the first Party shall cooperate with the second Party to have the entire 
NXX reassigned in the LERG (and associated industry databases, routing tables, 
etc.) to an End Office operated by the second Party. Such transfer will be 
accomplished with appropriate coordination between the Parties and subject to 
appropriate industry lead-times for movements of NXXs from one switch to 
another. Neither Party shall charge the other in connection with this 
coordinated transfer.

     14.5 RECEIPT OF TERMINATING COMPENSATION ON TRAFFIC TO INP'ED NUMBERS

     The Parties agree in principle that, under the INP arrangements described 
in subsections 14.2 and 14.3 above, terminating compensation on calls to INP'ed 
numbers should be received by each Customer's chosen LEC as if each call to the 
Customer had been originally addressed by the caller to a telephone number 
bearing an NPA-NXX directly assigned to the Customer's chosen LEC. In order to 
accomplish this objective where INP is employed, the Parties shall utilize the 
process set forth in this subsection 14.5 whereby terminating compensation on 
calls subject to INP will be passed from the Party (the "Performing Party") 
which performs the INP to the other Party (the "Receiving Party") for whose 
Customer the INP is provided.

          14.5.1  The Parties shall individually and collectively make best 
efforts to track and quantify INP traffic between their networks based on the 
CPN of each call by identifying CPNs which are INP'ed numbers. The Receiving 
Party shall charge the Performing Party for each minute of INP traffic at the 
INP Traffic Rate specified in subsection 14.5.3 in lieu of any other 
compensation charges for terminating such traffic, except as provided in 
subsection 14.5.2.

          14.5.2  By the Interconnection Activation Date in each LATA, the 
Parties shall jointly estimate for the prospective six months, based on historic
data of all traffic in the LATA, the percentages of such traffic that, if dialed
to telephone numbers bearing NPA-NXXs directly assigned to a Receiving Party (as
opposed to the INP'ed number), would have been subject to (i) Reciprocal 
Compensation ("Recip Traffic"), (ii) appropriate intrastate FGD charges ("Intra 
Traffic"), (iii) interstate FGD charges ("Inter Traffic"), or (iv) handling as 
Transit Traffic. On the date which is six (6) months after the Interconnection 
Activation Date, and thereafter on each succeeding six month anniversary of such
Interconnection Activation Date, the Parties shall establish new INP traffic 
percentages to be applied in the prospective six (6) month period, based on the 
Performing Party's choice of actual INP traffic percentages from the preceding
six (6) month period or historic data of all traffic in the LATA.

          14.5.3  The INP Traffic Rate shall be equal to the sum of:

                                      40
<PAGE>
 
  (Recip Traffic percentage times the Reciprocal Compensation Rate set forth 
                            -----
in Exhibit A)
                                     plus
                                     ----

     (Intra Traffic percentage times Receiving Party's effective intrastate FGD
                               -----
rates)
                                     plus
                                     ----

     (Inter Traffic percentage times Receiving Party's effective interstate FGD
                               -----
rates).

     The Receiving Party shall compensate the Performing Party for its billing
and collection of charges for the intrastate and interstate FGD access services
provided by the Receiving Party to a third party through the greater of (i) the
difference between the intrastate and interstate FGD rates of the Receiving
Party and the Performing Party, or (ii) three percent (3%) of the Performing
Party's intrastate and interstate FGD revenues for INP'ed numbers. Under no
circumstances shall the Performing Party, in performing the billing and
collections service on behalf of the Receiving Party, be obligated to pass
through more than ninety seven percent (97%) of its FGD access charge to the
Receiving Party in connection with any given INP'ed call.

     1.46      RECOVERY OF INP COSTS PURSUANT TO FCC ORDER AND RULEMAKING

     Notwithstanding anything to the contrary contained in this Section 14, in 
light of the FCC's First Report and Order and Further Notice of Proposed 
Rulemaking, adopted June 27, 1996, in CC Docket 95-116 (the "Order"), the 
Parties stipulate and agree as follows:

               14.6.1    The rates listed in Exhibit A for the provision of INP 
are appropriate amounts that each Party providing INP service should recover for
the provision of those INP functionalities in BA's operating territory. For the 
INP functions it provides, each Party should be allowed to recover these amounts
in a manner consistent with any final FCC and/or Commission order on INP cost 
recovery (such as a state-wide fund contributed to by all telecommunications 
carriers).

               14.6.2    Within three (3) weeks of the Effective Date, the 
Parties will jointly seek a Commission proceeding and ruling to develop and 
implement an INP cost recovery mechanism consistent with the policy described 
in the Order and/or any subsequent FCC or Commission decision.

               14.6.3    Until such time as a final FCC and/or Commission order,
pursuant to subsection 14.6.2 above, is implemented, each Party will provide INP
service to the other Party at the INP rates listed in Exhibit A. All revenues
received by the providing Party from its provision of INP service to the other
Party shall be placed into an escrow fund maintained by or tracked separately by
the providing Party. Upon issuance of a final FCC and/or Commission order, and
to the extent that it permits the Party providing INP to recover the associated
costs from a state-wide fund, the providing Party shall refund to the purchasing
Party an amount equal to the amount it recovers from such fund for its provision
of INP service to the purchasing Party from the Effective Date, provided that in
no event shall the refund amount exceed the aggregate amount the providing Party
has received from the purchasing Party's INP services. If no such

                                      41
<PAGE>
 
fund is ordered or established, the providing Party shall retain the full amount
of the revenues tracked or held in escrow by it pursuant to this subsection 
14.6.3.

          14.6.4  The Parties agree that neither Party waives its rights to 
advocate its views that are consistent with this subsection 14.6 on the 
appropriate INP cost recovery mechanism, or to present such views before any 
relevant regulatory body or other agency as they relate to FCC or Commission 
actions on INP cost recovery.

15.0 DIALING PARITY -- SECTION 251(B)(3).

     BA and MFS shall each provide the other with nondiscriminatory access 
to such services and information as are necessary to allow the other Party to 
implement dialing parity for Telephone Exchange Service, operator services, 
directory assistance, and directory listing information with no unreasonable 
dialing delays, as required under Section 251(b)(3) of the Act.

16.0 ACCESS TO RIGHTS-OF-WAY -- SECTION 251(B)(4).

     Each Party shall provide the other Party access to its poles, ducts, 
rights-of-way and conduits it owns or controls in conformance with 47 U.S.C. 
(S) 224, as set forth in Exhibit A, where facilities are available, on terms, 
conditions and prices comparable to those offered to any other entity pursuant 
to each Party's applicable Tariffs. Where no such Tariffs exist, such access 
shall be provided in accordance with the requirements of 47 U.S.C. (S) 224, 
including any FCC regulations that may be issued. In addition, the Parties agree
to review any existing rights-of-way arrangements between them in order to bring
such arrangements into conformance with the requirements of 47 U.S.C. (S) 224 
within ninety (90) days of the date hereof. In conducting such review and making
the necessary conforming changes, if any, the Parties agree to consider the 
appropriateness of applying such changes on a retroactive basis to the date 
hereof. If the Parties are unable to agree on the necessary changes to the 
existing arrangements or the appropriateness of applying them on a retroactive 
basis, the Parties may invoke the procedures set forth in subsection 29.9 below.


17.0 DATABASES AND SIGNALING.

     17.1 Each Party shall provide the other Party with access to databases and
associated signaling necessary for call routing and completion by providing SS7
Common Channel Signaling (CCS) Interconnection in accordance with existing
Tariffs, and Interconnection and access to 800/888 databases. LIDB, and any
other necessary databases in accordance with existing Tariffs and/or agreements
with other unaffiliated carriers, as set forth in the Exhibit A. Alternatively,
either Party may secure CCS Interconnection from a commercial SS7 hub provider,
and in that case the other Party will permit the purchasing Party to access the
same databases as would have been accessible if the purchasing party had
connected directly to the other Party's CCS network.

                                      42
<PAGE>
 
       17.2    The Parties will provide CCS Signaling to one another, where and
as available, in conjunction with all Local Traffic, Toll Traffic, Meet Point
Billing Traffic, and Transit Traffic. The Parties will cooperate on the exchange
of TCAP messages to facilitate interoperability of CCS-based features between
their respective networks, including all CLASS features and functions, to the
extent each Party offers such features and functions to its Customers. All CCS
Signaling parameters will be provided upon request (where available), including
called party number, calling party number, originating line information, calling
party category, and charge number. All privacy indicators will be honored. The
Parties will follow all Ordering and Billing Forum-adopted standards pertaining
to CIC/OZZ codes. Where CCS Signaling is not available, in-band multi-frequency
(MF) wink start signaling will be provided. Any such MF arrangement will require
a separate local trunk circuit between the Parties' respective switches. In such
an arrangement, each Party will outpulse the full ten-digit telephone number of
the called party to the other Party.

       17.3    Each Party shall provide trunk groups, where available and upon
reasonable request, that are configured utilizing the B8ZS & ESF protocol for 64
kbps clear channel transmission to allow for ISDN interoperability between the
Parties' respective networks.

       17.4    The following publications describe the practices, procedures and
specifications generally utilized by BA for signaling purposes and is listed
herein to assist the Parties in meeting their respective Interconnection
responsibilities related to Signaling:

               (a)  Bellcore Special Report SR-TSV-002275. BOC Notes on the LEC
Networks - Signaling; and

               (b)  Bell Atlantic Supplement Common Channel Signaling Network
Interface Specification (BA-905).

       17.5    Each Party shall charge the other Party mutual and reciprocal
rates for CCS Signaling as follows: BA shall charge MFS in accordance with
Exhibit A hereto and applicable Tariffs; MFS shall charge BA rates equal to the
rates BA charges MFS, unless MFS's Tariffs for CCS signaling provide for lower
generally available rates, in which case MFS shall charge BA such lower rates.

18.0   COORDINATED SERVICE ARRANGEMENTS.

       18.1    INTERCEPT AND REFERRAL ANNOUNCEMENTS. When a Customer changes its
service provider from BA to MFS, or from MFS to BA, and does not retain its
original telephone number, the Party formerly providing service to such Customer
shall provide a referral announcement ("Referral Announcement") on the abandoned
telephone number which provides details on the Customer's new number or provide
other appropriate information to the extent known. Referral Announcements shall
be provided reciprocally, free of charge to either the other Party or the
Customer to the extent the providing Party does not charge its own customers for

                                      43
<PAGE>
 
such service, for a period of not less than four (4) months after the date the 
Customer changes its telephone number in the case of business Customers and not 
less than sixty (60) days after the date the Customer changes its telephone 
number in the case of residential Customers. However, if either Party provides 
Referral Announcements for different periods than the above respective periods 
when its Customers change their telephone numbers, such Party shall provide the 
same level of service to Customers of the other Party.

      18.2   COORDINATED REPAIR CALLS. MFS and BA will employ the following 
procedures for handling misdirected repair calls:

             18.2.1   MFS and BA will educate their respective Customers as to
the correct telephone numbers to call in order to access their respective repair
bureaus.

             18.2.2   To the extent Party A is identifiable as the correct
provider of service to Customers that make misdirected repair calls to Party B,
Party B will immediately refer the Customers to the telephone number provided by
Party A, or to an information source that can provide the telephone number of
Party A, in a courteous manner and at no charge. In responding to misdirected
repair calls, neither Party shall make disparaging remarks about the other
Party, its services, rates, or service quality.
           
             18.2.3   MFS and BA will provide their respective repair contact
numbers to one another on a reciprocal basis.

      18.3   CUSTOMER AUTHORIZATION. In order for either Party to order or
terminate service on behalf of the other Party's Customer, the requesting Party
must have proper written authorization from the customer in its files, and
provide a copy of such authorization to the other Party upon request. In the
event the requesting Party (i) fails to provide a copy of the Customer's proper
written authorization upon request, (ii) requests changes in the other Party's
Customer's service without having such authorization in it files, or (iii)
mistakenly changes the other Party's Customer's service, the requesting Party
shall be liable to the other Party for all charges that would be applicable to
the Customer for restoring service to the other Party.

19.0  DIRECTORY SERVICES ARRANGEMENTS 

      BA will, upon request, provide the following directory services to MFS in
accordance with the terms set forth herein. In this Section 19, references to a
MFS Customer's "primary listing" shall mean such Customer's name, address, and
main telephone number, which number falls within the NXX codes directly assigned
to MFS or is retained by MFS on the Customer's behalf pursuant to LTNP 
arrangements with BA or any other carrier within the geographic area covered in 
the relevant BA directory.

      19.1 DIRECTORY LISTINGS AND DIRECTORY DISTRIBUTIONS

                                      44




           
<PAGE>
 
          19.1.1  BA will include the MFS Customer's primary listing in its
"White Pages" directory (residence and business listings) and "Yellow Pages"
directory (business listings) that cover the address of the Customer. Listings
of MFS's Customers will be interfiled with listings of BA's Customers and the
Customers of other LECs included in the BA directories. MFS will pay BA a non-
recurring charge as set forth in Exhibit A for providing such service for each
MFS Customer's primary listing. MFS will also pay BA's Tariffed charges, as the
case may be, for additional and foreign white page listings and other white
pages services for MFS's Customers. BA will not require a minimum number of
listings per order.

          19.1.2  BA will also include the MFS Customer's primary listing in
BA's directory assistance database on the same basis that BA's own Customers are
included, as well as in any electronic directories in which BA's Customers are
ordinarily included, for no charge other than the charges identified in
subsection 19.1.1.

          19.1.3  BA will distribute to MFS Customers copies of their primary
white pages and yellow pages directories at the same time and on the same basis
that BA distributes primary directories to its own Customers. BA will also
deliver a reasonable number of such directories to MFS. These distributions will
be made for no additional charge. MFS and its Customers may request additional
directories from BA's Directory Fulfillment Centers, which Centers will provide
such additional directories for the same charges applicable to comparable
requests by BA Customers.

          19.1.4  BA will include all MFS NXX codes associated with the areas to
which each directory pertains, along with BA's own NXX codes in any maps or
lists of such codes which are contained in the general reference portions of the
directories. MFS's NXX codes shall appear in such maps or lists in the same
manner as BA's NXX information.

          19.1.5  MFS shall provide BA with daily listing information on all new
MFS Customers in the format required by BA or a mutually-agreed upon industry
standard format. The information shall include the Customer's name, address,
telephone number, the delivery address and number of directories to be
delivered, and, in the case of a business listing, the primary business heading
under which the business Customer desires to be placed, and any other
information necessary for the publication and delivery of directories. MFS will
also provide BA with daily listing information showing Customers that have
disconnected or terminated their service with MFS. BA will provide MFS with
confirmation of listing order activity within forty eight (48) hours.

          19.1.6  BA will accord MFS's directory listing information the same
level of confidentiality which BA accords its own directory listing information,
and BA shall ensure that access to MFS's directory listing information will be
used solely for the purpose of providing directory services; provided, however,
that BA may use or license information contained in its directory listings for
direct marketing purposes so long as the MFS Customers are not separately
identified as such; and provided further that MFS may identify those of its
Customers that request that their names not be sold for direct marketing
purposes, and BA will honor such requests to the same extent as it does for its
own Customers.

                                      45
<PAGE>
 
           19.1.7  BA or BA's publisher shall provide MFS with a report of all
MFS Customer listings ninety (90) days prior to directory publication in such
form and format as may be mutually agreed to by both Parties. Both Parties
shall use their best efforts to ensure the accurate listing of such information.
BA will also provide MFS, upon request, a copy of the BA listings standards
and specifications manual. In addition, BA will provide MFS with a listing of
Yellow Pages headings and directory close schedules on an ongoing basis.

           19.1.8  MFS will adhere to all practices, standards, and ethical
requirements of BA with regard to listings, and, by providing BA with listing
information, warrants to BA that MFS has the right to place such listings on
behalf of its Customers. MFS agrees that it will undertake commercially
practicable and reasonable steps to attempt to ensure that any business or
person to be listed is authorized and has the right (i) to provide the product
or service offered, and (ii) to use any personal or corporate name, trade name
or language used in the listing.

           19.1.9  BA's liability to MFS in the event of a BA error in or
omission of a listing shall be subject to the same limitations that BA's
liability to its own Customers are subject to. In addition, MFS agrees to
take, with respect to its own Customers, all reasonable steps to ensure that its
and BA's liability to MFS's Customers in the event of a BA error in or omission
of a listing shall be subject to the same limitations that BA's liability to its
own Customers are subject to.

     19.2  YELLOW PAGE MAINTENANCE. The Parties agree to work cooperatively
to ensure that Yellow Page advertisements purchased by Customers that switch
their service to MFS (including Customers utilizing MFS-assigned telephone
numbers and MFS Customers utilizing LTNP) are maintained without interruption.
BA will allow MFS Customers to purchase new Yellow Pages advertisements without
discrimination, under the identical rates, terms and conditions as apply to BA's
Customers. BA and MFS may implement a commission program whereby MFS may, at
MFS's sole discretion, act as a sales, billing and collection agent for Yellow
Pages advertisements purchased by MFS's Telephone Exchange Service Customers.

     19.3  SERVICE INFORMATION PAGES. BA will include in the "Customer Guide" or
comparable section of the applicable white pages directories listings provided
by MFS for MFS's installation, repair and customer service and other essential
service oriented information, as agreed by the Parties, including appropriate
identifying logo. Such listings shall appear in the manner agreed to by the
Parties. BA shall not charge MFS for inclusion of this essential service-
oriented information, but reserves the right to impose charges on other
information MFS may elect to submit and BA may elect to accept for inclusion in
BA's white pages directories. BA will provide MFS with the annual directory
close dates and reasonable notice of any changes in said dates.

     19.4  DIRECTORY ASSISTANCE (DA); CALL COMPLETION

           19.4.1  Upon request, BA will provide MFS with directory assistance
and/or call completion services substantially in accordance with the terms set
forth in the form Directory Assistance and Call Completion Services Agreement
appended hereto as Exhibit C.

                                      46
<PAGE>
 
               19.4.2    Also upon request, BA will provide to MFS operator
services trunk groups, utilizing Feature Group D type signaling, with ANL minus
OZZ when interconnecting to the BA operator services network.

20.0   COORDINATION WITH TARIFF TERMS

       20.1    The Parties acknowledge that some of the services, facilities, 
and arrangements described herein are or will be available under and subject to 
the terms of the federal or state tariffs of the other Party applicable to such
services, facilities, and arrangements. To the extent a Tariff of the providing
Party applies to any service, facility, and arrangement described herein, the
Parties agree as follows:

               20.1.1    Those rates and charges set forth in Exhibit A for the
services, facilities, and arrangements described herein that are designated with
an asterisk shall remain fixed for the initial term of the Agreement,
notwithstanding that such rates may be different from those contained in an
effective, pending, or future Tariff of the providing Party (including any
changes to such Tariff subsequent to the Effective Date). Those rates and
charges for services, facilities, and arrangements that are not designated with
an asterisk, and reference or are identical to a rate contained in an existing
Tariff of the providing Party, shall conform with those contained in the then-
prevailing Tariff and vary in accordance with any changes that may be made to
the Tariff rates and charges subsequent to the Effective Date. Even the
asterisked fixed rates and charges shall be changed to reflect any changes in
the Tariff rates and charges they reference, however, if the Parties agree to
adopt the changed Tariff rates and charges.

       20.2    Except with respect to the rates and charges described in 
subsection 20.1 above, all other terms contained in an applicable Tariff of the 
providing Party shall apply in connection with its provision of the particular
service, facility, and arrangement hereunder.

21.0   INSURANCE

       21.1    MFS shall maintain, during the term of this Agreement, all 
insurance and/or bonds required by law and necessary to satisfy its obligations 
under this Agreement, including, without limitation, its obligations set forth
in Section 25 hereof. At a minimum and without limiting the foregoing covenant,
MFS shall maintain the following insurance:

               (a)  Commercial General Liability Insurance, on an occurrence
       basis, including but not limited to, premises-operations, broad form
       property damage, products/completed operations, contractual liability,
       independent contractors, and personal injury, with limits of at least
       $1,000,000 combined single limit for each occurrence.

               (b)  Automobile Liability, Comprehensive Form, with limits of at 
       least $500,000 combined single limit for each occurrence.

                                      47


<PAGE>
 
            (c)  Excess Liability, in the umbrella form, with limits of at least
      $15,000,000 combined single limit for each occurrence.

            (d)  Worker's Compensation Insurance as required by law and
      Employer's Liability Insurance with limits of not less than $1,000,000 per
      occurrence.


      21.2   MFS shall name BA as an additional insured on the foregoing
insurance. MFS agrees that MFS's insurer(s) and anyone claiming by, through,
under or on behalf of MFS, shall have no claim, right of action, or right of
subrogation, against BA. BA's affiliated companies, or the directors, officers
or employees of BA or BA's affiliated companies, based on any loss or liability
insurable under the foregoing insurance.

      21.3   MFS shall, within two (2) weeks of the date hereof and on a 
quarterly basis thereafter, furnish certificates or other adequate proof of the 
foregoing insurance. The certificates or other proof of the foregoing insurance 
shall be sent to: Bell Atlantic, Insurance Administration Group, 1320 N. Court 
House Road, 4th Floor, Arlington, Virginia, 22201. In addition, MFS shall 
require its agents, representatives, or contractors, if any, that may enter upon
the premises of BA or BA's affiliated companies to maintain similar and 
appropriate insurance and, if requested, to furnish BA certificates or other 
adequate proof of such insurance. Certificates furnished by MFS or MFS's agents,
representatives, or contractors shall contain a clause stating: "Bell Atlantic -
Virginia, Inc. shall be notified in writing at least thirty (30) days prior to 
cancellation of, or any material change in, the insurance."

22.0  TERM AND TERMINATION.

      22.1   This Agreement shall be effective as of the date first above
written and continue in effect until July 1, 1999, and thereafter the Agreement
shall continue in force and effect unless and until terminated as provided
herein. Upon the expiration of the initial term, either Party may terminate this
Agreement by providing written notice of termination to the other Party, such
written notice to be provided at least ninety (90) days in advance of the date
of termination. In the event of such termination, those service arrangements
made available under this Agreement and existing at the time of termination
shall continue without interruption under (a) a new agreement executed by the
Parties, (b) standard Interconnection terms and conditions approved and made
generally effective by the Commission, (c) Tariff terms and conditions generally
available to CLEC, or (d) if none of the above is available, under the terms of
this Agreement on a month-to-month basis until such time as (a), (b), or (c)
becomes available.

     22.2    For service arrangements made available under this Agreement and 
existing at the time of termination, if the standard Interconnection terms and 
conditions or Tariff terms and conditions result in the non-terminating Party 
physically rearranging facilities or incurring programming expense, the 
non-terminating Party shall be entitled to recover such rearrangement or 
programming costs, from the terminating Party. By mutual agreement, the Parties
may jointly petition the appropriate regulatory bodies for permission to have
this Agreement supersede any future standardized agreements or rules as such
regulators might adopt or approve.

                                      48
<PAGE>
 
       22.3  If either Party defaults in the payment of any amount due
hereunder, or if either Party violates any other provision of this Agreement,
and such default or violation shall continue for sixty (60) days after written
notice thereof, the other Party may terminate this Agreement and services
hereunder by written notice; provided the other Party has provided the
defaulting Party and the appropriate federal and/or state regulatory bodies with
written notice at least twenty five (25) days' prior to terminating service.
Notice shall be posted by certified mail, return receipt requested. If the
defaulting Party cures the default or violation within the twenty five (25) day
period, the other Party will not terminate service or this Agreement but shall
be entitled to recover all costs, if any, incurred by it in connection with the
default or violation, including, without limitation, costs incurred to prepare
for the termination of service.

23.0   DISCLAIMER OF REPRESENTATIONS AND WARRANTIES.
     
       EXCEPT AS EXPRESSLY PROVIDED UNDER THIS AGREEMENT, NEITHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES, FUNCTIONS AND
PRODUCTS IT PROVIDES UNDER OR CONTEMPLATED BY THIS AGREEMENT AND THE PARTIES
DISCLAIM THE IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A
PARTICULAR PURPOSE.

24.0   CANCELLATION CHARGES.
     
       Except as provided in this Agreement or as otherwise provided in any
applicable Tariff, no cancellation charges shall apply.

25.0   INDEMNIFICATION.

       25.1  Each Party agrees to release, indemnify, defend and hold harmless
the other Party from and against all losses, claims, demands, expenses, suits or
other actions, or any liability whatsoever, including, but not limited to, costs
and attorneys' fees (collectively, a "Loss"), (a) whether suffered, made,
instituted, or asserted by any other party or person, (i) relating to personal
injury to or death of any person, or for loss, damage to, or destruction of real
and/or personal property, whether or not owned by others, incurred during the
term of this Agreement and to the extent proximately caused by the acts or
omissions of the indemnifying Party, regardless of the form of action, or (ii)
arising out of BA's listing of the directory listing information provided by MFS
pursuant to subsection 19.1. or (b) suffered, made, instituted, or asserted by
its own customer(s) against the other Party arising out of the other Party's
provision of services to the indemnifying Party under this Agreement.
Notwithstanding the foregoing indemnification, nothing in this such Section 25,
shall affect or limit any claims, remedies, or other actions the indemnifying
Party may have against the indemnified Party under this Agreement, any other
contract, or any applicable Tariff(s), regulations or laws for the indemnified
Party's provision of said services.

                                      49

<PAGE>
 
       25.2    The indemnification provided herein shall be conditioned upon:

               (a)  The indemnified Party shall promptly notify the indemnifying
       Party of any action taken against the indemnified Party relating to the
       indemnification.

               (b)  The indemnifying Party shall have sole authority to defend 
       any such action, including the selection of legal counsel, and the
       indemnified Party may engage separate legal counsel only at its sole cost
       and expense.

               (c)  In no event shall the indemnifying Party settle or consent 
       to any judgment pertaining to any such action without the prior written
       consent of the indemnified Party, which consent shall not be unreasonably
       withheld.

               (d)  The indemnified Party shall, in all cases, assert any and 
       all provisions in its Tariffs that limit liability to third parties as a
       bar to any recovery by the third party claimant in excess of such
       limitation of liability.

               (e)  The indemnified Party shall offer the indemnifying Party all
       reasonable cooperation and assistance in the defense of any such action.

       25.3    In addition to its indemnity obligations under subsection 25.1, 
each Party shall provide, in its tariffs and contracts with its Customers that 
relate to any Telecommunications Service or Network Element provided or 
contemplated under this Agreement, that in no case shall such Party or any of 
its agents, contractors or others retained by such parties be liable to any 
Customer or third party for (i) any Loss relating to or arising out of this 
Agreement, whether in contract or tort, that exceeds the amount such Party would
have charged the applicable Customer for the service(s) or function(s) that gave
rise to such Loss, and (ii) any Consequential Damages (as defined in subsection 
26.2 below).

26.0   LIMITATION OF LIABILITY.

       26.1    Except as may be provided pursuant to Section 27 below, the 
liability of either Party to the other Party for damages arising out of failure 
to comply with a direction to install, restore or terminate facilities; or out 
of failures, mistakes, omissions, interruptions, delays, errors, or defects 
occurring in the course of furnishing any services, arrangements, or facilities 
hereunder shall be determined in accordance with the terms of the applicable 
tariff(s) of the providing Party. In the event no tariff(s) apply, the providing
Party's liability shall not exceed an amount equal to the pro rata monthly 
charge for the period in which such failures, mistakes, omissions, 
interruptions, delays, errors or defects occur. Recovery of said amount shall be
the injured Party's sole and exclusive remedy against the providing Party for 
such failures, mistakes, omissions, interruptions, delays, errors or defects.

       26.2    Neither Party shall be liable to the other in connection with the
provision or use of services offered under this Agreement for indirect, 
incidental, consequential, reliance or special

                                      50
<PAGE>
 
damages, including (without limitation) damages for lost profits (collectively, 
"Consequential Damages"), regardless of the form of action, whether in contract,
warranty, strict liability, or tort, including, without limitation, negligence 
of any kind, even if the other Party has been advised of the possibility of such
damages; provided, that the foregoing shall not limit a Party's obligation under
Section 25.

       26.3    The Parties agree that neither Party shall be liable to the 
customers of the other Party in connection with its provision of services to the
other Party under this Agreement. Nothing in this Agreement shall be deemed to 
create a third party beneficiary relationship between the Party providing the 
service and the customers of the Party purchasing the service. In the event of a
dispute involving both Parties with a customer of one Party both Parties shall 
assert the applicability of any limitations on liability to customers that may 
be contained in either Party's applicable Tariff(s).

27.0   PERFORMANCE STANDARDS FOR SPECIFIED ACTIVITIES.

       27.1    CERTAIN DEFINITIONS.  When used in this Section 27, the following
terms shall have the meanings indicated.

               27.1.1  "Specified Performance Breach" means the failure by BA 
to meet the Performance Criteria for any one of the three Specified Activities 
for a period of three (3) consecutive calendar months.

               27.1.2  "Specified Activity" means any of the following 
activities:

               (a)     the installation by BA of Unbundled Local Loop Elements 
       for MFS ("ULL Installation"):

               (b)     BA's provision of INP to MFS or

               (c)     repair of out of service problems for MFS ("Out of 
       Service Repairs").

               27.1.3  "Performance Criteria" means, with respect to any 
calendar month during the term of this Agreement, the performance by BA during 
such month of each Specified Activity (except Out-of-Service Repairs) shown in 
Schedule 27.0, within the time interval shown, in at least eighty percent (80%) 
of the covered instances.  BA shall perform the Out-of-Service Repairs within 
the specified time interval in at least seventy percent (70%) of the covered 
instances. Within one week of each anniversary of the Effective Date, the 
Parties shall jointly review BA's actual network-wide monthly performance
percentages for Out-of-Service Repairs for the preceding year and agree upon any
improvements in the seventy percent (70%) standard based on the actual
percentages for any three consecutive month period and/or the full preceding
year, up to and including any eighty percent (80%) standard, as the Out-of-
Service Repairs percentage standard applicable to the following year.

                                      51
<PAGE>
 
       27.2    PERFORMANCE STANDARDS.  BA shall exercise best efforts to meet 
the Performance Criteria for the three Specified Activities. In the event BA 
fails to meet the Performance Criteria at any time during the term of this 
Agreement, MFS shall be entitled to pursue all remedies set forth in the 
applicable BA Tariffs, except as may be agreed to by the Parties. In addition, 
if BA commits a Specified Performance Breach during the term of this Agreement, 
the Parties agree to meet immediately to determine whether any liquidated 
damages provisions are appropriate as an amendment hereof in light of such 
Breach and, if so, the terms therein; provided, however, that if BA commits a 
Specified Performance Breach during initial nine (9) months of this Agreement, 
the Parties agree to meet at the end of the nine-month period. If the Parties 
are unable to agree as to the appropriateness of the liquidated damages 
provisions and or the terms therein within ninety (90) days after the date of 
the first meeting pursuant to this subsection, or if no such meeting has
occurred within ninety (90) days of the end of the nine-month period for reasons
other than the mutual agreement of the Parties, the Parties agree to submit to
arbitration such disagreement and request that the arbitrators base their
decision on comparable ILEC-CLEC interconnection agreements. Unless otherwise
agreed to by the Parties, the arbitration shall be conducted by a panel of three
(3) arbitrators, one to be appointed by each Party pursuant to CPR's Non-
Administered Arbitration Rules and subject to the United States Arbitration Act
(9 U.S.C (S)(S) 1-16), to be conducted in Arlington, Virginia. The Parties agree
that the liquidated damages provisions, if any, finally determined by the
arbitral process shall be adopted as an amendment to this Agreement.

       27.3    LIMITATIONS.  In no event shall BA be deemed to have failed to 
meet any of the Performance Criteria if:

               27.3.1  BA's failure to meet or exceed any of the Performance 
Criteria is caused, directly or indirectly, by a Delaying Event. A "Delaying 
Event" means (a) a failure by MFS to perform any of its obligations set forth in
this Agreement (including, without limitation, the Implementation Schedule and 
the Joint Grooming Plan), (b) any delay, act or failure to act by a Customer, 
agent, representative, or subcontractor of MFS or (c) any Force Majeure Event. 
If a Delaying Event prevents or delays BA from performing a Specified Activity, 
then such Specified Activity shall be excluded from the calculation of BA's 
compliance with the Performance Criteria, provided BA performs the Specified 
Activity in the course of its normal service cycle once the Delaying Event no 
longer exists; or

               27.3.2  the Parties agree to a time interval with respect to a 
particular order that exceeds the interval set forth in Schedule 27. In such 
event, the time interval for BA's performance of the Specified Activit(ies) set 
forth in the order shall be extended to such later date agreed to by the 
Parties.

       27.4    SERVICE QUALITY STANDARDS.  MFS agrees to specific performance 
standards associated with quality of service requests as specified in Schedule 
27.1. Should MFS fail to meet these service quality standards, during a period 
in which BA has failed to meet the Performance Criteria. BA's failure during 
such time period shall be excused and not apply toward the calculation of a 
Specified Performance Breach.

                                      52
<PAGE>
 
       27.5    RECORDS.  Each Party shall maintain complete and accurate records
in the manner and format agreed to by the Parties, on a monthly basis, of BA's 
performance under this Agreement of each Specified Activity and its compliance 
with the Performance Criteria during the initial nine-month period. Each Party 
shall provide to the other Party such records in a self-reporting format on a 
monthly basis. The Parties agree that such records shall be deemed "Proprietary 
Information" for purposes of subsection 29.4.

28.0   COMPLIANCE WITH LAWS; REGULATORY APPROVAL.

       28.1    Each Party represents and warrants that it is now and will remain
in compliance with all laws, regulations, and orders applicable to the 
performance of its obligations hereunder (collectively, "Applicable Lawss"). 
Each Party shall promptly notify the other Party in writing of any governmental
action that suspends, cancels, withdraws, limits, or otherwise materially
affects its ability to perform its obligations hereunder.

       28.2    The Parties understand and agree that this Agreement will be 
filed with the Commission and may thereafter be filed with the FCC. The Parties 
covenant and agree that this Agreement is satisfactory to them as an agreement 
under Section 251 of the Act. Each Party covenants and agrees to fully support 
approval of this Agreement by the Commission or the FCC under Section 252 of the
Act without modification. The Parties, however, reserve the right to seek 
regulatory relief and otherwise seek redress from each other regarding 
performance and implementation of this Agreement.

       28.3    The Parties recognize that the FCC is currently, promulgating 
regulations implementing the Act, including, without limitation, Sections 251, 
252, and 271 thereof (the "FCC Regulations"), that may affect the terms 
contained in this Agreement. In the event that any one or more of the provisions
contained herein is inconsistent with any such FCC Regulations, the Parties 
agree to make only the minimum revisions necessary to eliminate the 
inconsistency. Such minimum changes to conform this Agreement to the FCC 
Regulations shall not be considered material, and shall not require further 
Commission approval (beyond any Commission approval required under Section 
252(e) of the Act).

       28.4    In the event any Applicable Laws other than the FCC Regulations 
requires modification of any material term(s) contained in this Agreement, 
either Party may require a renegotiation of the term(s) that require direct 
modification as well as of any term(s) that are reasonably affected thereby. If 
neither Party requests a renegotiation or if an Applicable Laws requires 
modification of any non-material term(s), then the Parties agree to make only 
the minimum modifications necessary, and the remaining provisions of this 
Agreement shall remain in full force and effect. For purposes of this subsection
28.4 and without limitation of any other modifications required by Applicable 
Lawss, the Parties agree that any modification required by Applicable Lawss (i) 
to the two-tier Reciprocal Call Termination compensation structure for the 
transport and termination of Local Tariff described in Exhibit A, or (ii) that 
affects either Party's receipt of reciprocal compensation for the transport and 
termination of Local Tariff, shall be deemed to be a modification of a material 
term that requires immediate good faith renegotiation between the Parties.

                                      53
<PAGE>
 
Until such renegotiation results in a new agreement or an amendment to this 
Agreement between the Parties, the Parties agree that (y) in the case of (i) 
above, they will pay each other appropriate transport charges in addition to the
usual call termination charge for Local Traffic that it delivers to the other 
Party's Local Serving Wire Center, provided each Party continues to offer the 
option of delivering Local Traffic to another IP in the LATA at the usual call 
termination charge only, and (z) in the case of (ii) above, the Party whose 
receipt of reciprocal compensation is affected shall not be obligated to pay the
other Party reciprocal compensation for the other Party's transport and 
termination of the same kind of Local Traffic delivered by the affected Party in
excess of what the affected Party is permitted to receive and retain.

29.0   MISCELLANEOUS.

       29.1    AUTHORIZATION.

               29.1.1  BA is a corporation duly organized, validly existing and 
in good standing under the laws of the Commonwealth of Virginia and has full 
power and authority to execute and deliver this Agreement and to perform the 
obligations hereunder on behalf of BA.

               29.1.2  MFS is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has full power and 
authority to execute and deliver this Agreement and to perform its obligations 
hereunder.

       29.2    INDEPENDENT CONTRACTOR.  Each Party shall perform services 
hereunder as an independent contractor and nothing herein shall be construed as 
creating any other relationship between the Parties. Each Party and each Party's
contractor shall be solely responsible for the withholding or payment of all 
applicable federal, state and local income taxes, social security taxes and 
other payroll taxes with respect to their employees, as well as any taxes, 
contributions or other obligations imposed by applicable state unemployment or 
workers' compensation acts. Each Party has sole authority and responsibility to 
hire, fire and otherwise control its employees.

       29.3    FORCE MAJEURE.  Neither Party shall be responsible for delays or 
failures in performance resulting from acts or occurrences beyond the reasonable
control of such Party, regardless of whether such delays or failures in 
performance were foreseen or foreseeable as of the date of this Agreement, 
including, without limitation: adverse weather conditions, fire, explosion, 
power failure, acts of God, war, revolution, civil commotion, or acts of public 
enemies; any law, order, regulation, ordinance or requirement of any government 
or legal body; or labor unrest, including, without limitation, strikes, 
slowdowns, picketing or boycotts; or delays caused by the other Party or by 
other service or equipment vendors; or any other circumstances beyond the 
Party's reasonable control. In such event, the affected Party shall, upon giving
prompt notice to the other Party, be excused from such performance on a 
day-to-day basis to the extent of such interferences (and the other Party shall 
likewise be excused from performance of its obligations on a day-to-day basis 
to the extent such Party's obligations relate to the performance so interfered 
with). The affected Party shall use its best efforts to avoid or remove the 
cause(s) of non-

                                      54
<PAGE>
 
performance and both Parties shall proceed to perform with dispatch once the 
cause(s) are removed or cease.

       29.4    CONFIDENTIALITY.
     
               29.4.1  All information, including but not limited to 
specification, microfilm, photocopies, magnetic disks, magnetic tapes, drawings,
sketches, models, samples, tools, technical information, data, employee records,
maps, financial reports, and market data, (i) furnished by one Party to the 
other Party dealing with customer specific, facility specific, or usage 
specific information, other than customer information communicated for the 
purpose of publication or directory database inclusion, or (ii) in written, 
graphic, electromagnetic, or other tangible form and marked at the time of 
delivery as "Confidential" or "Proprietary," or (iii) communicated orally and 
declared to the receiving Party at the time of delivery, or by written notice 
given to the receiving Party within ten (10) days after delivery, to be 
"Confidential" or "Proprietary" (collectively referred to as "Proprietary 
Information"), shall remain the property of the disclosing Party.

               29.4.2  Each Party shall keep all of the other Party's 
Proprietary Information confidential and shall use the other Party's Proprietary
Information only for performing the covenants contained in this Agreement. 
Neither Party shall use the other Party's Proprietary Information for any other 
purpose except upon such terms and conditions as may be agreed upon between the 
Parties in writing.

               29.4.3  Unless otherwise agreed, the obligations of 
confidentiality and non-use set forth in this Agreement do not apply to such 
Proprietary Information that:

               (a)     was, at the time of receipt, already known to the 
       receiving Party free of any obligation to keep it confidential as
       evidenced by written records prepared prior to delivery by the disclosing
       Party; or

               (b)     is or becomes publicly known through no wrongful act of 
       the receiving Party; or

               (c)     is rightfully received from a third person having no 
       direct or indirect secrecy or confidentiality obligation to the
       disclosing Party with respect to such information; or

               (d)     is independently developed by an employee, agent, or 
       contractor of the receiving Party that is not involved in any manner with
       the provision of services pursuant to this Agreement and does not have
       any direct or indirect access to the Proprietary Information; or

               (e)     is approved for release by written authorization of the 
       disclosing Party; or

               (f)     is required to be made public by the receiving Party 
       pursuant to applicable law or regulation, provided that the receiving
       Party shall give sufficient notice of the requirement to the disclosing
       Party to enable the disclosing Party to seek protective orders.

                                      55


<PAGE>
 
               29.4.4  Upon request by the disclosing Party, the receiving Party
shall return all tangible copies of Proprietary Information, whether written, 
graphic or otherwise, except that the receiving Party may retain one copy for 
archival purposes only.

               29.4.5  Notwithstanding any other provision of this Agreement, 
the provisions of this subsection 29.4 shall apply to all Proprietary 
Information furnished by either Party to the other in furtherance of the purpose
of this Agreement, even if furnished before the Effective Date.

       29.5    CHOICE OF LAW.  The construction, interpretation and performance 
of this Agreement shall be governed by and construed in accordance with the laws
of the state in which this Agreement is to be performed, except for its 
conflicts of laws provisions. In addition, insofar as and to the extent federal 
law may apply, federal law will control.

       29.6    TAXES
          
               29.6.1. In General.  With respect to any purchase hereunder of 
                       ----------
services, facilities or arrangements, if any federal, state or local tax, fee, 
surcharge or other tax-like charge (a "Tax") is required or permitted by 
Applicable Laws (as defined in subsection 28.1) to be collected from the 
purchasing Party by the providing Party, then (i) the providing Party shall 
properly bill the purchasing Party for such Tax, (ii) the purchasing Party shall
timely remit such Tax to the providing Party and (iii) the providing Party shall
timely remit such collected Tax to the applicable taxing authority.

               29.6.2. Taxes Imposed on the Providing Party.  With respect to 
                       ------------------------------------
any purchase hereunder of services, facilities or arrangements, if any federal, 
state or local Tax is imposed by Applicable Laws on the receipts of the 
providing Party, which Law permits the providing Party to exclude certain 
receipts received from sales for resale to a public utility, distributor, 
telephone company, local exchange carrier, telecommunications company or other 
communications company ("Telecommunications Company"), such exclusion being 
based solely on the fact that the purchasing Party is also subject to a tax 
based upon receipts ("Receipts Tax"), then the purchasing Party (i) shall 
provide the providing Party with notice in writing in accordance with subsection
29.6.6 of this Agreement of its intent to pay the Receipts Tax and (ii) shall 
timely pay the Receipts Tax to the applicable tax authority.

               29.6.3. Taxes Imposed on Customers.  With respect to any purchase
                       --------------------------
hereunder of services, facilities or arrangements that are resold to a third 
party, if any federal, state or local Tax is imposed by Applicable Laws on the 
subscriber, end-user, Customer or ultimate consumer ("Subscriber") in connection
with any such purchase, which a Telecommunications Company is required to impose
and/or collect from a Subscriber, then the purchasing Party (i) shall be 
required to impose and/or collect such Tax from the Subscriber and (ii) shall 
timely remit such Tax to the applicable taxing authority.

               29.6.4. Liability for Uncollected Tax, Interest and Penalty.  If 
                       ---------------------------------------------------
the providing Party has not received an exemption certificate and fails to 
collect any Tax as required by subsection,

                                      56
<PAGE>
 
29.6.1, then, as between the providing Party and the purchasing Party, (i) the 
purchasing Party shall remain liable for such uncollected Tax and (ii) the 
providing Party shall be liable for any interest assessed thereon and any 
penalty assessed with respect to such uncollected Tax by such authority. If the 
providing Party properly bills the purchasing Party for any Tax but the 
purchasing Party fails to remit such Tax to the providing Party as required by 
subsection 29.6.1, then, as between the providing Party and the purchasing 
Party, the purchasing Party shall be liable for such uncollected Tax and any 
interest assessed thereon, as well as any penalty assessed with respect to such 
uncollected Tax by the applicable taxing authority. If the providing Party does 
not collect any Tax as required by subsection 29.6.1 because the purchasing 
Party has provided such providing Party with an exemption certificate that is 
later found to be inadequate by a taxing authority, then, as between the 
providing Party and the purchasing Party, the purchasing Party shall be liable 
for such uncollected Tax and any interest assessed thereon, as well as any 
penalty assessed with respect to such uncollected Tax by the applicable taxing 
authority. If the purchasing Party fails to pay the Receipts Tax as required by 
subsection 29.6.2, then, as between the providing Party and the purchasing 
Party, (x) the providing Party shall be liable for any Tax imposed on its 
receipts and (y) the purchasing Party shall be liable for any interest assessed 
thereon and any penalty assessed upon the providing Party with respect to such 
Tax by such authority. If the purchasing Party fails to impose and or collect 
any Tax from Subscribers as required by subsection 29.6.3, then, as between the 
providing Party and the purchasing Party, the purchasing Party shall remain 
liable for such uncollected Tax and any interest assessed thereon, as well as 
any penalty assessed with respect to such uncollected Tax by the applicable 
taxing authority. With respect to any Tax that the purchasing Party has agreed 
to pay, or is required to impose on and/or collect from Subscribers, the 
purchasing Party agrees to indemnify and hold the providing Party harmless on an
after-tax basis for any costs incurred by the providing Party as a result of 
actions taken by the applicable taxing authority to recover the Tax from the 
providing Party due to the failure of the purchasing Party to timely pay, or 
collect and timely remit, such Tax to such authority. In the event either Party 
is audited by a taxing authority, the other Party agrees to cooperate fully with
the Party being audited in order to respond to any audit inquiries in a proper 
and timely manner so that the audit and/or any resulting controversy may be 
resolved expeditiously.

               29.6.5  Tax Exemptions and Exemption Certificates.  If Applicable
                       -----------------------------------------
Laws clearly exempts a purchase hereunder from a Tax, and if such Law also 
provides an exemption procedure, such as an exemption-certificate requirement, 
then, if the purchasing Party complies with such procedure, the providing Party 
shall not collect such Tax during the effective period of such exemption. Such 
exemption shall be effective upon receipt of the exemption certificate or 
affidavit in accordance with the terms set forth in subsection 29.6.6. If 
Applicable Laws clearly exempts a purchase hereunder from a Tax, but does not 
also provide an exemption procedure, then the providing Party shall not collect 
such Tax if the purchasing Party (i) furnishes the providing Party with a letter
signed by an officer requesting such an exemption and citing the provision in 
the Law which clearly allows such exemption and (ii) supplies the providing 
Party with an indemnification agreement, reasonably acceptable to the providing 
Party (e.g., an agreement commonly used in the industry), which holds the 
       - -
providing Party harmless on an after-tax basis with respect to its forbearing to
collect such Tax.

                                      57
<PAGE>
 
          29.6.6.   Notices for Purposes of this Subsection 29.6.  All notices, 
                    --------------------------------------------
affidavits, exemption-certificates or other communications required or permitted
to be given by either Party to the other, for purposes of this subsection 29.6, 
shall be made in writing and shall be delivered in person or sent by certified 
mail, return receipt requested, or registered mail, or a courier service 
providing proof of service, and sent to the addresses set forth in subsection 
29.10 as well as to the following:

     To Bell Atlantic:        Tax Administration
                              Bell Atlantic Network Services, Inc.
                              1717 Arch Street
                              30th Floor
                              Philadelphia, PA 19103

     To MFS:                  Corporate Tax Department
                              MFS Communications Company, Inc.
                              11808 Miracle Hills Drive
                              Omaha, Nebraska 68154

Either Party may from time to time designate another address or other addressees
by giving notice is accordance with the terms of this subsection 29.6. Any
notice or other communication shall be deemed to be given when received.

     29.7 ASSIGNMENT.  Neither Party shall assign this Agreement nor any of its 
rights or obligations hereunder without the prior written consent of the other 
Party, which consent shall not be unreasonably withheld. Any assignment or 
delegation in violation of this subsection 29.7 shall be void and ineffective 
and constitute a default of this Agreement.

     29.8 BILLING AND PAYMENT; DISPUTED AMOUNTS.

          29.8.1  Except may otherwise be provided in this Agreement, each Party
shall submit on a monthly basis an itemized statement of charges incurred by the
other Party during the preceding month(s) for services rendered hereunder. 
Payment of billed amounts under this Agreement, whether billed on a monthly 
basis or as otherwise provided herein, shall be due, in immediately available 
U.S. funds, within thirty (30) days of the date of such statement.

          29.8.2  Although it is the intent of both Parties to submit timely and
accurate statements of charges, failure by either Party to present statements to
the other Party in a timely manner shall not constitute a breach or default, or 
a waiver of the right to payment of the incurred charges, by the billing Party 
under this Agreement, and the billed Party shall not be entitled to dispute the 
billing Party statement(s) based on such Party's failure to submit them in a 
timely fashion.

          29.8.3  If any portion of an amount due to a Party (the "Billing 
Party") under this Agreement is subject to a bona fide dispute between the 
Parties, the Party billed (the "Non-Paying Party") shall within sixty (60) days 
of its receipt of the invoice containing such

                                      58

<PAGE>
 
disputed amount give notice to the Billing Party of the amounts it disputes 
("Disputed Amounts") and include in such notice the specific details and reasons
for disputing each item. The Non-Paying Party shall pay when due (i) all 
undisputed amounts to the Billing Party and (ii) all Disputed Amounts into an 
interest bearing escrow account with a third party escrow agent mutually agreed 
upon by the Parties.

            29.8.4    If the Parties are unable to resolve the issues related to
the Disputed Amounts in the normal course of business within ninety (90) days
after delivery to the Billing Party of notice of the Disputed Amounts, each of
the Parties shall appoint a designated representative that has authority to
settle the dispute and that is at a higher level of management than the persons
with direct responsibility for administration of this Agreement. The designated
representatives shall meet as often as they reasonably deem necessary in order
to discuss the dispute and negotiate in good faith in an effort to resolve such
dispute. The specific format for such discussions will be left to the discretion
of the designated representatives, however all reasonable requests for relevant
information made by one Party to the other Party shall be honored.

            29.8.5    If the Parties are unable to resolve issues related to the
Disputed Amounts within forty-five (45) days after the Parties' appointment of
designated representatives pursuant to subsection 29.8.4, then either Party may
file a complaint with the Commission to resolve such issues or proceed with any
other remedy pursuant to law or equity. The Commission may direct release of any
or all funds (including any accrued interest) in the escrow account, plus
applicable late fees, to be paid to either Party.

            29.8.6    The Parties agree that all negotiations pursuant to this
subsection 29.8 shall remain confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence and state
rules of evidence.

            29.8.7    Any undisputed amounts not paid when due shall accrue
interest from the date such amounts were due at the lesser of (i) one and one-
half percent (1-1/2%) per month or (ii) the highest rate of interest that may be
charged under applicable law.

     29.9   DISPUTE RESOLUTION. Any dispute between the Parties regarding the
interpretation or enforcement of this Agreement or any of its terms shall be 
addressed by good faith negotiation between the Parties, in the first instance. 
Should such negotiations fail to resolve the dispute in a reasonable time, 
either Party may initiate an appropriate action in any regulatory or judicial 
forum of competent jurisdiction.

     29.10  NOTICES. Notices given by one Party to the other Party under this
Agreement shall be in writing and shall be (a) delivered personally, (b) 
delivered by express delivery service, (c) mailed, certified mail or first class
U.S. mail postage prepaid, return receipt requested, or (d) delivered by 
telecopy to the following addresses of the Parties.

               To MFS:

                                      59
<PAGE>
 
               MFS Intelenet of Virginia, Inc.
               33 Whitehall St.
               15/th/ floor
               New York, NY 10004
               Attn: Director, Regulatory Affairs - Eastern Region
               Facsimile: 212/843-3060


               To Bell Atlantic:

               Director - Interconnection Services
               Bell Atlantic Network Services, Inc.
               1320  N. Courthouse Road
               9/th/ Floor
               Arlington, VA 22201
               Facsimile: 703/974-2183

               with a copy to:

               Vice President and General Counsel
               Bell Atlantic - Virginia, Inc.
               600 East Main Street
               24/th/ Floor
               Richmond, VA 23261
               Facsimile: (804) 772-2143

or to such other address as either Party shall designate by proper notice.
Notices will be deemed given as of the earlier of (i) the date of actual
receipt, (ii) the next business day when notice is sent via express mail or
personal delivery, (iii) three (3) days after mailing in the case of first 
class or certified U.S. mail, or (iv) on the date set forth on the confirmation 
in the case of telecopy.

          29.11  SECTION 252(I) OBLIGATIONS.

                 29.11.1 If, at any time during the term of this Agreement,
either Party enters into an agreement to provide an integrated package of
services or arrangements substantially similar to that described herein to
another CLEC (in the case of BA), or another incumbent LEC (in the case of MFS),
operating within the same state to which this Agreement applies, on terms
significantly different than those available under this Agreement (the "Other
Agreement"), then the other Party may opt to adopt, on a prospective basis only,
the rates, terms, and conditions contained in the Other Agreement (i) in its
entirety, or (ii) that relate directly to any of the following individual
services. Network Elements, or arrangements, for its own reciprocal arrangements
with the first Party, including, without limitation, any term or volume
commitments or network architecture configurations:

                                      60




<PAGE>
 
               (a)  Unbundled Loop Elements - Section 251(c)(3) of the Act 
(Section 11 of this Agreement); or

               (b)  Collocation - Section 251(c)(6) of the Act (Section 13 of 
this Agreement); or

               (c)  Number Portability - Section 251(b)(2) of the Act (Section 
14 of this Agreement); or

               (d)  Access to Rights of Way - Section 251(b)(4) of the Act 
(Section 16 of this Agreement).

               (e)  transiting arrangements.

               29.11.2   To the extent the exercise of the foregoing options 
requires a rearrangement of facilities by the providing Party, the opting Party 
shall be liable for the non-recurring charges associated therewith.

               29.11.3   The Party electing to exercise such option shall do so 
by delivering written notice to the first Party. Upon receipt of said notice by 
the first Party, the Parties shall amend this Agreement to provide the same 
rates, terms and conditions to the notifying Party for the remaining term of 
this Agreement; provided, however, that the Party exercising its option under 
this subsection 29.11 must continue to provide the same services or arrangements
to the first Party as required by this Agreement, subject either to the rates, 
terms, and conditions applicable to the first Party in its agreement with the 
third party or to the rates, terms, and conditions of this Agreement, whichever 
is more favorable to the first Party in its sole determination.

               29.11.4   BA represents and warrants that, as of the date of this
Agreement, it has not entered into any comparable Interconnection agreement with
any other CLEC in BA's service territory that is significantly more favorable 
than the terms contained herein. BA makes no warranty or representation with 
respect to its Interconnection arrangements with its affiliates of ITCs.

     29.12     JOINT WORK PRODUCT. This Agreement is the joint work product of
the Parties and has been negotiated by the Parties and their respective counsel
and shall be fairly interpreted in accordance with its terms and, in the event
of any ambiguities, no inferences shall be drawn against either Party.


     29.13     NO THIRD PARTY BENEFICIARIES; DISCLAIMER OF AGENCY. This 
Agreement is for the sole benefit of the Parties and their permitted assigns, 
and nothing herein express or implied shall create or be construed to create any
third-party beneficiary rights hereunder. Except for provisions herein expressly
authorizing a Party to act for another, nothing in this Agreement shall 
constitute a Party as a legal representative or agent of the other Party, nor 
shall a Party have the right or authority to assume, create or incur any 
liability or any obligation of any kind, express or implied, against or in the 
name or on behalf of the other Party unless otherwise expressly

                                      61












    
<PAGE>
 
permitted by such other Party. Except as otherwise expressly provided in this 
Agreement, no Party undertakes to perform any obligation of the other Party, 
whether regulatory or contractual, or to assume any responsibility for the 
management of the other Party's business.

     29.14     NO LICENSE.

               29.14.1 Nothing in this Agreement shall be construed as the grant
of a license, either express or implied, with respect to any patent, copyright, 
trademark, trade name, trade secret or any other proprietary or intellectual 
property now or hereafter owned, controlled or licensable by either Party. 
Neither Party may use any patent, copyrightable materials, trademark, trade 
name, trade secret or other intellectual property right of the other Party 
except in accordance with the terms of a separate license agreement between the 
parties granting such rights.

               29.14.2 Neither Party shall have any obligation to defend, 
indemnify or hold harmless, or acquire any license or rights for the benefit  
of, or owe any other obligation or have any liability to, the other Party or its
customers based on or arising from any claim, demand, or proceeding by any third
party alleging or asserting that the use of any circuit, apparatus, or system,
or the use of any software, or the performance of any service or method, or the
provision of any facilities by either Party under this Agreement, alone or in
combination with that of the other Party, constitutes direct, vicarious or
contributory infringement or inducement to infringe, misuse or misappropriation
of any patent, copyright, trademark, trade secret, or any other proprietary or
in intellectual property right of any Party or third party. Each Party, however,
shall offer to the other reasonable cooperation and assistance in the defence of
any such claim.

               29.14.3   NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,
THE PARTIES AGREE THAT NEITHER PARTY HAS MADE, AND THAT THERE DOES NOT EXIST,
ANY WARRANTY, EXPRESS OR IMPLIED, THAT THE USE BY THE PARTIES OF THE OTHER'S
FACILITIES, ARRANGEMENTS, OR SERVICES PROVIDED UNDER THIS AGREEMENT SHALL NOT
GIVE RISE TO A CLAIM BY ANY THIRD PARTY OF INFRINGEMENT, MISUSE, OR
MISAPPROPRIATION OF ANY INTELLECTUAL PROPERTY RIGHT OF SUCH THIRD PARTY.
                    
     29.15     TECHNOLOGY UPGRADES. Nothing in this Agreement shall limit BA's
ability to upgrade its network through the incorporation of new equipment, new
software or otherwise. BA shall provide MFS written notice at least ninety (90)
days prior to the incorporation of any such upgrades in BA's network that will
materially affect MFS's service. MFS shall be solely responsible for the cost
and effort of accommodating such changes in its own network.

     29.16     SURVIVAL. The Parties' obligations under this Agreement which by
their nature are intended to continue beyond the termination or expiration of
this Agreement shall survive the termination or expiration of this Agreement.


     29.17     ENTIRE AGREEMENT. The terms contained in this Agreement and any 
Schedules, Exhibits, tariffs and other document or instruments referred to 
herein, which are incorporated into this Agreement by this reference, constitute
the entire agreement between the Parties with

                                      62








    




<PAGE>
 
respect to the subject matter hereof, superseding all prior understandings, 
proposals and other communications, oral or written. Neither Party shall be 
bound by any preprinted terms additional to or different from those in this 
Agreement that may appear subsequently in the other Party's form documents, 
purchase orders, quotations, acknowledgments, invoices or other communications.

     29.18     COUNTERPARTS.  This Agreement may be executed in two or more 
counterparts, each of which shall be deemed an original and all of which 
together shall constitute one and the same instrument.

     29.19     MODIFICATION, AMENDMENT, SUPPLEMENT, OR WAIVER. No modification, 
amendment, supplement to, or waiver of the Agreement or any of its provisions 
shall be effective and binding upon the Parties unless it is made in writing and
duly signed by the Parties. A failure or delay of either Party to enforce any of
the provisions hereof, to exercise any option which is herein provided, or to 
require performance of any of the provisions hereof shall in no way be construed
to be a waiver of such provisions or options.

     29.20     SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and
inure to the benefit of the Parties and their respective legal successors and
permitted assigns.

     29.21     PUBLICITY. Neither Party shall use the name of the other Party in
connection with this Agreement in a press release or statement without the prior
consent of the other Party, which consent shall not be unreasonably withheld.

                                      63
     
<PAGE>
 
                                 SCHEDULE 12.3
                          SUPPORT SERVICES FOR RESALE
                          ---------------------------


1.   BA OSS SERVICES
     ---------------

     1.1 Definitions
         -----------

     As used in this Schedule 12.3, the following terms shall have the meanings 
     stated below:

     1.1.1 "BA Operations Support Systems" means BA systems for pre-ordering,
     ordering, provisioning, maintenance and repair, and billing.

     1.1.2 "BA OSS Services" means access to BA Operations Support Systems
     functions. The term "BA OSS Services" includes, but is not limited to: (a)
     BA's provision of MFS Usage Information to MFS pursuant to Section 1.3
     below; and, (b) "BA OSS Information", as defined in Section 1.1.4 below.

     1.1.3 "BA OSS Facilities" means any gateways, interfaces, databases,
     facilities, equipment, software, or systems used by BA to provide BA OSS
     Services to MFS.

     1.1.4 "BA OSS Information" means any information accessed by, or disclosed
     or provided to, MFS through or as a part of BA OSS Services. The term "BA
     OSS Information" includes, but is not limited to: (a) any Customer
     Information related to a BA Customer or an MFS Customer accessed by, or
     disclosed or provided to, MFS through or as a part of BA OSS Services: and,
     (b) any MFS Usage Information (a defined in Section 1.1.6 below) accessed
     by, or disclosed or provided to, MFS.

     1.1.5 "BA Retail Telecommunications Service" means any Telecommunications
     Service that Bell Atlantic provides at retail to subscribers that are not
     Telecommunications Carriers. The term "BA Retail Telecommunications
     Service" does not include any exchange access service (as defined in
     Section 3(16) of the Act, 47 U.S.C (Section) 153 (16)) provided by BA.

     1.1.6 "MFS Usage Information" means the usage information for a BA Retail
     Telecommunications Service purchased by MFS under this Agreement that BA
     would record if BA was furnishing such BA Retail Telecommunications Service
     to a BA end-user retail Customer.
<PAGE>
 
     1.1.7 "Customer Information" means CPNI, as defined in the Act, of a
     Customer and any other non-public, individually identifiable information
     about a Customer or the purchase by a Customer of the services or products
     of a Party.


     1.2 BA OSS Services
         ---------------

     1.2.1 Upon request by MFS, BA shall provide to MFS, pursuant to Section 
     251(c)(3) of the Act, 47 U.S.C (Section) 251(c)(3), BA OSS Services.

     1.2.2 Subject to the requirements of Applicable Laws, BA Operations Support
     Systems, BA Operations Support Systems functions, BA OSS Facilities, BA OSS
     Information, and the BA OSS Services that will be offered by BA, shall be
     as determined by BA. Subject to the requirements of Applicable Laws, BA
     shall have the right to change BA Operations Support Systems, BA Operations
     Support Systems functions, BA OSS Facilities, BA OSS Information, and the
     BA OSS Services, from time-to-time, without the consent of MFS. Except as
     otherwise provided by this Agreement or Applicable Laws, BA will give MFS
     notice in writing or electronically (which may be giving MFS access to a
     database or an Internet site that contains the applicable information, or
     by other electronic means) of material modification of the operation of BA
     OSS Services furnished under this Agreement at least sixty (60) days prior
     to the time the material modification becomes effective.


     1.3 MFS Usage Information
         ---------------------

     1.3.1 Upon request by MFS, BA shall provide to MFS, pursuant to Section 
     251(c)(3) of the Act, 47 U.S.C. (Section) 251(c)(3), MFS Usage Information.

     1.3.2 MFS Usage Information will be available to MFS through the following:

            (a) Daily Usage File on Data Tape.

            (b) Daily Usage File through Network Data Mover ("NDM").

            (c) Daily Usage File through Centralized Message Distribution System
                ("CMDS").  

     1.3.3.1 MFS Usage Information will be provided in a Bellcore Exchange
     Message Records ("EMR") format.

     1.3.3.2 Daily Usage File Data Tapes provided pursuant to Section 1.3.2(a)
     above will be issued each day, Monday through Friday, except holidays
     observed by BA.


    

    
<PAGE>
 
     1.3.4 Except as stated in this Section 1.3, subject to the requirements of
     Applicable Laws, the manner in which, and the frequency with which, MFS
     Usage Information will be provided to MFS shall be determined by BA.

     1.4   Access to and Use of BA OSS Facilities
           --------------------------------------

     1.4.1 BA OSS Facilities may be accessed and used by MFS only to the extent
     necessary for MFS's access to and use of BA OSS Services pursuant to this
     Agreement.


     1.4.2 BA OSS Facilities may be accessed and used by MFS only to provide 
     Telecommunications Services to MFS Customers.


     1.4.3 MFS shall restrict access to and use of BA OSS Facilities to MFS.
     This Schedule 12.3 does not grant to MFS any right or license to grant
     sublicenses to other persons, or permission to other persons (except MFS'S
     employees, agents and contractors, in accordance with Section 1.4.7 below),
     to access or use BA OSS Facilities.


     1.4.4 MFS shall not (a) alter, modify or damage the BA OSS Facilities
     (including, but not limited to, BA software), (b) copy, remove, derive,
     reverse engineer, or decompile, software from the BA OSS Facilities, or (c)
     obtain access through BA OSS Facilities to BA databases, facilities,
     equipment, software, or systems, which are not offered for MFS'S use under
     this Schedule 12.3.

     1.4.5 MFS shall comply with all practices and procedures established by BA
     for access to and use of BA OSS Facilities (including, but not limited to,
     BA practices and procedures with regard to security and use of access and
     user identification codes).

     1.4.6 All practices and procedures for access to and use of BA OSS
     Facilities, and all access and user identification codes for BA OSS
     Facilities: (a) shall remain the property of BA; (b) shall be used by MFS
     only in connection with MFS's use of BA OSS Facilities permitted by this
     Schedule 12.3: and, (c) shall be treated by MFS as Proprietary Information
     of BA pursuant to subsection 29.4 of the Agreement.

     1.4.7 MFS's employees, agents and contractors may access and use BA OSS
     Facilities only to the extent necessary for MFS's access to and use of the
     BA OSS Facilities permitted by this Agreement. Any access to or use of BA
     OSS Facilities by MFS's employees, agents, or contractors, shall be subject
     to the provisions of the Agreement, including, but not limited to,
     subsection 29.4 thereof and Sections 1.4.6 and 1.5.3.3 of this Schedule
     12.3.

     1.5 BA OSS Information
         ------------------
<PAGE>
 
     1.5.1 Subject to the provisions of this Agreement and Applicable Laws, BA
     grants to MFS a non-exclusive license to use BA OSS Information.

     1.5.2 All BA OSS Information shall at all times remain the property of BA.
     Except as expressly stated in this Schedule 12.3, MFS shall acquire no
     rights in or to any BA OSS Information.

     1.5.3.1 The provisions of this Section 1.5.3 shall apply to all BA OSS
     Information, except (a) MFS Usage Information, (b) CPNI of MFS, and (c)
     CPNI of a BA Customer or an MFS Customer, to the extent the Customer has
     authorized MFS to use the Customer Information.

     1.5.3.2 BA OSS Information may be accessed and used by MFS only to provide 
     Telecommunications Services to MFS Customers.

     1.5.3.3 MFS shall treat BA OSS Information that is designated by BA,
     through written or electronic notice (including, but not limited to,
     through the BA OSS Services), as "Confidential" or "Proprietary" as
     Proprietary Information of BA pursuant to subsection 29.4 of the Agreement.

     1.5.3.4 Except as expressly stated in this Schedule 12.3, this Agreement
     does not grant to MFS any right or license to grant sublicenses to other
     persons, or permission to other persons (except MFS's employees, agents or
     contractors, in accordance with Section 1.5.3.5 below), to access, use or
     disclose BA OSS Information.

     1.5.3.5 MFS's employees, agents and contractors may access, use and
     disclose BA OSS Information only to the extent necessary for MFS's access
     to, and use and disclosure of, BA OSS Information permitted by this
     Schedule 12.3. Any access to, or use or disclosure of, BA OSS Information
     by MFS'S employees, agents or contractors, shall be subject to the
     provisions of this Agreement, including, but not limited to, subsection
     29.4 of the Agreement and Section 1.5.3.3 above.

     1.5.3.6 MFS's license to use BA OSS Information shall expire upon the
     earlier of: (a) termination of the license in accordance with this Schedule
     12.3; or (b) expiration or termination of the Agreement.

     1.5.3.7 All BA OSS Information received by MFS shall be destroyed or
     returned by MFS to BA, upon expiration, suspension or termination of the
     license to use such BA OSS Information.

     1.5.4 Unless sooner terminated or suspended in compliance with the
     Agreement or this Schedule 12.3 (including, but not limited to, subsection
     22.3 of the





    
<PAGE>
 
     Agreement and Section 1.6.1 below). MFS's access to BA OSS Information
     through BA OSS Services shall terminate upon the expiration or termination
     of the Agreement.

     1.5.5.1 BA shall have the right (but not the obligation) to perform at BA's
     expense (provided that there will be no charge to BA for reasonable access
     to MFS' employees, books, records, documents and facilities) an audit of
     MFS upon three (3) full business days notice to MFS to ascertain whether
     MFS is complying with the requirements of Applicable Laws and this
     Agreement with regard to MFS's access to, and use and disclosure of, BA OSS
     Information.

     1.5.5.2 Without in any way limiting any other rights BA may have under the
     Agreement or Applicable Laws, BA shall have the right (but not the
     obligation) to monitor MFS's access to and use of BA OSS Information which
     is made available by BA to MFS pursuant to this Agreement, to ascertain
     whether MFS is complying with the requirements of Applicable Laws and this
     Agreement, with regard to MFS's access to, and use and disclosure of, such
     BA OSS Information. The foregoing right shall include, but not be limited
     to, the right (but not the obligation) to electronically monitor at BA's
     expense (provided that there will be no charge to BA by MFS to perform this
     activity), MFS's access to and use of BA OSS Information which is made
     available by BA to MFS through BA OSS Facilities.

     1.5.5.3 Information obtained by BA pursuant to this Section 1.5.5 shall be
     treated by BA as Proprietary Information of MFS pursuant to subsection 29.4
     of the Agreement; provided that, BA shall have the right (but not the
     obligation) to use and disclose information obtained by BA pursuant to this
     Section 1.5.5 to enforce BA's rights under this Agreement or Applicable
     Laws.

     1.5.6 MFS acknowledges that the BA OSS Information, by its nature, is
     updated and corrected on a continuous basis by BA, and therefore that BA
     OSS Information is subject to change from time to time.

     1.6 Liabilities and Remedies
         ------------------------

     1.6.1 Any breach by MFS, or MFS's employees, agents or contractors, of the
     provisions of Sections 1.4 or 1.5 above shall be deemed a material breach
     of the Agreement. In addition, if MFS or an employee, agent or contractor
     of MFS at any time breaches a provision of Sections 1.4 or 1.5 above and
     such breach continues for more than fifteen (15) days after written notice
     thereof from BA, then, except as otherwise required by Applicable Laws, Ba
     shall have the right, upon notice to MFS, to suspend the license to use BA
     OSS Information granted by Section 1.5.1 above and/or the provision of BA
     OSS Services, in whole or in part.
<PAGE>
 
     1.6.2 MFS agrees that BA would be irreparably injured by a breach of
     Sections 1.4 or 1.5 above by MFS or the employees, agents or contractors of
     MFS, and that BA shall be entitled to seek equitable relief, including
     injunctive relief and specific performance, in the event of any such
     breach. Such remedies shall not be deemed to be the exclusive remedies for
     any such breach, but shall be in addition to any other remedies available
     under this Agreement or at law or in equity.

     1.7 Relation to Applicable Laws
         ---------------------------

     The provisions of Sections 1.4, 1.5 and 1.6 above shall be in addition to
     and not in derogation of any provisions of Applicable Laws, including, but
     not limited to, 47 U.S.C. (S) 222, and are not intended to constitute a
     waiver by BA of any right with regard to protection of the confidentiality
     of the information of BA or BA Customers provided by Applicable Laws.

     1.8 Cooperation
         -----------

     MFS, at MFS's expense, shall reasonably cooperate with BA in using BA OSS
     Services. Such cooperation shall include, but not be limited to, the
     following:
     
     1.8.1 Upon request by BA, MFS shall by no later than the fifteenth (15th)
     day of the month preceding the first calendar month of each calendar
     quarter submit to BA reasonable, good faith estimates (by geographic area
     designated by BA) of the volume of each BA Retail Telecommunications
     Service for which MFS anticipates submitting orders in each week of the
     next calendar quarter.

     1.8.2 MFS shall participate in cooperative testing of BA OSS Services and
     shall provide assistance to BA in identifying and correcting mistakes,
     omissions, interruptions, delays, errors, defects, faults, failures, or
     other deficiencies, in BA OSS Services. The Parties will jointly agree upon
     the schedule for such testing and the tests that will be conducted.

     1.9 BA Access to Information Related to MFS Customers
         -------------------------------------------------

     BA shall have the right to access, use and disclose information related to
     MFS Customers that is in BA's possession (including, but not limited to, in
     BA OSS Facilities) to the extent such access, use and/or disclosure has
     been authorized by the MFS Customer in the manner required by Applicable
     Laws.

2.   BELL ATLANTIC PRE-OSS SERVICES
     ------------------------------

     2.1 As used in this Schedule 12.3, "BA Pre-OSS Service" means a service
     that allows the performance of an activity that is comparable to an
     activity to be performed through a BA OSS Service and that BA offers to
     provide to MFS. The term "BA Pre-OSS Service" includes, but is not limited
     to, the activity of placing






    



<PAGE>
 
     orders for BA Telecommunications Services through a telephone facsimile
     communication. Prior to purchasing BA OSS Services, MFS may purchase BA
     Pre-OSS Services.

     2.2 Subject to the requirements of Applicable Laws, the BA Pre-OSS Services
     that will be offered by BA shall be as determined by BA and BA shall have
     the right to change BA Pre-OSS Services, from time-to-time, without the
     consent of MFS. Except as otherwise provided by this Agreement or
     Applicable Laws, BA will give MFS notice in writing or electronically
     (which may be by giving MFS access to a database or an Internet site that
     contains the applicable information, or by other electronic means) of
     material modification of the operation of BA Pre-OSS Services furnished
     under this Agreement at least thirty (30) days prior to the time the
     material modification becomes effective.

     2.3 Subject to the requirements of Applicable Laws, the prices for BA Pre-
     OSS Services shall be as determined by BA and shall be subject to change by
     BA from time-to-time.

     2.4 The provisions of Sections 1.5 through 1.9 above shall also apply to BA
     Pre-OSS Services. For the purposes of this Section 2.4: (a) references in
     Sections 1.5 through 1.9 above to BA OSS Services shall be deemed to
     include BA Pre-OSS Services; and, (b) references in Sections 1.5 through
     1.9 above to BA OSS Information shall be deemed to include information made
     available to MFS through BA Pre-OSS Services.

3.   RATES AND CHARGES
     -----------------

     3.1 The prices for the foregoing services shall be as set forth in BA's
     Tariffs or, in the absence of an applicable BA Tariff price, in Exhibit A
     or, if not set forth in either, as may be determined by BA from time to
     time. If BA at any time offers a resale support service the prices for
     which are not stated in BA's Tariffs or Exhibit A and MFS elects to
     purchase such service, BA shall have the right to revise Exhibit A to add
     such prices; provided that, if the resale support service is already being
     used by MFS at the time BA revises Exhibit A to add such prices, except as
     otherwise required by this Agreement or Applicable Laws, the revision shall
     not become effective until BA has given MFS thirty (30) days prior notice
     of the revision.
<PAGE>
 

                                                                       EXHIBIT A


                BELL ATLANTIC-VIRGINIA, INC. AND MFS INTELENET
                               OF VIRGINIA, INC.


                   DETAILED SCHEDULE OF ITEMIZED CHARGES/1/
                   -------------------------------------

 A.     BA SERVICES, FACILITIES, AND ARRANGEMENTS:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
       BA SERVICE                                 NON-RECURRING          RECURRING
       ----------                                 -------------          ---------
---------------------------------------------------------------------------------------------------
<S>                                               <C>                    <C>
 1.a.  Entrance facilities, and transport, as     Per interstate [BA FCC #1 sec. 6.9.1.] and
       appropriate, for Interconnection at        (proposed) intrastate [BA-VA SCC 217
       BA End Office, Tandem Office,              sec. 6.8.2] access tariffs for Feature Group
       Serving Wire Center, or other Point        D Service/2/
       of Interconnection

                                                  Illustrative:

                                                    Interstate non-recurring: $1, plus $1
                                                  switched access connection charge per
                                                  trunk; DS-1 entrance facility $210-
                                                  $212/mo.

                                                    Intrastate nonrecurring: $895 for first DS-
                                                  1, $280 for additional, plus $25 switched
                                                  access connection charge per trunk; DS-1
                                                  entrance facility $270/mo.
---------------------------------------------------------------------------------------------------
 1.b.  Collocation and related services for       Per interstate [BA FCC 1 sec. 19] and
       Interconnection at BA End Office,          intrastate access tariffs/3/
       Tandem Office, or Serving Wire
       Center
---------------------------------------------------------------------------------------------------
</TABLE>

___________________
/1/       Rates listed herein for services, facilities, or arrangements that are
marked with an asterisk (*) are fixed pursuant to Section 20 of the Agreement
for the initial term of the Agreement, as set forth in Section 22 of the
Agreement. Rates for services, facilities, or arrangements that are not marked
with an asterisk shall change in accordance with the provisions of Section 20 of
the Agreement.
/2/       Pending approval of the BA intrastate local transport restructure
tariff, intrastate access services subject to the pending tariff will be charged
pursuant to effective tariffs, as agreed by the Parties, subject to true-up at
either Party's request.
/3/       Pending approval of the BA intrastate collocation tariff to be filed
no later December 31, 1996, all collocation services shall be charged at rates
found in BA FCC 1 sec. 19.

                                       1
<PAGE>
 
<TABLE> 
<CAPTION> 
------------------------------------------------------------------------------------------------------------------------------------
     BA SERVICE                        NON-RECURRING                           RECURRING
     ----------                        -------------                           ---------
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                                     <C> 
1.c. Tandem transit arrangements       Per tariffs cited in    
     (for Interconnection between      sections 1.a. and 1.b. above, as        Per interstate [BA FCC 1 sec. 6.9.1.B] and      
     MFS and carriers other than BA)   applicable; separate trunks required    (proposed) intrastate [BA-VA SCC 217 sec. 6.8.2.B]
                                       for IXC subtending trunks/4/            for tandem switching and tandem switched transport,
                                                                               as applicable/5/   
                                                                               

                                                                               Illustrative:
                                     
                                                                                Interstate, (proposed) intrastate tandem switching 
                                                                               $.000999/mou, tandem switched transport $.000195/mou
                                                                               plus $.000045/mou/mile
------------------------------------------------------------------------------------------------------------------------------------
1.d. 911 Interconnection               Per tariffs cited in 1.a., 1.b., and 1.c. above, as applicable, for entrance facility plus
                                       applicable transport, or Collocation Arrangement at 911 tandem
------------------------------------------------------------------------------------------------------------------------------------
</TABLE> 


________________________________
/4/    See note 2 above.
/5/    See note 2 above.

                                       2

                                                                 
<PAGE>
 
<TABLE> 
<CAPTION> 
------------------------------------------------------------------------------------------------------------------------------------
      BA SERVICE                                NON-RECURRING                            RECURRING
      ----------                                -------------                            ---------
------------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                                      <C> 
1.e.  Directory assistance Interconnection      Intrastate per (proposed) BA-VA SCC      Intrastate per (proposed) BA-VA SCC 217
                                                217 sec. 9.6.B (transport)/6/            sec. 9.6.B:  
                                                
                                                                                         Illustrative: 

                                                                                           Per call rate $.000092 fixed, $.000021
                                                                                         per mile, $.000462 tandem switching,
                                                                                         $.003705 interconnection

                                                Interstate per BA FCC 1 sec. 9.6.B       Interstate per BA FCC 1 sec. 9.6.B 

                                                                                         Illustrative: 

                                                                                           Per call rate $.000082 fixed, $.000019
                                                                                         per mile, $.000353 tandem switching, 
                                                                                         $.002311 interconnection
------------------------------------------------------------------------------------------------------------------------------------
1.f.  Operator services (call completion)       Per separate contract
      Interconnection
------------------------------------------------------------------------------------------------------------------------------------
2.    Unbundled elements                        Available as listed herein and in interstate and intrastate tariffs, and pursuant
                                                to Section 11. of the Agreement
------------------------------------------------------------------------------------------------------------------------------------
3.    Poles, ducts, conduits, ROW               Per contract rates pursuant to 47 U.S.C. sec. 224
                         
                                                Illustrative:

                                                  Duct (Northern Virginia) $4.50/ft/yr.
                                                  Pole $4.46/attachment/yr.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE> 


____________________________________
/6/   See note 2 above
/7/   See note 2 above.

                                       3
<PAGE>
 
<TABLE> 
 <CAPTION> 
--------------------------------------------------------------------------------
     BA SERVICE                 NON-RECURRING              RECURRING
     ----------                 -------------              ---------
--------------------------------------------------------------------------------
<S>  <C>                        <C>                        <C> 
4.a. Local loop transmission*   Permanent rates to be      Permanent rates to be 
                                determined by appropriate  determined by appropriate
       Unbundled Local Loop     arbitral body. Interim     arbitral body. Interim   
       Element                  rates will apply until     rates will apply until   
                                the permanent rates are    the permanent rates are 
       Cross Connection to      determined./8/             determined./9/           
       POTS loop                                                                
                                                                               

--------------------------------------------------------------------------------
4.b. Special construction       As applicable per BA-VA SCC 203 sec. 2
     charges
--------------------------------------------------------------------------------
4.c. Central office technician  Per interstate [BA FCC 1 sec. 13.2 or sec. 19.5]
     charges (during normal     tariff.
     working hours)

--------------------------------------------------------------------------------
5.a. Trunk Side local      
     transport

       DS-1 transport         Per interstate [BA FCC 1 sec. 6.9.1.C] and 
                              (proposed) intrastate [BA-VA SCC 217 sec. 6.8.2.C]
                              tariffs
                    
                              Illustrative recurring:

                                Interstate $60/mo. fixed, $17.70/mile/mo.

                                Intrastate $75/mo. fixed, $30/mile/mo.
--------------------------------------------------------------------------------
5.b. DS-3 transport           Tariff reference see 5.a. above.

                              Illustrative recurring:

                                Interstate, intrastate $900/mo. fixed, 
                              $180/mile/mo.
--------------------------------------------------------------------------------
</TABLE> 

_______________________
/8/  Interim rates will be based on the following order of precedence (i)
effective tariff(s), (ii) other BA ILEC-CLEC Interconnection Agreement(s) in the
state, (iii) any Commission recommendation, or (iv) mutual agreement of the
Parties.

/9/  See preceding note.
/10/ See note 2 above.

                                       4

<PAGE>
 
--------------------------------------------------------------------------------
     BA SERVICES                 NON-RECURRING                 RECURRING  
     -----------                 -------------                 ---------
--------------------------------------------------------------------------------
6.   Local switching*  

      POTS switch Port            $6/service order              $1.50/mo., plus
                                 plus $6/Port                  usage per tariff,
                                                               minus wholesale
                                                               discount per 
                                                               section 14 below
--------------------------------------------------------------------------------
7.a. Operator services

      911 service (data entry;   No charge  
     database maintenance)*
--------------------------------------------------------------------------------
7.b.  Directory assistance       Per tariff or separate        Per tariff or  
                                 contact; branding             separate contract
                                 available
                                                               Illustrative 
                                                               tariff rates:

                                                               Interstate [BA 
                                                               FCC 1 sec. 9.6],
                                                               $.275-.288 per 
                                                               call 

                                                               Intrastate 
                                                               (proposed) [BA-VA
                                                               SCC 217 sec. 9.6.
                                                               A], $.25 per call

                                                               Directory 
                                                               transport per 
                                                               section 1.e. 
                                                               above
--------------------------------------------------------------------------------
7.c.  Operator call              Per separate contract; branding available     
      completion
--------------------------------------------------------------------------------
8.a. White pages directory       $5.00 per primary listing     No charge 
     listings*                   per number
--------------------------------------------------------------------------------
8.b.  Books & delivery           No charge for normal numbers of books delivered
     (annual home area           to end users: bulk deliveries to CLEC per
     directories only)*          separate arrangement 
--------------------------------------------------------------------------------

                                       5

<PAGE>
 

<TABLE> 
<CAPTION> 
----------------------------------------------------------------------------------------------------
     BA SERVICE                              NON-RECURRING                  RECURRING
     ----------                              -------------                  ---------
----------------------------------------------------------------------------------------------------
<S>  <C>                                     <C>                            <C> 
8.c.  Additional listings, changes           Per tariff [BA-VA              Per tariff [BA-VA SCC 
     to listing, non-listed, non-            SCC 203 sec. 4]                203 sec. 4]
     published, and other extra services
                                             Illustrative:                  Illustrative:

                                              Additional listing:           Additional listing:  
                                             $9 residence: $17              $1.12/mo. residence, 
                                             business                       $1.42/mo. business    
                                                                            
                                              Change to listing:           
                                             $9 residence: $17              Non-list:            
                                             business                       $1.06//mo. residence 
                                                                            or business           
                                              Non-list:                    
                                             $9 residence: $17              Non-published:     
                                             business                       $1.71/mo. residence
                                                                            or business         
                                              Non-published:
                                             $9 residence: $17
                                             business
---------------------------------------------------------------------------------------------------- 
9.   Access to telephone numbers (NXX
     codes issued per ICCF Code              No charge
     Administration Guidelines)*        
----------------------------------------------------------------------------------------------------  
10.a SS7 Interconnection                     Per interstate [BA             Per interstate [BA
                                             FCC 1 sec. 6.9.1.G]            FCC 1 sec. 6.9.1.L]
                                             and intrastate [BA-            and intrastate [BA-
                                             VA SCC 217 sec.                VA SCC 217 sec.
                                             6.8.2.C] tariff                6.8.2.G] tariff 

     
                                                                            Illustrative:
          
                                                                             STP ports,
                                                                            $900/mo.;
                              
                                                                             STP access,
                                                                            $3.50/mile/mo. to
                                                                            $5.72/mile/mo.
----------------------------------------------------------------------------------------------------
</TABLE> 
  
                                       6
<PAGE>
 
<TABLE> 
<CAPTION> 
------------------------------------------------------------------------------------------------
     BA SERVICE                              NON-RECURRING                  RECURRING
     ----------                              -------------                  ---------
------------------------------------------------------------------------------------------------
<S>  <C>                                     <C>                            <C> 
10.b LIDB Interconnection                    Per tariff [BA FCC             Per tariff [BA FCC 
                                             1 sec. 6.9.1M]                 1 sec. 6.9.1M]     
          
                                             Illustrative:                  Illustrative:
                              
                                              Originating point              Query validation
                                             code, $125                     $.04/query

                                                                             Query transport
                                                                            $.0002/query
------------------------------------------------------------------------------------------------
10.c 800/888 data base Interconnection       No separate charge             Per interstate [BA
                                             (included in FGD               FCC 1 sec.
                                             trunk and STP links)           6.9.2.A.1], and
                                                                            intrastate [BA-VA
                                                                            SCC 217 sec.
                                                                            6.8.2.K]tariffs

                                                                            Illustrative:

                                                                             Interstate basic
                                                                            query,
                                                                            $.003105/query;
                                                                            vertical feature
                                                                            package,
                                                                            $.000337/query

                                                                             Intrastate basic 
                                                                            query,
                                                                            $.003089/query;
                                                                            vertical feature
                                                                            package,
                                                                            $.000327/query
------------------------------------------------------------------------------------------------
11.a Interim number portability through      service order per              $3/mo. per number
     co-carrier call forwarding              location $30                   for up to 10 paths;
                                                                            $.40/mo. per 
                                             installation per               additional path
                                             number $35 (unless
                                             installed with 
                                             unbundled loop)
               
                                             installation per 
                                             separate path
                                             arrangement $20
------------------------------------------------------------------------------------------------
</TABLE> 

                                       7
<PAGE>
 
<TABLE> 
<CAPTION> 
------------------------------------------------------------------------------------------------
     BA SERVICE                              NON-RECURRING                  RECURRING
     ----------                              -------------                  ---------
------------------------------------------------------------------------------------------------
<S>  <C>                                     <C>                            <C> 
11.b  Access pass-through to number                                         In accordance with
     portability purchaser*                                                 section 14.5 of
                                                                            Agreement.
------------------------------------------------------------------------------------------------
12.  Local dialing parity*                   No charge
------------------------------------------------------------------------------------------------
13.a Reciprocal call termination

      Local Traffic delivered to Bell
     Atlantic Interconnection Point

      First year*               
                                                                            $.009/mou
    -------------------------------------------------------------------------------------------- 
      After first year*                                                     In accordance with 
                                                                            note 14 below
------------------------------------------------------------------------------------------------
13.b  Access charges for termination of                                     Per interstate and
     intrastate and interstate Toll Traffic                                 intrastate access
                                                                            tariffs (charged in
                                                                            conjunction with
                                                                            Local Traffic, using
                                                                            PLU and PIU, as 
                                                                            appropriate)
------------------------------------------------------------------------------------------------
14.a Wholesale rates for resale of           Percentage discount from retail tariff/12/
                                             --------------------------------------
     telecommunications services
     provided to end users/11/
------------------------------------------------------------------------------------------------
14.b Resale of retail Telecommunications     21.3% or discount as determined by further
     Services if MFS provides its own        Commission order.
     Operator Services

------------------------------------------------------------------------------------------------
14.c Resale of retail Telecommunications     18.5% or discount as determined by further
     Services if MFS uses BA Operator        Commission order.
     Services.
------------------------------------------------------------------------------------------------
</TABLE> 


____________________

/11/      Excludes telecommunications services designated primarily for
wholesale, such as switched and special access, and, subject to Section 12 of
the Agreement, the following additional arrangements that are not subject to
resale: limited duration (90 days or less) promotional offerings, public coin
telephone services, and technical and market trials. Taxes shall be collected
and remitted by the reseller and BA in accordance with legal requirements and as
agreed between the Parties. Surcharges (e.g., 911, telecommunications relay
service, universal service fund) shall be collected by the reseller and either
remitted to the recipient agency or NECA, or passed through to BA for remittance
to the recipient agency or NECA, as appropriate and agreed between the Parties.
End user common line charges shall be collected by the resellers and remitted to
BA.

/12/      Pending establishment of mechanized billing procedures adapted to 
resale, the Parties will agree upon a composite "bottom-of-the-bill" discount 
that reflects the discounts and exclusions identified herein, and such other 
adjustments as the Parties agree.

                                       8

<PAGE>
 
--------------------------------------------------------------------------------
     BA SERVICE                    NON-RECURRING            RECURRING
     ----------                    -------------            ---------
--------------------------------------------------------------------------------
15.  Access to BA OSS/13/          
--------------------------------------------------------------------------------
15.a Access to Pre-Ordering OSS                             $.26/Query
--------------------------------------------------------------------------------
15.  Access to Ordering OSS                                 $4.53/Transaction
b
--------------------------------------------------------------------------------
15.c Access to Provisioning OSS                             Included in Ordering
--------------------------------------------------------------------------------
15d  Access to Maintenance &                                $1.23/Trouble Ticket
     Repair OSS
--------------------------------------------------------------------------------
15e. Access to Billing OSS; CD-ROM                          $261.04/CD-ROM
1
--------------------------------------------------------------------------------
15.e Access to Billing OSS; Daily 
 .2   Usage File
       Existing Message Recording                     
 
                                                            $.000274/Message
--------------------------------------------------------------------------------
15.e Access to Billing OSS; Daily
     Usage
 .3   File Delivery
       Data Tape                   $64.96/Programming Hour  $20.11/Tape

       Network Data Mover          Not Applicable           $.000099/Message

       CMDS                        $64.96/Programming Hour  $.000099/Message
--------------------------------------------------------------------------------
15.e Access to Billing OSS; Daily  
     Usage
 .4   File Transport
       9.6 kb Communications Port  $8,335.27/Port           $10.84/Month
--------------------------------------------------------------------------------

___________________
/13/ The rates for BA OSS Services that appear in Section 15 above shall apply 
until the earlier of August 15, 1997 or the date the Commission approves rates 
for BA OSS Services. If the Commission approves rates for BA OSS Services on or 
before August 15, 1997, the rates approved by the Commission will apply from the
date they are approved by the Commission until any subsequent change in rates 
becomes effective in accordance with this Agreement.

     If by August 15, 1997 the Commission has not approved rates for BA OSS 
Services, from August 16, 1997 until such time as the Commission approves rates
for BA OSS Services, BA will track the usage of BA OSS Services by MFS. When 
the Commission approves rates for BA OSS Services, those rates will apply from 
August 16, 1997 until any subsequent change in rates becomes effective in 
accordance with this Agreement.

     MFS reserves the right to at any time prior to the above-mentioned 
Commission approval of rates for BA OSS Services initiate or participate in a 
proceeding before the Commission or other governmental entity of appropriate 
jurisdiction to obtain a determination as to the lawfulness of the rates stated 
above in Section 15 for Bell Atlantic OSS Services. However, until such time as 
the Commission or other governmental entity of appropriate jurisdiction, in an 
order that is binding upon Bell Atlantic, requires Bell Atlantic to change or 
delete the rates stated above in Section 15 for Bell Atlantic OSS Services,
MFS agrees to pay such rates as provided in this Footnote.

     When rates for BA OSS Services are approved by the Commission Section 15 
above shall be amended by the Parties to state such rates.

                                       9
<PAGE>
 
--------------------------------------------------------------------------------
     BA SERVICE                    NON-RECURRING                 RECURRING
     ----------                    -------------                 ---------
--------------------------------------------------------------------------------
       56 kb Communications Port   $34,494.62/Port               $29.93/Month

       256 kb Communications Port  $57,422.87/Port               $29.93/Month
       
       T1 Communications Port      $204,901.39/Port              $380.18/Month

       Line Installation           $64.96/Programming Hour/Port  Not applicable

       Port Set-up                 $10.43/Port                   Not applicable

       Network Control Programming $64.96/Programming Hour/Port  Not applicable
       Coding
--------------------------------------------------------------------------------

                                      10

<PAGE>
 
           MFS SERVICES, FACILITIES, AND ARRANGEMENTS:
--------------------------------------------------------------------------------
          MFS SERVICE                   NON-RECURRING            RECURRING
          -----------                   -------------            ---------
--------------------------------------------------------------------------------
1.a.      Interim Number Portability    
          through co-carrier call 
          forwarding*
      
           Number portability*          $30/service order.       $3/mo. for ten 
                                        $35/number (not ordered  paths per 
                                        with ULL)                number; plus 
                                                                 $.40/mo.per 
                                                                 additional path

                                        $20 per additional path
                                        order
--------------------------------------------------------------------------------
1.b.      Access pass-through to number                          In accordance 
         portability purchaser*                                  with sec. 14.5 
                                                                 of Agreement
--------------------------------------------------------------------------------
2.       Local dialing parity*          No charge
--------------------------------------------------------------------------------
3.a.     Reciprocal call termination

          Local Traffic delivered to  
          MFS Interconnection Point*

           First year*                                           $.009/mou
         -----------------------------------------------------------------------
           After first year*                                     In accordance 
                                                                 with note 14 
                                                                 below
--------------------------------------------------------------------------------
3.b.      Access charges for                                     Per MFS 
         termination of intrastate and                           interstate and
         interstate Toll Traffic                                 intrastate
                                                                 access rates
                                                                 (charged in
                                                                 conjunction
                                                                 with Local
                                                                 Traffic, using
                                                                 PLU and PIU, as
                                                                 appropriate)
--------------------------------------------------------------------------------
4.       All other MFS services         Available at MFS tariffed or otherwise
         available to BA for purposes   generally available rates, not to exceed
         of effectuating local          BA rates for equivalent services  
         exchange competition           available to MFS 
--------------------------------------------------------------------------------
5.        Other Services

         Information Service billing    No charge                $.03 per call
         fee    
--------------------------------------------------------------------------------

                                      11

<PAGE>
 
A.   Charges by BA
     -------------
     (a)  Traffic delivered to BA Local Serving Wire Center ("LSWC") or BA
          Access Tandem: $.009 per mou
     (b)  Traffic delivered directly to terminating BA End Office: $.007 per mou
     Note: All BA-IPs identified in Schedule 4.0 as of the Effective Date are 
     LSWC or Access Tandems. Therefore, Local Traffic delivered to such BA-IPs 
     shall be subject to the rate of $.009 per mou.

B.   Charges by MFS
     --------------
1.   Single-tiered interconnection structure:
     MFS's rates for the termination of BA's Local Traffic under the 
     single-tiered interconnection structure shall be recalculated once each 
     year on each anniversary of the Effective Date (the "Rate Determination 
     Date"). The initial Rate Determination Date shall be the first anniversary 
     of the Effective Date. The methodology for recalculating the rates is as 
     follows:
          LSWC/Access Tandem Minutes = Total minutes of use of Local Traffic
          delivered by MFS to the BA LSWC or BA Access Tandem for most recent
          billed month.
          End Office Minutes = Total minutes of use Local Traffic delivered by
          MFS directly to the terminating BA End Office for most recent billed
          month. 
          Total Minutes = Total minutes of use of Local Traffic delivered by 
          MFS to BA for most recent billed month.
          MFS Charge at the M-IP = (LSWC/Access Tandem Minutes X $.009) + (End
          Office Minutes X $.007)
          -------------------------------------------------------------------
                                 Total Minutes

2.   Multiple-tiered interconnection structure (if offered by MFS to any 
     carrier)
     (a) Local Traffic delivered to MFS LSWC or MFS Access Tandem: $.009
     (b) Local Traffic delivered to terminating MFS End Office/node: $.007

C.   Miscellaneous Notes
     -------------------
1.   In the event a Party desires to deliver Local Traffic to a LSWC (i) that is
not located within 25 miles of the Tandem Office to which it is subtended,
and/or (ii) where the Tandem Office that it subtends is not located within 25
miles of the Tandem Office that is subtended by the terminating End Office, then
such Party shall (x) in addition to paying the LSWC/Access Tandem termination
rate described above, purchase the necessary facilities from the terminating
Party to transport such Traffic to a qualifying LSWC or Access Tandem that is
not subject to either conditions (i) or (ii) above, (y) purchase such other
service(s) as the terminating Party may offer under applicable tariff to remedy
such condition(s), or (z) enter into a new compensation arrangement as the
Parties may agree. Notwithstanding the foregoing, nothing in this Agreement
shall obligate BA to provide switching services at a LSWC when it functions as
such.

                                      12 





   
<PAGE>
 
2.   In the event the two-tiered rate structure described above is modified
pursuant to Applicable Law to a single rate structure. BA and MFS (to the extent
MFS is offering a multiple-tiered interconnection structure) shall each have the
right to apply its tariffed switched access transport charges for transporting
Local Traffic it receives at its LSWC to the first point of switching in its
network in the LATA.

3.   The MFS termination rate under the single-tiered interconnection structure
set forth above is intended by the Parties to be a Local Traffic termination 
rate for Interconnection to the M-IP within each LATA that is reciprocal and 
equal to the actual rates that will be charged by BA to MFS under the 
two-tiered Local Traffic termination rate structure described above that will 
apply after the first anniversary of the Effective Date. The single MFS 
termination rate is also intended to provide financial incentives to MFS to 
deliver traffic directly to BA's terminating End Offices once MFS's traffic 
volumes reach an appropriate threshold. The Parties agree that the Reciprocal 
Compensation rate(s) set forth herein recover a reasonable approximation of 
each Party's additional costs of terminating calls that originate on the 
network facilities of the other Party.

                                      13

  




<PAGE>
 
SCHEDULE 3.0

NETWORK IMPLEMENTATION SCHEDULE FOR VIRGINIA

     In accordance with the provisions of Section 3 of the Agreement, the 
Parties shall make their best efforts to meet the following Milestones no later 
than the listed Dates.

--------------------------------------------------------------------------------
 LATA IN VIRGINIA     MILESTONE                                      DATE
--------------------------------------------------------------------------------
 LATA 236             LATA Start Date ("SD")                         7/21/98
                      ----------------------------------------------------------
                      SS7 Certification, Collocation, and NXX(s)     8/19/98
                      Applied For
                      ----------------------------------------------------------
                      Parties Agree on Initial Network Design        8/24/98
                      ----------------------------------------------------------
                      Valid Access Service Request(s) ("ASRs") and   TBD
                      Routing Information Received by BA
                      ----------------------------------------------------------
                      Collocation Arrangements Complete for Trunk    N/A
                      Interconnection and IDLC for ULLs
                      ----------------------------------------------------------
                      All Trunks Tested and Turned Up; SS7 Certifi-  11/20/98
                      cation Achieved; /1/  VG ULL Capability 
                      Available
                      ----------------------------------------------------------
                      Call-through Testing Completed;                12/11/98  
                      "Interconnection Activation Date"  
--------------------------------------------------------------------------------
                           

     Failure of a Party or the Parties to meet an earlier Milestone Date shall
not relieve either Party of the responsibility to make its best efforts to meet
subsequent Milestone Date(s) in the LATA, unless, and only to the extent that,
the subsequent Milestone Date(s) depend on the timely completion of such earlier
Milestone Date.

     For purposes of Section 3, (i) business Telephone Exchange Service shall be
considered "fully operational" in a LATA in the Commonwealth of Virginia when
Focal has an effective Tariff for business Telephone Exchange Service in the
Commonwealth of Virginia and has a significant number of Telephone Exchange
Service in the Commonwealth of Virginia and has a significant number of 
Telephone Exchange Service  Customer lines in service for business Telephone 
Exchange Service Customers in that LATA in the Commonwealth of Virginia that 
are not affiliates or employees of either BA or Focal, and (ii) residential 
Telephone Exchange Service shall be considered "fully operational" in a LATA 
in the Commonwealth of Virginia when Focal has an effective Tariff for 
residential Telephone Exchange Service in the Commonwealth of Virginia and 
has a significant number of Telephone Exchange Service Customer lines in service
for residential Telephone Exchange Service Customers in that LATA in the
Commonwealth of Virginia that are not affiliates or employees of either BA or 
Focal.

_____________________________
/1/  SS7 certification scheduling depends on actual schedule availability at
     time of request.

                                       1


<PAGE>
 
SCHEDULE 4.0

VIRGINIA - INTERCONNECTION POINTS IN LATA



                                   LATA 236
                                   --------

F-IP:      Washington D.C. Switch
           1120 Vermont Ave. N.W.  
           Washington, D.C.
           WASHDCRKDS2

BA-IP      WorldCom COLO
           1025 N. Irving Street
           Arlington, VA
           ARTNVAARHVA