----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION **

**WASHINGTON,      D.C. 20549 **

----

**FORM      10-K/A**

**(Amendment      No. 1) **

| **x** | **Annual                  Report Pursuant to Section 13 or 15(d) of the Securities Exchange                  Act of                  1934** |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ** ̈** | **Transition                  Report pursuant to Section 13 or 15(d) of the Securities Exchange                  Act of                  1934** |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

**RCN      Corporation**

**(Exact      name of registrant as specified in charter) **

| **Delaware**                                                                                        | **22-3498533**                                                            |
|-----------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|
| **(State                or other jurisdiction of****incorporation                or organization)** | **(I.R.S.                Employer****Identification                No.)** |

| **196                Van Buren Street, Herndon, VA**        | **20170**                     |
|-------------------------------------------------------------|-------------------------------|
| **(Address                of principal executive offices)** | **(Zip                Code)** |

**Registrant’s      telephone number, including area code: (703) 434-8200 **

**Securities      Registered Pursuant to Section 12(b) of the Act: None **

----

----

----

**Securities      Registered Pursuant to Section      12(g) of the Act:**

**Common      stock, par value $0.01 per share **

**(Title      of Classes) **

----

**DOCUMENTS      INCORPORATED BY REFERENCE**

**EXPLANATORY        NOTE **

**RCN          Corporation (“RCN”) is filing this Amendment No. 1 to Form 10-K (“Amendment No.          1”) to correct the omission of a required disclosure, to correct several          typographical errors and to remove a sentence inadvertently included in          Item 9B          of Part I in its Annual Report on Form 10-K for the year ended December          31,          2005, which was originally filed with the Securities and Exchange Commission          (the “SEC”) on March 15, 2006. The purpose of this amendment is to add the          schedule of maturities of long-term debt required by Generally Accepted          Accounting Principles (“GAAP”) that was inadvertently omitted from Note 16 to          the Consolidated Financial Statements and to correct the following typographical          errors in the column headings on the Consolidated Statements of Operations          for          the year ended December 31, 2005 and for the period from December 21, 2004          through December 31, 2004 (Successor), and for the period January 1, 2004          through December 20, 2004 (Predecessor) and for the year ended December          31,          2003(Predecessor):**

|   | · | **In                  the first column, replace the word “period” with the word “year.”** |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | **In                  the second column, replace the word “year” with the words “period from.”** |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | **In                  the third column, replace the word “ended” with the word “from.”** |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

**In          addition, the following sentence is deleted in its entirety from Item 9B          of Part          I - Other Information - “RCN has amended outstanding restricted stock awards          made to its outside directors to (i) permit transfers of shares to entities          in          which a director is a shareholder, partner or member so long as the director          retains sole power over the voting, tendering and disposition of the shares          and          (ii) clarify that the requirement that the director continue to hold 50%          of all          vested granted shares for so long as he or she serves as an RCN director          is          determined on a net-after tax basis.  An amended form of Director          Restricted Stock Agreement is attached as Exhibit 10.31 to this Annual          Report”**

**On        March 23, 2006 RCN reached an agreement to sell its 48.93% interests in        Megacable, S.A. de C.V. (“Megacable”) and Megacable Communicaciones de Mexico        S.A. (“MCM”) to Teleholding, S.A. de C.V. (“Teleholding”), a Mexican entity        comprised of the majority shareholders of Megacable and MCM for net after-tax        proceeds of approximately $300 million. RCN will apply the sale’s after-tax        proceeds of $300 million to repay debt as required under its various debt        agreements. **

**On          April          7, 2006, RCN Corporation (“RCN”)          established the RCN Corporation Change of Control Severance          Plan.**

----

**RCN      CORPORATION AND SUBSIDIARIES**

**For      the year ended December 31, 2005 **

**Table      of Contents **

|                                           |                                                                                                                                                                      | **Page** |
|------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                           |                                                                                                                                                                      |     |
|                                           | **PART                  I**                                                                                                                                               |     |
| Item                  1                        | Business                                                                                                                                                                  | 6        |
| Item                  1A                       | Risk                  Factors                                                                                                                                             | 26       |
| Item                  2                        | Properties                                                                                                                                                                | 31       |
| Item                  3                        | Legal                  Proceedings                                                                                                                                        | 34       |
| Item                  4                        | Submission                  of Matters to a Vote of Security                  Holders                                                                                     | 37       |
| Item                  4A                       | Executive                  Officers of the Registrant                                                                                                                     |     |
|                                           |                                                                                                                                                                      |     |
|                                           | **PART                  II**                                                                                                                                              |     |
|                                           |                                                                                                                                                                      |     |
| Item                  5                        | Market                  for the Registrant’s Common Equity, Related                  Stockholder Matters and Issuer Purchases of Equity                  Securities | 37       |
| Item                  6                        | Selected                  Financial Data                                                                                                                                  | 40       |
| Item                  7                        | Management’s                  Discussion and Analysis of Financial Condition                  And Results of Operations                                             | 42       |
| Item                  7A                       | Quantitative                  and Qualitative Disclosures about Market                  Risk                                                                              | 60       |
| Item                  8                        | Financial                  Statements and Supplementary                  Data                                                                                             | 60       |
| Item                  9                        | Changes                  in and Disagreements with Accountants on Accounting                  and Financial Disclosure                                                    | 60       |
| Item                  9A                       | Controls                  and Procedures                                                                                                                                  | 60       |
| Item                  9B                       | Other                  Information                                                                                                                                        | 62       |
|                                           |                                                                                                                                                                      |     |
|                                           | **PART                  III**                                                                                                                                             |     |
|                                           |                                                                                                                                                                      |     |
| Item                  10                       | Directors                  and Executive Officers of the                  Registrant                                                                                      | 63       |
| Item                  11                       | Executive                  Compensation                                                                                                                                   | 63       |
| Item                  12                       | Security                  Ownership of Certain Beneficial Owners and                  Management                                                                          | 63       |
| Item                  13                       | Certain                  Relationships and Related                  Transactions                                                                                          | 63       |
| Item                  14                       | Principal                  Accountant’s Fees and                  Services                                                                                          | 64       |
|                                           |                                                                                                                                                                      |     |
|                                           | **PART                  IV**                                                                                                                                              |     |
|                                           |                                                                                                                                                                      |     |
| Item                  15                       | Exhibits                  and Financial Statement                  Schedules                                                                                              | 64       |
|                                           |                                                                                                                                                                      |     |
| SIGNATURES                                     | S-1                                                                                                                                                                       |
| INDEX                  TO EXHIBITS             | E-1                                                                                                                                                                       |
| INDEX                  TO FINANCIAL STATEMENTS | F-1                                                                                                                                                                       |

----

*Table            of Contents*

**Cautionary      Statement Regarding Forward Looking Statements:**

|   | • | the                ability to operate in compliance with the terms of its financing                facilities (particularly the financial covenants); |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the                ability to maintain adequate liquidity and produce sufficient cash                flow to                fund RCN’s capital expenditures; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the                ability to attract and retain qualified management and other personnel; |
|--------|---------|--------------------------------------------------------------------------------------------|

|   | • | the                number of potential customers in a target market and the ability                to                achieve targeted penetration and average subscriber revenue                levels; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes                in the competitive environment in which RCN operates; |
|--------|---------|------------------------------------------------------------------------------|

|   | • | changes                in government and regulatory policies; |
|--------|---------|---------------------------------------------------------------|

|   | • | the                ability to obtain regulatory approvals and to maintain approvals                of                franchises previously granted; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | uncertainty                relating to economic conditions generally and in particular affecting                the                markets in which RCN operates; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | pricing                and availability of equipment, materials, inventory and programming; |
|--------|---------|---------------------------------------------------------------------------------------------|

|   | • | the                ability to meet the requirements in its franchise agreements; |
|--------|---------|----------------------------------------------------------------------------------|

|   | • | the                ability to complete acquisitions or divestitures and to integrate                any                business or operation acquired; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | the                ability to enter into strategic alliances or other business relationships; |
|--------|---------|-----------------------------------------------------------------------------------------------|

|   | • | the                ability to overcome significant operating losses; |
|--------|---------|----------------------------------------------------------------------|

|   | • | the                ability to reduce costs; |
|--------|---------|---------------------------------------------|

|   | • | the                ability to develop RCN’s products and services and to penetrate existing                and new markets; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | • | technological                developments and changes in the industry; and |
|--------|---------|----------------------------------------------------------------------------|

----

*Table            of Contents*

|   | • | the                risks discussed in “Risk Factors” under Item 1A below. |
|--------|---------|---------------------------------------------------------------------------------------|

----

*Table            of Contents*

**PART      I **

| **ITEM                1.** | **BUSINESS** |
|----------------------------|--------------|

**Introduction      **

**Strategy      **

|   | • | ***Increase                revenues within existing footprint.***                RCN intends to increase revenues within its existing network footprint                by                continuing to increase the number of customers subscribing to “triple                play” bundled video, high-speed data and voice packages, leveraging its                broadband network to provide innovative services and enhanced products,                offering differentiated pricing and packaging, improving sales and                marketing distribution and effectiveness and increasing penetration                among                business customers. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***Improve                operational efficiency.***RCN                also believes it can create a more profitable business model by reducing                operating costs where appropriate. RCN intends to continue to improve                its                cost structure by simplifying its product offerings, streamlining                back                office systems and processes, standardizing, centralizing and automating                headcount-intensive functions, focusing on improved service quality,                consolidating real estate, renegotiating key contracts, and divesting                under-performing or non-core customers and assets. In addition, to                the                extent RCN is able to increase subscribers, it should be able to                realize                economies of scale across certain elements of its cost                structure. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***Selectively                expand footprint.***                RCN will continue to seek opportunities to increase its network footprint                within and adjacent to its existing market clusters, based on availability                of capital and stringent return on investment criteria. RCN currently                has                rights to provide “triple play” services to approximately six million                homes, allowing it to increase the number of its marketable homes                significantly beyond the current level of approximately 1.4 million                homes,                without the need to obtain additional licenses. In addition, RCN                will                continue to evaluate acquisition and joint venture opportunities                that are                accretive to RCN’s value and that leverage RCN’s experience as a leading                provider of high-quality telecommunication                services. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

**Overview      of Business **

**Fiber-optic      Broadband Network**

|   | • | metropolitan                rings with high-speed, redundant connections which allow immediate                redirection of network traffic in the event of a fiber cut; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | back-up                power supplies in the event of a power outage; |
|--------|---------|-----------------------------------------------------------------------|

|   | • | sufficient                inventory for maintenance and extensions; |
|--------|---------|---------------------------------------------------------------------|

|   | • | a                highly trained employee base; and |
|--------|---------|----------------------------------------------------|

|   | • | sufficient                fiber capacity for future growth in services. |
|--------|---------|-------------------------------------------------------------------------|

----

*Table            of Contents*

**Services      **

***Video***

|   | • | ***Basic                Analog Cable TV:***                All of RCN’s video customers receive a package of basic programming which                generally consists of local broadcast television, local community                programming, including governmental and public access, and limited                satellite-delivered or non-broadcast channels. The basic channel                line-up                generally has between 18 and 35 channels. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***Expanded                Basic Cable TV:***                This expanded programming level includes approximately 45 to 60 channels                in addition to the basic channel line-up, including many popular                cable                networks. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***Digital                Cable TV:***Access                to this level of service requires a digital set-top box and includes                approximately 31 to 50 channels of additional programming. The set-top                box                comes with an interactive program guide and 45 channels of digital                music.                Digital cable subscribers can receive advanced services such as Video                on                Demand and High Definition Television (described below). As of January                15,                2006 RCN enhanced its Digital Cable TV service to include Showtime,                The                Movie Channel, Cinemax, Starz!, and Encore services, which were previously                only available as Premium Channels. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***Premium                Channels:***                These channels provide commercial-free movies, foreign language                programming and adult content for an additional monthly fee. A converter                box is required to receive these offerings. Subscribers that have                a                digital set-top box receive multiple screens of popular premium channel                services, such as HBO with their subscription. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***Pay-Per-View:***                This service allows customers to receive and pay on a per event basis                to                view a single showing of a recently released movie, a one-time special                sporting event, music concert, or similar event on a commercial-free                basis                by tuning into a specific activated channel. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***Video                on Demand and Subscription Video on Demand:***                RCN offers VOD service in all markets, except Los Angeles, which                allows                customers to access hundreds of movies and other programming at any                time                with the ability to pause and rewind. RCN also offers SVOD services                that                are included as part of several of RCN’s service bundles or that can be                added for an additional fee by customers if they have a digital set-top                box. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ***High                Definition Television:***                HDTV is offered to digital cable subscribers in most markets. HDTV                is a                digital television service that displays enhanced picture quality                that                surpass standard analog and digital television images. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | ***Digital                  Video Recorder:***                  DVR technology is included with certain set-top boxes RCN offers                  and                  allows customers to digitally record television programs and watch                  them on                  their own schedule. In addition to recording and replay, DVRs also                  allow                  customers to pause and rewind live programming. RCN offers dual-tuner                  DVRs                  that allow customers to record programs while watching other channels                  on a                  real-time basis. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

***High-Speed      Data***

|   | • | **RCN*****interACTIONSM*** ***Games:***                Subscribers can download over 150 games onto their home computer                on demand                and for unlimited use. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | **RCN*****interACTIONSM*** ***Kids:***                Similar service as interACTION Games but offering games for children                of                various ages. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | **RCN*****interACTIONSM*** ***Music:***                Subscribers can download music onto their home computer from a substantial                digital music library containing more than 1 million high-quality                tracks. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Dial-up      Internet***

***Voice***

----

*Table            of Contents*

***Commercial      Services***

|   | • | Metro                and Intercity SONET and Ethernet based transport services including                T1,                DS3, OC3, OC12, OC48 Fast Ethernet and Gigabit Ethernet circuits; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Dark                Fiber leases; |
|--------|---------|-----------------------------------|

|   | • | High-speed                Internet access; |
|--------|---------|--------------------------------------------|

|   | • | Managed                dedicated servers and Web-hosting; |
|--------|---------|-----------------------------------------------------------|

|   | • | Bulk                and retail video service; and |
|--------|---------|---------------------------------------------------|

|   | • | Switch-based                resale long distance and local telephone service to customers on                its                broadband network. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

***Other      Services***

***Home      Networking.***
*Home Networking*
*Home Networking*
*Home      Networking*
*Home Networking*

***Webwatch***
**SM**

***/Home      Monitoring***
**.**
*WebWatch*
*WebWatch*

***Video      Mail.***
*Video      Mail*
*Video      Mail*
*Story      Teller*

----

*Table            of Contents*

**Pricing      of RCN’s Products and Services **

**Customer      Service **

**Joint      Ventures and Other Investments **

***Megacable      and MCM***

*“Criteria      for Applying the Equity Method of Accounting for Investments in Common      Stock”*

***Starpower***

----

*Table            of Contents*

***RCN-BecoCom***

**Con      Edison Communications**

| • | 560                route miles of fiber optics in the greater New York metropolitan                region,                including 10 river crossings; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 193                on-network buildings; |
|---------|------------------------------------------|

| • | superior                positioning for disaster recovery networks through the use of the                electrical conduit system to deliver service, which is diverse from                the                Verizon and Empire City Subway (ECS) ducts used by most telecommunications                companies; and |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | an                experienced sales and engineering staff with state-of-the-art operational                systems. |
|---------|---------------------------------------------------------------------------------------------------------------------|

**Asset      Sales **

***Sale      of Carmel, New York Cable System.***
*“Accounting      for the Impairment or Disposal of Long-Lived*
*Assets”*

***Sale      of Central New Jersey Cable System***
**.**

----

*Table            of Contents*

***California      Properties.***

**Employees      **

**Licenses      **

**Competition      **

***Video***

----

*Table            of Contents*

***Data***

----

*Table            of Contents*

|   | • | established                online services; |
|--------|---------|---------------------------------------------|

|   | • | small,                local ISPs; |
|--------|---------|-----------------------------------|

|   | • | Internet                access (including DSL service) offered by regional Bell operating                companies (“RBOCs”); |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | high-speed                services offered by incumbent cable providers and other regional                cable                providers offering high-speed Internet access over a cable modem; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | fixed                wireless Internet access services offered by certain telecommunications                providers; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------|

|   | • | mobile                wireless Internet access services offered by cellular providers. |
|--------|---------|----------------------------------------------------------------------------------------|

***Voice***

**RCN’s      Chapter 11 Reorganization **

***Events      Leading Up to Chapter 11 Reorganization***

----

*Table            of Contents*

***Commencement      of the Chapter 11 Cases***

***Plan      of Reorganization and Exit Financing***

|   | • | The                RCN Debtors obtained a $355 million senior secured credit facility                comprised of term loans for an aggregate amount of $330 million and                a $25                million letter of credit facility (the “First Lien Credit Agreement”); |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | RCN                issued $125 million aggregate principal amount of 7.375% convertible                second-lien notes due 2012 which are convertible into shares of                Reorganized RCN’s common stock (the “Convertible Notes”); and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | RCN                amended and extended its Evergreen Credit Agreement (the “Third-Lien Term                Loan”) |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------|

***Effect      of Consummation of the Plan***

----

*Table            of Contents*

**Regulation      **

***Overview***

**Regulation      of Video Services **

***Cable      Television Systems***

----

*Table            of Contents*

***Open      Video Systems***

***Cable      and OVS Regulation***

----

*Table            of Contents*

----

*Table            of Contents*

----

*Table            of Contents*

**Regulation      of Data Services **

**Regulation      of Voice Services **

***Federal      Regulation***

|   | • | Interconnection—Requires                the ILECs to permit their competitors to interconnect with ILEC facilities                at any technically feasible point in the ILEC’s network. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Reciprocal                Compensation—Requires all ILECs and CLECs to complete calls originated by                competing local exchange carriers under reciprocal arrangements at                prices                set by the FCC, PUCs or negotiated prices. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Access                to Unbundled Network Elements—Requires ILECs to provide nondiscriminatory                access to unbundled network elements (“UNEs”), including network                facilities, equipment, features, functions and capabilities, at any                technical feasible point within their networks, on nondiscriminatory                terms, at prices based on the ILEC’s forward looking costs, which may                include a reasonable profit. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Collocation                of Equipment—Allows CLECs to install and maintain their own network                equipment in ILEC central offices. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Resale—Requires                the ILEC to establish wholesale “discounted” rates for services it                provides to end-users at retail rates. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Number                Portability—Requires all ILECs and CLECs to permit users of                telecommunications services to retain existing telephone numbers                without                impairment of quality, reliability or convenience when switching                from one                telecommunications provider to another. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|   | • | Dialing                Parity—Requires the ILECs and CLECs to establish dialing parity so that                all customers must dial the same number of digits to place the same                type                of call. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Access                to Rights-of-Way—Requires all ILECs to permit competing carriers access to                poles, ducts, conduits and rights-of-way at regulated prices. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Reciprocal      Compensation***

----

*Table            of Contents*

***Access      Charges***

***Slamming      and Cramming***

***Voice      over Internet Protocol***

----

*Table            of Contents*

***State      Regulation***

***Taxes      and Regulatory Fees***

----

*Table            of Contents*

**Other      Regulatory Issues **

***Right-of-Way      Access***

**,      **
**,      **

***Pole      and Conduit Attachments***

***Program      Access***

----

*Table            of Contents*

***Building      Access***

| **ITEM                  1A.** | **RISK                  FACTORS** |
|-------------------------------|-----------------------------------|

***We      emerged from Chapter 11 reorganization in 2004 and have a history of losses.***

***We      continue to be highly leveraged and to have substantial indebtedness relative      to      our cash flow.***

|   | • | placing                us at a competitive disadvantage compared to our competitors that                have                less debt; and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | making                it difficult for us to obtain additional financing in the future                for                working capital, capital expenditures and other purposes. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|   | • | the                intensity of competition and our ability to successfully market our                products and services; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------|

|   | • | the                rate at which we add new customers and lose existing customers; |
|--------|---------|------------------------------------------------------------------------------------|

|   | • | the                time and expense required to acquire new customers and to enhance                our                broadband network as planned; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | our                ability to lower the cost of serving customers and the expense we                will                incur to achieve these cost savings. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

***The      covenants in our debt instruments restrict our financial and operational      flexibility.***

|   | • | incur                additional debt; |
|--------|---------|---------------------------------------|

|   | • | issue                preferred stock; |
|--------|---------|---------------------------------------|

|   | • | create                liens on our assets; |
|--------|---------|--------------------------------------------|

|   | • | make                particular types of investments or other restricted payments; |
|--------|---------|-----------------------------------------------------------------------------------|

|   | • | engage                in transactions with affiliates; |
|--------|---------|--------------------------------------------------------|

|   | • | acquire                assets or make certain capital expenditures; |
|--------|---------|---------------------------------------------------------------------|

|   | • | utilize                proceeds from asset sales for purposes other than debt                reduction; |
|--------|---------|---------------------------------------------------------------------------------------------------------|

|   | • | merge                or consolidate or sell substantially all of our assets; and |
|--------|---------|----------------------------------------------------------------------------------|

|   | • | pay                dividends. |
|--------|---------|-------------------------------|

----

*Table            of Contents*

***Future      sales of our common stock could adversely affect the price of our stock and      our      ability to raise capital.***

|   | • | in                2005 we issued options to purchase 3,752,835 shares of our common                stock                and 730,086 shares of our restricted stock under our Stock Plan,                which                vest ratably over three years (some of which are subject to performance                criteria); |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | in                2005 we distributed warrants to purchase 188,032 shares of our common                stock at a per share price of $34.16 to holders of Old RCN stock                as part                of our Chapter 11 reorganization; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | we                have issued notes that are currently convertible into 4,968,204 shares                of                our common stock at a per share price of $25.16; and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | we                have 628,446 shares of our common stock remaining in a reserve to                settle                disputed claims against us that were outstanding as of the date of                our                emergence from Chapter 11, which will be distributed either to claimants                in settlement of any remaining outstanding claims, or to unsecured                creditors and former bond holders on a pro rata basis once all outstanding                claims are resolved and the period to reconsider the Bankruptcy Court’s                ruling on RCN’s objections to the claims of all creditors                expires. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Our      markets are highly competitive.***

|   | • | significant                economies of scale; |
|--------|---------|------------------------------------------------|

|   | • | greater                name recognition; |
|--------|---------|------------------------------------------|

|   | • | greater                financial, technical, marketing and other resources; |
|--------|---------|-----------------------------------------------------------------------------|

|   | • | well-established                customer and vendor relationships; |
|--------|---------|--------------------------------------------------------------------|

|   | • | significant                control over limited conduit and pole space (in the case of incumbent                cable and telephone companies); and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | ownership                of sought after content. |
|--------|---------|---------------------------------------------------|

----

*Table            of Contents*

***New      regulations or changes in existing regulations could adversely affect our      business.***

***Changes      in regulations or additional regulations may make it more difficult or costly      to      obtain or retain necessary governmental authorizations for our business.***

***We      may encounter difficulties expanding our existing markets and delays in      constructing our network.***

***Programming      costs have risen in past years and are expected to continue to rise, which      may      adversely affect our financial results.***

----

*Table            of Contents*

***We      are not large enough to negotiate programming contracts as favorable as some      of      our larger competitors.***

***We      operate OVS systems in some of the markets that we service under FCC channel      capacity rules that are not applicable to franchised cable systems.***

***Loss      of interconnection arrangements could impair our telephone service.***

----

*Table            of Contents*

***The      rates we pay for pole attachments and rights-of-way may increase significantly.***

***Our      current licenses are generally non-exclusive and the granting authorities are      not required to renew them.***

***There      are risks of network failure and disruption.***

| **ITEM                2.** | **PROPERTIES** |
|----------------------------|----------------|

**Overview      of the RCN Network **

----

*Table            of Contents*

**Video      Plant and Equipment **

***Broadband      Video***

***Wireless      Video***

----

*Table            of Contents*

**High-Speed      Data Plant and Equipment **

**Voice      Plant and Equipment **

***Voice      Networks***

***VoIP***

----

*Table            of Contents*

**Real      Estate **

| **ITEM                3.** | **LEGAL                PROCEEDINGS** |
|----------------------------|--------------------------------------|

**ERISA      Litigation**

----

*Table            of Contents*

**Legal      Proceedings Relating to Megacable**

**City      of Chicago Franchise Fee**

----

*Table            of Contents*

**Other      Legal Proceedings**

**Bankruptcy      Matters**

**Claims      by Kemper Insurance **

**Claims      by Merrill Lynch, Pierce, Fenner & Smith**

----

*Table            of Contents*

**Claim      by Former Employee**

**Ordinary      Course Matters**

| **ITEM                4.** | **SUBMISSION                OF MATTERS TO A VOTE OF SECURITY HOLDERS** |
|----------------------------|------------------------------------------------------------------------|

**PART      II**

| **ITEM                5.** | **MARKET                FOR THE REGISTRANT’S COMMON STOCK AND RELATED SHAREHOLDER MATTERS** |
|----------------------------|---------------------------------------------------------------------------------------------------|

**Market      Information **

----

*Table            of Contents*

| **Period**                                                  |   | **High                  Price** |   | **Low                  Price** |   |
|-------------------------------------------------------------|--------|---------------------------------|--------|--------------------------------|--------|
|                                                        |   |                            |   |                           |   |
| **2004**                                                    |   |                            |   |                           |   |
| First                  Quarter                              |   | $                               | 1.58   |                           | $      | 0.25 |   |
| Second                  Quarter                             |   | $                               | 0.33   | (1)(2)                         | $      | 0.10 | (1)(2) |
| Third                  Quarter                              |   | $                               | 0.14   | (1)                            | $      | 0.04 | (1) |
| Fourth                  Quarter (through December 20, 2004) |   | $                               | 0.07   | (1)                            | $      | 0.0 | (1) |

|   | (1) | Represents                market prices while operating during the Chapter 11 reorganization                for                periods subsequent to May 11, 2004. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | High                sales price reflects the sales price on NASDAQ prior to Old RCN’s                delisting on May 12, 2004. Low sales price reflects the OTC Market                low bid                price during the balance of the quarter. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Period**                                                   |   | **High                  Price** |   | **Low                  Price** |   |
|--------------------------------------------------------------|--------|---------------------------------|--------|--------------------------------|--------|
|                                                         |   |                            |   |                           |   |
| **2004**                                                     |   |                            |   |                           |   |
| December                  21, 2004 through December 31, 2004 |   | $                               | 23.25  |                           | $      | 19.05 |   |
| **2005**                                                     |   |                            |   |                           |   |   |   |
| From                  January 1, 2005 through March 20, 2005 |   | $                               | 23.40  |                           | $      | 18.75 |   |
| From                  March 21, 2005 through March 31, 2005  |   | $                               | 20.95  |                           | $      | 19.11 |   |
| Second                  Quarter                              |   | $                               | 24.75  |                           | $      | 16.69 |   |
| Third                  Quarter                               |   | $                               | 25.67  |                           | $      | 21.00 |   |
| Fourth                  Quarter                              |   | $                               | 24.57  |                           | $      | 19.56 |   |

**Dividends      **

**Description      of RCN Corporation’s Equity Securities **

----

*Table            of Contents*

**Securities      Authorized For Issuance Under Equity Compensation Plans**

|                                                                    |   | Number                  of securities tobe                  issued upon exerciseof                  outstanding options |      | Weighted                  averageexercise                  price ofoutstanding                  options |   | Number                  of securitiesremaining                  available forfuture                  issuance |   |
|-------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|
|                                                                    |   |                                                                                                                    |      |                                                                                                    |   |                                                                                                          |   |
| Equity                  compensation plans approved by stockholders     |   |                                                                                                                    | 3,149,802 |                                                                                                    | $      | 21.77                                                                                                         |   |   | 681,731 |   |
|                                                                    |   |                                                                                                                    |      |                                                                                                    |   |                                                                                                          |   |   |   |   |
| Equity                  compensation plans not approved by stockholders |   |                                                                                                                    | -         |                                                                                                    | $      | -                                                                                                             |   |   | - |   |
| Total                                                                   |   |                                                                                                                    | 3,149,802 |                                                                                                    | $      | -                                                                                                             |   |   | 681,731 |   |

**Sales      of Unregistered Securities**

----

*Table            of Contents*

**Registration      Rights **

| **ITEM                6.** | **SELECTED                FINANCIAL DATA** |
|----------------------------|--------------------------------------------|

----

*Table            of Contents*

**RCN      CORPORATION **

**SELECTED      FINANCIAL DATA(1) **

**(Dollars      in Thousands Except Per Share Amounts) **

|                                                                                |   | **Successor** |      | **Predecessor**                                               |   |
|-------------------------------------------------------------------------------------|--------|---------------|-----------|---------------------------------------------------------------|--------|
|                                                                                |   | **2005**      |      | **December 21, to****December 31,****2004(2)** |   | **January                  1, to****December 20,****2004** |   | **2003** |   | **2002** |   | **2001** |   |
|                                                                                |   |          |      |                                                          |   |   |   |   |   |   |   |   |   |
| Revenues                                                                            |   | $             | 560,964   |                                                          | $      | 16,372 |     | $ | 470,459 |   | $ | 484,854 |   | $ | 433,494 |   | $ | 386,386 |   |
| Income/(loss)                  from continuing operations                           |   |          | (138,601  | )                                                             |   | (3,688 | )(3) |   | 971,962 | (4) |   | (499,747 | ) |   | (1,422,295 | ) |   | (692,849 | ) |
| Income/(loss)                  from continuing operations per average common share: |   |          |      |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                               |   | $             | (3.86     | )                                                             | $      | (0.10 | )       | $ | 8.33 |   | $ | (6.07 | ) | $ | 14.92 |   | $ | (8.97 | ) |
| Diluted                                                                             |   | $             | (3.86     | )                                                             | $      | (0.10 | ) | $ | 6.77 |   | $ | (6.07 | ) | $ | 14.92 |   | $ | (8.97 | ) |
| Total                  assets                                                       |   |          | 1,253,940 |                                                          |   | 1,400,510 |   |   | 1,254,689 |   |   | 1,529,356 |   |   | 1,990,272 |   |   | 3,603,131 |   |
| Total                  debt                                                         |   |          | 492,097   |                                                          |   | 493,568 |   |   | 1,669,560 |   |   | 1,654,585 |   |   | 1,744,114 |   |   | 1,896,148 |   |
| Redeemable                  preferred stock                                         |   |          | -         |                                                          |   | - |   |   | 1,825,212 |   |   | 1,772,310 |   |   | 2,304,426 |   |   | 2,142,276 |   |
| Preferred                  stock dividend and accretion                             |   |          | -         |                                                          |   | - |   |   | 52,902 |   |   | 173,392 |   |   | 162,150 |   |   | 151,663 |   |

| (1) | Excludes                discontinued operations (See “Management’s Discussion and Analysis of                Financial Condition and Results of Operations—Discontinued Operations” and                Note 9 to RCN’s Consolidated Financial Statements). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Successor                11 day period includes consolidated Starpower results. |
|-----|---------------------------------------------------------------------------------|

| (3) | Includes                a gain from “fresh start” adjustments of approximately $173.2 million. See                Note 5 to RCN’s Consolidated Financial Statements. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes                a gain on settlement of liabilities as a result of RCN’s bankruptcy                restructuring under Chapter 11 of the Bankruptcy Code of approximately                $1,166.0 million. See Note 5 to RCN’s Consolidated Financial Statements. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

| **ITEM                7.** | **MANAGEMENT’S                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |
|----------------------------|----------------------------------------------------------------------------------------------------------------|

**The      following discussion and analysis should be read together with RCN’s      Consolidated Financial Statements and related notes beginning on page F-1.      Reference is made to “Cautionary Statement Regarding Forward Looking Statements”on page 1 of this Annual Report, which describes important factors that could      cause actual results to differ from expectations and non-historical information      contained in this Annual Report. The application of SOP 90-7 and RCN’s      implementation of “fresh start” accounting for periods following its      reorganization under Chapter 11 of the Bankruptcy Code makes it more difficult      to compare RCN’s post-emergence operations and results to those for periods      prior to the date RCN filed for protection under Chapter 11 of the Bankruptcy      Code. See “Accounting Impact of Reorganization” below. **

**Overview      **

**Critical      Accounting Policies and Estimates**

|   | · | Fresh                start adjustments |
|--------|--------|----------------------------------------|

|   | · | Revenue                recognition |
|--------|--------|------------------------------------|

|   | · | Accrual                of telecommunication costs |
|--------|--------|---------------------------------------------------|

|   | · | Valuation                of long-lived assets and indefinite-lived                assets |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Leases |
|--------|--------|--------|

----

*Table            of Contents*

|   | · | Allowance                for doubtful accounts |
|--------|--------|------------------------------------------------|

**Fresh      Start Adjustments**

**Revenue      Recognition**

**Accrual      of Telecommunication Costs**

**Valuation      of Indefinite-Lived Intangible Assets and Long-Lived      Assets**

*,      “Goodwill and Other Intangible Asset” *

*Accounting      for Impairment or Disposal of Long-Lived Assets*

----

*Table            of Contents*

**Exit      Costs and Other Lease Related Costs**

*Accounting      for Costs Associated with Exit or Disposal Activities” *

**Allowance      for Doubtful Accounts**

**Joint      Ventures **

***Starpower***

***Megacable      and MCM***

*“The      Equity Method of Accounting for Investments in Common Stock” *
* *
*Criteria      for Applying the Equity Method of Accounting for Investments in Common      Stock*

----

*Table            of Contents*

***RCN-BecoCom***

**Accounting      Impact of Reorganization **

***Fresh      Start Reporting***

**Reclassifications      **

**Segment      Reporting **

*Disclosures      about Segments of an Enterprise and Related Information *

----

*Table            of Contents*

**Key      Financial and Statistical Measures **

|                                                                       |   | Successor2005 |    | Successor                    / Predecessor2004 |   |
|----------------------------------------------------------------------------|--------|---------------|---------|------------------------------------------------|--------|
|                                                                       |   |          |    |                                           |   |
|                                                                       |   |          |    |                                           |   |
| Voice                    RGUs 1                    , 6                     |   |          | 273,000 |                                           |   | 280,000 |   |
| Penetration                                                                |   |          | 19.5    | %                                              |   | 19.9 | % |
|                                                                       |   |          |         |                                           |   |  |   |
| Basic                    Video RGUs 1                    , 6               |   |          | 370,000 |                                           |   | 383,000 |   |
| Penetration                                                                |   |          | 26.4    | %                                              |   | 27.2 | % |
|                                                                       |   |          |         |                                           |   |  |   |
| Data                    RGUs 1                    , 6                      |   |          | 244,000 |                                           |   | 222,000 |   |
| Penetration                                                                |   |          | 17.4    | %                                              |   | 15.8 | % |
|                                                                       |   |          |         |                                           |   |  |   |
| Total                    RGUs (Excluding Digital) 1                    , 6 |   |          | 887,000 |                                           |   | 885,000 |   |
|                                                                       |   |          |         |                                           |   |  |   |
|                                                                       |   |          |         |                                           |   |  |   |
| Digital                    Subscribers                    2                |   |          | 220,000 |                                           |   | 196,000 |   |
| Penetration                                                                |   |          | 59.5    | %                                              |   | 51.2 | % |
|                                                                       |   |          |         |                                           |   |  |   |
|                                                                       |   |          |         |                                           |   |  |   |
| Customers                    3                    , 6                      |   |          | 409,000 |                                           |   | 425,000 |   |
|                                                                       |   |          |         |                                           |   |  |   |
| Average                    Revenue Per Customer 4                          |   | $             | 102     |                                           | $      | 96 |   |
|                                                                       |   |          |         |                                           |   |  |   |
| Average                    RGUs Per Customer 5                             |   |          | 2.1     |                                           |   | 2.0 |   |

----

*Table            of Contents*

|                                |   | PreviousMethodologyDecember                    31, 2005 |    | NewMethodologyDecember                    31, 2005 |   |
|-------------------------------------|--------|---------------------------------------------------------|---------|----------------------------------------------------|--------|
|                                |   |                                                    |    |                                               |   |
|                                |   |                                                    |    |                                               |   |
| Voice                    RGUs       |   |                                                    | 273,000 |                                               |   | 278,000 |   |
|                                |   |                                                    |         |                                               |   |  |   |
| Basic                    Video RGUs |   |                                                    | 370,000 |                                               |   | 369,000 |   |
|                                |   |                                                    |         |                                               |   |  |   |
| Data                    RGUs        |   |                                                    | 244,000 |                                               |   | 244,000 |   |
|                                |   |                                                    |         |                                               |   |  |   |
| Total                    RGUs       |   |                                                    | 887,000 |                                               |   | 891,000 |   |
|                                |   |                                                    |         |                                               |   |  |   |
|                                |   |                                                    |         |                                               |   |  |   |
| Customers                           |   |                                                    | 409,000 |                                               |   | 419,000 |   |

**Results      of Operations **

----

*Table          of Contents*

----

*Table            of Contents*

**RCN      CORPORATION AND SUBSIDIARIES **

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**(Dollars      in Thousands, Except Share and Per Share Data) **

|                                                                                                                                                                                |   | **Successor**                                                                       |     | **Successor**                                                                |   | **Predecessor**                                                            |   | **Predecessor**                                                                     |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|----------|------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|-----------|
|                                                                                                                                                                                |   | **For                  the year****ended****December                  31,****2005** |     | **December                  21 to****December                  31,****2004** |   | **January                  1 to****December                  20,****2004** |   | **For                  the year****ended****December                  31,****2003** |      |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |
| Revenues                                                                                                                                                                            |   | $                                                                                   | 560,964  |                                                                         | $      | 16,372                                                                     |   | $                                                                                   | 470,459   |   | $ | 484,854 |   |
| Costs                  and expenses:                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Direct                  expenses                                                                                                                                                    |   |                                                                                | 196,832  |                                                                         |   | 5,958                                                                      |   |                                                                                | 172,188   |   |   | 174,260 |   |
| Selling,                  general and administrative (exclusive of stock-based compensation                  shown                  seperately below)                               |   |                                                                                | 275,994  |                                                                         |   | 7,996                                                                      |   |                                                                                | 237,998   |   |   | 308,151 |   |
| Non-cash                  stock-based compensation                                                                                                                                  |   |                                                                                | 8,913    |                                                                         |   | -                                                                          |   |                                                                                | 4,414     |   |   | 4,692 |   |
| Impairments,                  exit costs and restructuring                                                                                                                          |   |                                                                                | 5,245    |                                                                         |   | -                                                                          |   |                                                                                | (7,674    | ) |   | 167,241 |   |
| Depreciation                  and amortization                                                                                                                                      |   |                                                                                | 190,322  |                                                                         |   | 5,218                                                                      |   |                                                                                | 231,734   |   |   | 197,267 |   |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Operating                  loss                                                                                                                                                     |   |                                                                                | (116,342 | )                                                                            |   | (2,800                                                                     | )      |                                                                                | (168,201  | ) |   | (366,757 | ) |
| Investment                  income                                                                                                                                                  |   |                                                                                | 5,648    |                                                                         |   | -                                                                          |   |                                                                                | 2,942     |   |   | 6,260 |   |
| Interest                  expense                                                                                                                                                   |   |                                                                                | 42,333   |                                                                         |   | 888                                                                        |   |                                                                                | 96,702    |   |   | 180,206 |   |
| Gain                  on sale of assets                                                                                                                                             |   |                                                                                | 2,536    |                                                                         |   | -                                                                          |   |                                                                                | 1,875     |   |   | 7,130 |   |
| Gain                  on the early extinuishment of debt                                                                                                                            |   |                                                                                | -        |                                                                         |   | -                                                                          |   |                                                                                | -         |   |   | 45,556 |   |
| Other                  income (expense), net                                                                                                                                        |   |                                                                                | 1,556    |                                                                         |   | -                                                                          |   |                                                                                | (295      | ) |   | 1,071 |   |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Loss                  from continuing operations before reorganization items, income                  taxes and                  equity in income (loss) of unconsolidated entities |   |                                                                                | (148,935 | )                                                                            |   | (3,688                                                                     | )      |                                                                                | (260,381  | ) |   | (486,946 | ) |
| Reorganization                  (expense) income, net                                                                                                                               |   |                                                                                | 11,113   |                                                                         |   | -                                                                          |   |                                                                                | (92,554   | ) |   | - |   |
| Gain                  on settlement of liabilities subject to compromise and                  restructuring                                                                         |   |                                                                                | -        |                                                                         |   | -                                                                          |   |                                                                                | 1,166,027 |   |   | - |   |
| Gain                  from "Fresh Start" adjustments                                                                                                                                |   |                                                                                | -        |                                                                         |   | -                                                                          |   |                                                                                | 173,178   |   |   | - |   |
| Income                  tax expense (benefit)                                                                                                                                       |   |                                                                                | 779      |                                                                         |   | -                                                                          |   |                                                                                | (114      | ) |   | 1,271 |   |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Income                  (loss) from continuing operations before equity in unconsolidated                  entities                                                                 |   |                                                                                | (138,601 | )                                                                            |   | (3,688                                                                     | )      |                                                                                | 986,384   |   |   | (488,217 | ) |
| Equity                  in income (loss) of unconsolidated entities                                                                                                                 |   |                                                                                | -        |                                                                         |   | -                                                                          |   |                                                                                | 11,267    |   |   | 23,470 |   |
| Impairment                  of unconsolidated entities                                                                                                                              |   |                                                                                | -        |                                                                         |   | -                                                                          |   |                                                                                | (25,689   | ) |   | (35,000 | ) |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Net                  income (loss) from continuing operations                                                                                                                       |   |                                                                                | (138,601 | )                                                                            |   | (3,688                                                                     | )      |                                                                                | 971,962   |   |   | (499,747 | ) |
| Income                  (loss) from discontinued operations, net of tax                                                                                                             |   |                                                                                | (111     | )                                                                            |   | -                                                                          |   |                                                                                | 2,204     |   |   | 10,362 |   |
| Gain                  on sale of discontinued operations, net of tax                                                                                                                |   |                                                                                | -        |                                                                         |   | -                                                                          |   |                                                                                | 88,580    |   |   | 163,684 |   |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Net                  income (loss) before cumulative effect of change in accounting                  principle                  and preferred dividend and accretion requirements   |   |                                                                                | (138,712 | )                                                                            |   | (3,688                                                                     | )      |                                                                                | 1,062,746 |   |   | (325,701 | ) |
| Cumulative                  effect on prior years of retroactive application of a change in                  accounting                  for legal fees, net of tax                 |   |                                                                                | 2,600    |                                                                         |   | -                                                                          |   |                                                                                | -         |   |   | - |   |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Net                  income (loss) before preferred dividend and accretion                  requirements                                                                            |   |                                                                                | (136,112 | )                                                                            |   | (3,688                                                                     | )      |                                                                                | 1,062,746 |   |   | (325,701 | ) |
| Preferred                  dividend and accretion requirements                                                                                                                      |   |                                                                                | -        |                                                                         |   | -                                                                          |   |                                                                                | 52,902    |   |   | 173,392 |   |
|                                                                                                                                                                                |   |                                                                                |     |                                                                         |   |                                                                       |   |                                                                                |      |   |   |   |   |
| Net                  income (loss) attributable to common stockholders                                                                                                              |   | $                                                                                   | (136,112 | )                                                                            | $      | (3,688                                                                     | )      | $                                                                                   | 1,009,844 |   | $ | (499,093 | ) |

----

*Table            of Contents*

**2005      (Successor) Compared to 2004 (Successor/Predecessor) **

***Revenues***

|                                     |   | Revenue                                          |    |
|------------------------------------------|--------|--------------------------------------------------|---------|
|                                     |   | for                  the year ended December 31, |    |
|                                     |   | Successor                                        |    | Predecessor |   | Fav/(unfav) |   |   |   |
|                                     |   | 2005                                             |    | 2004 |   | Variance |   | Var                  % |   |
|                                     |   |                                             |    |   |   |   |   |   |   |
| Video                                    |   | $                                                | 254,820 |   | $ | 220,158 |   | $ | 34,662 |   |   | 15.7 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Data                                     |   |                                             | 135,456 |   |   | 105,919 |   |   | 29,537 |   |   | 27.9 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Voice                                    |   |                                             | 146,961 |   |   | 141,475 |   |   | 5,486 |   |   | 3.9 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Reciprocal                  Compensation |   |                                             | 6,582   |   |   | 6,758 |   |   | (176 | ) |   | -2.6 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Other                                    |   |                                             | 17,145  |   |   | 12,521 |   |   | 4,624 |   |   | 36.9 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Total                                    |   | $                                                | 560,964 |   | $ | 486,831 |   | $ | 74,133 |   |   | 15.2 | % |

***Direct      Expenses***

----

*Table            of Contents*

***Selling,      General and Administrative Expenses***

|                                                   |   | SG&A                                         |    |
|--------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                   |   | for                  the year ended December 31, |    |
|                                                   |   | Successor                                        |    | Predecessor |   | Fav/(unfav) |   |   |   |
|                                                   |   | 2005                                             |    | 2004 |   | Variance |   | Var                  % |   |
|                                                   |   |                                             |    |   |   |   |   |   |   |
| Network                  operations and construction   |   | $                                                | 98,313  |   | $ | 93,569 |   |   | ($4,744 | ) |   | -5.1 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Sales                  and marketing                   |   |                                             | 50,571  |   | $ | 45,523 |   |   | (5,048 | ) |   | -11.1 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Customer                  Service                      |   |                                             | 20,791  |   | $ | 24,348 |   |   | 3,557 |   |   | 14.6 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Operating,                  general and administrative |   |                                             | 106,319 |   | $ | 82,554 |   |   | (23,765 | ) |   | -28.8 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Total                  SG&A                        |   | $                                                | 275,994 |   | $ | 245,994 |   |   | ($30,000 | ) |   | -12.2 | % |

***Non-Cash      Stock-Based Compensation***

----

*Table            of Contents*

***Impairments,      Exit Costs and Restructuring***

***Depreciation      and Amortization***

***Investment      Income***

***Interest      Expense***

***Gain      on sale of assets***

***Other      income, net***

***Reorganization      expense***

***Equity      in Income of Unconsolidated Entities***

----

*Table            of Contents*

***Discontinued      Operations***

**2004      (Successor/Predecessor) Compared to 2003 (Predecessor) **

***Revenues***

----

*Table            of Contents*

|                                     |   | Revenue                                          |    |
|------------------------------------------|--------|--------------------------------------------------|---------|
|                                     |   | for                  the year ended December 31, |    |
|                                     |   | Predecessor                                      |    | Predecessor |   | Fav/(unfav) |   |   |   |
|                                     |   | 2004                                             |    | 2003 |   | Variance |   | Var                  % |   |
|                                     |   |                                             |    |   |   |   |   |   |   |
| Video                                    |   | $                                                | 220,158 |   | $ | 201,845 |   | $ | 18,313 |   |   | 9.1 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Data                                     |   |                                             | 105,919 |   |   | 95,068 |   |   | 10,851 |   |   | 11.4 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Voice                                    |   |                                             | 141,475 |   |   | 146,265 |   |   | (4,790 | ) |   | -3.3 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Reciprocal                  Compensation |   |                                             | 6,758   |   |   | 35,763 |   |   | (29,005 | ) |   | -81.1 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Other                                    |   |                                             | 12,521  |   |   | 5,913 |   |   | 6,608 |   |   | 111.8 | % |
|                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Total                                    |   | $                                                | 486,831 |   | $ | 484,854 |   | $ | 1,977 |   |   | 0.4 | % |

***Direct      Expenses***

***Selling,      and General and Administrative Expenses***

----

*Table            of Contents*

|                                                   |   | SG&A                                         |    |
|--------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                   |   | for                  the year ended December 31, |    |
|                                                   |   | Predecessor                                      |    | Predecessor |   | Fav/(unfav) |   |   |   |
|                                                   |   | 2004                                             |    | 2003 |   | Variance |   | Var                  % |   |
|                                                   |   |                                             |    |   |   |   |   |   |   |
| Network                  operations and construction   |   | $                                                | 93,569  |   | $ | 100,483 |   | $ | 6,914 |   |   | 6.9 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Sales                  and marketing                   |   |                                             | 45,523  |   | $ | 52,815 |   |   | 7,292 |   |   | 13.8 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Customer                  Service                      |   |                                             | 24,348  |   | $ | 37,309 |   |   | 12,961 |   |   | 34.7 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Operating,                  general and administrative |   |                                             | 82,554  |   | $ | 117,544 |   |   | 34,990 |   |   | 29.8 | % |
|                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Total                  SG&A                        |   | $                                                | 245,994 |   | $ | 308,151 |   | $ | 62,157 |   |   | 20.2 | % |

***Non-cash      Stock-Based Compensation***

***Impairments      and other charges, net***

***Depreciation      and Amortization***

***Investment      Income***

***Interest      Expense***

***Gain      on Early Extinguishment of Debt***

----

*Table            of Contents*

***Gain      on Sale of Assets***

***Reorganization      Expenses***

***Gain/(loss)      on Settlement of Liabilities Subject to Compromise and      Restructuring***

***Gain/(loss)      on Fresh Start Adjustments***

***Discontinued      Operations***

***Equity      in Income of Unconsolidated Entities***

***Impairment      of Unconsolidated Entities***

**Liquidity      and Capital Resources **

|                                                                             |   | **December                31,****2005** |    | **December                31,****2004** |   |
|----------------------------------------------------------------------------------|--------|-----------------------------------------|---------|-----------------------------------------|--------|
|                                                                             |   |                                    |    |                                    |   |
| Cash,                cash equivalents and short-term investments                 |   | $                                       | 143,017 |                                    | $      | 163,964 |   |
| Debt                (including current maturities and capital lease obligations) |   |                                    | 492,097 |                                    |   | 493,568 |   |

***Cash      Provided by (Used in) Operating Activities***

----

*Table            of Contents*

***Cash      Provided by Investing Activities***

***Cash      Provided by (Used in) Financing Activities***

***Description      of Outstanding Debt***

*Successor      First-Lien Credit Agreement *

----

*Table            of Contents*

*Successor      Notes *

*Successor      Third-Lien Term Loan *

***Covenants***

***Letters      of Credit***

----

*Table            of Contents*

***Contractual      Cash Commitments***

|                                           |   | **(dollars                  in thousands)** |    |
|------------------------------------------------|--------|---------------------------------------------|---------|
| **Contractual                  Obligations**   |   | **Total**                                   |    | **Less                    than****1                  Year** |   | **1-3                  years** |   | **4-5                  years** |   | **After****5                  years** |   |
|                                           |   |                                        |    |   |   |   |   |   |   |   |   |
| First                  Lien                    |   | $                                           | 324,479 |   | $ | 3,278 |   | $ | 9,833 |   | $ | 311,368 |   | $ | - |   |
| Convertible                  Second Lien Notes |   |                                        | 125,000 |   |   | - |   |   | - |   |   | - |   |   | 125,000 |   |
| Third                  Lien                    |   |                                        | 39,155  |   |   | - |   |   | - |   |   | - |   |   | 39,155 |   |
| Capital                  leases                |   |                                        | 3,463   |   |   | 370 |   |   | 458 |   |   | 392 |   |   | 2,243 |   |
| Operating                  leases              |   |                                        | 138,520 |   |   | 21,356 |   |   | 41,895 |   |   | 33,732 |   |   | 41,537 |   |
|                                           |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Contractual Obligations |   | $                                           | 630,617 |   | $ | 25,004 |   | $ | 52,186 |   | $ | 345,492 |   | $ | 207,935 |   |

***Recently      Issued Accounting Pronouncements***

***Inflation***

----

*Table            of Contents*

| **ITEM                7A.** | **QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** |
|-----------------------------|-------------------------------------------------------------------------------|

| **ITEM                8.** | **FINANCIAL                STATEMENTS AND SUPPLEMENTARY DATA** |
|----------------------------|----------------------------------------------------------------|

| **ITEM                9.** | **CHANGES                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL                DISCLOSURE** |
|----------------------------|------------------------------------------------------------------------------------------------------------------------|

| **ITEM                9A.** | **CONTROLS                AND PROCEDURES** |
|-----------------------------|--------------------------------------------|

----

*Table            of Contents*

*Disclosure      Controls and Procedures *

*Management's      Report on Internal Control over Financial Reporting *

*Internal      Control — Integrated Framework*
*Internal      Control — Integrated Framework*

*Remediation      of the Material Weaknesses Identified at December 31, 2004*

*“The      Equity Method of Accounting for Investments in Common Stock”*
*“Criteria      for Applying the Equity Method of Accounting for Investments in Common      Stock”*

----

*Table          of Contents*

*Changes      in Internal Control over Financial Reporting *

| **ITEM                9B.** | **OTHER                INFORMATION** |
|-----------------------------|--------------------------------------|

----

*Table            of Contents*

**PART      III**

| **ITEM                10.** | **DIRECTORS                AND EXECUTIVE OFFICERS OF THE REGISTRANT** |
|-----------------------------|-----------------------------------------------------------------------|

| **ITEM                11.** | **EXECUTIVE                COMPENSATION** |
|-----------------------------|-------------------------------------------|

| **ITEM                12.** | **SECURITY                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT** |
|-----------------------------|-----------------------------------------------------------------------------------|

| **ITEM                13.** | **CERTAIN                RELATIONSHIPS AND RELATED TRANSACTIONS** |
|-----------------------------|-------------------------------------------------------------------|

----

*Table            of Contents*

| **ITEM                14.** | **PRINCIPAL                ACCOUNTANT’S FEES AND SERVICES** |
|-----------------------------|-------------------------------------------------------------------|

**PART      IV **

| **ITEM                15.** | **EXHIBITS                AND FINANCIAL STATEMENT SCHEDULES** |
|-----------------------------|---------------------------------------------------------------|

| (a) | The                following documents are filed as part of this Annual Report: |
|-----|---------------------------------------------------------------------------------|

|   | (1) | Financial                Statements. |
|--------|-----|--------------------------------------|

|   | (2) | Financial                Statement Schedules |
|--------|-----|----------------------------------------------|

|   | (3) | The                index to the Exhibits begins on page E-1 of this Annual Report. |
|--------|-----|------------------------------------------------------------------------------------|

----

*Table            of Contents*

**SIGNATURES**

|                                |                           |
|-------------------------------------|--------------------------------|
| Date:                April 10, 2006 | RCN                Corporation |
|                                |                           |
|                                | By:                            | /s/ PETER                D. AQUINO  |
|                                |                           | **Peter                D. Aquino****President                and Chief Executive                Officer** |

----

*Table            of Contents*

**EXHIBITS        INDEX **

**(Exhibits        are listed by numbers corresponding to the Exhibit Table of Item 601 in        Regulation S-K). **

|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Exhibit****No.** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|               |   |
|   2.1    |   | Joint                  Plan of Reorganization of RCN Corporation and Certain Subsidiaries,                  dated                  as of December 21, 2004 (incorporated by reference to Exhibit 2.1                  of RCN’s                  Current Report on Form 8-K filed on December 14, 2004).                                                                                                                                                       |
|               |   |
|   2.2    |   | Order                  Confirming the Joint Plan of Reorganization of RCN Corporation                  and Certain                  Subsidiaries, dated as of December 8, 2004 (incorporated by reference                  to                  Exhibit 2.2 of RCN’s Current Report on Form 8-K filed on December 14,                  2004).                                                                                                                  |
|               |   |
|   3.1    |   | Amended                  and Restated Certificate of Incorporation of RCN Corporation, dated                  as of                  December 21, 2004 (incorporated by reference to Exhibit 3.1 of                  RCN’s                  Current Report on Form 8-K filed on December 27, 2004                  8-K).                                                                                                                                      |
|               |   |
|   3.2    |   | Amended                  and Restated Bylaws of RCN Corporation (incorporated by reference                  to                  Exhibit 3.2 of RCN’s Current Report on Form 8-K filed on December 27,                  2004).                                                                                                                                                                                                                                 |
|               |   |
|   4.1    |   | Warrant                  Agreement, dated as of December 21, 2004, by and between RCN Corporation                  and HSBC Bank USA, National Association as Warrant Agent (incorporated                  by                  reference to Exhibit 4.1 of RCN’s Current Report on Form 8-K filed on                  December 27, 2004.                                                                                                                      |
|               |   |
|   4.2    |   | Registration                  Rights Agreement, dated as of December 21, 2004, by and between                  RCN                  Corporation and the Stockholders listed on the signature pages                  thereto                  (incorporated by reference to Exhibit 4.2 of RCN’s Current Report on Form                  8-K filed on December 27, 2004).                                                                                      |
|               |   |
|   4.3    |   | Note                  Purchase Agreement, dated as of December 21, 2004, by and among                  RCN                  Corporation, the Guarantors listed on the signature pages thereto                  and the                  Purchasers listed in Schedule I and Schedule II thereto (incorporated                  by                  reference to Exhibit 4.3 of RCN’s Current Report on Form 8-K filed on                  December 27, 2004). |
|               |   |
|   4.4    |   | Indenture,                  dated as of December 21, 2004, by and among RCN Corporation and                  HSBC Bank                  USA, National Association (incorporated by reference to Exhibit                  4.4 of                  RCN’s Current Report on Form 8-K filed on December 27,                  2004).                                                                                                                               |
|               |   |
|   4.5    |   | Registration                  Rights Agreement, dated as of December 21, 2004, by and between                  RCN                  Corporation and the Purchasers listed in Schedule I and Schedule                  II                  thereto (incorporated by reference to Exhibit 4.5 of RCN’s Current Report                  on Form 8-K filed on December 27, 2004).                                                                                 |
|               |   |
| 10.1               |   | Dark                  Fiber IRU Agreement dated as of May 8, 1997 among Metropolitan                  Fiber                  Systems/McCourt, Inc. and RCN Telecom Services of Massachusetts,                  Inc. (is                  incorporated by reference to Exhibit 10.2 to RCN’s Amendment No. 2 to Form                  10/A filed September 5, 1997 (Commission File No.                  0-22825.))                                            |
|               |   |
| 10.2               |   | Dark                  Fiber IRU Agreement dated as of May 8, 1997 among Metropolitan                  Fiber                  Systems of New York, Inc. and RCN Telecom Services of New York,                  Inc. (is                  incorporated by reference to Exhibit 10.3 to RCN’s Amendment No. 2 to Form                  10/A filed September 5, 1997 (Commission File No.                  0-22825.))                                             |
|               |   |
| 10.3               |   | Amended                  and Restated Operating Agreement of RCN-Becocom, LLC dated as of                  June 17,                  1997 (is incorporated by reference to Exhibit 10.8 to RCN’s Amendment No.                  2 to Form 10/A filed September 5, 1997 (Commission File No.                  0-22825.))                                                                                                                                       |
|               |   |
| 10.4               |   | Management                  Agreement dated as of June 17, 1997 among RCN Operating Services,                  Inc. and                  RCN-Becocom, Inc. (is incorporated herein by reference to Exhibit                  10.9 to                  RCN’s Amendment No. 2 to Form 10/A filed September 5, 1997 (Commission                  File No. 0-22825.))                                                                                              |
|               |   |
| 10.5               |   | Construction                  and Indefeasible Right of Use Agreement dated as of June 17, 1997                  between                  RCN-Becocom, Inc. and RCN-Becocom, LLC (is incorporated herein                  by                  reference to Exhibit 10.10 to RCN’s Amendment No. 2 to Form 10/A filed                  September 5, 1997 (Commission File No.                  0-22825.))                                                      |

----

*Table            of Contents*

|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Exhibit****No.** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|               |   |
| 10.6               |   | License                  Agreement dated as of June 17, 1997 between Boston Edison Company                  and                  RCN-Becocom, Inc. (is incorporated by reference to Exhibit 10.11                  to RCN’s                  Amendment No. 2 to Form 10/A filed September 5, 1997 (Commission                  File No.                  0-22825.))                                                                                                                                                          |
|               |   |
| 10.7               |   | Joint                  Investment and Non-Competition Agreement dated as of June 17, 1997                  among                  RCN Telecom Services of Massachusetts, Inc., RCN-Becocom, Inc.                  and                  RCN-BecoCom, LLC (is incorporated by reference to Exhibit 10.12                  to RCN’s                  Amendment No. 2 to Form 10/A filed September 5, 1997 (Commission                  File No.                  0-22825.))                                                     |
|               |   |
| 10.8               |   | Amended                  and restated Operating Agreement of Starpower Communications, L.L.C.                  by                  and between Pepco Communications, L.L.C. and RCN Telecom Services                  of                  Washington, D.C. Inc. dated October 28, 1997(is incorporated by                  reference                  to Exhibit 10.13 to RCN’s Annual Report on Form 10-K for the year ended                  December 31, 1997 (Commission File No. 0-22825.))                             |
|               |   |
| 10.9+              |   | Employment                  Agreement between RCN Corporation and Peter D. Aquino, dated May                  6, 2005.                  (incorporated by reference to Exhibit 10.9 of RCN’s Annual Report on Form                  10-K, filed on May 11, 2005).                                                                                                                                                                                                                                                             |
|               |   |
| 10.10+             |   | Employment                  Agreement between RCN Corporation and James Mooney dated May 6,                  2005.                  (incorporated by reference to Exhibit 10.10 of RCN’s Annual Report on Form                  10-K, filed on May 11, 2005).                                                                                                                                                                                                                                                                |
|               |   |
| 10.11              |   | Credit                  Agreement, dated as of December 21, 2004, by and among RCN, the                  lenders                  party thereto and Deutsche Bank AG Cayman Islands Branch, as                  administrative agent (incorporated by reference to Exhibit 99.2                  of RCN’s                  December 27, 2004 8-K).                                                                                                                                                                           |
|               |   |
| 10.12              |   | Amended                  and Restated Term Loan and Credit Agreement, dated as of December                  21,                  2004, by and among RCN Corporation, HSBC Bank USA, National Association,                  as agent and collateral agent and certain financial institutions                  parties                  thereto, as lenders (incorporated by reference to Exhibit 99.3                  of RCN’s                  December 27, 2004 8-K).                                                      |
|               |   |
| 10.13    |   | Security                  Agreement, dated as of December 21, 2004, made by RCN and each                  Guarantor                  in favor of the Second-Lien Collateral Agent for the benefit of                  the                  Secured Creditors (as defined therein) (incorporated by reference                  to                  Exhibit 99.4 of RCN’s Current Report on Form 8-K filed on December 14,                  2004).                                                                             |
|               |   |
| 10.14    |   | Pledge                  Agreement, dated as of December 21, 2004, made by RCN Corporation                  and each                  Guarantor in favor of the Second-Lien Collateral Agent for the                  benefit of                  the Secured Creditors (as defined therein) (incorporated by reference                  to                  Exhibit 99.5 of RCN’s Current Report on Form 8-K filed on December 14,                  2004).                                                                   |
|               |   |
| 10.15    |   | Subsidiary                  Guaranty, dated as of December 21, 2004, made by each of the Guarantors                  (as defined therein) in favor of the Agent (as defined therein)                  for the                  benefit of the Secured Creditors (as defined therein) (incorporated                  by                  reference to Exhibit 99.6 of RCN’s Current Report on Form 8-K filed on                  December 14, 2004).                                                                          |
|               |   |
| 10.16    |   | Intercreditor                  Agreement, dated as of December 21, 2004, by and between Deutsche                  Bank                  Cayman Islands Branch, as Administrative Agent, and HSBC Bank USA,                  National Association, as Second-Lien Collateral Agent and Third-Lien                  Collateral Agent (incorporated by reference to Exhibit 99.7 of                  RCN’s                  Current Report on Form 8-K filed on December 14, 2004).                                             |
|               |   |
| 10.17    |   | Security                  Agreement, dated as of December 21, 2004, made by each of the Loan                  Parties                  (as defined therein) in favor of Deutsche Bank AG Cayman Islands                  Branch,                  the First-Lien Collateral Agent (incorporated by reference to Exhibit                  99.8                  of RCN’s Current Report on Form 8-K filed on December 14,                  2004).                                                                             |
|               |   |
| 10.18    |   | Pledge                  Agreement, dated as of December 21, 2004, made by each of the Loan                  Parties                  (as defined therein) in favor of Deutsche Bank AG Cayman Islands                  Branch,                  as First-Lien Collateral Agent for the benefit of the Secured Creditors                  (as defined therein) (incorporated by reference to Exhibit 99.9                  of RCN’s                  Current Report on Form 8-K filed on December 14, 2004).                  |
|               |   |
| 10.19              |   | Subsidiary                  Guaranty, dated as of December 21, 2004, made by each of the Guarantors                  (as defined therein) in favor of HSBC Bank USA, National Association,                  as                  Second-Lien Collateral Agent for the benefit of the Secured Creditors                  (as                  defined therein) (incorporated by reference to Exhibit 99.10 of                  RCN’s                  Current Report on Form 8-K filed on December 14,                  2004). |

----

*Table            of Contents*

| **Exhibit****No.** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |   |
| 10.20              |   | Security                      Agreement, dated as of December 21, 2004, made by RCN Corporation                      in favor                      of the Third-Lien Collateral Agent (incorporated by reference                      to Exhibit                      99.11 of RCN’s Current Report on Form 8-K filed on December 14,                      2004).                                                                                                                                                                                                                        |
|               |   |
| 10.21              |   | Pledge                      Agreement, dated as of December 21, 2004, made by RCN Corporation                      in favor                      of HSBC Bank USA, National Association, as Third-Lien Collateral                      Agent for                      the benefit of the Secured Creditors (as defined therein) (incorporated                      by                      reference to Exhibit 99.12 of RCN’s Current Report on Form 8-K filed on                      December 14, 2004).                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.22+             |   | Employment                      Letter by and between RCN Corporation and Stephen A. Bogiages,                      dated April                      7, 2005 (incorporated by reference to Exhibit 99.1 of RCN’s Current Report                      on Form 8-K, filed on April 20, 2005).                                                                                                                                                                                                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.23+             |   | Employment                      Letter by and between RCN Corporation and Michael Sicoli, dated                      May 12,                      2005 (incorporated by reference to Exhibit 99.2 of RCN’s Current Report on                      Form 8-K, filed on May 12, 2005).                                                                                                                                                                                                                                                                                                      |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.24*+            |   | Separation                      Agreement between RCN Corporation and Patrick T. Hogan, dated                      as of June                      30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.25+             |   | RCN                      Corporation Senior Executive Annual Bonus Plan (incorporated                      by reference                      to Exhibit 99.1 of RCN’s Current Report on Form 8-K, filed on July 26,                      2005).                                                                                                                                                                                                                                                                                                                                          |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.26+             |   | RCN                      Corporation 2005 Stock Compensation Plan (incorporated by reference                      to                      Exhibit 99.2 of RCN’s Current Report on Form 8-K, filed on July 26,                      2005).                                                                                                                                                                                                                                                                                                                                                |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.27              |   | First                      Amendment, dated as of November 30, 2005, to the First Lien                      Credit                      Agreement, dated as of December 21, 2004, among RCN Corporation,                      the                      lenders from time to time party thereto and Deutsche Bank AG,                      Cayman                      Islands Branch, as Administrative Agent (incorporated by reference                      to                      Exhibit 99.3 of RCN’s Current Report on Form 8-K, filed on December 8,                      2005). |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.28*+            |   | Separation                      Agreement between RCN Corporation and Stephen A. Bogiages,                      dated as of                      December 22, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                            |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.29*+            |   | Amended                      Form Non-Qualified Option Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.30*+            |   | Amended                      Form Incentive Stock Option Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.32+             |   | Form                      Executive Restricted Stock Agreement (incorporated by reference                      to Exhibit                      10.1 of RCN’s Current Report on Form 8-K, filed on January 6,                      2006).                                                                                                                                                                                                                                                                                                                                                 |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.33*             |   | Stock                      Purchase Agreement between RCN Corporation and Consolidated                      Edison, Inc.,                      dated as of December 5, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                   |
|               |   |
| 10.34              |   | Stock                      Purchase Agreement, dated March 6, 2006, entered into by and                      among RCN                      International Holdings, Inc, Teleholding, S.A. de C.V., Mega                      Cable, S.A.                      de C.V. and MCM Holding, S.A. de C.V. (incorporated by reference                      to                      Exhibit 99.2 of RCN’s Current Report on Form 8-K, filed on March 8,                      2006)                                                                                                              |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.35*             |   | Settlement                      Agreement, dated March 6, 2006, entered into by and among RCN                      International Holdings, Inc., Teleholding, S.A. de C.V., Mega                      Cable, S.A.                      de C.V., MCM Holding, S.A. de C.V. and the Private Shareholders                      listed                      therein.                                                                                                                                                                                                                               |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.36+             |   | Employment                      Letter by and between RCN Corporation and Benjamin R. Preston                      dated April                      5, 2006 (incorporated by reference to Exhibit 99.2 of RCN’s Current Report                      on Form 8-K, filed on April 5, 2006.)                                                                                                                                                                                                                                                                                                |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|  10.37*+      |   | RCN                      Corporation Change of Control Severance Plan dated April 7,                      2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 21                 |   | Subsidiaries                      of Registrant (incorporated by reference to Exhibit 21 of RCN’s Annual                      Report on Form 10-K for the year ended December 31, 2004 (Commission                      File                      No. 001-16805))                                                                                                                                                                                                                                                                                                                        |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 23.1*              |   | Consent                      of Pricewaterhouse Coopers LLP, Independent Registered Public                      Accounting                      Firm                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|               |   |
| 23.2*              |   | Consent                      of Friedman LLP, Independent Registered Public Accounting                      Firm                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.1*              |   | Certification                      of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14                      promulgated                      under the Securities and Exchange Act of 1934, as amended,                      as adopted                      pursuant to section 302 of the Sarbanes-Oxley Act of                      2002.                                                                                                                                                                                                                                        |
|               |   |
| 31.2*              |   | Certification                      of the Executive Vice President and Chief Financial Officer                      pursuant to                      Rules 13a-14 and 15d-14 promulgated under the Securities and                      Exchange Act                      of 1934, as amended, as adopted pursuant to section 302 of                      the                      Sarbanes-Oxley Act of 2002.                                                                                                                                                                                  |
|               |   |
| 32.1*              |   | Certification                      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350                      as adopted                      pursuant to Section 906 of the Sarbanes-Oxley Act of                      2002.                                                                                                                                                                                                                                                                                                                                                          |
|               |   |
| 32.2*              |   | Certification                      of Executive Vice President and Chief Financial Officer pursuant                      to 18                      U.S.C. Section 1350 as adopted pursuant to Section 906 of the                      Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                             |
|               |   |
| 99.1               |   | Press                      release announcing emergence of RCN Corporation from Bankruptcy                      published                      December 22, 2004 ((incorporated by reference to Exhibit 99.1                      of RCN’s                      Current Report on Form 8-K filed on December 14, 2004) RCN’s December 27,                      2004 8-K).                                                                                                                                                                                                          |

| ***** | **Document                  attached.** |
|-------|-----------------------------------------|

| **+** | **Management                  compensatory plan or arrangement.** |
|-------|-------------------------------------------------------------------|

----

*Table            of Contents*

**Index      to Financial Statements **

|                                                                                                                                                                                                                                                                                                                                                                                                                       | **Page** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Report                of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                                                                                     | F-2      |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Report                of Independent Registered Public Accounting Firm on Internal Control                over                Financial Reporting                                                                                                                                                                                                                                                                          | F-3      |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Report                of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                                                                                     | F-4      |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Consolidated                Statements of Operations for the year ended December 31, 2005 (Successor),                the periods from December 21, 2004 to December 31, 2004 (Successor)                and                January 1, 2004 to December 20, 2004 (Predecessor) and the year ended                December 31, 2003 (Predecessor)                                                                           | F-5      |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Consolidated                Balance Sheets as of December 31, 2005 (Successor) and December 31,                2004                (Successor)                                                                                                                                                                                                                                                                             | F-6      |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Consolidated                Statements of Cash Flows for the year ended December 31, 2005 (Successor),                the period from December 21, 2004 to December 31, 2004 (Successor),                the                period from January 1, 2004 to December 20, 2004 (Predecessor) and                the                year ended December 31, 2003 (Predecessor)                                                | F-8      |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Consolidated                Statements of Changes in Common Stockholders’ Equity (Deficit) for the                year ended December 31, 2005 (Successor), the periods from December                21,                2004 to December 31, 2004 (Successor) and January 1, 2004 to December                20,                2004 (Predecessor) and the year ended December 31, 2003                (Predecessor) | F-9      |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Notes                to Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                  | F-10     |
|                                                                                                                                                                                                                                                                                                                                                                                                                       |     |
| Schedule                II—Valuation and Qualifying Accounts                                                                                                                                                                                                                                                                                                                                                         | F-67     |

----

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

*Internal      Control - Integrated Framework*

----

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

*Internal      Control - Integrated Framework*

*Internal      Control - Integrated Framework*
*Internal      Control - Integrated Framework*

----

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM **

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**(Dollars      in Thousands, Except Share and Per Share Data) **

|                                                                                                                                                                                      |   | **Successor**                                                                           |       | **Successor**                                                                                                              |   | **Predecessor**                                                                                                                     |   | **Predecessor**                                                                         |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|-------------|
|                                                                                                                                                                                      |   | **For                    the year****ended****December                    31,****2005** |       | **For                    the period from****December                    21 to****December                    31,****2004** |   | **For                      the period****from January                        1 to****December                    20,****2004** |   | **For                    the year****ended****December                    31,****2003** |        |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |
| Revenues                                                                                                                                                                                  |   | $                                                                                       | 560,964    |                                                                                                                       | $      | 16,372                                                                                                                              |   | $                                                                                       | 470,459     |   | $ | 484,854 |   |
| Costs                    and expenses:                                                                                                                                                    |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Direct                    expenses                                                                                                                                                        |   |                                                                                    | 196,832    |                                                                                                                       |   | 5,958                                                                                                                               |   |                                                                                    | 172,188     |   |   | 174,260 |   |
| Selling,                    general and administrative (exclusive of stock-based compensation                    shown                    seperately below)                               |   |                                                                                    | 275,994    |                                                                                                                       |   | 7,996                                                                                                                               |   |                                                                                    | 237,998     |   |   | 308,151 |   |
| Non-cash                    stock-based compensation                                                                                                                                      |   |                                                                                    | 8,913      |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 4,414       |   |   | 4,692 |   |
| Impairments,                    exit costs and restructuring                                                                                                                              |   |                                                                                    | 5,245      |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | (7,674      | ) |   | 167,241 |   |
| Depreciation                    and amortization                                                                                                                                          |   |                                                                                    | 190,322    |                                                                                                                       |   | 5,218                                                                                                                               |   |                                                                                    | 231,734     |   |   | 197,267 |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Operating                    loss                                                                                                                                                         |   |                                                                                    | (116,342   | )                                                                                                                          |   | (2,800                                                                                                                              | )      |                                                                                    | (168,201    | ) |   | (366,757 | ) |
| Investment                    income                                                                                                                                                      |   |                                                                                    | 5,648      |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 2,942       |   |   | 6,260 |   |
| Interest                    expense                                                                                                                                                       |   |                                                                                    | 42,333     |                                                                                                                       |   | 888                                                                                                                                 |   |                                                                                    | 96,702      |   |   | 180,206 |   |
| Gain                    on sale of assets                                                                                                                                                 |   |                                                                                    | 2,536      |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 1,875       |   |   | 7,130 |   |
| Gain                    on the early extinuishment of debt                                                                                                                                |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | -           |   |   | 45,556 |   |
| Other                    income (expense), net                                                                                                                                            |   |                                                                                    | 1,556      |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | (295        | ) |   | 1,071 |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Loss                    from continuing operations before reorganization items, income                    taxes and                    equity in income (loss) of unconsolidated entities |   |                                                                                    | (148,935   | )                                                                                                                          |   | (3,688                                                                                                                              | )      |                                                                                    | (260,381    | ) |   | (486,946 | ) |
| Reorganization                    (expense) income, net                                                                                                                                   |   |                                                                                    | 11,113     |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | (92,554     | ) |   | - |   |
| Gain                    on settlement of liabilities subject to compromise and                    restructuring                                                                           |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 1,166,027   |   |   | - |   |
| Gain                    from "Fresh Start" adjustments                                                                                                                                    |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 173,178     |   |   | - |   |
| Income                    tax expense (benefit)                                                                                                                                           |   |                                                                                    | 779        |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | (114        | ) |   | 1,271 |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Income                    (loss) from continuing operations before equity in unconsolidated                    entities                                                                   |   |                                                                                    | (138,601   | )                                                                                                                          |   | (3,688                                                                                                                              | )      |                                                                                    | 986,384     |   |   | (488,217 | ) |
| Equity                    in income (loss) of unconsolidated entities                                                                                                                     |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 11,267      |   |   | 23,470 |   |
| Impairment                    of unconsolidated entities                                                                                                                                  |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | (25,689     | ) |   | (35,000 | ) |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Net                    income (loss) from continuing operations                                                                                                                           |   |                                                                                    | (138,601   | )                                                                                                                          |   | (3,688                                                                                                                              | )      |                                                                                    | 971,962     |   |   | (499,747 | ) |
| Income                    (loss) from discontinued operations, net of tax                                                                                                                 |   |                                                                                    | (111       | )                                                                                                                          |   | -                                                                                                                                   |   |                                                                                    | 2,204       |   |   | 10,362 |   |
| Gain                    on sale of discontinued operations, net of tax                                                                                                                    |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 88,580      |   |   | 163,684 |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Net                    income (loss) before cumulative effect of change in accounting                    principle                    and preferred dividend and accretion requirements   |   |                                                                                    | (138,712   | )                                                                                                                          |   | (3,688                                                                                                                              | )      |                                                                                    | 1,062,746   |   |   | (325,701 | ) |
| Cumulative                    effect on prior years of retroactive application of a change                    in accounting                    for legal fees, net of tax                 |   |                                                                                    | 2,600      |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | -           |   |   | - |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Net                    income (loss) before preferred dividend and accretion                    requirements                                                                              |   |                                                                                    | (136,112   | )                                                                                                                          |   | (3,688                                                                                                                              | )      |                                                                                    | 1,062,746   |   |   | (325,701 | ) |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Preferred                    dividend and accretion requirements                                                                                                                          |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 52,902      |   |   | 173,392 |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Net                    income (loss) attributable to common stockholders                                                                                                                  |   | $                                                                                       | (136,112   | )                                                                                                                          | $      | (3,688                                                                                                                              | )      | $                                                                                       | 1,009,844   |   | $ | (499,093 | ) |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Net                    income (loss) per common share                                                                                                                                     |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Basic:                                                                                                                                                                                    |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Continuing                    Operations                                                                                                                                                  |   | $                                                                                       | (3.85      | )                                                                                                                          | $      | (0.10                                                                                                                               | )      | $                                                                                       | 8.33        |   | $ | (6.07 | ) |
| Discontinued                    Operations                                                                                                                                                |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 0.82        |   |   | 1.57 |   |
| Net                    Income/(loss) before cumulative effect of change in accounting                    principle                                                                        |   | $                                                                                       | (3.85      | )                                                                                                                          | $      | (0.10                                                                                                                               | )      | $                                                                                       | 9.15        |   | $ | (4.50 | ) |
| Cumulative                    effect of change in accounting for legal fees                                                                                                               |   |                                                                                    | 0.07       |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | -           |   |   | - |   |
| Net                    income (loss) attributable to common stockholders                                                                                                                  |   | $                                                                                       | (3.78      | )                                                                                                                          | $      | (0.10                                                                                                                               | )      | $                                                                                       | 9.15        |   | $ | (4.50 | ) |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Diluted:                                                                                                                                                                                  |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Continuing                    Operations                                                                                                                                                  |   | $                                                                                       | (3.85      | )                                                                                                                          | $      | (0.10                                                                                                                               | )      | $                                                                                       | 6.77        |   | $ | (6.07 | ) |
| Discontinued                    Operations                                                                                                                                                |   |                                                                                    | -          |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | 0.63        |   |   | 1.57 |   |
| Net                    Income/(loss) before cumulative effect of change in accounting                    principle                                                                        |   | $                                                                                       | (3.85      | )                                                                                                                          | $      | (0.10                                                                                                                               | )      | $                                                                                       | 7.40        |   | $ | (4.50 | ) |
| Cumulative                    effect of change in accounting for legal fees                                                                                                               |   |                                                                                    | 0.07       |                                                                                                                       |   | -                                                                                                                                   |   |                                                                                    | -           |   |   | - |   |
| Net                    income (loss) attributable to common stockholders                                                                                                                  |   | $                                                                                       | (3.78      | )                                                                                                                          | $      | (0.10                                                                                                                               | )      | $                                                                                       | 7.40        |   | $ | (4.50 | ) |
| Weighted                    Average Shares Outstanding:                                                                                                                                   |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Basic                                                                                                                                                                                     |   |                                                                                    | 36,040,165 |                                                                                                                       |   | 36,020,850                                                                                                                          |   |                                                                                    | 110,294,169 |   |   | 110,877,797 |   |
|                                                                                                                                                                                      |   |                                                                                    |       |                                                                                                                       |   |                                                                                                                                |   |                                                                                    |        |   |   |   |   |
| Diluted                                                                                                                                                                                   |   |                                                                                    | 36,040,165 |                                                                                                                       |   | 36,020,850                                                                                                                          |   |                                                                                    | 143,519,490 |   |   | 110,877,797 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS **

**(Dollars      in Thousands) **

|                                                                                                                                     |   | **December                  31,** |         |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------------|
|                                                                                                                                     |   | **Successor****2005**             |         | **Successor****2004** |   |
|                                                                                                                                     |   |                              |         |   |   |
| ASSETS                                                                                                                                   |   |                              |         |   |   |
|                                                                                                                                     |   |                              |         |   |   |
| Current                  Assets:                                                                                                         |   |                              |         |   |   |
| Cash                  and cash equivalents                                                                                               |   | $                                 | 70,906       |   | $ | 113,539 |   |
| Short-term                  investments                                                                                                  |   |                              | 72,111       |   |   | 50,425 |   |
| Accounts                  receivable, net of allowance for doubtful accounts of $3,665 and                  $4,568                       |   |                              | 49,242       |   |   | 52,618 |   |
| Unbilled                  revenues                                                                                                       |   |                              | 655          |   |   | 792 |   |
| Interest                  receivable                                                                                                     |   |                              | 390          |   |   | 755 |   |
| Prepayments                  and other current assets                                                                                    |   |                              | 13,603       |   |   | 22,373 |   |
| Short-term                  restricted investments                                                                                       |   |                              | -            |   |   | 1,525 |   |
|                                                                                                                                     |   |                              |    |   |   |    |   |
| Total                  current assets                                                                                                    |   |                              | 206,907      |   |   | 242,027 |   |
|                                                                                                                                     |   |                              |         |   |   |   |   |
|                                                                                                                                     |   |                              |         |   |   |   |   |
| Property,                  plant and equipment, net of accumulated depreciation of $175,215                  and                  $4,605 |   |                              | 705,908      |   |   | 793,691 |   |
| Investment                  in unconsolidated entity                                                                                     |   |                              | 184,896      |   |   | 178,000 |   |
|                                                                                                                                     |   |                              |         |   |   |   |   |
| Intangible                  assets, net of accumulated amortization of $19,743 and                  $613                                 |   |                              | 118,145      |   |   | 141,786 |   |
| Long-term                  restricted investments                                                                                        |   |                              | 17,568       |   |   | 25,063 |   |
| Deferred                  charges and other assets                                                                                       |   |                              | 20,516       |   |   | 19,943 |   |
|                                                                                                                                     |   |                              |    |   |   |    |   |
| Total                  assets                                                                                                            |   | $                                 | 1,253,940    |   | $ | 1,400,510 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS—(Continued) **

**(Dollars      in Thousands, Except Share and Per Share Data) **

|                                                                                                                                                              |   | **December                  31,** |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                                                                                                                              |   | **Successor****2005**             |      | **Successor****2004** |   |
|                                                                                                                                                              |   |                              |      |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                                                                                                             |   |                              |      |   |   |
|                                                                                                                                                              |   |                              |      |   |   |
| Current                  Liabilities:                                                                                                                             |   |                              |      |   |   |
| Current                  maturities of capital lease obligations                                                                                                  |   | $                                 | 370       |   | $ | 558 |   |
| Current                  maturities of long-term debt                                                                                                             |   |                              | 3,278     |   |   | 3,300 |   |
| Accounts                  payable                                                                                                                                 |   |                              | 24,153    |   |   | 29,763 |   |
| Advance                  billings and customer deposits                                                                                                           |   |                              | 36,202    |   |   | 37,082 |   |
| Accrued                  expenses                                                                                                                                 |   |                              | 25,656    |   |   | 36,330 |   |
| Accrued                  interest                                                                                                                                 |   |                              | 4,942     |   |   | 837 |   |
| Accrued                  direct expenses                                                                                                                          |   |                              | 42,287    |   |   | 32,301 |   |
| Accrued                  exit costs                                                                                                                               |   |                              | 3,106     |   |   | 2,340 |   |
| Accrued                  employee compensation and related expenses                                                                                               |   |                              | 17,365    |   |   | 14,704 |   |
| Deferred                  reorganization costs                                                                                                                    |   |                              | -         |   |   | 21,644 |   |
| Current                  liabilities of discontinued operations                                                                                                   |   |                              | 1,422     |   |   | 1,082 |   |
|                                                                                                                                                              |   |                              |      |   |   |   |   |
| Total                  current liabilities                                                                                                                        |   |                              | 158,781   |   |   | 179,941 |   |
|                                                                                                                                                              |   |                              |      |   |   |   |   |
| Long-term                  debt and capital lease obligations                                                                                                     |   |                              | 488,449   |   |   | 489,710 |   |
| Other                  long-term liabilities                                                                                                                      |   |                              | 43,808    |   |   | 25,937 |   |
|                                                                                                                                                              |   |                              |      |   |   |   |   |
| Total                  liabilities                                                                                                                                |   |                              | 691,038   |   |   | 695,588 |   |
|                                                                                                                                                              |   |                              |      |   |   |   |   |
| Commitments                  and contingencies                                                                                                                    |   |                              |      |   |   |   |   |
|                                                                                                                                                              |   |                              |      |   |   |   |   |
| Stockholders'                  Equity:                                                                                                                            |   |                              |      |   |   |   |   |
| Common                  stock, par value $0.01 per share, 100,000,000 shares authorized,                  36,028,116 and 31,919,044 shares issued and outstanding |   |                              | 360       |   |   | 319 |   |
| Committed                  stock, par value $0.01, 797,938 and 4,101,806 shares                  committed                                                        |   |                              | 8         |   |   | 41 |   |
| Committed                  capital in excess of par                                                                                                               |   |                              | 25,549    |   |   | 131,355 |   |
| Additional                  paid-in-capital                                                                                                                       |   |                              | 684,146   |   |   | 576,895 |   |
| Unearned                  compensation                                                                                                                            |   |                              | (14,384   | ) |   | - |   |
| Accumulated                  deficit                                                                                                                              |   |                              | (139,800  | ) |   | (3,688 | ) |
| Accumulated                  other comprehensive income                                                                                                           |   |                              | 7,023     |   |   | - |   |
|                                                                                                                                                              |   |                              |      |   |   |   |   |
| Total                  stockholders' equity                                                                                                                       |   |                              | 562,902   |   |   | 704,922 |   |
|                                                                                                                                                              |   |                              |      |   |   |   |   |
| Total                  liabilities and stockholders' equity                                                                                                       |   | $                                 | 1,253,940 |   | $ | 1,400,510 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(Dollars      in Thousands)**

|                                                                                                                                                            |   | **Successor**                                                                           |         | **Successor**                                                                                                         |   | **Revised****Predecessor**                                                                                          |   | **Revised****Predecessor**                                                              |         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------------|-----------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------------|
|                                                                                                                                                            |   | **For                    the year****ended****December                    31,****2005** |         | **For                    the period****December                    21 to****December                    31,****2004** |   | **For                    the period****January                    1 to****December                    20,****2004** |   | **For                    the year****ended****December                    31,****2003** |         |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |
| **Cash                    flows from operating activities:**                                                                                                    |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |
| Net                    income (loss) before preferred dividend and accretion                    requirements                                                    |   | $                                                                                       | (136,112     | )                                                                                                                     | $      | (3,688                                                                                                              | )      | $                                                                                       | 1,062,746    |   | $ | (325,701 | ) |
| Income                    (loss) from discontinued operations, net of tax                                                                                       |   |                                                                                    | 111          |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (2,204       | ) |   | (10,362 | ) |
| Gain                    on sale of discontinued operations                                                                                                      |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (88,580      | ) |   | (163,684 | ) |
| Cumulative                    effect of a change in accounting for legal fees                                                                                   |   |                                                                                    | (2600        | )                                                                                                                     |   |  -                                                                                                             |   |                                                                                    | -            |   |   | - |   |
| Net                    income (loss) from continuing operations                                                                                                 |   |                                                                                    | (138,601     | )                                                                                                                     |   | (3,688                                                                                                              | )      |                                                                                    | 971,962      |   |   | (499,747 | ) |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| **Adjustments                    to reconcile net income (loss) to net cash provided by (used                    in) operating                    activities:** |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Accretion                    of discounted debt                                                                                                                 |   |                                                                                    | 4,608        |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 4,541        |   |   | 14,370 |   |
| Amortization                    of financing costs                                                                                                              |   |                                                                                    | 2,333        |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 9,511        |   |   | 15,762 |   |
| Non-cash                    stock based compensation                                                                                                            |   |                                                                                    | 8,913        |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 4,413        |   |   | 4,692 |   |
| Gain                    on sale of assets                                                                                                                       |   |                                                                                    | (2,536       | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | (1,651       | ) |   | (8,386 | ) |
| Write                    off of deferred financing charges                                                                                                      |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 18,076       |   |   | - |   |
| Gain                    on early extingishment of debt                                                                                                          |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | -            |   |   | (45,556 | ) |
| Gain                    on settlement of lease obligation                                                                                                       |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (14,525      | ) |   | - |   |
| Non-cash                    fresh start adjustments                                                                                                             |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (173,178     | ) |   | - |   |
| Gain                    on settlement of liabilities subject to compromise                                                                                      |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (1,166,027   | ) |   | - |   |
| Depreciation                    and amortization                                                                                                                |   |                                                                                    | 190,322      |                                                                                                                  |   | 5,218                                                                                                               |   |                                                                                    | 231,734      |   |   | 197,267 |   |
| Tax                    provision charged against intangibles                                                                                                    |   |                                                                                    | 809          |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | -            |   |   | - |   |
| Deferred                    income taxes, net                                                                                                                   |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (934         | ) |   | - |   |
| Provision                    for doubtful accounts                                                                                                              |   |                                                                                    | 9,516        |                                                                                                                  |   | 342                                                                                                                 |   |                                                                                    | 8,617        |   |   | 12,335 |   |
| Equity                    in loss of unconsolidated entities                                                                                                    |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (11,267      | ) |   | (23,470 | ) |
| Impairment                    in unconsolidated entity                                                                                                          |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 25,689       |   |   | 35,000 |   |
| Non-cash                    impairments, exit costs and restructuring                                                                                           |   |                                                                                    | 8,264        |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 6,851        |   |   | 167,241 |   |
| Payment                    of deferred reorganization costs                                                                                                     |   |                                                                                    | (21,644      | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | -            |   |   | - |   |
|                                                                                                                                                            |   |                                                                                    |    |                                                                                                                  |   |                                                                                                           |   |                                                                                    |    |   |   |    |   |
|                                                                                                                                                            |   |                                                                                    | **61,984**   |                                                                                                                  |   | **1,872**                                                                                                           |   |                                                                                    | **(86,188**  | **)** |   | **(130,492** | **)** |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Net                    change in certain assets and liabilities, net of business                    acquisitions                                                |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Accounts                    receivable and unbilled revenues                                                                                                    |   |                                                                                    | (6,003       | )                                                                                                                     |   | (914                                                                                                                | )      |                                                                                    | (10,700      | ) |   | (2,931 | ) |
| Accounts                    payable                                                                                                                             |   |                                                                                    | (6,237       | )                                                                                                                     |   | (20,594                                                                                                             | )      |                                                                                    | 29,513       |   |   | (4,579 | ) |
| Accrued                    expenses                                                                                                                             |   |                                                                                    | 8,168        |                                                                                                                  |   | 5,842                                                                                                               |   |                                                                                    | 36,945       |   |   | (9,043 | ) |
| Accounts                    receivable from related parties                                                                                                     |   |                                                                                    | -            |                                                                                                                  |   | 15,469                                                                                                              |   |                                                                                    | 3,378        |   |   | (3,261 | ) |
| Accounts                    payable to related parties                                                                                                          |   |                                                                                    | -            |                                                                                                                  |   | (15,469                                                                                                             | )      |                                                                                    | 1,803        |   |   | (10,117 | ) |
| Advanced                    billing and customer deposits                                                                                                       |   |                                                                                    | (880         | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | 1,310        |   |   | 135 |   |
| Unrealized                    appreciation (depreciation) on investments                                                                                        |   |                                                                                    | 127          |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | -            |   |   | - |   |
| Other                                                                                                                                                           |   |                                                                                    | 3,028        |                                                                                                                  |   | 1,075                                                                                                               |   |                                                                                    | (12,207      | ) |   | (13,049 | ) |
|                                                                                                                                                            |   |                                                                                    |    |                                                                                                                  |   |                                                                                                           |   |                                                                                    |    |   |   |    |   |
| Net                    cash provided by (used in) continuing operations                                                                                         |   |                                                                                    | 60,187       |                                                                                                                  |   | (12,719                                                                                                             | )      |                                                                                    | (36,146      | ) |   | (173,337 | ) |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Cash                    provided by discontinued operations                                                                                                     |   |                                                                                    | 239          |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 2,012        |   |   | 3,087 |   |
|                                                                                                                                                            |   |                                                                                    |    |                                                                                                                  |   |                                                                                                           |   |                                                                                    |    |   |   |    |   |
| **Net                    cash provided by (used in) operating activities**                                                                                      |   |                                                                                    | **60,426**   |                                                                                                                  |   | **(12,719**                                                                                                         | **)**  |                                                                                    | **(34,134**  | **)** |   | **(170,250** | **)** |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| **Cash                    flows from investing activities:**                                                                                                    |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Additions                    to property, plant and equipment                                                                                                   |   |                                                                                    | (89,340      | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | (52,294      | ) |   | (87,481 | ) |
| Acquisition                    of Starpower, net of cash acquired                                                                                               |   |                                                                                    | -            |                                                                                                                  |   | (14,933                                                                                                             | )      |                                                                                    | -            |   |   | - |   |
| Investment                    in acquisition                                                                                                                    |   |                                                                                    | (2,244       | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | -            |   |   | - |   |
| (Increase)                    decrease in short-term investments                                                                                                |   |                                                                                    | (21,559      | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | (50,425      | ) |   | 227,641 |   |
| Investment                    in unconsolidated joint venture                                                                                                   |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | -            |   |   | (2,000 | ) |
| Distribution                    from unconsolidated joint venture                                                                                               |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | -            |   |   | 7,750 |   |
| Proceeds                    from sale of assets                                                                                                                 |   |                                                                                    | 6,259        |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 391          |   |   | 17,408 |   |
| Decrease                    (increase) in restricted investments                                                                                                |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 203,160      |   |   | (199,285 | ) |
| Decrease                    (increase) in investments restricted for debt service                                                                               |   |                                                                                    | 9,020        |                                                                                                                  |   | 4,634                                                                                                               |   |                                                                                    | 1,077        |   |   | - |   |
|                                                                                                                                                            |   |                                                                                    |    |                                                                                                                  |   |                                                                                                           |   |                                                                                    |    |   |   |    |   |
| Net                    cash provided by (used in) continuing operations                                                                                         |   |                                                                                    | (97,864      | )                                                                                                                     |   | (10,299                                                                                                             | )      |                                                                                    | 101,909      |   |   | (35,967 | ) |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Proceeds                    from sale of discontinued operations                                                                                                |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 118,061      |   |   | 239,644 |   |
| Cash                    used in discontinued operations                                                                                                         |   |                                                                                    | (10          | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | -            |   |   | (8,813 | ) |
|                                                                                                                                                            |   |                                                                                    |    |                                                                                                                  |   |                                                                                                           |   |                                                                                    |    |   |   |    |   |
| **Net                    cash provided by (used in) investing activities**                                                                                      |   |                                                                                    | **(97,874**  | **)**                                                                                                                 |   | **(10,299**                                                                                                         | **)**  |                                                                                    | **219,970**  |   |   | **194,864** |   |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| **Cash                    flows from financing activities:**                                                                                                    |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Repayments                    of long-term debt                                                                                                                 |   |                                                                                    | (5,522       | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | (395,367     | ) |   | (68,000 | ) |
| Change                    in term loans                                                                                                                         |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | (111,377     | ) |   | - |   |
| Payments                    of capital lease obligations                                                                                                        |   |                                                                                    | (558         | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | (3,715       | ) |   | (2,590 | ) |
| Payments                    made for debt financing costs                                                                                                       |   |                                                                                    | (515         | )                                                                                                                     |   | -                                                                                                                   |   |                                                                                    | (12,215      | ) |   | (12,853 | ) |
| Proceeds                    from the issuance of long-term debt                                                                                                 |   |                                                                                    | -            |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | 455,000      |   |   | 27,806 |   |
| Proceeds                    from the exercise of stock options                                                                                                  |   |                                                                                    | 1,410        |                                                                                                                  |   | -                                                                                                                   |   |                                                                                    | -            |   |   | 53 |   |
|                                                                                                                                                            |   |                                                                                    |    |                                                                                                                  |   |                                                                                                           |   |                                                                                    |    |   |   |    |   |
| **Net                    cash used in financing activities**                                                                                                    |   |                                                                                    | **(5,185**   | **)**                                                                                                                 |   | **-**                                                                                                               |   |                                                                                    | **(67,674**  | **)** |   | **(55,584** | **)** |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Net                    increase (decrease)                    in cash and cash equivalents                                                                      |   |                                                                                    | (42,633      | )                                                                                                                     |   | (23,018                                                                                                             | )      |                                                                                    | 118,162      |   |   | (30,970 | ) |
| Cash                    and cash equivalents at beginning of period                                                                                             |   |                                                                                    | 113,539      |                                                                                                                  |   | 136,557                                                                                                             |   |                                                                                    | 18,395       |   |   | 49,365 |   |
|                                                                                                                                                            |   |                                                                                    |    |                                                                                                                  |   |                                                                                                           |   |                                                                                    |    |   |   |    |   |
| **Cash                    and cash equivalents at end of period**                                                                                               |   | $                                                                                       | 70,906       |                                                                                                                  | $      | 113,539                                                                                                             |   | $                                                                                       | 136,557      |   | $ | 18,395 |   |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| **Supplemental                    disclosures of cash flow information**                                                                                        |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Cash                    paid during the periods for:                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Interest,                    net of capitalized interest of $0, $0, $539 and $1,430                                                                             |   | $                                                                                       | 31,277       |                                                                                                                  | $      | 1,763                                                                                                               |   | $                                                                                       | 39,775       |   | $ | 137,794 |   |
|                                                                                                                                                            |   |                                                                                    |         |                                                                                                                  |   |                                                                                                                |   |                                                                                    |         |   |   |   |   |
| Income                    taxes                                                                                                                                 |   | $                                                                                       | -            |                                                                                                                  | $      | -                                                                                                                   |   | $                                                                                       | 68           |   | $ | 56 |   |

----

**RCN      CORPORATION**

**Consolidated      Statements of Changes in **

**Common      Stockholders' Equity/(Deficit) **

**Each      of the years in the three year period ended December 31,      2005**

**(Dollars      in thousands Except Share and Per Share Data)**

|                                                                                                                                                  |   | **Common Stock****Class                    A Shares** |         | **Common Stock****Class A****Amount** |   | **Committed                    Capital Shares** |   | **Committed                    Capital Amount** |       | **Committed****Capital****in                    Excess****of                    Par** |   | **Common****Stock                    Class****B                    Shares** |   | **Common Stock****Class                    B****amount** |     | **Warrants** |   | **Additional****Paid in Capital** |   | **Retained****Earnings/****(Accumulated****Deficit)** |    | **Treasury****Stock****Shares** |   | **Treasury****Stock Amount** |   | **Unearned****Compensation****Expense** |       | **Unrealized****Cumulative****Translation****Adjustment** |   | **Appreciation/****Depreciation on****Investments** |   | **Total Common****Stockholders’****Equity(Deficit)** |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|--------------|-------------------------------------------------|--------|-------------------------------------------------|--------|-------------------------------------------------|------------|---------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------|----------|--------------|--------|---------------------------------------------|--------|-------------------------------------------------------|---------|---------------------------------|--------|-----------------------------------|--------|-----------------------------------------|------------|-----------------------------------------------------------|--------|----------------------------------------------------------|--------|-----------------------------------------------------------------|------------|
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |
| **Balance,                    December 31, 2002, Predesessor**                                                                                        |   |                                                       | 110,795,577  |                                            | $      | 110,796                                         |   |                                            |       |                                                                                  | $      | -                                                                           |   | $                                                             | -        |         |   |                                        |   | $                                                     | -       |                            |   |                              |   | $                                       | 1,451,744  |                                                      | $      | (3,889,385                                               | )      |                                                            | (682,867   | ) | $ | (9,583 | ) | $ | (4,336 | ) | $ | (5,134 | ) | $ | 1,484 |   | $ | (2,344,414 | ) |
| Net                    loss to common shareholders                                                                                                    |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   | (499,093                                                 | )      |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (499,093 | ) |
| Stock                    plan transactions                                                                                                            |   |                                                       | 1,355,983    |                                            |   | 1,356                                           |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 5,718      |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   | 58 |   |   |   |   |   |   |   |   | 7,132 |   |
| Conversion                    of joint venture ownership interest                                                                                     |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 276        |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 276 |   |
| Warrant                    issuance                                                                                                                   |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 4,025      |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4,025 |   |
| Recognition of unearned compensation                                                                                                   |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   | 3,936 |   |   |   |   |   |   |   |   | 3,936 |   |
| Conversion of Series B Preferred Stock                                                                                       |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   | 11,424,810                                  |   |                                                  | 11,425  |                            |   |                              |   |                                    | 694,082    |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 705,507 |   |
| Cancellation of restricted stock grants                                                                                           |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | (5,427     | )                                                         |   |                                                     |   |                                                            | (633,693   | ) |   | (727 | ) |   |   |   |   |   |   |   |   |   |   | (6,154 | ) |
| Unrealized                    depreciation on investments                                                                                             |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   | (1,244 | ) |   | (1,244 | ) |
| Cumulative                    translation adjustment                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   | (8,856 | ) |   |   |   |   | (8,856 | ) |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                    December 31, 2003, Predesessor**                                                                                        |   |                                                       | 112,151,560  |                                            | $      | 112,152                                         |   |                                            | -          |                                                                                  | $      | -                                                                           |   | $                                                             | -        |         |   | 11,424,810                                  |   | $                                                     | 11,425  |                            |   | -                                 |   | $                                       | 2,150,418  |                                                      | $      | (4,388,478                                               | )      |                                                            | (1,316,560 | ) | $ | (10,310 | ) | $ | (342 | ) | $ | (13,990 | ) | $ | 240 |   | $ | (2,138,885 | ) |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    Income/(loss) to common shareholders                                                                                           |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   | 1,009,844                                                |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 1,009,844 |   |
| Stock                    plan transactions                                                                                                            |   |                                                       | 84,359       |                                            |   | 84                                              |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   | 144 |   |   | (6 | ) |   |   |   |   |   |   |   | 222 |   |
| Record                    Restricted Stock Expense                                                                                                    |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   | 316 |   |   |   |   |   |   |   |   | 316 |   |
| Recognition                    of unearned compensation                                                                                               |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 3,851      |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,851 |   |
| Conversion                    of Series B Preferred Stock                                                                                             |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Cancellation                    of restricted stock grants                                                                                            |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            | (638,649   | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Unrealized                    depreciation on investments                                                                                             |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   | (403 | ) |   | (403 | ) |
| Cumulative                    translation adjustment                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   | (3,298 | ) |   |   |   |   | (3,298 | ) |
| **Impact                    on Fresh Start Adjustments:**                                                                                             |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Cancellation                    of shares in Predecessor                                                                                              |   |                                                       | (112,235,919 | )                                               |   | (112,236                                        | )      |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   | (11,424,810                                 | )      |                                                  | (11,425 | )                               |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            | 1,955,209  |   |   | 10,166 |   |   |   |   |   |   |   |   |   |   |   | (113,495 | ) |
| Elimination                    of accumulated losses                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   | 3,378,634                                                |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,378,634 |   |
| Other                    Fresh Start adjustments                                                                                                      |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | (2,154,269 | )                                                         |   |                                                     |   |                                                            |       |   |   |   |   |   | 32 |   |   | 17,288 |   |   | 163 |   |   | (2,136,786 | ) |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                    December 20, 2004, Predesessor**                                                                                        |   |                                                       | -            |                                            | $      | -                                               |   |                                            | -          |                                                                                  | $      | -                                                                           |   | $                                                             | -        |         |   | -                                           |   | $                                                     | -       |                            |   | -                                 |   | $                                       | -          |                                                      | $      | -                                                        |   |                                                            | -          |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Successor:**                                                                                                                                        |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   | $                                       | 576,895    |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 576,895 |   |
| Equity                    issued to creditors Issuance of common stock                                                                                |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock                                                                                                           |   |                                                       | 31,919,044   |                                            | $      | 319                                             |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 319 |   |
| Committed                    capital                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            | 4,101,806  |                                                                                  | $      | 41                                                                          |   | $                                                             | 131,355  |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 131,396 |   |
| Successor                    Balance December 21, 2004                                                                                                |   |                                                       | 31,919,044   |                                            |   | 319                                             |   |                                            | 4,101,806  |                                                                                  |   | 41                                                                          |   |                                                          | 131,355  |         |   | -                                           |   |                                                  | -       |                            |   | -                                 |   |                                    | 576,895    |                                                      |   | -                                                        |   |                                                            | -          |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 708,610 |   |
| Net                    Income/(loss) to common shareholders                                                                                           |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   | (3,688                                                   | )      |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3,688 | ) |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                    December 31, 2004, Successor**                                                                                           |   |                                                       | 31,919,044   |                                            | $      | 319                                             |   |                                            | 4,101,806  |                                                                                  | $      | 41                                                                          |   | $                                                             | 131,355  |         |   | -                                           |   | $                                                     | -       |                            |   | -                                 |   | $                                       | 576,895    |                                                      | $      | (3,688                                                   | )      |                                                            | -          |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | 704,922 |   |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    loss to common shareholders                                                                                                    |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   | (136,112                                                 | )      |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (136,112 | ) |
| Issuance                    of committed shares in payment of claims                                                                                  |   |                                                       | 3,303,981    |                                            |   | 33                                              |   |                                            | (3,303,981 | )                                                                                     |   | (33                                                                         | )      |                                                          | (105,806 | )            |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 105,806    |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (0 | ) |
| Issuance                    of restricted stock                                                                                                       |   |                                                       | 730,086      |                                            |   | 7                                               |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 17,486     |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   | (17,493 | ) |   |   |   |   |   |   |   | - |   |
| Exercise                    of warrant                                                                                                                |   |                                                       | 5            |                                            |   | -                                               |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   | -                                 |   |                                    | -          |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Return                    of committed shares                                                                                                         |   |                                                       |         |                                            |   |                                            |   |                                            | 113        |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Amortization                    of restricted stock award                                                                                             |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   | 3,109 |   |   |   |   |   |   |   |   | 3,109 |   |
| Amortization                    of stock options                                                                                                      |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 5,804      |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,804 |   |
| Issuance                    of stock upon exercise of options                                                                                         |   |                                                       | 75,000       |                                            |   | 1                                               |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | 1,409      |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,410 |   |
| Adjustment                    to deferred tax valuation allowance related to indefinite-lived                    intangible                    assets |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    | (23,819    | )                                                         |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (23,819 | ) |
| Warrant                    issuance                                                                                                                   |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          | 0        |         |   |                                        |   |                                                  |    |                            |   | 735                               |   |                                    | 565        |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 565 |   |
| Foreign                    currency translation gain/(loss)                                                                                           |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   | 6,896 |   |   |   |   |   | 6,896 |   |
| Gain                    (loss) on assets held for sale                                                                                                |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   | 127 |   |   | 127 |   |
|                                                                                                                                                  |   |                                                       |         |                                            |   |                                            |   |                                            |       |                                                                                  |   |                                                                        |   |                                                          |     |         |   |                                        |   |                                                  |    |                            |   |                              |   |                                    |       |                                                      |   |                                                     |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                    December 31, 2005, Successor**                                                                                           |   |                                                       | 36,028,116   |                                            | $      | 360                                             |   |                                            | 797,938    |                                                                                  | $      | 8                                                                           |   | $                                                             | 25,549   |         |   | -                                           |   | $                                                     | -       |                            |   | 735                               |   | $                                       | 684,146    |                                                      | $      | (139,800                                                 | )      |                                                            | -          |   | $ | - |   | $ | (14,384 | ) | $ | 6,896 |   | $ | 127 |   | $ | 562,902 |   |

----

**RCN      CORPORATION **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS **

**(Thousands      of Dollars, Except Share and Per Share Data) **

| **1.** | **ORGANIZATION                    AND BASIS OF PRESENTATION** |
|--------|---------------------------------------------------------------|

***Megacable      and MCM***

*“The      Equity Method of Accounting for Investments in Common Stock” *
* *
*Criteria      for Applying the Equity Method of Accounting for Investments in Common      Stock*

***Starpower***

----

***Change      in Accounting for Legal Fees***

*Accounting*
*Changes*

***Revisions      and Reclassifications***

| **2.** | **EMERGENCE                FROM CHAPTER 11** |
|--------|----------------------------------------------|

**Operations      and Liquidity Prior to Commencement of Chapter 11 Cases **

**Commencement      of Chapter 11 Cases **

**Plan      of Reorganization and Exit Financing **

----

|   | • | The                RCN Debtors obtained a $355 million senior secured credit facility                comprised of term loans for an aggregate amount of $330 million and                a $25                million letter of credit facility (the “First-Lien Credit Facility”); and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | RCN                issued $125 million aggregate principal amount of 7.375% convertible                second-lien notes due 2012 which are convertible into shares of                reorganized RCN’s common stock (the “Convertible Notes”). |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | RCN                amended and extended its Evergreen Credit Agreement (the “Third-Lien Term                Loan”) |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------|

**Effect      of Consummation of the Plan **

| **3.** | **SUMMARY                OF SIGNIFICANT ACCOUNTING POLICIES** |
|--------|---------------------------------------------------------------|

**“Fresh      Start” Accounting **

*“Financial      Reporting By Entities in Reorganization Under the Bankruptcy      Code”*

**Cash      and Cash Equivalents **

----

**Short-term      Investments **

|                                             |   | **(dollars                  in thousands)**         |   |
|--------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                             |   |                                                |   |   |   |
| **Short                    Term****Investments** |   | **Successor****December                  31, 2005** |   | **Successor****December                  31, 2004** |   |
|                                             |   |                                                |   |   |   |
| Commercial                  Paper                |   | $                                                   | 21,425 |   | $ | - |   |
| Corporate                                        |   |                                                | -      |   |   | 30,647 |   |
| Federal                  Agency                  |   |                                                | 50,686 |   |   | 19,778 |   |
|                                             |   |                                                |   |   |   |   |   |
| Total                                            |   | $                                                   | 72,111 |   | $ | 50,425 |   |

**Concentration      of Credit Risk**

**Accounts      Receivable **

**Property,      Plant and Equipment and Depreciation and Amortization **

----

|                                               |   | Lives  |                          |
|----------------------------------------------------|--------|--------|-------------------------------|
|                                               |   |   |                          |
| Telecommunication                network           |   |   | 5                - 22.5 years |   |
| Computer                equipment                  |   |   | 3                - 5 years    |   |
| Building                and leasehold improvements |   |   | 5                - 30 years   |   |
| Furniture,                fixtures and vehicles    |   |   | 3                - 10 years   |   |
| Other                                              |   |   | 5                - 10 years   |   |

**Intangibles      **

*,      “Goodwill and Other Intangible Asset” *

*“Accounting      for Costs of Computer Software Developed or Obtained for Internal      Use.*

**Valuation      of Long-Lived Assets **

*“Accounting      for the Impairment or Disposal of Long-Lived Assets,” *

**Short-Term      and Long-Term Restricted Investments **

**Leases      **

----

**Programmer      Launch Funds **

**Direct      Expenses **

**Selling,      General and Administrative **

**Non-cash      stock based compensation**

**Advertising      Expense **

**Debt      Issuance Costs **

*Successor      *

**Income      Taxes **

**Foreign      Currency Translation **

----

**Comprehensive      Income (Loss) **

|                                                                                                    |   | **(dollars                  in thousands)** |         |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------------|
|                                                                                                    |   | **Successor**                               |         | **Predecessor** |   |
|                                                                                                    |   | **2005**                                    |         | **December 21, to****December 31,****2004** |   | **January                      1, to****December 20,****2004** |   | **2003** |   |
|                                                                                                    |   |                                        |         |   |   |   |   |   |   |
| Net                  income(loss) before preferred dividend and accretion                  requirements |   | $                                           | (136,112     | ) | $ | (3,688 | ) | $ | 1,062,746 |   | $ | (325,701 | ) |
|                                                                                                    |   |                                        |         |   |   |   |   |   |   |   |   |   |   |
| Cumulative                  foreign currency translation gain (loss)                                    |   |                                        | 6,896        |   |   | - |   |   | (3,298 | ) |   | (8,856 | ) |
| Unrealized                  appreciation (depreciation) on investments                                  |   |                                        | 127          |   |   | - |   |   | (403 | ) |   | (1,244 | ) |
| “Fresh                  Start” adjustments                                                  |   |                                        | -            |   |   | - |   |   | 17,451 |   |   | - |   |
|                                                                                                    |   |                                        |    |   |   |    |   |   |    |   |   |    |   |
| Comprehensive                  income (loss)                                                            |   | $                                           | (129,089     | ) | $ | (3,688 | ) | $ | 1,076,496 |   | $ | (335,801 | ) |

***Use      of Estimates***

***Change      in Accounting Estimates***

***Segment      Reporting***

*“Disclosures      about Segments of an Enterprise and Related Information.” *

**Revenue      Recognition**

----

***Recently      Issued Accounting Pronouncements***

*“Accounting      Changes and Error Corrections, a replacement of APB 20 and FASB Statement No.      3”*
*“Accounting      Changes” *
*“Reporting      Accounting Changes in Interim Financial Statements” *

*“Accounting      for Conditional Asset Retirement Obligations” *
*Accounting      for Asset Retirement Obligations*

*“Share-Based      Payment (“SFAS No. 123R”),” *
*“Accounting      for Stock Based Compensation,”*
*“Accounting      for Stock Issued to Employees.” *
**.      **

*Exchanges      of Nonmonetary Assets - an amendment of APB Opinion No. 29*

*“Inventory      Costs — an amendment of ARB No. 43, Chapter 4”*

*“The      Meaning of Other Than Temporary Impairment and its Application to Certain      Investments”*

----

| **4.** | **FRESH                START ACCOUNTING** |
|--------|-------------------------------------------|

*Business      Combinations *

----

**RCN      CORPORATION**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

**(Dollars      in Thousands) **

|                                                          |   | **Predecessor****Dec.                  20,** **2004** |      | **Equity** |   | **Restructuring** |   | **“Fresh****Start”** |    | **Successor****Dec.                  21,** **2004** |   |
|---------------------------------------------------------------|--------|------------------------------------------------------------|-----------|------------|--------|-------------------|--------|----------------------------------|---------|----------------------------------------------------------|--------|
| ASSETS                                                        |   |                                                       |      |       |   |              |   |                             |    |                                                     |   |
| Current                  Assets:                              |   |                                                       |      |       |   |              |   |                             |    |                                                     |   |
| Cash                  and cash equivalents                    |   | $                                                          | 136,557   |       | $      | —           |   | $                                | (37     | )(K)                                                     | $      | — |   | $ | 136,520 |   |
| Short-term                  investments                       |   |                                                       | 50,425    |       |   | —           |   |                             | — |                                                     |   | — |   |   | 50,425 |   |
| Accounts                  receivable from related parties     |   |                                                       | 9,951     |       |   | —           |   |                             | — |                                                     |   | — |   |   | 9,951 |   |
| Accounts                  receivable, net                     |   |                                                       | 47,461    |       |   | —           |   |                             | (80     | )(L)                                                     |   | — |   |   | 47,381 |   |
| Unbilled                  revenues                            |   |                                                       | 792       |       |   | —           |   |                             | — |                                                     |   | — |   |   | 792 |   |
| Interest                  and dividends receivable            |   |                                                       | 755       |       |   | —           |   |                             | — |                                                     |   | — |   |   | 755 |   |
| Prepayments                  and other current assets         |   |                                                       | 21,652    |       |   | —           |   |                             | (129    | )(M)                                                     |   | — |   |   | 21,523 |   |
| Short-term                  restricted investments            |   |                                                       | 1,348     |       |   | —           |   |                             | — |                                                     |   | — |   |   | 1,348 |   |
| Current                  deferred tax asset                   |   |                                                       | —   |       |   | —           |   |                             | — |                                                     |   | — |   |   | — |   |
|                                                          |   |                                                       |      |       |   |              |   |                             |    |                                                     |   |   |   |   |   |   |
| Total                  current assets                         |   |                                                       | 268,941   |       |   | —           |   |                             | (246    | )                                                        |   | — |   |   | 268,695 |   |
| Property,                  plant and equipment, net           |   |                                                       | 719,999   |       |   | —           |   |                             |    |                                                     |   | 4,501 | (Z) |   | 724,500 |   |
| Investments                  in unconsolidated entity         |   |                                                       | 210,063   |       |   | —           |   |                             | (25,689 | )(N)                                                     |   | 33,626 | (AA) |   | 218,000 |   |
| Intangible                  assets, net                       |   |                                                       | 1,218     |       |   | —           |   |                             | — |                                                     |   | 141,181 | (AB) |   | 142,399 |   |
| Goodwill,                  net                                |   |                                                       | 6,130     |       |   | —           |   |                             | — |                                                     |   | (6,130 | )(AC) |   | — |   |
| Long-term                  restricted investments             |   |                                                       | 29,697    |       |   | —           |   |                             | — |                                                     |   | — |   |   | 29,697 |   |
| Deferred                  charges and other assets            |   |                                                       | 18,641    |       |   | —           |   |                             | 846     | (O)                                                      |   | — |   |   | 19,487 |   |
| Noncurrent                  assets of discontinued operations |   |                                                       | —   |       |   | —           |   |                             | — |                                                     |   | — |   |   | — |   |
|                                                          |   |                                                       |      |       |   |              |   |                             |    |                                                     |   |   |   |   |   |   |
| Total                  assets                                 |   | $                                                          | 1,254,689 |       | $      | —           |   | $                                | (25,089 | )                                                        | $      | 173,178 |   | $ | 1,402,778 |   |

----

**RCN      CORPORATION **

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)**

**(Dollars      in Thousands) **

|                                                                  |   | **Predecessor****Dec.                  20,** **2004** |       | **Equity** |   | **Restructuring** |   | **“Fresh****Start”** |       | **Successor****Dec.                  21,** **2004** |   |
|-----------------------------------------------------------------------|--------|------------------------------------------------------------|------------|------------|--------|-------------------|--------|----------------------------------|------------|----------------------------------------------------------|--------|
| LIABILITIES                  AND STOCKHOLDERS’ EQUITY (DEFICIT) |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |
| Current                  Liabilities:                                 |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |
| Current                  maturities of capital lease obligations      |   | $                                                          | 529        |       | $      | —           |   | $                                | —    |                                                     | $      | — |   | $ | 529 |   |
| Current                  maturities of long-term debt                 |   |                                                       | 3,300      |       |   | —           |   |                             | —    |                                                     |   | — |   |   | 3,300 |   |
| Accounts                  payable                                     |   |                                                       | 52,209     |       |   | —           |   |                             | (2,408     | )(P)                                                     |   | — |   |   | 49,801 |   |
| Accounts                  payable to related parties                  |   |                                                       | 5,519      |       |   | —           |   |                             | —    |                                                     |   | — |   |   | 5,519 |   |
| Advance                  billings and customer deposits               |   |                                                       | 28,216     |       |   | —           |   |                             | (73        | )(Q)                                                     |   | — |   |   | 28,143 |   |
| Accrued                  expenses                                     |   |                                                       | 29,417     |       |   | —           |   |                             | 1,210      | (R)                                                      |   | — |   |   | 30,627 |   |
| Accrued                  interest                                     |   |                                                       | —    |       |   | —           |   |                             | —    |                                                     |   | — |   |   | — |   |
| Accrued                  cost of sales                                |   |                                                       | 22,856     |       |   | —           |   |                             | —    |                                                     |   | — |   |   | 22,856 |   |
| Accrued                  exit costs                                   |   |                                                       | 669        |       |   | —           |   |                             | —    |                                                     |   | — |   |   | 669 |   |
| Accrued                  employee compensation and related expenses   |   |                                                       | 15,375     |       |   | —           |   |                             | —    |                                                     |   | — |   |   | 15,375 |   |
| Deferred                  reorganization costs                        |   |                                                       | —    |       |   | —           |   |                             | 21,644     | (S)                                                      |   | — |   |   | 21,644 |   |
| Deferred                  income taxes                                |   |                                                       | (919       | )          |   | —           |   |                             | 919        | (S)                                                      |   | — |   |   | — |   |
| Current                  liabilities of discontinued operations       |   |                                                       | 1,082      |       |   | —           |   |                             | —    |                                                     |   | — |   |   | 1,082 |   |
|                                                                  |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |   |   |   |   |   |
| Total                  current liabilities                            |   |                                                       | 158,253    |       |   | —           |   |                             | 21,292     |                                                     |   | — |   |   | 179,545 |   |
|                                                                  |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |   |   |   |   |   |
| Long-term                  debt                                       |   |                                                       | 486,991    |       |   | —           |   |                             | 2,751      | (T)                                                      |   | — |   |   | 489,742 |   |
| Other                  deferred credits                               |   |                                                       | 5,073      |       |   | —           |   |                             | 19,808     | (U)                                                      |   | — |   |   | 24,881 |   |
| Liabilities                  subject to compromise                    |   |                                                       | 1,215,626  |       |   | —           |   |                             | (1,215,626 | )(S)                                                     |   | — |   |   | — |   |
| Preferred                  Stock                                      |   |                                                       |            |       |   | —           |   |                             |       |                                                     |   |   |   |   |   |   |
| Cumulative                  Convertible Series A                      |   |                                                       | 350,362    |       |   | (350,362          | )(A)   |                             | —    |                                                     |   | — |   |   | — |   |
| Cumulative                  Convertible Series B                      |   |                                                       | 1,474,850  |       |   | (1,474,850        | )(B)   |                             | —    |                                                     |   | — |   |   | — |   |
| Stockholders’                  Equity (deficit):                |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |   |   |   |   |   |
| Predecessor                  Class A                                  |   |                                                       | 112,163    |       |   | (112,163          | )(C)   |                             | —    |                                                     |   | — |   |   | — |   |
| Common                  stock                                         |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |   |   |   |   |   |
| Successor                  Common stock                               |   |                                                       | —    |       |   | —           |   |                             | 319        | (V)                                                      |   | — |   |   | 319 |   |
| Predecessor                  Class B                                  |   |                                                       | 11,425     |       |   | (11,425           | )(D)   |                             | —    |                                                     |   | — |   |   | — |   |
| Common                  stock                                         |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |   |   |   |   |   |
| Committed                  Capital                                    |   |                                                       | —    |       |   | —           |   |                             | 131,396    | (W)                                                      |   | — |   |   | 131,396 |   |
| Additional                  paid-in capital                           |   |                                                       | 2,155,794  |       |   | (1,630,265        | )(E)   |                             | (121,812   | )(X)                                                     |   | 173,178 | (AD) |   | 576,895 |   |
| Accumulated                  deficit                                  |   |                                                       | (4,688,198 | )          |   | 3,551,415         | (F)    |                             | 1,136,783  | (Y)                                                      |   | — |   |   | — |   |
| Unearned                  compensation expense                        |   |                                                       | (32        | )          |   | 32                | (G)    |                             | —    |                                                     |   | — |   |   | — |   |
| Cumulative                  translation adjustments                   |   |                                                       | (17,288    | )          |   | 17,288            | (H)    |                             | —    |                                                     |   | — |   |   | — |   |
| Unrealized                  appreciation on investments               |   |                                                       | (162       | )          |   | 162               | (I)    |                             | —    |                                                     |   | — |   |   | — |   |
| Predecessor                  Treasury stock                           |   |                                                       | (10,168    | )          |   | 10,168            | (J)    |                             | —    |                                                     |   | — |   |   | — |   |
|                                                                  |   |                                                       |       |       |   |              |   |                             |       |                                                     |   |   |   |   |   |   |
| Total                  stockholders’ equity (deficit)           |   |                                                       | (2,436,466 | )          |   | 1,825,212         |   |                             | 1,146,686  |                                                     |   | 173,178 |   |   | 708,610 |   |
| Total                  liabilities and stockholders’ equity     |   | $                                                          | 1,254,689  |       | $      | —           |   | $                                | (25,089    | )                                                        | $      | 173,178 |   | $ | 1,402,778 |   |

----

***Notes      to “Fresh Start” Activity***

| (A) | Preferred                Stock Series A - represents the cancellation of the old Preferred                Stock                Series A. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Preferred                Stock Series B - represents the cancellation of the old Preferred                Stock                Series B. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (C) | Common                Stock Class A - represents the cancellation of the old Common Stock                Class                A. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (D) | Common                Stock Class B - represents the cancellation of the old Common Stock                Class                B. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (E) | Additional                paid-in capital - represents the cancellation of all the outstanding                preferred common and treasury stock of the predecessor company in                accordance with the plan of                reorganization. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (F) | Accumulated                deficit - represents the cancellation of all accumulated                losses. |
|-----|------------------------------------------------------------------------------------------------------------|

| (G) | Unearned                compensation expense - represents the closing out of the remaining                equity                accounts in accordance with the recapitalization provisions of fresh                start                accounting. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (H) | Cumulative                translation adjustments - represents closing out of the remaining                equity                accounts in accordance with the recapitalization provisions of fresh                start                accounting. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (I) | Unrealized                appreciation on investments - represents the closing out of the remaining                equity accounts in accordance with the recapitalization provisions                of                fresh start accounting. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (J) | Treasury                stock - represents the cancellation of treasury                stock. |
|-----|-----------------------------------------------------------------------------------------------|

| (K) | Cash                and cash equivalents - represents cash used in                restructuring. |
|-----|--------------------------------------------------------------------------------------------------|

| (L) | Accounts                receivable, net - represents adjustments in the carrying value of                accounts                receivable due in accordance with fresh start                accounting. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (M) | Prepayments                and other current assets - represents adjustments in the carrying                value of                prepaids in accordance with fresh start                accounting. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (N) | Investments                in unconsolidated entities - represents the valuation decrease in                Starpower in accordance with fresh start                accounting. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (O) | Deferred                charges and other assets - represents increase in debt issuance costs                due                to restructuring. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

| (P) | Accounts                payable - represents the adjustment of certain liabilities to fair                value                in accordance with fresh start                accounting. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (Q) | Advance                billings and customer deposits - represents the adjustment of certain                liabilities to fair value in accordance with fresh start                accounting. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (R) | Accrued                expenses - represents the adjustment of certain liabilities to fair                value                in accordance with fresh start                accounting. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (S) | Liabilities                subject to compromise - represents the adjustment of deferred taxes                and                the settlement of the prior liabilities subject to compromise and                liabilities not yet settled. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (T) | Long-term                debt - represents the reduction of warrants associated with the old                debt. |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (U) | Other                deferred credits - includes $19.0 million for deferred rent associated                with fair value of leases upon                emergence. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (V) | Common                stock - represents the issuance of the new common                stock. |
|-----|-----------------------------------------------------------------------------------------------|

| (W) | Committed                capital - represents the value of shares committed for                reserve. |
|-----|---------------------------------------------------------------------------------------------------------|

----

| (X) | Additional                paid in capital - represents the net decrease associated with                restructuring. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

| (Y) | Accumulated                deficit - represents the net of all the restructuring                charges. |
|-----|----------------------------------------------------------------------------------------------------------|

| (Z) | Property,                plant and equipment - represents the adjustment in the carrying value                in                accordance with fresh start                accounting. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (AA) | Investments                in unconsolidated entities - represents the valuation increase in                Megacable. |
|------|------------------------------------------------------------------------------------------------------------------------|

| (AB) | Intangible                assets - represents the adjustment in the carrying value for intangible                assets in accordance with fresh start accounting. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (AC) | Goodwill,                net - represents the adjustment in the carrying value in accordance                with                fresh start accounting. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (AD) | Additional                paid-in capital - represents the gain on the adjustment in the carrying                values of property, plant and equipment, intangible assets and goodwill                in                accordance with fresh start                accounting. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **5.** | **INCOME                (LOSS) PER SHARE** |
|--------|--------------------------------------------|

**Successor      **

*“Earnings      per Share*

|                                                               |   | Outstanding                at December                31, 2005 |      |
|--------------------------------------------------------------------|--------|----------------------------------------------------------------|-----------|
|                                                               |   |                                                           |      |
| Options                                                            |   |                                                           | 3,149,802 |   |
| Warrants                                                           |   |                                                           | 188,032   |   |
| Shares                issuable upon conversion of convertible debt |   |                                                           | 4,968,204 |   |
| Unvested                restricted stock                           |   |                                                           | 730,086   |   |
| Total                                                              |   |                                                           | 9,036,124 |   |

**Predecessor      **

----

|                                                                                                               |   | **(dollars                  in thousands)** |       |
|--------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|------------|
|                                                                                                               |   | **Successor**                               |       | **Predecessor** |   |
|                                                                                                               |   | **2005**                                    |       | **December 21, to****December 31,****2004** |   | **January                    1, to****December 20,****2004** |   | **2003** |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |
| Net                  Income/(loss) from continuing operations                                                      |   | $                                           | (138,601   | ) | $ | (3,688 | ) | $ | 971,962 |   | $ | (499,747 | ) |
| Income                  from discontinued operations, net of tax                                                   |   |                                        | (111       | ) |   | - |   |   | 90,784 |   |   | 174,046 |   |
| Cumulative                    effect of a change in accounting for legal fees                                      |   |                                        | 2,600      |   |   |   |   |   |   |   |   |   |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Net                  Income/(loss )                                                                                |   | $                                           | (136,112   | ) | $ | (3,688 | ) | $ | 1,062,746 |   | $ | (325,701 | ) |
| Preferred                  dividend and accretion requirements                                                     |   |                                        | -          |   |   | - |   |   | 52,902 |   |   | 173,392 |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Net                  Income/(loss) to common stockholders                                                          |   | $                                           | (136,112   | ) | $ | (3,688 | ) | $ | 1,009,844 |   | $ | (499,093 | ) |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Weighted                  average shares outstanding                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                              |   |                                        | 36,040,165 |   |   | 36,020,850 |   |   | 110,294,169 |   |   | 110,877,797 |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Incremental                  Shares based on cumulative convertible preferred stock                  (Predecessor) |   |                                        |       |   |   |   |   |   | 33,225,321 |   |   |   |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                                            |   |                                        | 36,040,165 |   |   | 36,020,850 |   |   | 143,519,490 |   |   | 110,877,797 |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Basic                  earnings (loss) per share                                                                   |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Income/(loss)                  per average common share from continuing operations                                 |   | $                                           | (3.85      | ) | $ | (0.10 | ) | $ | 8.33 |   | $ | (6.07 | ) |
| Income                  from discontinued operations                                                               |   |                                        | -          |   |   | - |   |   | 0.82 |   |   | 1.57 |   |
| Net                  Income/(loss) before cumulative effect of change in accounting                  principle     |   |                                        | (3.85      | ) |   | (0.10 | ) |   | 9.15 |   |   | (4.50 | ) |
| Cumulative                    effect of a change in accounting for legal fees                                      |   |                                        | 0.07       |   |   | - |   |   | - |   |   | - |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Net                  Income/(loss) attributable to common stockholders                                             |   | $                                           | (3.78      | ) | $ | (0.10 | ) | $ | 9.15 |   | $ | (4.50 | ) |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Diluted                  earnings per share                                                                        |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Income/(loss)                  per average common share from continuing operations                                 |   | $                                           | (3.85      | ) | $ | (0.10 | ) | $ | 6.77 |   | $ | (6.07 | ) |
| Income                  from discontinued operations                                                               |   |                                        | -          |   |   | - |   |   | 0.63 |   |   | 1.57 |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Net                    Income/(loss) before cumulative effect of change in accounting                    principle |   |                                        | (3.85      | ) |   | (0.10 | ) |   | 7.40 |   |   | (4.50 | ) |
| Cumulative                    effect of a change in accounting for legal fees                                      |   |                                        | 0.07       |   |   | - |   |   | - |   |   | - |   |
|                                                                                                               |   |                                        |       |   |   |   |   |   |   |   |   |   |   |
| Net                  Income/(loss) to common stockholders                                                          |   | $                                           | (3.78      | ) | $ | (0.10 | ) | $ | 7.40 |   | $ | (4.50 | ) |

----

| **6.** | **BUSINESS                COMBINATIONS** |
|--------|------------------------------------------|

|                                                                |  **(dollars                in thousands)** |
|---------------------------------------------------------------------|-------------------------------------------------|
|                                                                |                                            |   |   |
| Cash                and Cash Equivalents and Short-Term Investments |                                            | $ | 14,067 |   |
| Current                Assets                                       |                                            |   | 11,430 |   |
| Fixed                Assets                                         |                                            |   | 73,806 |   |
| Other                Assets                                         |                                            |   | 456 |   |
| Total                Assets                                         |                                            | $ | 99,759 |   |
| Current                Liabilities                                  |                                            |   | (27,417 | ) |
| Long-term                Liabilities                                |                                            |   | (3,342 | ) |
| Fair                Value of Net Assets                             |                                            | $ | 69,000 |   |

|                                   | **(dollars                in thousands)** |
|----------------------------------------|-------------------------------------------|
|                                   |                                      |   |
|                                   |                                      | **As                of December 31,** |   |
|                                   |                                      |   |   |
|                                   |                                      | **Predecessor****2003** |   |
|                                   |                                      |   |   |
| Current                assets          |                                      | $ | 24,300 |   |
| Non-current                assets      |                                      |   | 291,100 |   |
| Current                liabilities     |                                      |   | 35,900 |   |
| Non-current                liabilities |                                      |   | 1,700 |   |
| Members’                equity   |                                      |   | 277,800 |   |

----

|                                   |   | **Predecessor****January                1, to****December                20,** |    | **Predecessor****Year                ended December****31,** |   |
|----------------------------------------|--------|--------------------------------------------------------------------------------|---------|--------------------------------------------------------------|--------|
|                                   |   |                                                                           |    |                                                         |   |
|                                   |   | **2004**                                                                       |    | **2003**                                                     |   |
|                                   |   |                                                                           |    |                                                         |   |
| Revenues                               |   | $                                                                              | 76,152  |                                                         | $      | 106,529 |   |
| Operating                expense       |   |                                                                           | 88,405  |                                                         |   | 105,280 |   |
| Operating                income (loss) |   |                                                                           | (12,253 | )                                                            |   | 1,249 |   |
| Net                income (loss)       |   |                                                                           | (12,253 | )                                                            |   | 1,317 |   |

| **7.** | **IMPAIRMENTS,                EXIT COSTS AND RESTRUCTURING** |
|--------|--------------------------------------------------------------|

|                                               |   | **(dollars                    in thousands)****For                  the years ended December 31,** |   |
|----------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|--------|
|                                               |   | **Successor****2005**                                                                              |   | **Predecessor/****Successor****2004** |   | **Predecessor****2003** |   |
|                                               |   |                                                                                               |   |   |   |   |   |
|                                               |   |                                                                                               |   |   |   |   |   |
| Exit                  costs for excess facilities  |   | $                                                                                                  | 8,858  |   | $ | (14,525 | ) | $ | 14,534 |   |
| Accrual/Reversal                  of deferred rent |   |                                                                                               | (6,903 | ) |   | - |   |   | - |   |
| Asset                  impairment                  |   |                                                                                               | 279    |   |   | 6,851 |   |   | 107,600 |   |
| Abandoned                  Assets                  |   |                                                                                               |   |   |   |   |   |   | 45,107 |   |
|                                               |   |                                                                                               | 2,234  |   |   | (7,674 | ) |   | 167,241 |   |
| Severance                  and retention           |   |                                                                                               | 3,011  |   |   | - |   |   | - |   |
| Total                                              |   | $                                                                                                  | 5,245  |   | $ | (7,674 | ) | $ | 167,241 |   |

----

*Accounting      for the Impairment or Disposal of Long-Lived Assets,”*

|                                        |   | **(dollars                  in thousands)**             |   |
|---------------------------------------------|--------|---------------------------------------------------------|--------|
|                                        |   | **Lease                    Cost/Fair Value****Reserve** |   | **Exit                  Costs** |   |
|                                        |   |                                                    |   |   |   |   |   |
| Balance,                  December 31, 2002 |   | $                                                       | -      |   | $ | 30,667 |   |
| Additional                  accrued costs   |   |                                                    | -      |   |   | 19,278 |   |
| Recoveries                                  |   |                                                    | -      |   |   | (3,278 | ) |
| Payments                                    |   |                                                    | -      |   |   | (8,572 | ) |
|                                        |   |                                                    |   |   |   |   |   |
| Balance,                  December 31, 2003 |   |                                                    |   |   |   | 38,095 |   |
| Additional                  accrued costs   |   |                                                    | 19,005 |   |   | 3,778 |   |
| Recoveries                                  |   |                                                    | -      |   |   | (32,033 | ) |
| Payments                                    |   |                                                    | -      |   |   | (7,500 | ) |
|                                        |   |                                                    |   |   |   |   |   |
| Balance,                  December 31, 2004 |   |                                                    | 19,005 |   |   | 2,340 |   |
| Additional                  accrued costs   |   |                                                    | -      |   |   | 8,858 |   |
| Amortization                                |   |                                                    | (2,541 | ) |   | (1,950 | ) |
| Reversals/Settlements                       |   |                                                    | (6,903 | ) |   | - |   |
| Payments                                    |   |                                                    | -      |   |   | (650 | ) |
|                                        |   |                                                    |   |   |   |   |   |
| Balance,                  December 31, 2005 |   |                                                    | 9,561  |   |   | 8,598 |   |
|                                        |   |                                                    |   |   |   |   |   |
| Less                  current portion       |   |                                                    | 1,471  |   |   | 1,635 |   |
|                                        |   |                                                    |   |   |   |   |   |
|                                        |   | $                                                       | 8,090  |   | $ | 6,963 |   |

| **8.** | **DISCONTINUED                OPERATIONS** |
|--------|--------------------------------------------|

*“Accounting      for the Impairment or Disposal of Long-Lived*
*Assets,”*

----

|                              |   |  **Successor****December                31,****2005**  |    | **Predecessor****January                1,****to                December 20,****2004**  |   |  **Predecessor****December                31,****2003**  |   |
|-----------------------------------|--------|------------------------------------------------------------------|---------|----------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
| Revenues                          |   | $                                                                | — |                                                                                         | $      | 5,928                                                              |   | $ | 29,083 |   |
| Operating                expenses |   |                                                             | (25     | )                                                                                            |   | 4,354                                                              |   |   | 20,723 |   |
| Other                Income       |   |                                                             | 15      |                                                                                         |   |                                                               |   |   |   |   |
| Income                before tax  |   |                                                             |         |                                                                                         |   | 1,574                                                              |   |   | 8,360 |   |
| Income                after tax   |   |                                                             | 40      |                                                                                         |   | 1,574                                                              |   |   | 8,360 |   |

|                                  |   | **Successor****December                21,****to                December 31****2004** |    | **Predecessor****January                1,****to                December 20,****2004** |   | **Predecessor****January                1,****to                December 31,****2003**  |   |
|---------------------------------------|--------|---------------------------------------------------------------------------------------|---------|----------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|
| Revenues                              |   | $                                                                                     | — |                                                                                   | $      | —                                                                                      |   | $ | 7,438 |   |
| Operating                expenses     |   |                                                                                  | 49      |                                                                                   |   | 20                                                                                           |   |   | 5,436 |   |
| Other                Income (expense) |   |                                                                                  | (200    | )                                                                                      |   | 650                                                                                          |   |   | — |   |
| Income                after tax       |   |                                                                                  | (151    | )                                                                                      |   | 630                                                                                          |   |   | 2,002 |   |
| Income                after tax       |   |                                                                                  | (151    | )                                                                                      |   | 630                                                                                          |   |   | 2,002 |   |

----

| **9.** | **FAIR                VALUE OF FINANCIAL INSTRUMENTS** |
|--------|--------------------------------------------------------|

|                                                |   | **(dollars                  in thousands)** |    |
|-----------------------------------------------------|--------|---------------------------------------------|---------|
|                                                |   | **Successor                  2005**         |    | **Successor                  2004** |   |
|                                                |   | **Carrying****Amount**                      |    | **Fair****Value** |   | **Carrying****Amount** |   | **Fair****Value** |   |
|                                                |   |                                        |    |   |   |   |   |   |   |
| Financial                  Assets:                  |   |                                        |    |   |   |   |   |   |   |
| Cash                  and cash equivents            |   | $                                           | 70,906  |   | $ | 70,906 |   | $ | 113,539 |   | $ | 113,539 |   |
| Short-term                  investments             |   |                                        | 72,111  |   |   | 72,111 |   |   | 50,425 |   |   | 50,425 |   |
| Restricted                  short-term investments  |   |                                        | -       |   |   | - |   |   | 1,525 |   |   | 1,525 |   |
| Financial                  Liabilities:             |   |                                        |    |   |   |   |   |   |   |   |   |   |   |
| Fixed                  rate long-term debt          |   |                                        |    |   |   |   |   |   |   |   |   |   |   |
| Convertible                  Notes                  |   |                                        | 125,000 |   |   | 147,854 |   |   | 125,000 |   |   | 125,000 |   |
| Third-Lien                  Term Loan               |   |                                        | 39,156  |   |   | 39,156 |   |   | 34,547 |   |   | 34,547 |   |
| Floating                  rate long-term debt:      |   |                                        |    |   |   |   |   |   |   |   |   |   |   |
| First-Lien                  Term Loan               |   |                                        | 324,478 |   |   | 327,723 |   |   | 330,000 |   |   | 330,000 |   |
| Unrecognized                  financial instruments |   |                                        |    |   |   |   |   |   |   |   |   |   |   |
| Letters                  of credit                  |   |                                        | 20,984  |   |   | 20,984 |   |   | 29,977 |   |   | 29,977 |   |
| Capital                  lease obligations          |   |                                        | 3,463   |   |   | 3,463 |   |   | 4,021 |   |   | 4,021 |   |

| **10.** | **RESTRUCTURING** |
|---------|-------------------|

|                           |   | **(dollars                  in thousands)** |   |
|--------------------------------|--------|---------------------------------------------|--------|
|                           |   |                                        |   |
|                           |   |                                        |   |
| Costs                  accrued |   | $                                           | 3,011  |   |
| Payments                       |   |                                        | (198   | ) |
|                           |   |                                        |   |   |
|                           |   | $                                           | 2,813  |   |

----

| **11.** | **PROPERTY,                PLANT AND EQUIPMENT** |
|---------|--------------------------------------------------|

|                                                        |   | **(dollars                  in thousands)** |     |
|-------------------------------------------------------------|--------|---------------------------------------------|----------|
|                                                        |   | **Successor****2005**                       |     | **Successor****2004** |   |
|                                                        |   |                                        |     |   |   |
|                                                        |   |                                        |     |   |   |
| Telecommunications                  plant                   |   | $                                           | 715,883  |   | $ | 685,415 |   |
| Computer                  equipment                         |   |                                        | 47,774   |   |   | 30,217 |   |
| Buildings,                  leasehold improvements and land |   |                                        | 44,024   |   |   | 48,662 |   |
| Furniture,                  fixtures and vehicles           |   |                                        | 25,404   |   |   | 18,334 |   |
| Construction                  materials                     |   |                                        | 19,546   |   |   | 9,852 |   |
| Construction                  in process                    |   |                                        | 27,967   |   |   | 5,816 |   |
| Other                                                       |   |                                        | 525      |   |   | - |   |
|                                                        |   |                                        |     |   |   |   |   |
| Total                  property, plant and equipment        |   |                                        | 881,123  |   |   | 798,296 |   |
| Less                  accumulated depreciation              |   |                                        | (175,215 | ) |   | (4,605 | ) |
|                                                        |   |                                        |     |   |   |   |   |
| Property,                  plant and equipment, net         |   | $                                           | 705,908  |   | $ | 793,691 |   |

| **12.** | **INVESTMENTS                IN JOINT VENTURES** |
|---------|--------------------------------------------------|

**Starpower**

----

*“The      Equity Method of Accounting for Investments in Common Stock”*

**Megacable      and MCM**

*“Criteria      for Applying the Equity Method of Accounting for Investments in Common      Stock”*

**RCN-BECOCOM**

----

| **13.** | **INTANGIBLE                ASSETS** |
|---------|--------------------------------------|

|                                             |   | **(dollars                    in thousands)**   |                       |
|--------------------------------------------------|--------|-------------------------------------------------|----------------------------|
|                                             |   | **Estimated****Useful                    Life** |                       | **Successor****2005** |   | **Successor****2004** |   |
|                                             |   |                                            |                       |   |   |   |   |
|                                             |   |                                            |                       |   |   |   |   |
| Trademarks/Tradenames                            |   |                                            | 5                    years |   | $ | 13,753 |   | $ | 14,203 |   |
| Customer                    Lists                |   |                                            | 4                    years |   |   | 63,371 |   |   | 65,444 |   |
| Franchise                    Agreements          |   |                                            | Indefinite                 |   |   | 60,584 |   |   | 62,566 |   |
| Software                                         |   |                                            | 3                    years |   |   | 180 |   |   | 186 |   |
|                                             |   |                                            |                       |   |   |   |   |   |   |   |
|                                             |   |                                            |                       |   |   | 137,888 |   |   | 142,399 |   |
| Less                    accumulated amortization |   |                                            |                       |   |   | (19,743 | ) |   | (613 | ) |
|                                             |   |                                            |                       |   |   |   |   |   |   |   |
| Total                    intangibles             |   |                                            |                       |   | $ | 118,145 |   | $ | 141,786 |   |

|                                                               |   | **(dollars                  in thousands)** |   |
|--------------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                               |   |                                        |   |
| **Year                    Ended****December                  31,** |   | **Amount**                                  |   |
|                                                               |   |                                        |   |
| 2006                                                               |   | $                                           | 18,478 |   |
| 2007                                                               |   |                                        | 18,476 |   |
| 2008                                                               |   |                                        | 17,955 |   |
| 2009                                                               |   |                                        | 2,652  |   |
| 2010                                                               |   |                                        | -      |   |

*“Accounting      for Income Taxes” *

----

| **14.** | **DEFERRED                CHARGES AND OTHER ASSETS** |
|---------|------------------------------------------------------|

|                                                                 |   | **(dollars                  in thousands)** |         |
|----------------------------------------------------------------------|--------|---------------------------------------------|--------------|
|                                                                 |   | **Successor****2005**                       |         | **Successor****2004** |   |
|                                                                 |   |                                        |         |   |   |
|                                                                 |   |                                        |         |   |   |
| Debt                  issuance cost, net of accumulated amortization |   | $                                           | 14,814       |   | $ | 16,094 |   |
| Security                  deposits                                   |   |                                        | 2,080        |   |   | 1,607 |   |
| Other                                                                |   |                                        | 3,622        |   |   | 2,242 |   |
|                                                                 |   |                                        |    |   |   |    |   |
| Total                  deferred charges and other assets             |   | $                                           | 20,516       |   | $ | 19,943 |   |

| **15.** | **OTHER                LONG-TERM LIABILITIES** |
|---------|------------------------------------------------|

|                                             |   | **(dollars                in thousands)** |         |
|--------------------------------------------------|--------|-------------------------------------------|--------------|
|                                             |   | **Successor**                             |         | **Successor** |   |
|                                             |   | **December                  31,****2005** |         | **December                  31,****2004** |   |
|                                             |   |                                 |         |    |   |
|                                             |   |                                      |         |   |   |
| Deferred                taxes                    |   | $                                         | 23,819       |   | $ | - |   |
| Lease                cost/fair value reserve     |   |                                      | 8,090        |   |   | 19,005 |   |
| Unearned                revenue                  |   |                                      | 4,864        |   |   | 5,536 |   |
| Lease                exit costs                  |   |                                      | 6,963        |   |   | - |   |
| Other                deferred credits            |   |                                      | 72           |   |   | 1,396 |   |
|                                             |   |                                      |    |   |   |    |   |
| Total                other long-term liabilities |   | $                                         | 43,808       |   | $ | 25,937 |   |

----

| **16.** | **DEBT** |
|---------|----------|

|                                  |   | **(dollars                  in thousands)** |    |
|---------------------------------------|--------|---------------------------------------------|---------|
|                                  |   | **Successor****2005**                       |    | **Successor****2004** |   |
|                                  |   |                                        |    |   |   |
|                                  |   |                                        |    |   |   |
| First-Lien                  Term Loan |   | $                                           | 324,478 |   | $ | 330,000 |   |
| Convertible                  Notes    |   |                                        | 125,000 |   |   | 125,000 |   |
| Third-Lien                  Term Loan |   |                                        | 39,156  |   |   | 34,547 |   |
| Capital                  Leases       |   |                                        | 3,463   |   |   | 4,021 |   |
|                                  |   |                                        |    |   |   |   |   |
| Total                                 |   |                                        | 492,097 |   |   | 493,568 |   |
| Less                  current portion |   |                                        | 3,648   |   |   | 3,858 |   |
|                                  |   |                                        |    |   |   |   |   |
|                                  |   | $                                           | 488,449 |   | $ | 489,710 |   |

**First-Lien      Credit Agreement **

----

**Convertible      Notes **

**Third-Lien      Term Loan **

|                                        |   | **(dollars                  in thousands)** |    |
|---------------------------------------------|--------|---------------------------------------------|---------|
| **Contractual                  Maturities** |   | **Amount**                                  |    |
| 2006                                        |   | $                                           | 3,648   |   |
| 2007                                        |   |                                        | 3,415   |   |
| 2008                                        |   |                                        | 3,430   |   |
| 2009                                        |   |                                        | 3,446   |   |
| 2010                                        |   |                                        | 3,464   |   |
| Thereafter                                  |   |                                        | 474,694 |   |
|                                        |   |                                        |    |   |
| Total                                       |   | $                                           | 492,097 |   |
|                                        |   |                                        |    |   |
| Less                  current portion       |   |                                        | 3,648   |   |
|                                        |   |                                        |    |   |
|                                        |   | $                                           | 488,449 |   |

----

| **17.** | **REORGANIZATION                EXPENSES** |
|---------|--------------------------------------------|

|                                             |   | **(dollars                  in thousands)**                                     |    |
|--------------------------------------------------|--------|---------------------------------------------------------------------------------|---------|
|                                             |   | **Successor**                                                                   |    | **Predecessor** |   |
|                                             |   | **For                    the year ended****December                  31, 2005** |    | **For                    the period****from                    January 1****to                  December 20, 2004** |   |
|                                             |   |                                                                            |    |   |   |
|                                             |   |                                                                            |    |   |   |
| Settlement                  of bankruptcy claims |   | $                                                                               | (11,113 | ) | $ | - |   |
| Professional                  Fees:              |   |                                                                            |    |   |   |   |   |
| Legal                                            |   |                                                                            | -       |   |   | 17,626 |   |
| Bankers                                          |   |                                                                            | -       |   |   | 23,123 |   |
| Consultants                                      |   |                                                                            | -       |   |   | 15,831 |   |
| Auditors                                         |   |                                                                            | -       |   |   | 558 |   |
| Employee                  Costs                  |   |                                                                            | -       |   |   | 4,001 |   |
| Interest                  Income                 |   |                                                                            | -       |   |   | (497 | ) |
| Other                                            |   |                                                                            | -       |   |   | 31,912 |   |
|                                             |   |                                                                            |    |   |   |   |   |
| Total                  Reorganization Expenses   |   | $                                                                               | (11,113 | ) | $ | 92,554 |   |

|   | • | Professional                fees—Professional fees include financial, legal and valuation services                directly associated with the reorganization process. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Employee                costs—RCN implemented a Bankruptcy Court approved retention plan that                provides for cash incentives to key members of RCN’s management team. The                retention plan is a milestone-based plan expected to encourage employees                to continue their employment through the reorganization process. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Interest                income—Interest income represents interest income earned by the Debtors                as                a result of excess cash balances due to the Chapter 11 filing. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Other—Other                represents Franchise restructuring expenses, Director and Officer                insurance and Investor Notifications and communications. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **18.** | **STOCKHOLDERS’                EQUITY AND STOCK PLANS** |
|---------|---------------------------------------------------------------|

**RCN      Common Stock**

**Successor      **

| Strike                  price                     |   | $      | 34.16                      |   |
|---------------------------------------------------|--------|--------|----------------------------|--------|
|                                              |   |   |                       |   |
| Stock                  price on date of emergence |   | $      | 20.00                      |   |
|                                              |   |   |                       |   |
| Expected                  life                    |   |   | 2.0                  years |   |
|                                              |   |   |                       |   |
| Expected                  volatility              |   |   | 55.0                       | %      |
|                                              |   |   |                       |   |
| Risk-free                  rate                   |   |   | 3.03                       | %      |
|                                              |   |   |                       |   |
| Fair                  value                       |   | $      | 3.14                       |   |

**RCN      Stock-Based Compensation**

**Successor**

*“Share-Based      Payment”*
*“Accounting      for Stock-Based Compensation,”*
*Accounting      for Stock Issued to Employees.”*

----

|                                                   |   | **Share                  Options** |      | **Weighted                  average exercise price per option** |   | **Weighted                  average fair value per option** |   |
|--------------------------------------------------------|--------|------------------------------------|-----------|-----------------------------------------------------------------|--------|-------------------------------------------------------------|--------|
|                                                   |   |                               |      |                                                            |   |                                                        |   |
| Awards                  Outstanding, December 31, 2004 |   |                               |      |                                                            |   |                                                        |   |
| Granted                                                |   |                               | 3,752,835 |                                                            | $      | 21.48                                                       |   | $ | 10.94 |   |
| Exercised                                              |   |                               | (75,000   | )                                                               | $      | 18.80                                                       |   | $ | 9.46 |   |
| Forfitures                                             |   |                               | (528,033  | )                                                               | $      | 20.11                                                       |   | $ | 10.87 |   |
|                                                   |   |                               |      |                                                            |   |                                                        |   |   |   |   |
| Awards                  Outstanding, December 31, 2005 |   |                               | 3,149,802 |                                                            | $      | 21.77                                                       |   | $ | 10.98 |   |

|                                                    |   | **Options                  Outstanding** |      | **Options                  Exercisable**                                 |   |
|---------------------------------------------------------|--------|------------------------------------------|-----------|--------------------------------------------------------------------------|--------|
| **Exercise                  Price Range of****Options** |   | **Share                  Options**       |      | **Weighted                  average remaining contractual life (Years)** |   | **Weighted                  average exercise price per share** |   | **As                  of****December                  31, 2005** |   | **Weighted                  average exercise price** |   |
|                                                    |   |                                     |      |                                                                     |   |   |   |   |   |   |   |
|                                                    |   |                                     |      |                                                                     |   |   |   |   |   |   |   |
| $                  18.80 - 21.74                        |   |                                     | 2,732,560 |                                                                     |   | 6.40 |   | $ | 20.29 |   |   | - |   | $ | - |   |
| 31.46                                                   |   |                                     | 417,242   |                                                                     |   | 6.40 |   |   | 31.46 |   |   | - |   |   | - |   |
|                                                    |   |                                     |      |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                                     |      |                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| 18.80                  - 31.46                          |   |                                     | 3,149,802 |                                                                     |   | 6.40 |   | $ | 21.77 |   |   | - |   | $ | - |   |

----

|                                                           |   | **Chairman and****President/CEO**  |                          | **Chairman and****President/CEO**  |   | **Other Senior****Executives**  |   | **Former****Executive**  |                          |
|----------------------------------------------------------------|--------|----------------------------------------------|-------------------------------|----------------------------------------------|--------|-------------------------------------------|--------|-------------------------------|-------------------------------|
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |
| Strike                Price (1)                                |   | $                                            | 20.97                         |                                         | $      | 31.46                                     |   | $                             | 20.97                         |   | $ | 18.80 |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Stock                price on date of grant                (2) |   | $                                            | 24.00                         |                                         | $      | 24.00                                     |   | $                             | 24.00                         |   | $ | 24.00 |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Term                                                           |   |                                         | 7                years        |                                         |   | 7                years                    |   |                          | 7                years        |   |   | 7                years |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Vesting                period                                  |   |                                         | 2.5                to 3 years |                                         |   | 2.5                to 3 years             |   |                          | 2.5                to 3 years |   |   | 3                months |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Options                Granted                                 |   |                                         | 417,242                       |                                         |   | 417,242                                   |   |                          | 300,000                       |   |   | 75,000 |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Expected                life of options                        |   |                                         | 4.08                years     |                                         |   | 5.06                years                 |   |                          | 4.5                years      |   |   | 1.67                years |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Expected                volatility                             |   |                                         | 58.0                          | %                                            |   | 58.0                                      | %      |                          | 58.0                          | % |   | 58.0 | % |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Risk-free                rate                                  |   |                                         | 3.72                          | %                                            |   | 3.72                                      | %      |                          | 3.72                          | % |   | 3.72 | % |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Dividend                yield                                  |   |                                         | —                       |                                         |   | —                                   |   |                          | —                       |   |   | — |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Annual                forfeiture rate                          |   |                                         | —                       |                                         |   | —                                   |   |                          | —                       |   |   | — |   |
|                                                           |   |                                         |                          |                                         |   |                                      |   |                          |                          |   |   |   |   |
| Fair                value at date of grant                     |   | $                                            | 12.57                         |                                         | $      | 11.22                                     |   | $                             | 13.08                         |   | $ | 9.46 |   |

|   | (1) | Set                  by RCN Board of Directors on May 24, 2005, subject to stockholder                  approval                  of the Stock Plan. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | As                  of July 19, 2005, the date of stockholder approval of the Stock                  Plan. |
|--------|-----|------------------------------------------------------------------------------------------------------------|

**Restricted      Stock**

----

**Predecessor      **

**Non-Cash      Stock-Based Compensation **

|                                                       |   | **(dollars                    in thousands)****For                    the years ended December 31,** |   |
|------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------|--------|
|                                                       |   | **Predecessor****2004***                                                                             |   | **Predecessor****2003** |   |
|                                                       |   |                                                                                                 |   |   |   |
|                                                       |   |                                                                                                 |   |   |   |
| Incentive                    stock options                 |   | $                                                                                                    | 1,029  |   | $ | 2,532 |   |
| Outperform                    stock options                |   |                                                                                                 | 2,819  |   |   | 4,916 |   |
| Restricted                    stock                        |   |                                                                                                 | 316    |   |   | (3,184 | ) |
| Executive                    stock purchase plan           |   |                                                                                                 | 250    |   |   | 428 |   |
|                                                       |   |                                                                                                 |   |   |   |   |   |
| Total                    non-cash stock-based compensation |   | $                                                                                                    | 4,414  |   | $ | 4,692 |   |

----

**Stock      Options **

**Outperform      Stock Option Plan **

----

----

|                                                   |   | **Number                  of** |         | **Weighted                  Average** |   |
|--------------------------------------------------------|--------|--------------------------------|--------------|---------------------------------------|--------|
|                                                   |   | **Options**                    |         | **Exercise                  Price**   |   |
|                                                   |   |                           |         |                                  |   |
| Grants                  Outstanding, December 31, 2002 |   |                           | 2,609,875    |                                  | $      | 2.17 |   |
| Granted                                                |   |                           | 750,000      |                                  | $      | 0.96 |   |
| Exercised                                              |   |                           | -            |                                  |   | - |   |
| Cancelled                                              |   |                           | 150,000      |                                  | $      | 2.90 |   |
|                                                   |   |                           |    |                                  |   |   |   |
| Grants                  Outstanding, December 31, 2003 |   |                           | 3,209,875    |                                  | $      | 1.85 |   |
| Granted                                                |   |                           | -            |                                  |   |   |   |
| Exercised                                              |   |                           | -            |                                  |   |   |   |
| Cancelled                                              |   |                           | 656,875      |                                  | $      | 2.12 |   |
|                                                   |   |                           |    |                                  |   |   |   |
| Grants                  Outstanding, December 20, 2004 |   |                           | 2,553,000    |                                  | $      | 1.79 |   |
| Cancelled                                              |   |                           | 2,553,000    |                                  | $      | 1.79 |   |
|                                                   |   |                           |         |                                  |   |   |   |
| Grants                  Outstanding, December 21, 2004 |   |                           | -            |                                  |   |   |   |

**Restricted      Stock **

**Preferred      Stock **

**Executive      Stock Purchase Plan **

----

| **19.** | **INCOME                TAXES** |
|---------|---------------------------------|

|                                                        |   | **(dollars                  in thousands)** |   |
|-------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                        |   | **Successor**                               |   | **Predecessor** |   |
|                                                        |   | **2005**                                    |   | **December 21, to****December 31,****2004** |   | **January                    1, to****December 20,****2004** |   | **2003** |   |
|                                                        |   |                                        |   |   |   |   |   |   |   |
|                                                        |   |                                        |   |   |   |   |   |   |   |
| Current                  taxes                              |   | $                                           | (30    | ) | $ | - |   | $ | 98 |   | $ | 50 |   |
| Deferred                  taxes                             |   |                                        | 809    |   |   | - |   |   | (212 | ) |   | 1,221 |   |
|                                                        |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Provision                  (Benefit) for income taxes:      |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| From                  continuing operations                 |   |                                        | 779    |   |   | - |   |   | (114 | ) |   | 1,271 |   |
| From                  discontinued operations               |   |                                        |   |   |   | - |   |   | - |   |   | - |   |
|                                                        |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Total                  provision (benefit) for income taxes |   | $                                           | 779    |   | $ | - |   | $ | (114 | ) | $ | 1,271 |   |

|                                                                         |   | **(dollars                  in thousands)** |         |
|------------------------------------------------------------------------------|--------|---------------------------------------------|--------------|
|                                                                         |   | **Successor**                               |         | **Successor** |   |
|                                                                         |   | **December                  31,****2005**   |         | **December                  31,****2004** |   |
|                                                                         |   |                                        |         |   |   |
|                                                                         |   |                                        |         |   |   |
| Net                  operating loss carryforwards                            |   | $                                           | 1,084,859    |   | $ | 1,006,625 |   |
| Employee                  benefit plan                                       |   |                                        | 5,452        |   |   | 5,291 |   |
| Reserve                  for bad debt                                        |   |                                        | 1,553        |   |   | 1,795 |   |
| Stock                  based compensation                                    |   |                                        | 3,105        |   |   | - |   |
| Investment                  in unconsolidated entity                         |   |                                        | 43,507       |   |   | 44,448 |   |
| Unearned                  revenue                                            |   |                                        | 1,955        |   |   | 1,573 |   |
| Deferred                  rent                                               |   |                                        | 3,397        |   |   | 6,757 |   |
| Reserve                  for obsolete inventory                              |   |                                        | 10,818       |   |   | 3,699 |   |
| Accruals                  for non-recurring charges and contract settlements |   |                                        | 4,554        |   |   | 3,913 |   |
| Property,                  plant, and equipment                              |   |                                        | 85,992       |   |   | 181,914 |   |
| Other,                  net                                                  |   |                                        | 3,342        |   |   | 3,331 |   |
|                                                                         |   |                                        |    |   |   |    |   |
| Total                  deferred tax assets                                   |   |                                        | 1,248,534    |   |   | 1,259,346 |   |
|                                                                         |   |                                        |    |   |   |     |   |
| Intangibles                                                                  |   |                                        | (32,068      | ) |   | (39,971 | ) |
|                                                                         |   |                                        |    |   |   |    |   |
| Total                  deferred tax liabilities                              |   |                                        | (32,068      | ) |   | (39,971 | ) |
|                                                                         |   |                                        |    |   |   |    |   |
| Subtotal                                                                     |   |                                        | 1,216,466    |   |   | 1,219,375 |   |
|                                                                         |   |                                        |    |   |   |    |   |
| Valuation                  allowance                                         |   |                                        | (1,240,285   | ) |   | (1,219,375 | ) |
|                                                                         |   |                                        |    |   |   |    |   |
| Total                  deferred taxes                                        |   | $                                           | (23,819      | ) | $ | - |   |

----

|                                                                                                                                                                   |   | **(dollars                  in thousands)** |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------|
|                                                                                                                                                                   |   | **Successor**                               |     | **Predecessor** |   |
|                                                                                                                                                                   |   | **2005**                                    |     | **December 21, to****December 31,****2004** |   | **January                    1, to****December 20,****2004** |   | **2003** |   |
|                                                                                                                                                                   |   |                                        |     |   |   |   |   |   |   |
|                                                                                                                                                                   |   |                                        |     |   |   |   |   |   |   |
| Net                  (loss) income before cumulative effect of change in accountng principle                  and preferred dividend and accretion requirements        |   | $                                           | (138,712 | ) | $ | (3,688 | ) | $ | 1,062,746 |   | $ | (325,701 | ) |
| Cumulative                  effect of on prior years of retroactive application of a change                  in                  accounting for legal fees, net of tax |   |                                        | 2,600    |   |   |   |   |   |   |   |   |   |   |
| Total                  provision (benefit) for income taxes                                                                                                            |   |                                        | 779      |   |   | - |   |   | (114 | ) |   | 1,271 |   |
| (Loss)                  income before provision for income taxes                                                                                                       |   | $                                           | (135,333 | ) | $ | (3,688 | ) | $ | 1,062,632 |   | $ | (324,430 | ) |
|                                                                                                                                                                   |   |                                        |     |   |   |   |   |   |   |   |   |   |   |
| Federal                  income tax (benefit) expense at statutory rate                                                                                                |   | $                                           | (47,366  | ) | $ | (1,291 | ) | $ | 371,921 |   | $ | (113,550 | ) |
| State                  income taxes, net of federal income tax provision                  (benefit)                                                                    |   |                                        | 507      |   |   |   |   |   | 64 |   |   | 161 |   |
| Federal                  valuation allowance                                                                                                                           |   |                                        | 46,947   |   |   | 1,291 |   |   | (129,508 | ) |   | 114,613 |   |
| Nondeductible                  expenses                                                                                                                                |   |                                        | 13       |   |   |   |   |   | 30 |   |   | 47 |   |
| FMV                  stock bondholders received                                                                                                                        |   |                                        |     |   |   |   |   |   | (253,400 | ) |   |   |   |
| Reversal                  of stock-based compensation                                                                                                                  |   |                                        | 395      |   |   |   |   |   | 52,793 |   |   |   |   |
| Restructuring                  costs                                                                                                                                   |   |                                        |     |   |   |   |   |   | 28,501 |   |   |   |   |
| Fresh                  start adjustments                                                                                                                               |   |                                        |     |   |   |   |   |   | (111,662 | ) |   |   |   |
| Reversal                  of State Valuation Allowance                                                                                                                 |   |                                        | 283      |   |   |   |   |   |   |   |   |   |   |
| Other,                  net                                                                                                                                            |   |                                        |     |   |   |   |   |   | 41,147 |   |   |   |   |
|                                                                                                                                                                   |   |                                        |     |   |   |   |   |   |   |   |   |   |   |
| Total                  provision (benefit) for income taxes                                                                                                            |   | $                                           | 779      |   | $ | - |   | $ | (114 | ) | $ | 1,271 |   |

----

----

| **20.** | **EMPLOYEE                BENEFIT PLANS** |
|---------|-------------------------------------------|

| **21.** | **COMMITMENTS                AND CONTINGENCIES** |
|---------|--------------------------------------------------|

|       |   | **(dollars                  in thousands)** |   |
|------------|--------|---------------------------------------------|--------|
| **Year**   |   | **Aggregate****Amounts**                    |   |
|       |   |                                        |   |
| 2006       |   | $                                           | 21,356 |   |
| 2007       |   |                                        | 21,052 |   |
| 2008       |   |                                        | 20,844 |   |
| 2009       |   |                                        | 18,404 |   |
| 2010       |   |                                        | 15,328 |   |
| Thereafter |   |                                        | 41,536 |   |

**ERISA      Litigation**

----

**Legal        Proceedings Relating to Megacable**

**City      of Chicago Franchise Fee**

----

**Claims      by Kemper Insurance **

**Claims      by Merrill Lynch **

**Claim      by Former Employee**

| **22.** | **RELATED                PARTY TRANSACTIONS** |
|---------|-----------------------------------------------|

----

| **23.** | **PREPAYMENTS                AND OTHER CURRENT ASSETS** |
|---------|---------------------------------------------------------|

|                                                        |   | **(dollars                  in thousands)** |   |
|-------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                        |   | **Successor**                               |   | **Successor** |   |
|                                                        |   | **December                  31,****2005**   |   | **December                  31,****2004** |   |
|                                                        |   |                                        |   |   |   |
|                                                        |   |                                        |   |   |   |
| Prepaid                  maintenance                        |   | $                                           | 1,790  |   | $ | 2,389 |   |
| Prepaid                  rent                               |   |                                        | 1,483  |   |   | 1,519 |   |
| Prepaid                  taxes                              |   |                                        | 4,146  |   |   | 3,986 |   |
| Prepaid                  insurance                          |   |                                        | 1,886  |   |   | 2,225 |   |
| Prepaid                  other                              |   |                                        | 958    |   |   | 6,514 |   |
| Security                  deposits                          |   |                                        | 537    |   |   | 604 |   |
| Escrow                  accounts                            |   |                                        | -      |   |   | 4,963 |   |
| Other                  current assets                       |   |                                        | 2,803  |   |   | 173 |   |
|                                                        |   |                                        |   |   |   |   |   |
| Total                  prepayments and other current assets |   | $                                           | 13,603 |   | $ | 22,373 |   |

| **24.** | **SUPPLEMENTAL                SCHEDULE OF NON-CASH INVESTING AND FINANCING                ACTIVITIES** |
|---------|--------------------------------------------------------------------------------------------------------|

----

----

| **25.** | **SELECTED                FINANCIAL DATA** |
|---------|--------------------------------------------|

**RCN      CORPORATION **

**SELECTED      QUARTERLY FINANCIAL DATA **

**Thousands      of Dollars Except Per Share Amounts **

**For      the Years Ended December 31, 2005 and 2004 **

|                                                                                                                                                                                          |   | **Successor                  2005** |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                                                                                                                                                          |   | **1st Quarter**                |    | **2nd Quarter** |   | **3rd Quarter** |   | **4th                  Quarter** |   |
|                                                                                                                                                                                          |   |                                |    |   |   |   |   |   |   |
| Revenues                                                                                                                                                                                      |   | $                                   | 140,809 |   | $ | 141,426 |   | $ | 138,809 |   | $ | 139,920 |   |
|                                                                                                                                                                                          |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Operating                  Income/(loss) before non-cash stock-based compensation, depreciation                  and                  amortization, and goodwill write-down and other charges |   |                                | 23,156  |   |   | 19,782 |   |   | 23,276 |   |   | 21,924 |   |
|                                                                                                                                                                                          |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Net                  Income/(loss) from continuing operations                                                                                                                                 |   |                                | (32,058 | ) |   | (31,340 | ) |   | (42,087 | ) |   | (33,032 | ) |
|                                                                                                                                                                                          |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Income/(loss)                  before discontinued operations per average share                                                                                                               |   | $                                   | (0.89   | ) | $ | (0.87 | ) | $ | (1.17 | ) | $ | (0.94 | ) |
|                                                                                                                                                                                          |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Net                  Income/(loss) available to common shareholders                                                                                                                           |   |                                | (29,403 | ) |   | (31,347 | ) |   | (42,097 | ) |   | (33,265 | ) |
|                                                                                                                                                                                          |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| Common                  Stock                                                                                                                                                                 |   |                                |    |   |   |   |   |   |   |   |   |   |   |
| High                                                                                                                                                                                          |   | $                                   | 22.66   |   | $ | 24.75 |   | $ | 25.67 |   | $ | 24.57 |   |
| Low                                                                                                                                                                                           |   | $                                   | 18.75   |   | $ | 16.69 |   | $ | 21.00 |   | $ | 19.56 |   |

|                                                                                                                                                                                                |   | **Predecessor                    2004** |    | **Successor****2004** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|-----------------------|--------|
|                                                                                                                                                                                                |   |                                    |    |                  |   |   |   |   |   |   |   |
|                                                                                                                                                                                                |   | **1st Quarter**                    |    | **2nd Quarter**  |   | **3rd Quarter** |   | **4th                    Quarter** |   | **4th                    Quarter** |   |
|                                                                                                                                                                                           |   |                                    |    |                  |   |   |   |   |   |   |   |
| Revenues                                                                                                                                                                                            |   | $                                       | 121,260 |                  | $      | 121,281 |   | $ | 121,358 |   | $ | 106,560 |   | $ | 16,372 |   |
|                                                                                                                                                                                                |   |                                    |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                    Income/(loss) before non-cash stock-based compensation, depreciation                    and                    amortization, and goodwill write-down and other charges |   |                                    | 3,417   |                  |   | 21,383 |   |   | 10,007 |   |   | 24,851 |   |   | 2,418 |   |
|                                                                                                                                                                                                |   |                                    |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    Income/(loss) from continuing operations                                                                                                                                     |   |                                    | (97,082 | )                     |   | (71,575 | ) |   | (75,081 | ) |   | 1,207,026 |   |   | (3,688 | ) |
|                                                                                                                                                                                                |   |                                    |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Income/(loss)                    before discontinued operations per average share                                                                                                                   |   | $                                       | (1.06   | )                     | $      | (0.75 | ) | $ | (0.61 | ) | $ | 10.89 |   | $ | (0.10 | ) |
|                                                                                                                                                                                                |   |                                    |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    Income/(loss) available to common shareholders                                                                                                                               |   |                                    | (37,312 | )                     |   | (94,139 | ) |   | (75,445 | ) |   | 1,208,066 |   |   | (3,688 | ) |
|                                                                                                                                                                                                |   |                                    |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    Stock                                                                                                                                                                     |   |                                    |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |
| High                                                                                                                                                                                                |   | $                                       | 1.58    |                  | $      | 0.33 |   | $ | 0.14 |   | $ | 0.07 |   | $ | 23.25 |   |
| Low                                                                                                                                                                                                 |   | $                                       | 0.25    |                  | $      | 0.10 |   | $ | 0.04 |   | $ | 0.01 |   | $ | 19.05 |   |

| **26.** | **GUARANTOR                  SUBSIDIARIES FINANCIAL STATEMENTS** |
|---------|------------------------------------------------------------------|

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**For      the year ended December 31, 2005**

**(Dollars      in Thousands) **

|                                                                                                           |   | **Successor**    |     |
|----------------------------------------------------------------------------------------------------------------|--------|------------------|----------|
|                                                                                                           |   |             |     |   |   |   |   |   |   |
|                                                                                                           |   | **NonGuarantor** |     | **Guarantor** |   |   |   |   |   |
|                                                                                                           |   | **Financials**   |     | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |
| Revenues                                                                                                       |   | $                | -        |   | $ | 560,964 |   | $ | - |   | $ | 560,964 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Direct                  expenses                                                                               |   |             | -        |   |   | 196,832 |   |   | - |   |   | 196,832 |   |
| Selling,                  general and administrative                                                           |   |             | 1,480    |   |   | 274,514 |   |   | - |   |   | 275,994 |   |
| Non-cash                  stock based compensation                                                             |   |             | 8,913    |   |   | - |   |   | - |   |   | 8,913 |   |
| Impairments,                  exit costs and restructurings                                                    |   |             | -        |   |   | 5,245 |   |   | - |   |   | 5,245 |   |
| Depreciation                  and amortization                                                                 |   |             | -        |   |   | 190,322 |   |   | - |   |   | 190,322 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                                                                                |   |             | (10,393  | ) |   | (105,949 | ) |   | - |   |   | (116,342 | ) |
| Investment                  income                                                                             |   |             | 15       |   |   | 5,633 |   |   | - |   |   | 5,648 |   |
| Interest                  expense                                                                              |   |             | 41,827   |   |   | 506 |   |   | - |   |   | 42,333 |   |
| Gain                  (loss) on sale of assets                                                                 |   |             | -        |   |   | 2,536 |   |   | - |   |   | 2,536 |   |
| Other                  income (expense,) net                                                                   |   |             | (264     | ) |   | 1,820 |   |   | - |   |   | 1,556 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before reorganization items and income                  taxes |   |             | (52,469  | ) |   | (96,466 | ) |   | - |   |   | (148,935 | ) |
| Reorganization                  (expense) income, net                                                          |   |             | 11,113   |   |   | - |   |   | - |   |   | 11,113 |   |
| Income                  tax expense (benefit)                                                                  |   |             | 13,961   |   |   | (13,182 | ) |   | - |   |   | 779 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before equity in unconsolidated entities                      |   |             | (55,317  | ) |   | (83,284 | ) |   | - |   |   | (138,601 | ) |
| Equity                  in income (loss) of consolidated entities                                              |   |             | (80,795  | ) |   | - |   |   | 80,795 |   |   | - |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Net                  Loss from continuing operations                                                           |   |             | (136,112 | ) |   | (83,284 | ) |   | 80,795 |   |   | (138,601 | ) |
| Income                  from discontinued operations, net of tax                                               |   |             | -        |   |   | (111 | ) |   | - |   |   | (111 | ) |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                      |   |             | (136,112 | ) |   | (83,395 | ) |   | 80,795 |   |   | (138,712 | ) |
| Cumulative                  effect of change in accounting                                                     |   |             | -        |   |   | 2,600 |   |   | - |   |   | 2,600 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Net                  loss to common stockholders                                                               |   | $                | (136,112 | ) | $ | (80,795 | ) | $ | 80,795 |   | $ | (136,112 | ) |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEET **

**December      31, 2005**

**(Dollars      in Thousands)**

|                                                                 |   | **Successor**    |         |
|----------------------------------------------------------------------|--------|------------------|--------------|
|                                                                 |   |             |         |   |   |   |   |   |   |
|                                                                 |   | **NonGuarantor** |         | **Guarantor** |   |   |   |   |   |
|                                                                 |   | **Financials**   |         | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
| **ASSETS**                                                           |   |             |         |   |   |   |   |   |   |
|                                                                 |   |             |         |   |   |   |   |   |   |
| Current                  Assets:                                     |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalents                           |   | $                | -            |   | $ | 70,906 |   | $ | - |   | $ | 70,906 |   |
| Short-term                  investments                              |   |             | -            |   |   | 72,111 |   |   | - |   |   | 72,111 |   |
| Accounts                  receivable from related parties            |   |             | 2,802        |   |   | - |   |   | (2,802 | ) |   | - |   |
| Accounts                  receivable, net of reserve                 |   |             | 215,036      |   |   | (165,794 | ) |   | - |   |   | 49,242 |   |
| Unbilled                  revenues                                   |   |             | -            |   |   | 655 |   |   | - |   |   | 655 |   |
| Interest                  receivable                                 |   |             | -            |   |   | 390 |   |   | - |   |   | 390 |   |
| Prepayments                  and other current assets                |   |             | -            |   |   | 13,603 |   |   | - |   |   | 13,603 |   |
|                                                                 |   |             |    |   |   |    |   |   |    |   |   |    |   |
| Total                  current assets                                |   |             | 217,838      |   |   | (8,129 | ) |   | (2,802 | ) |   | 206,907 |   |
|                                                                 |   |             |         |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Property,                  plant and equipment, net                  |   |             | -            |   |   | 705,908 |   |   | - |   |   | 705,908 |   |
| Investments                  in joint ventures and equity securities |   |             | -            |   |   | 184,896 |   |   | - |   |   | 184,896 |   |
| Investments                  in consolidated entities                |   |             | 1,089,334    |   |   | - |   |   | (1,089,334 | ) |   | - |   |
| Intangible                  assets, net of accumulated               |   |             | -            |   |   | 118,145 |   |   | - |   |   | 118,145 |   |
| Long-term                  restricted investments                    |   |             | -            |   |   | 17,568 |   |   | - |   |   | 17,568 |   |
| Deferred                  charges and other assets                   |   |             | 14,814       |   |   | 5,702 |   |   | - |   |   | 20,516 |   |
|                                                                 |   |             |    |   |   |    |   |   |    |   |   |    |   |
| Total                  assets                                        |   | $                | 1,321,986    |   | $ | 1,024,090 |   | $ | (1,092,136 | ) | $ | 1,253,940 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEET **

**December      31, 2005**

**(Dollars      in Thousands)**

**(continued)**

|                                                            |   | **Successor**    |      |
|-----------------------------------------------------------------|--------|------------------|-----------|
|                                                            |   |             |      |   |   |   |   |   |   |
|                                                            |   | **NonGuarantor** |      | **Guarantor** |   |   |   |   |   |
|                                                            |   | **Financials**   |      | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                            |   |             |      |   |   |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**       |   |             |      |   |   |   |   |   |   |
|                                                            |   |             |      |   |   |   |   |   |   |
| Current                  Liabilities:                           |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Current                  maturities of long-term debt           |   | $                | 3,278     |   | $ | 370 |   | $ | - |   | $ | 3,648 |   |
| Accounts                  payable                               |   |             | 265,430   |   |   | (241,277 | ) |   | - |   |   | 24,153 |   |
| Accounts                  payable related parties               |   |             | -         |   |   | 2,802 |   |   | (2,802 | ) |   | - |   |
| Advance                  billings and customer deposits         |   |             | -         |   |   | 36,202 |   |   | - |   |   | 36,202 |   |
| Accrued                  exit costs                             |   |             | -         |   |   | 3,106 |   |   | - |   |   | 3,106 |   |
| Accrued                  expenses                               |   |             | 5,020     |   |   | 85,230 |   |   | - |   |   | 90,250 |   |
| Current                  liabilities of discontinued operations |   |             | -         |   |   | 1,422 |   |   | - |   |   | 1,422 |   |
|                                                            |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Total                  current liabilities                      |   |             | 273,728   |   |   | (112,145 | ) |   | (2,802 | ) |   | 158,781 |   |
|                                                            |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Long                  term debt                                 |   |             | 485,356   |   |   | 3,093 |   |   | - |   |   | 488,449 |   |
| Other                  deferred credits                         |   |             | -         |   |   | 43,808 |   |   | - |   |   | 43,808 |   |
|                                                            |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Total                  liabilities                              |   |             | 759,084   |   |   | (65,244 | ) |   | (2,802 | ) |   | 691,038 |   |
|                                                            |   |             |      |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Sockholders'                  equity:                           |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Common                  stock                                   |   |             | 360       |   |   | - |   |   | - |   |   | 360 |   |
| Committed                  common stock                         |   |             | 8         |   |   | - |   |   | - |   |   | 8 |   |
| Committed                  capital in excess of par             |   |             | 25,549    |   |   | - |   |   | - |   |   | 25,549 |   |
| Additional                  paid-in-capital                     |   |             | 684,146   |   |   | 1,163,843 |   |   | (1,163,843 | ) |   | 684,146 |   |
| Unearned                  compensation                          |   |             | (14,384   | ) |   | - |   |   | - |   |   | (14,384 | ) |
| Accumulated                  deficit                            |   |             | (139,800  | ) |   | (81,532 | ) |   | 81,532 |   |   | (139,800 | ) |
| Accumulated                  other comprehensive income         |   |             | 7,023     |   |   | 7,023 |   |   | (7,023 | ) |   | 7,023 |   |
| Total                  stockholders' equity (deficit)           |   |             | 562,902   |   |   | 1,089,334 |   |   | (1,089,334 | ) |   | 562,902 |   |
| Total                  liabilities and stockholders' equity     |   | $                | 1,321,986 |   | $ | 1,024,090 |   | $ | (1,092,136 | ) | $ | 1,253,940 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS **

**For      the year ended December 31, 2005**

**(Dollars      in Thousands) **

|                                                                                                                                                      |   | **Successor**    |         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------------|
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |
|                                                                                                                                                      |   | **NonGuarantor** |         | **Guarantor** |   |   |   |   |   |
|                                                                                                                                                      |   | **Financials**   |         | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |
| Cash                  flows from operating activities                                                                                                     |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                                                                 |   | $                | (136,112     | ) | $ | (80,795 | ) | $ | 80,795 |   | $ | (136,112 | ) |
| Income                  from discontinued operations                                                                                                      |   |             | -            |   |   | 111 |   |   | - |   |   | 111 |   |
| Net                  loss from continuing operations                                                                                                      |   |             | (136,112     | ) |   | (80,684 | ) |   | 80,795 |   |   | (136,001 | ) |
| Adjustments                  to reconcile net loss from continuing operations to net cash used                  in                  operating activities: |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cumulative                  effect of change in accounting                                                                                                |   |             | -            |   |   | (2,600 | ) |   | - |   |   | (2,600 | ) |
| Accretion                  of discounted debt                                                                                                             |   |             | 4,608        |   |   | - |   |   | - |   |   | 4,608 |   |
| Amortization                  of financing costs                                                                                                          |   |             | 2,333        |   |   | - |   |   | - |   |   | 2,333 |   |
| Non-cash                  stock based compensation expense                                                                                                |   |             | 8,913        |   |   | - |   |   | - |   |   | 8,913 |   |
| Gain                  on sale of assets                                                                                                                   |   |             | -            |   |   | (2,536 | ) |   | - |   |   | (2,536 | ) |
| Depreciation                  and amortization                                                                                                            |   |             | -            |   |   | 190,322 |   |   | - |   |   | 190,322 |   |
| Tax                  provision charged against intangibles                                                                                                |   |             | 809          |   |   | - |   |   | - |   |   | 809 |   |
| Provision                  for losses on accounts receivable                                                                                              |   |             | -            |   |   | 9,516 |   |   | - |   |   | 9,516 |   |
| Equity                  in income of consolidated entities                                                                                                |   |             | 80,795       |   |   | - |   |   | (80,795 | ) |   | - |   |
| Payment                  of deferred reorganization costs                                                                                                 |   |             | (21,644      | ) |   | - |   |   | - |   |   | (21,644 | ) |
| Impairments,                  exit costs and restructurings                                                                                               |   |             | -            |   |   | 8,264 |   |   | - |   |   | 8,264 |   |
|                                                                                                                                                      |   |             | (60,298      | ) |   | 122,282 |   |   | - |   |   | 61,984 |   |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Net                  change in certain assets, net of business acquisitions                                                                               |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable and unbilled revenues                                                                                                |   |             | -            |   |   | (6,003 | ) |   | - |   |   | (6,003 | ) |
| Accounts                  payable                                                                                                                         |   |             | -            |   |   | (6,237 | ) |   | - |   |   | (6,237 | ) |
| Accrued                  expenses                                                                                                                         |   |             | -            |   |   | 8,168 |   |   | - |   |   | 8,168 |   |
| Accounts                  receivable for related parties                                                                                                  |   |             | 103,968      |   |   | (103,968 | ) |   | - |   |   | - |   |
| Unearned                  revenue, advanced billing and customer deposits                                                                                 |   |             | -            |   |   | (880 | ) |   | - |   |   | (880 | ) |
| Other                                                                                                                                                     |   |             | -            |   |   | 3,155 |   |   | - |   |   | 3,155 |   |
| Net                  cash provided by continuing operations                                                                                               |   |             | 43,670       |   |   | 16,517 |   |   | - |   |   | 60,187 |   |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  provided by discontinued operations                                                                                                 |   |             | -            |   |   | 239 |   |   | - |   |   | 239 |   |
| Net                  cash provided by operating activities                                                                                                |   |             | 43,670       |   |   | 16,756 |   |   | - |   |   | 60,426 |   |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from investing activities:                                                                                                    |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Additions                  to property, plant and equipment                                                                                               |   |             | -            |   |   | (89,340 | ) |   | - |   |   | (89,340 | ) |
| (Increase)                  decrease in short-term investments                                                                                            |   |             | -            |   |   | (21,559 | ) |   | - |   |   | (21,559 | ) |
| Investment                  in unconsolidated joint venture                                                                                               |   |             | (2,244       | ) |   | - |   |   | - |   |   | (2,244 | ) |
| Proceeds                  from sale of assets                                                                                                             |   |             | -            |   |   | 6,259 |   |   | - |   |   | 6,259 |   |
| Decrease                  (increase) in investments restricted for debt service                                                                           |   |             | 9,020        |   |   | - |   |   | - |   |   | 9,020 |   |
| Net                  cash provided by (used in) continuing operations                                                                                     |   |             | 6,776        |   |   | (104,640 | ) |   | - |   |   | (97,864 | ) |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  used in discontinued operations                                                                                                     |   |             | -            |   |   | (10 | ) |   | - |   |   | (10 | ) |
|                                                                                                                                                      |   |             |    |   |   |    |   |   |    |   |   |    |   |
| Net                  cash provided by (used in) investing activities                                                                                      |   |             | 6,776        |   |   | (104,650 | ) |   | - |   |   | (97,874 | ) |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                                                                                                    |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Repayment                  of long-term debt                                                                                                              |   |             | (5,522       | ) |   | - |   |   | - |   |   | (5,522 | ) |
| Repayment                  of capital lease obligations                                                                                                   |   |             | -            |   |   | (558 | ) |   | - |   |   | (558 | ) |
| Payments                  made for debt financing costs                                                                                                   |   |             | -            |   |   | (515 | ) |   | - |   |   | (515 | ) |
| Proceeds                     from exercise of options                                                                                                     |   |             | 1,410        |   |   | - |   |   | - |   |   | 1,410 |   |
| Net                  cash used in financing activities                                                                                                    |   |             | (4,112       | ) |   | (1,073 | ) |   | - |   |   | (5,185 | ) |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Net                  increase (decrease) in cash and cash equivalents                                                                                     |   |             | 46,334       |   |   | (88,967 | ) |   | - |   |   | (42,633 | ) |
| Cash                  and cash equivalents at beginning of year                                                                                           |   |             | 779          |   |   | 112,760 |   |   | - |   |   | 113,539 |   |
|                                                                                                                                                      |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at end of year                                                                                                 |   | $                | 47,113       |   | $ | 23,793 |   | $ | - |   | $ | 70,906 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES **

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**For      the period December 21, 2004 through December 31, 2004 **

**(Dollars      in Thousands) **

|                                                                                                           |   | **Successor**    |   |
|----------------------------------------------------------------------------------------------------------------|--------|------------------|--------|
|                                                                                                           |   |             |   |   |   |   |   |   |   |
|                                                                                                           |   | **NonGuarantor** |   | **Guarantor** |   |   |   |   |   |
|                                                                                                           |   | **Financials**   |   | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                           |   |             |   |   |   |   |   |   |   |
| Revenues                                                                                                       |   | $                | -      |   | $ | 16,372 |   | $ | - |   | $ | 16,372 |   |
|                                                                                                           |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                           |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Direct                  expenses                                                                               |   |             | -      |   |   | 5,958 |   |   | - |   |   | 5,958 |   |
| Selling,                  general and administrative                                                           |   |             | -      |   |   | 7,996 |   |   | - |   |   | 7,996 |   |
| Depreciation                  and amortization                                                                 |   |             | -      |   |   | 5,218 |   |   | - |   |   | 5,218 |   |
|                                                                                                           |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                                                                                |   |             | -      |   |   | (2,800 | ) |   | - |   |   | (2,800 | ) |
| Interest                  expense                                                                              |   |             | 888    |   |   | - |   |   | - |   |   | 888 |   |
|                                                                                                           |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before reorganization items and income                  taxes |   |             | (888   | ) |   | (2,800 | ) |   | - |   |   | (3,688 | ) |
|                                                                                                           |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before equity in unconsolidated entities                      |   |             | (888   | ) |   | (2,800 | ) |   | - |   |   | (3,688 | ) |
| Equity                  in income (loss) of consolidated entities                                              |   |             | (2,800 | ) |   | - |   |   | 2,800 |   |   | - |   |
|                                                                                                           |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Loss from continuing operations                                                           |   |             | (3,688 | ) |   | (2,800 | ) |   | 2,800 |   |   | (3,688 | ) |
|                                                                                                           |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                      |   | $                | (3,688 | ) | $ | (2,800 | ) | $ | 2,800 |   | $ | (3,688 | ) |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**For      the period January 1, 2004 through December 20, 2004 **

**(Dollars      in Thousands)**

|                                                                                                           |   | **Predecessor**  |         |
|----------------------------------------------------------------------------------------------------------------|--------|------------------|--------------|
|                                                                                                           |   |             |         |   |   |   |   |   |   |
|                                                                                                           |   | **NonGuarantor** |         | **Guarantor** |   |   |   |   |   |
|                                                                                                           |   | **Financials**   |         | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                           |   |             |         |   |   |   |   |   |   |
| Revenues                                                                                                       |   | $                | -            |   | $ | 470,459 |   | $ | - |   | $ | 470,459 |   |
|                                                                                                           |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                           |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Direct                  expenses                                                                               |   |             | -            |   |   | 172,188 |   |   | - |   |   | 172,188 |   |
| Selling,                  general and administrative                                                           |   |             | 2,168        |   |   | 235,830 |   |   | - |   |   | 237,998 |   |
| Non-cash                  stock based compensation                                                             |   |             | 4,316        |   |   | 98 |   |   | - |   |   | 4,414 |   |
| Impairments,                  exit costs and restructurings                                                    |   |             | -            |   |   | (7,674 | ) |   | - |   |   | (7,674 | ) |
| Depreciation                  and amortization                                                                 |   |             | -            |   |   | 231,734 |   |   | - |   |   | 231,734 |   |
|                                                                                                           |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                                                                                |   |             | (6,484       | ) |   | (161,717 | ) |   | - |   |   | (168,201 | ) |
| Investment                  income                                                                             |   |             | 6            |   |   | 2,936 |   |   | - |   |   | 2,942 |   |
| Interest                  expense                                                                              |   |             | 96,688       |   |   | 14 |   |   | - |   |   | 96,702 |   |
| Gain                  (loss) on sale of assets                                                                 |   |             | -            |   |   | 1,875 |   |   | - |   |   | 1,875 |   |
| Other                  income (expense), net                                                                   |   |             | (105         | ) |   | (190 | ) |   | - |   |   | (295 | ) |
|                                                                                                           |   |             |    |   |   |    |   |   |    |   |   |    |   |
| Loss                  from continuing operations before reorganization items and income                  taxes |   |             | (103,271     | ) |   | (157,110 | ) |   | - |   |   | (260,381 | ) |
| Reorganization                  items, net                                                                     |   |             | (84,882      | ) |   | (7,672 | ) |   | - |   |   | (92,554 | ) |
| Gain                  on liabilities subject to compromise and restructuring                                   |   |             | 1,189,304    |   |   | (23,277 | ) |   | - |   |   | 1,166,027 |   |
| Gain                  from fresh start adjustments                                                             |   |             | -            |   |   | 173,178 |   |   | - |   |   | 173,178 |   |
| Income                  tax expense (benefit)                                                                  |   |             | (114         | ) |   | - |   |   | - |   |   | (114 | ) |
|                                                                                                           |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before equity in unconsolidated entities                      |   |             | 1,001,265    |   |   | (14,881 | ) |   | - |   |   | 986,384 |   |
| Equity                  in income (loss) of unconsolidated entities                                            |   |             | -            |   |   | 11,267 |   |   | - |   |   | 11,267 |   |
| Equity                  in income (loss) of consolidated entities                                              |   |             | 87,170       |   |   | - |   |   | (87,170 | ) |   | - |   |
| Impairment                  of unconsolidated entities                                                         |   |             | (25,689      | ) |   | - |   |   | - |   |   | (25,689 | ) |
|                                                                                                           |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Net                  Loss from continuing operations                                                           |   |             | 1,062,746    |   |   | (3,614 | ) |   | (87,170 | ) |   | 971,962 |   |
| Income                  from discontinued operations, net of tax of $0 and $0                                  |   |             | -            |   |   | 90,784 |   |   | - |   |   | 90,784 |   |
|                                                                                                           |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                      |   |             | 1,062,746    |   |   | 87,170 |   |   | (87,170 | ) |   | 1,062,746 |   |
| Preferred                  dividend and accretion requirements                                                 |   |             | 52,902       |   |   | - |   |   | - |   |   | 52,902 |   |
|                                                                                                           |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Net                  loss to common stockholders                                                               |   |             | 1,009,844    |   |   | 87,170 |   |   | (87,170 | ) |   | 1,009,844 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEET **

**December      31, 2004 **

**(Dollars      in Thousands)**

|                                                     |   | **Successor**    |         |
|----------------------------------------------------------|--------|------------------|--------------|
|                                                     |   |             |         |   |   |   |   |   |   |
|                                                     |   | **NonGuarantor** |         | **Guarantor** |   |   |   |   |   |
|                                                     |   | **Financials**   |         | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
| **ASSETS**                                               |   |             |         |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Current                    Assets:                       |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Cash                    and cash equivalents             |   | $                | 779          |   | $ | 112,760 |   | $ | - |   | $ | 113,539 |   |
| Short-term                    investments                |   |             | -            |   |   | 50,425 |   |   | - |   |   | 50,425 |   |
| Accounts                    receivable, net of reserve   |   |             | -            |   |   | 52,618 |   |   | - |   |   | 52,618 |   |
| Unbilled                    revenues                     |   |             | -            |   |   | 792 |   |   | - |   |   | 792 |   |
| Interest                    receivable                   |   |             | -            |   |   | 755 |   |   | - |   |   | 755 |   |
| Prepayments                    and other current assets  |   |             | 450          |   |   | 21,923 |   |   | - |   |   | 22,373 |   |
| Short-term                    restricted investments     |   |             | -            |   |   | 1,525 |   |   | - |   |   | 1,525 |   |
|                                                     |   |             |    |   |   |    |   |   |    |   |   |    |   |
| Total                    current assets                  |   |             | 1,229        |   |   | 240,798 |   |   | - |   |   | 242,027 |   |
|                                                     |   |             |         |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |             |         |   |   |   |   |   |   |   |   |   |   |
| Property,                    plant and equipment, net    |   |             | -            |   |   | 793,691 |   |   | - |   |   | 793,691 |   |
| Investments                    in consolidated entities  |   |             | 1,208,241    |   |   | 178,000 |   |   | (1,208,241 | ) |   | 178,000 |   |
| Intangible                    assets, net of accumulated |   |             | -            |   |   | 141,786 |   |   | - |   |   | 141,786 |   |
| Long-term                    restricted investments      |   |             | -            |   |   | 25,063 |   |   | - |   |   | 25,063 |   |
| Deferred                    charges and other assets     |   |             | 16,094       |   |   | 3,849 |   |   | - |   |   | 19,943 |   |
|                                                     |   |             |    |   |   |    |   |   |    |   |   |    |   |
| Total                    assets                          |   | $                | 1,225,564    |   | $ | 1,383,187 |   | $ | (1,208,241 | ) | $ | 1,400,510 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEET **

**December      31, 2004 **

**(Dollars      in Thousands)**

**(continued)**

|                                                                  |   | **Successor**    |      |
|-----------------------------------------------------------------------|--------|------------------|-----------|
|                                                                  |   |             |      |   |   |   |   |   |   |
|                                                                  |   | **NonGuarantor** |      | **Guarantor** |   |   |   |   |   |
|                                                                  |   | **Financials**   |      | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                  |   |             |      |   |   |   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS' EQUITY**           |   |             |      |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Current                    Liabilities:                               |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Current                    maturities of capital lease obligations    |   | $                | -         |   | $ | 558 |   | $ | - |   | $ | 558 |   |
| Current                    maturities of long-term debt               |   |             | 3,300     |   |   | - |   |   | - |   |   | 3,300 |   |
| Accounts                    payable                                   |   |             | 6,899     |   |   | 22,864 |   |   | - |   |   | 29,763 |   |
| Advance                    billings and customer deposits             |   |             | -         |   |   | 37,082 |   |   | - |   |   | 37,082 |   |
| Accrued                    expenses                                   |   |             | 1,215     |   |   | 35,115 |   |   | - |   |   | 36,330 |   |
| Accrued                    interest                                   |   |             | 837       |   |   | - |   |   | - |   |   | 837 |   |
| Accrued                    cost of sales                              |   |             | -         |   |   | 32,301 |   |   | - |   |   | 32,301 |   |
| Accrued                    exit costs                                 |   |             | -         |   |   | 2,340 |   |   | - |   |   | 2,340 |   |
| Accrued                    employee compensation and related expenses |   |             | 694       |   |   | 14,010 |   |   | - |   |   | 14,704 |   |
| Deferred                    reorganization costs                      |   |             | 21,450    |   |   | 194 |   |   | - |   |   | 21,644 |   |
| Current                    liabilities of discontinued operations     |   |             | -         |   |   | 1,082 |   |   | - |   |   | 1,082 |   |
|                                                                  |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Total                    current liabilities                          |   |             | 34,395    |   |   | 145,546 |   |   | - |   |   | 179,941 |   |
|                                                                  |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Long                    term debt and capital lease obligations       |   |             | 486,247   |   |   | 3,463 |   |   | - |   |   | 489,710 |   |
| Other                    deferred credits                             |   |             | -         |   |   | 25,937 |   |   | - |   |   | 25,937 |   |
|                                                                  |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Total                    liabilities                                  |   |             | 520,642   |   |   | 174,946 |   |   | - |   |   | 695,588 |   |
|                                                                  |   |             |      |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Sockholders'                    equity:                               |   |             |      |   |   |   |   |   |   |   |   |   |   |
| Common                    stock                                       |   |             | 319       |   |   | 4 |   |   | (4 | ) |   | 319 |   |
| Committed                    common stock                             |   |             | 41        |   |   | - |   |   | - |   |   | 41 |   |
| Committed                    capital in excess of par                 |   |             | 131,355   |   |   | - |   |   | - |   |   | 131,355 |   |
| Additional                    paid-in-capital                         |   |             | 576,895   |   |   | 1,208,974 |   |   | (1,208,974 | ) |   | 576,895 |   |
| Accumulated                    deficit                                |   |             | (3,688    | ) |   | (737 | ) |   | 737 |   |   | (3,688 | ) |
| Total                    stockholders' equity (deficit)               |   |             | 704,922   |   |   | 1,208,241 |   |   | (1,208,241 | ) |   | 704,922 |   |
| Total                    liabilities and stockholders' equity         |   | $                | 1,225,564 |   | $ | 1,383,187 |   | $ | (1,208,241 | ) | $ | 1,400,510 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS **

**For      the period December 21, 2004 through December 31, 2004 **

**(Dollars      in Thousands)**

|                                                                                                                                                      |   | **Successor**    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |
|                                                                                                                                                      |   | **NonGuarantor** |   | **Guarantor** |   |   |   |   |   |
|                                                                                                                                                      |   | **Financials**   |   | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |
| Cash                  flows from operating activities                                                                                                     |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                                                                 |   | $                | (3,688 | ) | $ | (2,800 | ) | $ | 2,800 |   | $ | (3,688 | ) |
| Net                  loss from continuing operations                                                                                                      |   |             | (3,688 | ) |   | (2,800 | ) |   | 2,800 |   |   | (3,688 | ) |
| Adjustments                  to reconcile net loss from continuing operations to net cash used                  in                  operating activities: |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and amortization                                                                                                            |   |             | -      |   |   | 5,218 |   |   | - |   |   | 5,218 |   |
| Provision                  for losses on accounts receivable                                                                                              |   |             | -      |   |   | 342 |   |   | - |   |   | 342 |   |
| Equity                  in income of consolidated entities                                                                                                |   |             | 2,800  |   |   | - |   |   | (2,800 | ) |   | - |   |
|                                                                                                                                                      |   |             | (888   | ) |   | 2,760 |   |   | - |   |   | 1,872 |   |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable and unbilled revenues                                                                                                |   |             | -      |   |   | (914 | ) |   | - |   |   | (914 | ) |
| Accounts                  payable                                                                                                                         |   |             | -      |   |   | (20,594 | ) |   | - |   |   | (20,594 | ) |
| Accrued                  expenses                                                                                                                         |   |             | -      |   |   | 5,842 |   |   | - |   |   | 5,842 |   |
| Accounts                  receivable from related parties                                                                                                 |   |             | -      |   |   | 15,469 |   |   | - |   |   | 15,469 |   |
| Accounts                  payable to related parties                                                                                                      |   |             | -      |   |   | (15,469 | ) |   | - |   |   | (15,469 | ) |
| Guarantor/nonguarantor                  interco                                                                                                           |   |             | (187   | ) |   | 187 |   |   | - |   |   | - |   |
| Other                                                                                                                                                     |   |             | 1,075  |   |   | - |   |   | - |   |   | 1,075 |   |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net                  cash used in continuing operations                                                                                                   |   |             | -      |   |   | (12,719 | ) |   | - |   |   | (12,719 | ) |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net                  cash used in operating activities                                                                                                    |   |             | -      |   |   | (12,719 | ) |   | - |   |   | (12,719 | ) |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from investing activities:                                                                                                    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition                  of Starpower, net of cash acquired                                                                                           |   |             | -      |   |   | (14,933 | ) |   | - |   |   | (14,933 | ) |
| Decrease                  (increase) in investments restricted for debt service                                                                           |   |             | -      |   |   | 4,634 |   |   | - |   |   | 4,634 |   |
| Net                  cash used in investing activities                                                                                                    |   |             | -      |   |   | (10,299 | ) |   | - |   |   | (10,299 | ) |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                                                                                                    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net                  cash used in financing activities                                                                                                    |   |             | -      |   |   | - |   |   | - |   |   | - |   |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net                  decrease in cash and cash equivalents                                                                                                |   |             | -      |   |   | (23,018 | ) |   | - |   |   | (23,018 | ) |
| Cash                  and cash equivalents at beginning of period                                                                                         |   |             | 779    |   |   | 135,778 |   |   | - |   |   | 136,557 |   |
|                                                                                                                                                      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at end of period                                                                                               |   | $                | 779    |   | $ | 112,760 |   | $ | - |   | $ | 113,539 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS **

**For      the period January 1, 2004 through December 20, 2004 **

**(Dollars      in Thousands)**

|                                                                                                                                                      |   | **Revised                  Predecessor** |         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------------|
|                                                                                                                                                      |   |                                     |         |   |   |   |   |   |   |
|                                                                                                                                                      |   | **NonGuarantor**                         |         | **Guarantor** |   |   |   |   |   |
|                                                                                                                                                      |   | **Financials**                           |         | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                                                                      |   |                                     |         |   |   |   |   |   |   |
| Cash                  flows from operating activities                                                                                                     |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                                                                 |   | $                                        | 1,062,746    |   | $ | (3,614 | ) | $ | 3,614 |   | $ | 1,062,746 |   |
| Income                  from discontinued operations                                                                                                      |   |                                     | -            |   |   | (2,204 | ) |   | - |   |   | (2,204 | ) |
| Gain                  on sale of discontinued operation                                                                                                   |   |                                     | -            |   |   | (88,580 | ) |   | - |   |   | (88,580 | ) |
| Net                  income (loss) from continuing operations                                                                                             |   |                                     | 1,062,746    |   |   | (94,398 | ) |   | 3,614 |   |   | 971,962 |   |
| Adjustments                  to reconcile net loss from continuing operations to net cash used                  in                  operating activities: |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Accretion                  of discounted debt                                                                                                             |   |                                     | 4,541        |   |   | - |   |   | - |   |   | 4,541 |   |
| Amortization                  of financing costs                                                                                                          |   |                                     | 9,511        |   |   | - |   |   | - |   |   | 9,511 |   |
| Non-cash                  stock based compensation expense                                                                                                |   |                                     | 4,316        |   |   | 97 |   |   | - |   |   | 4,413 |   |
| Gain                  on sale of assets                                                                                                                   |   |                                     | -            |   |   | (1,651 | ) |   | - |   |   | (1,651 | ) |
| Debt                  Issuance costs                                                                                                                      |   |                                     | 18,076       |   |   | - |   |   | - |   |   | 18,076 |   |
| Gain                  on settlement of lease obligation                                                                                                   |   |                                     | (14,525      | ) |   | - |   |   | - |   |   | (14,525 | ) |
| Noncash                  fresh start adjustments                                                                                                          |   |                                     | (173,178     | ) |   | - |   |   | - |   |   | (173,178 | ) |
| Gain                  on settlement of liabilities subject to comprominse                                                                                 |   |                                     | (1,166,027   | ) |   | - |   |   | - |   |   | (1,166,027 | ) |
| Depreciation                  and amortization                                                                                                            |   |                                     | -            |   |   | 231,734 |   |   | - |   |   | 231,734 |   |
| Deferred                  income taxes, net                                                                                                               |   |                                     | -            |   |   | (934 | ) |   | - |   |   | (934 | ) |
| Provision                  for losses on accounts receivable                                                                                              |   |                                     | -            |   |   | 8,617 |   |   | - |   |   | 8,617 |   |
| Equity                  in income of consolidated entities                                                                                                |   |                                     | 3,614        |   |   | - |   |   | (3,614 | ) |   | - |   |
| Equity                  in income of unconsolidated entities                                                                                              |   |                                     | -            |   |   | (11,267 | ) |   | - |   |   | (11,267 | ) |
| Impairment                  in unconsolidated entity                                                                                                      |   |                                     | 25,689       |   |   | - |   |   | - |   |   | 25,689 |   |
| Impairments,                  exit costs and restructurings                                                                                               |   |                                     | -            |   |   | 6,851 |   |   | - |   |   | 6,851 |   |
|                                                                                                                                                      |   |                                     | (225,237     | ) |   | 139,049 |   |   | - |   |   | (86,188 | ) |
|                                                                                                                                                      |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable and unbilled revenues                                                                                                |   |                                     | -            |   |   | (10,700 | ) |   | - |   |   | (10,700 | ) |
| Accounts                  payable                                                                                                                         |   |                                     | -            |   |   | 29,513 |   |   | - |   |   | 29,513 |   |
| Accrued                  expenses                                                                                                                         |   |                                     | -            |   |   | 36,945 |   |   | - |   |   | 36,945 |   |
| Accounts                  receivable from related parties                                                                                                 |   |                                     | -            |   |   | 3,378 |   |   | - |   |   | 3,378 |   |
| Accounts                  payable to related parties                                                                                                      |   |                                     | -            |   |   | 1,803 |   |   | - |   |   | 1,803 |   |
| Unearned                  revenue, advanced billings                                                                                                      |   |                                     | -            |   |   | 1,310 |   |   | - |   |   | 1,310 |   |
| Guarantor/nonguarantor                  intercompany                                                                                                      |   |                                     | 299,424      |   |   | (299,424 | ) |   | - |   |   | - |   |
| Other                                                                                                                                                     |   |                                     | (12,207      | ) |   | - |   |   | - |   |   | (12,207 | ) |
|                                                                                                                                                      |   |                                     |    |   |   |    |   |   |    |   |   |    |   |
| Net                  cash provided by (used in) continuing operations                                                                                     |   |                                     | 61,980       |   |   | (98,126 | ) |   | - |   |   | (36,146 | ) |
|                                                                                                                                                      |   |                                     |         |   |   |   |   |   |   |   |   |   |   |
| Cash                  provided by discontinued operations                                                                                                 |   |                                     | 2,012        |   |   | - |   |   | - |   |   | 2,012 |   |
| Net                  provided by (used in) cash operating activities                                                                                      |   |                                     | 63,992       |   |   | (98,126 | ) |   | - |   |   | (34,134 | ) |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS **

**For      the period January 1, 2004 through December 20, 2004 **

**(Dollars      in Thousands)**

**(continued)**

|                                                                            |   | **Revised                  Predecessor** |     |
|---------------------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                                            |   |                                     |     |   |   |   |   |   |   |
|                                                                            |   | **NonGuarantor**                         |     | **Guarantor** |   |   |   |   |   |
|                                                                            |   | **Financials**                           |     | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |
| Cash                  flows from investing activities:                          |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Additions                  to property, plant and equipment                     |   | $                                        | -        |   | $ | (52,294 | ) | $ | - |   | $ | (52,294 | ) |
| (Increase)                  decrease in short-term investments                  |   |                                     | -        |   |   | (50,425 | ) |   | - |   |   | (50,425 | ) |
| Proceeds                  from sale of assets                                   |   |                                     | -        |   |   | 391 |   |   | - |   |   | 391 |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Decrease                  (increase) in investments restricted for debt service |   |                                     | -        |   |   | 203,160 |   |   | - |   |   | 203,160 |   |
| Refund                  of sales tax on capital equipment                       |   |                                     | -        |   |   | 1,077 |   |   | - |   |   | 1,077 |   |
| Net                  cash provided by continuing operations                     |   |                                     | -        |   |   | 101,909 |   |   | - |   |   | 101,909 |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from sale of discontinued operations                  |   |                                     | -        |   |   | 118,061 |   |   | - |   |   | 118,061 |   |
| Net                  cash provided by investing activities                      |   |                                     | -        |   |   | 219,970 |   |   | - |   |   | 219,970 |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                          |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Repayment                  of long-term debt                                    |   |                                     | (395,367 | ) |   | - |   |   | - |   |   | (395,367 | ) |
| Change                  in term loans                                           |   |                                     | (111,377 | ) |   | - |   |   | - |   |   | (111,377 | ) |
| Repayment                  of capital lease obligations                         |   |                                     | -        |   |   | (3,715 | ) |   | - |   |   | (3,715 | ) |
| Payments                  made for debt financing costs                         |   |                                     | (12,215  | ) |   | - |   |   | - |   |   | (12,215 | ) |
| Proceeds                  from the issuance of long-term debt                   |   |                                     | 455,000  |   |   | - |   |   | - |   |   | 455,000 |   |
| Net                  cash used in financing activities                          |   |                                     | (63,959  | ) |   | (3,715 | ) |   | - |   |   | (67,674 | ) |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Net                  increase in cash and cash equivalents                      |   |                                     | 33       |   |   | 118,129 |   |   | - |   |   | 118,162 |   |
| Cash                  and cash equivalents at beginning of period               |   |                                     | 746      |   |   | 17,649 |   |   | - |   |   | 18,395 |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at end of period                     |   | $                                        | 779      |   | $ | 135,778 |   | $ | - |   | $ | 136,557 |   |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**For      the year ended December 31, 2003 **

**(Dollars      in Thousands) **

|                                                                                                           |   | **Predecessor**  |     |
|----------------------------------------------------------------------------------------------------------------|--------|------------------|----------|
|                                                                                                           |   |             |     |   |   |   |   |   |   |
|                                                                                                           |   | **NonGuarantor** |     | **Guarantor** |   |   |   |   |   |
|                                                                                                           |   | **Financials**   |     | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |
| Revenues                                                                                                       |   | $                | -        |   | $ | 484,854 |   | $ | - |   | $ | 484,854 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Direct                  expenses                                                                               |   |             | -        |   |   | 174,260 |   |   | - |   |   | 174,260 |   |
| Selling,                  general and administrative                                                           |   |             | 113      |   |   | 308,038 |   |   | - |   |   | 308,151 |   |
| Non-cash                  stock based compensation                                                             |   |             | 4,264    |   |   | 428 |   |   | - |   |   | 4,692 |   |
| Impairments,                  exit costs and restructurings                                                    |   |             | -        |   |   | 167,241 |   |   | - |   |   | 167,241 |   |
| Depreciation                  and amortization                                                                 |   |             | -        |   |   | 197,267 |   |   | - |   |   | 197,267 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Operating                  loss                                                                                |   |             | (4,377   | ) |   | (362,380 | ) |   | - |   |   | (366,757 | ) |
| Investment                  income                                                                             |   |             | 4        |   |   | 6,256 |   |   | - |   |   | 6,260 |   |
| Interest                  expense                                                                              |   |             | 180,636  |   |   | (430 | ) |   | - |   |   | 180,206 |   |
| Gain                  on early extinguishment of debt                                                          |   |             | 45,556   |   |   | - |   |   | - |   |   | 45,556 |   |
| Other                  income (expense) net                                                                    |   |             | (1,232   | ) |   | 9,433 |   |   | - |   |   | 8,201 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before reorganization items and income                  taxes |   |             | (140,685 | ) |   | (346,261 | ) |   | - |   |   | (486,946 | ) |
| Income                  tax expense (benefit)                                                                  |   |             | 118,554  |   |   | (117,283 | ) |   | - |   |   | 1,271 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations before equity in unconsolidated entities                      |   |             | (259,239 | ) |   | (228,978 | ) |   | - |   |   | (488,217 | ) |
| Equity                  in income (loss) of unconsolidated entities                                            |   |             | -        |   |   | 23,470 |   |   | - |   |   | 23,470 |   |
| Equity                  in income (loss) of consolidated entities                                              |   |             | (66,462  | ) |   | (35,000 | ) |   | 66,462 |   |   | (35,000 | ) |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Net                  loss from continuing operations                                                           |   |             | (325,701 | ) |   | (240,508 | ) |   | 66,462 |   |   | (499,747 | ) |
| Income                  from discontinued operations, net of tax                                               |   |             | -        |   |   | 174,046 |   |   | - |   |   | 174,046 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                      |   |             | (325,701 | ) |   | (66,462 | ) |   | 66,462 |   |   | (325,701 | ) |
| Preferred                  dividend and accretion requirements                                                 |   |             | -        |   |   | 173,392 |   |   | - |   |   | 173,392 |   |
|                                                                                                           |   |             |     |   |   |   |   |   |   |   |   |   |   |
| Net                  loss to common stockholders                                                               |   | $                | (325,701 | ) | $ | (239,854 | ) | $ | 66,462 |   | $ | (499,093 | ) |

----

**RCN      CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS **

**For      the year ended December 31, 2003**

**(Dollars      in Thousands)**

|                                                                                                                                                      |   | **Revised                  Predecessor** |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                                                                                                                      |   |                                     |     |   |   |   |   |   |   |
|                                                                                                                                                      |   | **NonGuarantor**                         |     | **Guarantor** |   |   |   |   |   |
|                                                                                                                                                      |   | **Financials**                           |     | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                                                                                                      |   |                                     |     |   |   |   |   |   |   |
| Cash                  flows from operating activities                                                                                                     |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                                                                                 |   | $                                        | (325,701 | ) | $ | (66,462 | ) | $ | 66,462 |   | $ | (325,701 | ) |
| Income                  from discontinued operations                                                                                                      |   |                                     | -        |   |   | (10,362 | ) |   | - |   |   | (10,362 | ) |
| Gain                  on sale of discontinued operation                                                                                                   |   |                                     | -        |   |   | (163,684 | ) |   | - |   |   | (163,684 | ) |
| Net                  loss from continuing operations                                                                                                      |   |                                     | (325,701 | ) |   | (240,508 | ) |   | 66,462 |   |   | (499,747 | ) |
| Adjustments                  to reconcile net loss from continuing operations to net cash used                  in                  operating activities: |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Accretion                  of discounted debt                                                                                                             |   |                                     | 14,370   |   |   | - |   |   | - |   |   | 14,370 |   |
| Amortization                  of financing costs                                                                                                          |   |                                     | 15,762   |   |   | - |   |   | - |   |   | 15,762 |   |
| Non-cash                  stock based compensation expense                                                                                                |   |                                     | 4,692    |   |   | - |   |   | - |   |   | 4,692 |   |
| Gain                  on sale of assets                                                                                                                   |   |                                     | -        |   |   | (8,386 | ) |   | - |   |   | (8,386 | ) |
| Gain                  on early extinguishment of debt                                                                                                     |   |                                     | (45,556  | ) |   | - |   |   | - |   |   | (45,556 | ) |
| Depreciation                  and amortization                                                                                                            |   |                                     | -        |   |   | 197,267 |   |   | - |   |   | 197,267 |   |
| Provision                  for losses on accounts receivable                                                                                              |   |                                     | -        |   |   | 12,335 |   |   | - |   |   | 12,335 |   |
| Equity                  in income of unconsolidated entities                                                                                              |   |                                     | -        |   |   | (23,470 | ) |   | - |   |   | (23,470 | ) |
| Equity                  in income of consolidated entities                                                                                                |   |                                     | 66,462   |   |   | 35,000 |   |   | (66,462 | ) |   | 35,000 |   |
| Impairments,                  exit costs and restructurings                                                                                               |   |                                     | -        |   |   | 167,241 |   |   | - |   |   | 167,241 |   |
|                                                                                                                                                      |   |                                     | (269,971 | ) |   | 139,479 |   |   | - |   |   | (130,492 | ) |
|                                                                                                                                                      |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Net                  change in certain assets, net of business acquisitions                                                                               |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable and unbilled revenues                                                                                                |   |                                     | -        |   |   | (2,931 | ) |   | - |   |   | (2,931 | ) |
| Accounts                  payable                                                                                                                         |   |                                     | -        |   |   | (4,579 | ) |   | - |   |   | (4,579 | ) |
| Accrued                  expenses                                                                                                                         |   |                                     | -        |   |   | (9,043 | ) |   | - |   |   | (9,043 | ) |
| Accounts                  receivable for related parties                                                                                                  |   |                                     | -        |   |   | (3,261 | ) |   | - |   |   | (3,261 | ) |
| Accounts                  payable to related parties                                                                                                      |   |                                     | 522,159  |   |   | (532,276 | ) |   | - |   |   | (10,117 | ) |
| Unearned                  revenue, advanced billing and customer deposits                                                                                 |   |                                     | -        |   |   | 135 |   |   | - |   |   | 135 |   |
| Other                                                                                                                                                     |   |                                     | -        |   |   | (13,049 | ) |   | - |   |   | (13,049 | ) |
| Net                  cash provided by (used in) continuing operations                                                                                     |   |                                     | 252,188  |   |   | (425,525 | ) |   | - |   |   | (173,337 | ) |
|                                                                                                                                                      |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Cash                  provided by discontinued operations                                                                                                 |   |                                     | -        |   |   | 3,087 |   |   | - |   |   | 3,087 |   |
| Net                  cash (provided by) used in operating activities                                                                                      |   | $                                        | 252,188  |   | $ | (422,438 | ) | $ | - |   | $ | (170,250 | ) |

----

**RCN      CORPORATION AND SUBSIDIARIES **

**CONSOLIDATED      STATEMENT OF CASH FLOWS **

**For      the year ended December 31, 2003 **

**(Dollars      in Thousands)**

**(continued)**

|                                                                            |   | **Revised                  Predecessor** |     |
|---------------------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                                            |   |                                     |     |   |   |   |   |   |   |
|                                                                            |   | **NonGuarantor**                         |     | **Guarantor** |   |   |   |   |   |
|                                                                            |   | **Financials**                           |     | **Financials** |   | **Eliminations** |   | **Consolidated** |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |
| Cash                  flows from investing activities:                          |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Additions                  to property, plant and equipment                     |   | $                                        | -        |   | $ | (87,481 | ) | $ | - |   | $ | (87,481 | ) |
| Acquisition                  of starpower, net of cash acquired                 |   |                                     | -        |   |   | 227,641 |   |   | - |   |   | 227,641 |   |
| (Increase)                  decrease in short-term investments                  |   |                                     | -        |   |   | (2,000 | ) |   | - |   |   | (2,000 | ) |
| Investment                  in unconsolidated joint venture                     |   |                                     | -        |   |   | 7,750 |   |   | - |   |   | 7,750 |   |
| Proceeds                  from sale of assets                                   |   |                                     | -        |   |   | 17,408 |   |   | - |   |   | 17,408 |   |
| Decrease                  (increase) in investments restricted for debt service |   |                                     | (199,285 | ) |   | - |   |   | - |   |   | (199,285 | ) |
| Net                  cash provided by (used in) continuing operations           |   |                                     | (199,285 | ) |   | 163,318 |   |   | - |   |   | (35,967 | ) |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from sale of discontinued operations                  |   |                                     | -        |   |   | 239,644 |   |   | - |   |   | 239,644 |   |
| Cash                  used in discontinued operations                           |   |                                     | -        |   |   | (8,813 | ) |   | - |   |   | (8,813 | ) |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Net                  cash provided by (used in) investing activities            |   |                                     | (199,285 | ) |   | 394,149 |   |   | - |   |   | 194,864 |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                          |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Repayment                  of long-term debt                                    |   |                                     | (68,000  | ) |   | - |   |   | - |   |   | (68,000 | ) |
| Repayment                  of capital lease obligations                         |   |                                     | -        |   |   | (2,590 | ) |   | - |   |   | (2,590 | ) |
| Proceeds                  from exercise of options                              |   |                                     | 53       |   |   | - |   |   | - |   |   | 53 |   |
| Payments                  made for debt financing costs                         |   |                                     | (12,853  | ) |   | - |   |   | - |   |   | (12,853 | ) |
| Proceeds                  from the issuance of long-term debt                   |   |                                     | 27,806   |   |   | - |   |   | - |   |   | 27,806 |   |
| Net                  cash used in financing activities                          |   |                                     | (52,994  | ) |   | (2,590 | ) |   | - |   |   | (55,584 | ) |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Net                  decrease in cash and cash equivalents                      |   |                                     | (91      | ) |   | (30,879 | ) |   | - |   |   | (30,970 | ) |
| Cash                  and cash equivalents at beginning of period               |   |                                     | 779      |   |   | 48,586 |   |   | - |   |   | 49,365 |   |
|                                                                            |   |                                     |     |   |   |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at end of period                     |   | $                                        | 688      |   | $ | 17,707 |   | $ | - |   | $ | 18,395 |   |

| **27.** | **ACQUISITION** |
|---------|-----------------|

----

| **28.** | **SUBSEQUENT                EVENTS** |
|---------|--------------------------------------|

**SCHEDULE      II **

**RCN      CORPORATION **

**VALUATION      AND QUALIFYING ACCOUNTS AND RESERVES **

**FOR      THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003 **

**(THOUSANDS      OF DOLLARS) **

| **Column                  A**                                          |        |   | **Column                  B**                                                  |          | **Column                  C**                            |   | **Column                  D**                          |   | **Column                  E**                |   |
|------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------|---------------|----------------------------------------------------------|--------|--------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                   |   |   |                                                                           |          |                                                     |   |                                                   |   |                                         |   |   |
|                                                                   |   |   |                                                                           | **Additions** |                                                     |   |                                                   |   |                                         |
| **Description**                                                        |        |   | **Balance                    at****Beginning                    of****Period** |          | **Charged****to                    Cost and****Expense** |   | **Charged****to                    Other****Accounts** |   | **Accounts****Written                  Off** |   | **Balance at****End                    of****Period** |   |
|                                                                   |   |   |                                                                           |          |                                                     |   |                                                   |   |                                         |   |   |
| Allowance                  for Doubtful Accounts—                |   |   |                                                                           |          |                                                     |   |                                                   |   |                                         |   |   |
| Deducted                  from Accounts Receivable in the Consolidated |   |   |                                                                           |          |                                                     |   |                                                   |   |                                         |   |   |
| Balance                  Sheets                                        |   |   |                                                                           |          |                                                     |   |                                                   |   |                                         |   |   |
| 2005                  Successor                                        |   | $      | 4,568                                                                          |          | $                                                        | 9,516  |                                                   | $      | 1,168                                        |   | $ | 11,587 |   | $ | 3,665 |   |
| 2004                  Successor December 21, 2004 - December 31, 2004  |   | $      | 3,606                                                                          |          | $                                                        | 342    |                                                   | $      | 620                                          |   | $ | - |   | $ | 4,568 |   |
| 2004                  Predecessor January 1, 2004 - December 20, 2004  |   | $      | 5,923                                                                          |          | $                                                        | 8,617  |                                                   | $      | 2,360                                        |   | $ | 13,294 |   | $ | 3,606 |   |
| 2003                  Predecessor                                      |   | $      | 10,653                                                                         |          | $                                                        | 12,335 |                                                   | $      | 848                                          |   | $ | 17,913 |   | $ | 5,923 |   |

----

| **Exhibits** |                                                                                                                                                                                                                                                                                                          |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                          |
| 10.24        | Separation                Agreement between RCN Corporation and Patrick T. Hogan, dated as                of June                30, 2005.                                                                                                                                                                    |
| 10.28        | Separation                Agreement between RCN Corporation and Stephen A. Bogiages, dated                as of                December 22, 2005.                                                                                                                                                             |
| 10.29        | Amended                Form Non-Qualified Option Agreement.                                                                                                                                                                                                                                                   |
| 10.30        | Amended                Form Incentive Stock Option Agreement.                                                                                                                                                                                                                                                 |
| 10.33        | Stock                  Purchase Agreement between RCN Corporation and Consolidated Edison,                  Inc.,                  dated as of December 5, 2005.                                                                                                                                              |
| 10.35        | Settlement                Agreement, dated March 6, 2006, entered into by and among RCN                International Holdings, Inc., Teleholding, S.A. de C.V., Mega Cable,                S.A.                de C.V., MCM Holding, S.A. de C.V. and the Private Shareholders listed                therein. |
| 10.37        | RCN                  Corporation Change of Control Severance Plan dated April 7,                  2006.                                                                                                                                                                                                       |
| 23.1         | Consent                of Pricewaterhouse Coopers LLP, Independent Registered Public Accounting                Firm.                                                                                                                                                                                          |
| 23.2         | Consent                of Friedman LLP, Independent Registered Public Accounting                Firm.                                                                                                                                                                                                         |
| 31.1         | Certification                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002.                                                                                                                                                                             |
| 31.2         | Certification                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002.                                                                                                                                                                             |
| 32.1         | Certification                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002.*                                                                                                                                                                            |
| 32.2         | Certification                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002.*                                                                                                                                                                            |

|  | * | This                certification accompanies this Report pursuant to Section 906 of                the                Sarbanes-Oxley Act of 2002 and shall not, except to the extent required                by                the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for                purposes of Section 18 of the Securities Exchange Act of 1934, as                amended.                  |
|--|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----