THIRD AMENDMENT TO $200,000,000 AMENDED
                          AND RESTATED CREDIT AGREEMENT

         THIRD AMENDMENT TO $200,000,000  AMENDED AND RESTATED CREDIT  AGREEMENT
(this  "Amendment") is dated as of the 13th day of April,  1999 and entered into
among GCI HOLDINGS,  INC.,  an Alaskan  corporation  (herein,  together with its
successors and assigns,  called the "Borrower"),  the Lenders (as defined in the
Credit  Agreement as defined  below),  NATIONSBANK,  N.A.,  dba Bank of America,
National  Association,  a national banking association,  as Administrative Agent
for itself and the Lenders (the  "Administrative  Agent"),  CREDIT  LYONNAIS NEW
YORK BRANCH, as Documentation Agent and TD SECURITIES (USA), INC. as Syndication
Agent.

                                   WITNESSETH:

         WHEREAS, the Borrower, the Lenders and the Administrative Agent entered
into a $200,000,000  Amended and Restated Credit  Agreement,  dated November 14,
1997, as amended by that certain Consent and First Amendment,  dated January 27,
1998 and by that  certain  Second  Amendment  to  Amended  and  Restated  Credit
Agreement dated as of July 3, 1998 (as amended and as further amended,  restated
or  otherwise  modified  from  time  to  time,  the  "Credit  Agreement")  and a
$50,000,000 Amended and Restated Credit Agreement, dated as of November 14, 1997
(as amended by that certain Consent and First Amendment,  dated January 27, 1998
and that certain Second Amendment to Amended and Restated Credit Agreement dated
as of July 3, 1998 and as further amended,  restated or otherwise  modified from
time to time, the "Revolver/Term Credit Agreement");

         WHEREAS,  the Borrower has requested that, among other things,  certain
financial covenants of the Credit Agreement be amended;

         WHEREAS,  the Lenders,  the Administrative  Agent and the Borrower have
agreed to modify the Credit  Agreement  upon the terms and  conditions set forth
below;

         NOW, THEREFORE,  for valuable  consideration hereby  acknowledged,  the
Borrower, the Lenders and the Administrative Agent agree as follows:

         SECTION 1.  Definitions.

         (a)  In  General.  Unless  specifically  defined  or  redefined  below,
capitalized  terms used herein shall have the meanings  ascribed  thereto in the
Credit Agreement.

         (b)  Definition of Applicable  Margin . The  definition of  "Applicable
Margin" in Article I of the Credit  Agreement  is amended  and  restated  in its
entirety as follows:

         "Applicable  Margin"  means (i) with respect to the Base Rate  Advances
under the  Facility,  1.375% per annum and (ii) with  respect to LIBOR  Advances
under the Facility, 2.500% per annum.  Notwithstanding the foregoing,  effective
three Business Days after receipt by the Administrative  Agent from the Borrower
of a  Compliance  Certificate  delivered  to the  Lenders  for  any  reason  and
demonstrating  a change in the Total Leverage Ratio to an amount so that another
Applicable  Margin should be applied  


                                      -1-
<PAGE>
pursuant to the table set forth below,  the  Applicable  Margin for each type of
Advance shall mean the respective  amount set forth below opposite such relevant
Total  Leverage  Ratio in  Columns A and B below,  in each case  until the first
succeeding Quarterly Date which is at least three Business Days after receipt by
the  Administrative  Agent  from  the  Borrower  of  a  Compliance  Certificate,
demonstrating  a change in the Total Leverage Ratio to an amount so that another
Applicable Margin shall be applied;  provided that, if there exists a Default or
if the Total  Leverage  Ratio shall at any time be greater than or equal to 6.50
to 1.00, the Applicable  Margin shall again be the respective  amounts first set
forth in this definition; provided further, that the Applicable Margin in effect
on the Closing Date shall be  determined  pursuant to a  Compliance  Certificate
delivered on the Closing Date, provided,  further, that if the Borrower fails to
deliver any financial statements to the Administrative Agent within the required
time  periods set forth in Sections  6.05(a) and  Section  6.05(b)  hereof,  the
Applicable Margin shall again be the respective  amounts first set forth in this
definition until the date which is three Business Days after the  Administrative
Agent receives  financial  statements from the Borrower which  demonstrate  that
another  Applicable  Margin  should be applied  pursuant  to the table set forth
below;  and  provided  further,  that the  Applicable  Margin  shall  never be a
negative number.
<TABLE>
<CAPTION>
                                                                       Column A         Column B

Total Leverage Ratio                                                   Base Rate        LIBOR
--------------------                                                   ---------        -----
<S>                                                                    <C>              <C>        
Greater than or equal to
6.50 to 1.00                                                           1.375%           2.500%

Greater than or equal to
6.00 to 1.00 but less than
6.50 to 1.00                                                           1.000%           2.125%

Greater than or equal to
5.50 to 1.00 but less than
6.00 to 1.00                                                           0.750%           1.875%

Greater than or equal to
5.00 to 1.00 but less than
5.50 to 1.00                                                           0.500%           1.625%

Greater than or equal to
4.50 to 1.00 but less than
5.00 to 1.00                                                           0.250%           1.375%

Greater than or equal to
4.00 to 1.00 but less than
4.50 to 1.00                                                           0.000%           1.250%

Less than                                                              0.000%           1.000%
4.00 to 1.00
</TABLE>
         (c)  Definition of Operating  Cash Flow.  The  definition of "Operating
Cash Flow" in Article I of the Credit  Agreement  is amended and restated in its
entirety as follows:


                                      -2-
<PAGE>


                  "Operating  Cash  Flow"  means,   for  the  Borrower  and  the
         Restricted Subsidiaries,  for any period, determined in accordance with
         GAAP,  the  consolidated  net income  (loss) for such period taken as a
         single accounting  period,  excluding  extraordinary  gains and losses,
         plus the sum of the  following  amounts  for such  period to the extent
         included in the  determination  of such  consolidated  net income:  (a)
         depreciation  expense,  (b)  amortization  expense  and other  non-cash
         charges  reducing  income,  (c) Net Total  Interest  Expense,  (d) cash
         income tax expense for the Borrower and  Restricted  Subsidiaries,  (e)
         deferred  income Taxes for the Borrower  and  Restricted  Subsidiaries,
         plus (f) for the fiscal  quarter in which the  Borrower  purchases  the
         transponders  pursuant to that certain  Transponder  Purchase Agreement
         for Galaxy X, dated August 24, 1995, among GCI Communication  Corp. and
         Hughes  Communications  Galaxy,  Inc., now held by PanAmSat  Corp.,  as
         assignee, and that certain Transponder Service Agreement,  dated August
         24, 1995, among General  Communication Corp. and Hughes  Communications
         Satellite  Services,  Inc. (the "Galaxy X  Transponders"),  now held by
         PanAmSat Corp., as assignee,  the annualized amount of economic savings
         of the Borrower  resulting from the Borrower's  direct purchase of such
         Galaxy X  Transponders  instead of leasing  such Galaxy X  Transponders
         from GCI  Satellite  Co.,  Inc.  and  leasing  transponders  from other
         providers;  provided,  the  calculation  is made after giving effect to
         acquisitions  and  dispositions  of  assets  of  the  Borrower  or  any
         Restricted  Subsidiary  during such period as if such  transactions had
         occurred on the first day of such  period.  In  calculating  AOperating
         Cash Flow@ for  determination  of compliance  with financial  covenants
         beginning with the fiscal  quarter  ending March 31, 1999,  losses from
         local  telephone  businesses  shall be offset by amounts not  exceeding
         $20,000,000  contributed  to the Borrower  from the net proceeds of any
         offering of preferred  stock issued by GCI. The amount  attributable to
         such net proceeds  which is available  for such offset shall be reduced
         by the  amount  of net  proceeds  actually  used  for  such  offset  in
         determining  compliance  with  financial  covenants as permitted in the
         immediately preceding sentence.

         SECTION 2. Amendment to Section 2.10(a).  Section 2.10(a) in Article II
of the Credit  Agreement  is amended  and  restated  in its  entirety to read as
follows:

         (a) Subject to Section 10.09 hereof,  the Borrower agrees to pay to the
Administrative  Agent,  for the account of the Lenders in accordance  with their
Specified  Percentages,  a  commitment  fee on the average  daily  amount of the
Revolving Unused Commitment, from the Closing Date through the Maturity Date, at
the rate of .500% per annum, payable quarterly in arrears on each Quarterly Date
occurring  after the Closing  Date,  with the last such payment due and owing on
the Maturity Date.

         SECTION 3. Amendment to Section 7.01(a). Section 7.01(a) in Article VII
of the Credit  Agreement  is amended  and  restated  in its  entirety to read as
follows:



                                      -3-
<PAGE>
         (a) Total  Leverage  Ratio.  At all times during the term  hereof,  the
Total Leverage Ratio shall not be greater during the following time periods than
the ratio set forth opposite such time periods:

                       Time Period                                Maximum Ratio
                       -----------                                -------------
                  From the Closing Date
                  through June 30, 1999                           7.00 to 1.00

                  July 1, 1999 through
                  March 31, 2000                                  6.25 to 1.00

                  April 1, 2000 and thereafter                    5.50 to 1.00

         SECTION 4. Amendment to Section 7.01(c). Section 7.01(c) in Article VII
of the Credit Agreement is amended and restated in its entirety as follows:

         (c) Interest  Coverage Ratio. At all times during the term hereof,  the
Interest Coverage Ratio shall not be less during the following time periods than
the ratio set forth opposite such time periods:

                           Time Period                             Minimum Ratio
                           -----------                             -------------
         From the Closing Date through September 30, 1999          1.50 to 1.00
         October 1, 1999 through March 31, 2000                    1.75 to 1.00
         April  1, 2000 and thereafter                             2.00 to 1.00


         SECTION 5. Amendment to Section 7.01(f). Section 7.01(f) in Article VII
of the Credit Agreement is amended and restated in its entirety as follows:

                  (f) Capital Expenditures.  Capital Expenditures (not including
         any Galaxy X  Transponder  (as defined in the  definition  of Operating
         Cash  Flow)  purchases)  paid  or  incurred  by the  Borrower  and  the
         Restricted  Subsidiaries  shall  not  exceed,  in  the  aggregate,  the
         following amounts during the following years, provided that, any unused
         portion for any such year may be used during the following  fiscal year
         only (but not thereafter):

                  Fiscal Year                                    Maximum Amount
                  -----------                                    --------------
                  1998                                           $90,000,000
                  1999                                           $35,000,000
                  2000                                           $35,000,000
                  2001 and thereafter                            Not Applicable

         In  addition,  Capital  Expenditures  for  the  purpose  of  purchasing
satellite  transponders  may be made,  provided  no  Default or Event of Default
exists or would result therefrom in the aggregate amount  throughout the term of
this Agreement of $45,000,000  (excluding the Galaxy X Transponder  down payment
of $9,100,000).



                                      -4-
<PAGE>
         SECTION 6.  Amendment to Section 8.01.  Section 8.01 in Article VIII of
the Credit  Agreement is amended by deleting the "or" before  subparagraph  (x),
deleting  the  period at the end of  subparagraph  (x) and  substituting  ", or"
instead, and adding the following subparagraph (y):

         (y) the Borrower  shall not have  received  $20,000,000  in proceeds of
preferred stock offering of GCI (the terms of which shall provide for payment in
kind  dividends  for three  years from the date of  issuance  and cash  payments
thereafter, so long as the Total Leverage Ratio is less than 5.00 to 1.00 and no
Default or Event of Default exists or would result therefrom) by May 31, 1999.

         SECTION 7.  Conditions  Precedent.  This Third  Amendment  shall not be
effective  until the  Administrative  Agent  shall have  determined  in its sole
discretion  that all  proceedings of the Borrower taken in connection  with this
Third Amendment and the transactions  contemplated  hereby shall be satisfactory
in form and substance to the Administrative Agent and the Borrower has satisfied
the following conditions:

                  (a) the Borrower  shall have  delivered to the  Administrative
         Agent  a loan  certificate  of the  Borrower  certifying  (i) as to the
         accuracy of its  representations  and warranties set forth in Article V
         of the Credit  Agreement,  as amended by this Third  Amendment  and the
         other  Loan  Papers,  (ii) that  there  exists no  Default  or Event of
         Default,  and the  execution,  delivery and  performance  of this Third
         Amendment  will not cause a Default  or Event of  Default,  (iii) as to
         resolutions  authorizing  the Borrower to execute,  deliver and perform
         this  Third  Amendment  and all Loan  Papers  and other  documents  and
         instruments  delivered  or  executed  in  connection  with  this  Third
         Amendment, (iv) that it has complied with all agreements and conditions
         to be complied  with by it under the Credit  Agreement,  the other Loan
         Papers and this Third  Amendment by the date hereof and (v) that it has
         received  all  consents,   amendments  and  waivers  from  all  Persons
         necessary or required,  if any, to (A) enter into this Amendment or (B)
         effectuate  the  amendments   set  forth  above,   including,   without
         limitation, under the Indenture and related documentation and under the
         AUSP Credit Agreement and related documentation;

                  (b) the Borrower  shall have  delivered to the  Administrative
         Agent and Lenders  legal  opinions from counsel to the Borrower and its
         Restricted  Subsidiaries  regarding this Third Amendment and such other
         matters as reasonably requested by Special Counsel, including,  without
         limitation,  opinions regarding the waivers, consents and amendments in
         connection  with the  Indenture  and  AUSP  Credit  Agreement,  and the
         related agreements;

                  (c) the Borrower shall have received a firm  commitment for at
         least $20,000,000 in proceeds from the preferred stock offering by GCI;

                  (d) the Borrower shall have  delivered  such other  documents,
         instruments,  and certificates,  in form and substance  satisfactory to
         the  Administrative  Agent,  as the  Administrative  Agent  shall  deem
         necessary or  appropriate in connection  with this Third  Amendment and
         the transactions contemplated hereby;

                  (e) the  Revolving  Commitment  shall  permanently  reduce  to
         $150,000,000; and



                                      -5-
<PAGE>
                  (f) the Borrower  shall have paid all fees and expenses of the
         Administrative  Agent and the Lenders,  including  without  limitation,
         payment of an amendment fee, subject to 10.08 of the Credit  Agreement,
         to each  Lender  (to the extent it  executes  and  delivers  this Third
         Amendment by April 16, 1999) of .25% of its Specified Percentage of the
         aggregate amount of Revolving Commitment and Revolver\Term Commitment.

         SECTION 8. Representations and Warranties.  The Borrower represents and
warrants  to the  Lenders  and the  Administrative  Agent  that (a)  this  Third
Amendment  constitutes its legal, valid, and binding obligation,  enforceable in
accordance  with the terms hereof  (subject as to enforcement of remedies to any
applicable bankruptcy,  reorganization,  moratorium, or other laws or principles
of equity affecting the enforcement of creditors' rights  generally),  (b) there
exists no  Default  or Event of  Default  under the  Credit  Agreement,  (c) its
representations  and warranties set forth in the Credit Agreement and other Loan
Papers are true and correct on the date  hereof,  (d) it has  complied  with all
agreements and  conditions to be complied with by it under the Credit  Agreement
and the other Loan Papers by the date hereof,  and (e) the Credit Agreement,  as
amended hereby, and the other Loan Papers remain in full force and effect.

         SECTION 9. Entire Agreement; Ratification. THE CREDIT AGREEMENT AND THE
LOAN PAPERS  REPRESENT  THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT
OF THE PARTIES.  THERE ARE NO  UNWRITTEN  ORAL  AGREEMENTS  BETWEEN THE PARTIES.
EXCEPT AS MODIFIED OR SUPPLEMENTED HEREBY, THE CREDIT AGREEMENT,  THE OTHER LOAN
PAPERS AND ALL OTHER DOCUMENTS AND AGREEMENTS  EXECUTED IN CONNECTION  THEREWITH
SHALL CONTINUE IN FULL FORCE AND EFFECT.

         SECTION 10.  Counterparts.  This Third Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument. In making proof hereof, it shall not be necessary to produce or
account for any  counterpart  other than one signed by the party  against  which
enforcement is sought.

         SECTION 11.  GOVERNING LAW. THIS THIRD  AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS.

         SECTION 12. CONSENT TO  JURISDICTION.  THE BORROWER HEREBY  IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE  JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS
STATE  COURT  SITTING IN DALLAS IN ANY ACTION OR  PROCEEDING  ARISING  OUT OF OR
RELATING TO ANY LOAN PAPERS AND THE BORROWER  IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING  MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND  IRREVOCABLY  WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER  HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE  AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER


                                      -6-
<PAGE>
AGAINST  THE  ADMINISTRATIVE  AGENT  OR  ANY  LENDER  OR  ANY  AFFILIATE  OF THE
ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN PAPER SHALL BE
BROUGHT ONLY IN A COURT IN DALLAS, TEXAS.

         SECTION 13.  WAIVER OF JURY TRIAL.  THE  BORROWER,  THE  ADMINISTRATIVE
AGENT AND EACH LENDER  HEREBY  WAIVES TRIAL BY JURY IN ANY  JUDICIAL  PROCEEDING
INVOLVING,  DIRECTLY  OR  INDIRECTLY,  ANY  MATTER  (WHETHER  SOUNDING  IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,  RELATED TO, OR CONNECTED WITH
ANY LOAN PAPER OR THE RELATIONSHIP ESTABLISHED THEREUNDER.


================================================================================

             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
================================================================================



                                      -7-
<PAGE>
         IN WITNESS WHEREOF, this Third Amendment to Amended and Restated Credit
Agreement is executed as of the date first set forth above.

                                       GCI HOLDINGS, INC.



                                       By: 
                                       Its:



                                       NATIONSBANK,  N.A.,  dba Bank of America,
                                       National  Association,  Individually as a
                                       Lender and as Administrative Agent



                                       By: 
                                       Its:



                                       CREDIT  LYONNAIS  NEW  YORK  BRANCH,   as
                                       Documentation Agent and Individually as a
                                       Lender



                                       By:                 
                                       Its:



                                       TD SECURITIES (USA), INC., as Syndication
                                       Agent



                                       By:
                                       Its:




                                      -8-
<PAGE>
                                       TORONTO    DOMINION    (TEXAS),     INC.,
                                       Individually as a Lender



                                       By: 
                                       Its:


                                       COBANK, ACB, Individually as a Lender



                                       By: 
                                       Its:


                                       By: 
                                       Its:



                                       BANQUE PARIBAS, Individually as a Lender



                                       By: 
                                       Its:


                                       By: 
                                       Its:          


                                       GENERAL  ELECTRIC  CAPITAL   CORPORATION,
                                       Individually as a Lender



                                       By: 
                                       Its:


 
                                       THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
                                       LOS  ANGELES  AGENCY,  Individually  as a
                                       Lender




                                      -9-
<PAGE>
                                       By:
                                       Its:



                                       UNION   BANK   OF    CALIFORNIA,    N.A.,
                                       Individually as a Lender




                                       By: 
                                       Its:



                                       BANK OF HAWAII, Individually as a Lender




                                       By: 
                                       Its:



                                       THE BANK OF NEW YORK,  Individually  as a
                                       Lender




                                       By: 
                                       Its:





                                       BANQUE  NATIONALE DE PARIS,  Individually
                                       as a Lender




                                       By: 
                                       Its:


                                       By: 
                                       Its:      




                                      -10-
<PAGE>
                                       CITY  NATIONAL  BANK,  Individually  as a
                                       Lender




                                       By:
                                       Its:



                                       FIRST    NATIONAL   BANK   OF   MARYLAND,
                                       Individually as a Lender




                                       By: 
                                       Its:


                                       FLEET  NATIONAL BANK,  Individually  as a
                                       Lender



                                       By:
                                       Its:




                                       THE  FUJI  BANK,  LIMITED,   LOS  ANGELES
                                       AGENCY, Individually as a Lender



                                       By:
                                       Its:



                                       THE SUMITOMO BANK, LIMITED,  Individually
                                       as a Lender



                                       By:
                                       Its:


                                      -11-
<PAGE>
                                       NATIONAL BANK OF ALASKA,  Individually as
                                       a Lender



                                       By:
                                       Its:


                                      -12-