UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 1999

                                       OR

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

                       (Commission File Number 333-40495)

                                ICG FUNDING, LLC
             (Exact name of registrant as specified in its charter)

                               Delaware 84-1434980
(State or other jurisdiction of organization)(I.R.S. Employer Identification No.

                            161 Inverness Drive West
                            Englewood, Colorado 80112
                        (888) 424-1144 or (303) 414-5000
  (Address of principal executive offices and registrant's telephone numbers,
                             including area codes)


     ICG Funding, LLC has no securities registered pursuant to Sections 12(b) or
12(g) of the Act.

     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X   No

     All of the issued and outstanding common securities of ICG Funding, LLC are
owned by ICG Communications, Inc.


<PAGE>

                                TABLE OF CONTENTS




PART I ....................................................................... 3
   ITEM 1. FINANCIAL STATEMENTS .............................................. 3
           Balance Sheets as of December 31, 1998 and September 30, 1999
             (unaudited)...................................................... 3
           Statements of Operations (unaudited) for the Three Months and
             Nine Months Ended September 30, 1998 and 1999 ................... 4
           Statement of Member's Equity (unaudited) for the Nine Months
             Ended September 30, 1999 ........................................ 5
           Statements of Cash Flows (unaudited) for the Nine Months Ended
             September 30, 1998 and 1999 ..................................... 6
           Notes to Financial Statements, December 31, 1998 and September
             30, 1999 (unaudited)............................................. 7
   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS ............................... 8
   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ........13

PART II ......................................................................14
   ITEM 1. LEGAL PROCEEDINGS .................................................14
   ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS .........................14
   ITEM 3. DEFAULTS UPON SENIOR SECURITIES ...................................14
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ...............14
   ITEM 5. OTHER INFORMATION .................................................14
   ITEM 6. EXHIBIT AND REPORT ON FORM 8-K ....................................14
           Exhibit ...........................................................14
           Report on Form 8-K ................................................14



                                       2
<PAGE>


                                ICG FUNDING, LLC

                                 Balance Sheets
              December 31, 1998 and September 30, 1999 (unaudited)

<TABLE>
<CAPTION>
                                                   December 31,          September 30,
                                                       1998                  1999
                                                --------------------   ------------------
                                                             (in thousands)
Assets

Current assets:
<S>                                               <C>                          <C>
   Dividends receivable                           $         875                    914
   Restricted cash                                        8,693                  8,693
                                                --------------------   ------------------

       Total current assets                               9,568                  9,607
                                                --------------------   ------------------

Investment in ICG Preferred Stock                       117,507                122,833
Restricted cash                                           8,219                  2,102
                                                --------------------   ------------------

       Total assets                               $     135,294                134,542
                                                ====================   ==================

Liabilities and Member's Equity

Current liability - dividends payable             $       1,116                  1,116

Due to ICG                                                4,699                  4,699
                                                --------------------   ------------------

       Total liabilities                                  5,815                  5,815
                                                --------------------   ------------------

Redeemable preferred securities ($133.4 million
    liquidation value at September 30, 1999)            128,042                128,331

Member's equity:
    Additional paid-in capital                            3,385                  3,385
    Accumulated deficit                                  (1,948)                (2,989)
                                                --------------------   ------------------
       Total member's equity                              1,437                    396
                                                --------------------   ------------------

Commitments and contingencies

       Total liabilities and member's equity      $     135,294                134,542
                                                ====================   ==================
</TABLE>

                See accompanying notes to financial statements.


                                       3
<PAGE>


                                ICG FUNDING, LLC

                      Statements of Operations (unaudited)
         Three Months and Nine Months Ended September 30, 1998 and 1999

<TABLE>
<CAPTION>
                                                            Three months ended                     Nine months ended
                                                               September 30,                         September 30,
                                                    ------------------------------------  -------------------------------------
                                                          1998               1999               1998               1999
                                                    ------------------ -----------------  ------------------ ------------------
                                                                                  (in thousands)

<S>                                                   <C>                       <C>                <C>                <C>
Interest income                                       $         285                164              1,653                578
Dividend income                                               1,711              1,815              4,233              5,365
                                                    ------------------ -----------------  ------------------ ------------------

     Net income                                               1,996              1,979              5,886              5,943
                                                    ------------------ -----------------  ------------------ ------------------

Preferred dividends on redeemable preferred
    securities, including accretion of offering
    costs                                                    (2,328)            (2,328)            (6,984)            (6,984)
                                                    ------------------ -----------------  ------------------ ------------------

        Net loss available to common member           $        (332)              (349)            (1,098)            (1,041)
                                                    ================== =================  ================== ==================
</TABLE>

                See accompanying notes to financial statements.


                                       4
<PAGE>

                                ICG FUNDING, LLC

                    Statement of Member's Equity (unaudited)
                      Nine Months Ended September 30, 1999


<TABLE>
<CAPTION>

                                                             Additional          Accumulated        Total member's
                                                           paid-in capital         deficit             equity
                                                           ----------------  -------------------  ------------------
                                                                                (in thousands)

<S>                                                           <C>                     <C>               <C>
Balances at January 1, 1999                                   $     3,385             (1,948)            1,437
  Net income                                                            -              5,943             5,943
  Preferred dividends on redeemable preferred
    securities, including accretion of offering costs                   -             (6,984)           (6,984)
                                                           ----------------  -------------------  ------------------
Balances at September 30, 1999                                $     3,385             (2,989)              396
                                                           ================  ===================  ==================
</TABLE>

                See accompanying notes to financial statements.


                                       5
<PAGE>

                                ICG FUNDING, LLC

                      Statements of Cash Flows (unaudited)
                  Nine Months Ended September 30, 1998 and 1999

<TABLE>
<CAPTION>

                                                                                          Nine months ended
                                                                                            September 30,
                                                                             ------------------------------------------
                                                                                    1998                   1999
                                                                             -------------------    -------------------
                                                                                          (in thousands)

Cash flows from operating activities:
<S>                                                                          <C>                                <C>
    Net income                                                               $            5,886                  5,943
    Adjustment to reconcile net income to net cash provided by operating
       activities:
          Non-cash preferred dividends earned on ICG Preferred Stock                     (4,233)                (5,365)
                                                                             -------------------    -------------------

                 Net cash provided by operating activities                                1,653                    578
                                                                             -------------------    -------------------

Cash flows from investing activities:
    Proceeds from sale of short-term investments available for sale                     108,310                      -
    Purchase of ICG Preferred Stock                                                    (112,413)                     -
    Decrease in restricted cash                                                           5,760                  6,117
                                                                             -------------------    -------------------

       Net cash provided by investing activities                                          1,657                  6,117
                                                                             -------------------    -------------------

Cash flows from financing activities:
    Proceeds from sale of ICG Common Stock                                                3,385                      -
    Payment of preferred dividends on redeemable preferred securities                    (6,695)                (6,695)
                                                                             -------------------    -------------------

          Net cash used in financing activities                                          (3,310)                (6,695)
                                                                             -------------------    -------------------

Cash and cash equivalents at December 31, 1998 and
    September 30, 1999                                                       $                -                      -
                                                                             ===================    ===================
</TABLE>

                See accompanying notes to financial statements.


                                       6
<PAGE>


                                ICG FUNDING, LLC

                          Notes to Financial Statements
              December 31, 1998 and September 30, 1999 (unaudited)


 (1)     Organization and Nature of Business

         ICG Funding, LLC, a Delaware limited liability company (the "Company"),
         was formed on September 17, 1997 as a special purpose limited liability
         company existing for the exclusive  purposes of: (i) issuing common and
         preferred interests in the Company;  (ii) using at least 85% of the net
         proceeds of such issuances and related capital  contributions (the "Net
         Proceeds") to purchase shares of preferred stock of ICG Communications,
         Inc. ("ICG") ("ICG Preferred Stock") in a private placement;  and (iii)
         investing a portion of the  remaining  Net  Proceeds  in U.S.  Treasury
         securities,  to be held in escrow in an amount  sufficient  to fund the
         cash  payments  of  the  first  thirteen  quarterly  dividends  on  the
         Company's preferred interests (the "Redeemable Preferred  Securities").
         Unless  previously  dissolved,  the Company's  term will continue until
         December 31, 2050.

         ICG is the sole common member of the Company.  The business and affairs
         of the Company are  conducted by ICG and ICG pays all of the  Company's
         administrative expenses, which are insignificant.

 (2)     Significant Accounting Policies

         (a)   Basis of Presentation

               These financial statements should be read in conjunction with the
               Company's  Annual Report on Form 10-K for the year ended December
               31, 1998, as certain  information and note  disclosures  normally
               included in  financial  statements  prepared in  accordance  with
               generally accepted  accounting  principles have been condensed or
               omitted  pursuant  to the rules  and  regulations  of the  United
               States Securities and Exchange Commission.  The interim financial
               statements  reflect all adjustments  which are, in the opinion of
               management,  necessary  for  a  fair  presentation  of  financial
               position,  results of operations and cash flows as of and for the
               interim  periods  presented.  Such  adjustments  are of a  normal
               recurring  nature.  Operating  results for the nine months  ended
               September 30, 1999 are not necessarily  indicative of the results
               that may be expected for the year ending December 31, 1999.

         (b)   Net Loss Per Share

               The Company's one issued and outstanding common limited liability
               company  security  is owned  directly  by ICG.  Accordingly,  the
               Company  does not  present  net loss per  share in its  financial
               statements as such disclosure is not considered to be meaningful.


                                       7
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         The following  discussion includes certain  forward-looking  statements
which are affected by important  factors  including,  but not limited to, market
conditions affecting the price of ICG Common Stock, redemption of the Redeemable
Preferred  Securities by ICG,  exchange into ICG Common Stock by the  Redeemable
Preferred  Securityholders,  the  declaration  and  payment of  preferred  stock
dividends to the Company by ICG and the ability of ICG to pay the administrative
expenses of the Company,  that could cause actual  results to differ  materially
from the forward-looking  statements.  The results for the three months and nine
months ended  September  30, 1998 and 1999 have been derived from the  Company's
unaudited financial statements included elsewhere herein.

Company Overview and Description of Significant Transactions

         The  Company  was formed on  September  17,  1997 as a special  purpose
limited  liability  company existing for the exclusive  purposes of: (i) issuing
common and  preferred  interests in the Company;  (ii) using at least 85% of the
Net Proceeds of such  issuances and related  capital  contributions  to purchase
shares of preferred stock of ICG ("ICG Preferred Stock") in a private placement;
and (iii)  investing a portion of the  remaining  Net Proceeds in U.S.  Treasury
securities,  to be held in  escrow  in an  amount  sufficient  to fund  the cash
payments of the first thirteen quarterly  dividends on the Company's  Redeemable
Preferred Securities.

         On  September 24 and October 3, 1997,  the Company  completed a private
placement of 6 3/4% Exchangeable  Limited Liability Company Preferred Securities
Mandatorily  Redeemable 2009 (the "Redeemable  Preferred  Securities") for gross
proceeds of $132.25  million.  Net proceeds  from the private  placement,  after
offering costs of approximately $4.7 million advanced by ICG, were approximately
$127.6 million.  Restricted cash at September 30, 1999 of $10.8 million consists
of the remaining  proceeds from the private  placement  which are designated for
the payment of cash dividends on the  Redeemable  Preferred  Securities  through
November 15, 2000.

         The Redeemable Preferred  Securities consist of 2,645,000  exchangeable
preferred  securities of the Company that bear a cumulative dividend at the rate
of 6 3/4% per annum. The dividend is paid quarterly in arrears each February 15,
May 15, August 15 and November 15, and commenced November 15, 1997. The dividend
is payable in cash through November 15, 2000 and, thereafter,  in cash or shares
of common stock of ICG, $0.01 par value ("ICG Common  Stock"),  at the option of
the Company. The Redeemable Preferred Securities are exchangeable, at the option
of the holder,  at any time prior to November 15, 2009 into shares of ICG Common
Stock at a rate of 2.0812 shares of ICG Common Stock per preferred security,  or
$24.025 per share, subject to adjustment. The Company may, at its option, redeem
the Redeemable  Preferred  Securities at any time on or after November 18, 2000.
Prior to that time, the Company may redeem the Redeemable  Preferred  Securities
if the current market value of ICG Common Stock equals or exceeds,  for at least
20 days of any  consecutive  30-day trading  period,  160% of the exchange price
prior to November 15, 1999,  and 150% of the  exchange  price from  November 16,
1999 through November 15, 2000. The Redeemable  Preferred Securities are subject
to mandatory redemption on November 15, 2009.

                                       8
<PAGE>

         On February 13, 1998, ICG made a contribution  of 126,750 shares of ICG
Common  Stock to the  Company.  Immediately  thereafter,  the  Company  sold the
contributed shares to unrelated third parties for proceeds of approximately $3.4
million.  The  Company  recorded  the  contribution  of the ICG Common  Stock as
additional paid-in capital at the then fair market value and,  consequently,  no
gain or loss was recorded by the Company on the subsequent sale of those shares.

         Also,  on February 13, 1998,  the Company used the  remaining  proceeds
from the private placement of the Redeemable  Preferred  Securities,  which were
not restricted for the payment of cash  dividends,  along with the proceeds from
the sale of the  contributed ICG Common Stock to purchase  approximately  $112.4
million of ICG Preferred  Stock.  The ICG Preferred  Stock pays  dividends  each
February  15, May 15,  August 15 and  November  15 in  additional  shares of ICG
Preferred  Stock  through  November 15, 2000.  Subsequent  to November 15, 2000,
dividends on the ICG Preferred Stock are payable in cash or shares of ICG Common
Stock,  at the option of ICG. The ICG Preferred  Stock is  exchangeable,  at the
option of the Company, at any time prior to November 15, 2009 into shares of ICG
Common Stock at an exchange  rate based on the exchange  rate of the  Redeemable
Preferred Securities. The ICG Preferred Stock is subject to mandatory redemption
on November 15, 2009.

Results of Operations

         The following table provides the components of the Company's net income
and net loss available to common member for each of the periods presented.

<TABLE>
<CAPTION>

                                                            Three months ended                Nine months ended
                                                              September 30,                     September 30,
                                                       ---------------------------      -----------------------------
                                                           1998            1999             1998              1999
                                                       -----------     -----------      -----------       -----------
                                                                              (in thousands)
Statement of Operations Data:
<S>                                                    <C>                 <C>              <C>                 <C>
Interest income                                        $      285             164            1,653               578
Dividend income                                             1,711           1,815            4,233             5,365
                                                       -----------     -----------      -----------       -----------
     Net income                                             1,996           1,979            5,886             5,943
                                                       -----------     -----------      -----------       -----------
Preferred dividends on redeemable preferred
  securities, including accretion of offering costs        (2,328)         (2,328)          (6,984)           (6,984)
                                                       -----------     -----------      -----------       -----------

     Net loss available to common member               $     (332)           (349)          (1,098)           (1,041)
                                                       ===========     ===========      ===========       ===========
Other Data:
Net cash provided by operating activities              $      285             164            1,653               578
Net cash provided by investing activities                   1,946           2,067            1,657             6,117
Net cash used in financing activities                      (2,231)         (2,231)          (3,310)           (6,695)
</TABLE>


                                       9
<PAGE>

Three Months Ended  September 30, 1999 Compared To Three Months Ended  September
30, 1998

         Interest  income.  Interest income of $0.3 million and $0.2 million for
the three months ended  September 30, 1998 and 1999,  respectively,  consists of
income  earned on invested  cash  proceeds  from the issuance of the  Redeemable
Preferred  Securities  in  September  and  October  1997.  Interest  income  has
decreased and will continue to decrease each period through November 15, 2000 as
restricted cash balances  invested in U.S. Treasury  securities  decrease due to
quarterly cash dividend  payments on the  Redeemable  Preferred  Securities.  On
November 15, 2000, the Company's restricted cash balances will be depleted.

         Dividend  income.  Dividend income of $1.7 million and $1.8 million for
the three months ended  September 30, 1998 and 1999,  respectively,  consists of
preferred dividends earned on the ICG Preferred Stock, which dividends were paid
with  additional  shares of ICG Preferred  Stock.  The ICG  Preferred  Stock was
initially  purchased by the Company on February 13,  1998.  Dividend  income has
increased  and will  continue to increase  as the  Company  receives  additional
shares of ICG Preferred Stock as dividend payments on the ICG Preferred Stock.

         Net income. The Company's net income of $2.0 million for both the three
months  ended  September  30,  1998 and 1999  consists  of  interest  income and
dividend income, as noted above.

         Preferred  dividends  on  redeemable  preferred  securities,  including
accretion  of  offering  costs.  Preferred  dividends  on  redeemable  preferred
securities,  including accretion of offering costs was $2.3 million for both the
three months ended September 30, 1998 and 1999 and includes  approximately  $2.2
million of preferred  security  dividends  paid and accrued during both periods,
and the accretion of offering costs from the private placement of the Redeemable
Preferred Securities of approximately $0.1 million for both periods.

         Net loss  available  to common  member.  Net loss  available  to common
member of $0.3 million for both the three months  ended  September  30, 1998 and
1999 is a result of preferred  dividends  on  redeemable  preferred  securities,
offset by net income, as noted above.

Nine Months Ended September 30, 1999 Compared To Nine Months Ended September 30,
1998

         Interest  income.  Interest income of $1.7 million and $0.6 million for
the nine months ended  September  30, 1998 and 1999,  respectively,  consists of
income  earned on invested  cash  proceeds  from the issuance of the  Redeemable
Preferred  Securities  in  September  and  October  1997.  Interest  income  has
decreased and will continue to decrease each period through November 15, 2000 as
restricted cash balances  invested in U.S. Treasury  securities  decrease due to
quarterly cash dividend payments on the Redeemable Preferred Securities.

         Dividend  income.  Dividend income of $4.2 million and $5.4 million for
the nine months ended  September  30, 1998 and 1999,  respectively,  consists of
preferred dividends earned on the ICG Preferred Stock, which dividends were paid
with additional shares of ICG Preferred Stock. Dividend income has increased and
will  continue  to increase as the  Company  receives  additional  shares of ICG
Preferred Stock as dividend payments on the ICG Preferred Stock.

                                       10
<PAGE>

         Net income.  The Company's net income of $5.9 million for both the nine
months  ended  September  30,  1998 and 1999  consists  of  interest  income and
dividend income, as noted above.

         Preferred  dividends  on  redeemable  preferred  securities,  including
accretion  of  offering  costs.  Preferred  dividends  on  redeemable  preferred
securities,  including accretion of offering costs was $7.0 million for both the
nine months ended September 30, 1998 and 1999, and includes  approximately  $6.7
million of preferred security dividends paid and accrued during both periods and
the  accretion of offering  costs from the private  placement of the  Redeemable
Preferred Securities of approximately $0.3 million for both periods.

         Net loss  available  to common  member.  Net loss  available  to common
member of $1.1 million and $1.0 million for the nine months ended  September 30,
1998 and 1999,  respectively,  is a result of preferred  dividends on redeemable
preferred securities, offset by net income, as noted above.

Liquidity and Capital Resources

         The Company's operations consist entirely of effecting the transactions
 required  by the  terms  of  the  Redeemable  Preferred  Securities  issued  in
 September and October 1997. To date, the Company's  operations have been funded
 through the proceeds from the issuance of the Redeemable  Preferred  Securities
 and the sale of ICG Common Stock which was  contributed  to the Company by ICG.
 As of  September  30,  1999,  the  Company has assets of  approximately  $134.5
 million  which consist of the  Company's  investment in ICG Preferred  Stock of
 approximately  $122.8  million,  restricted  cash  invested  in  U.S.  Treasury
 securities of  approximately  $10.8  million for the payment of cash  dividends
 through  November  15,  2000  on  the  Redeemable  Preferred  Securities  and a
 receivable  for  preferred  dividends  earned  on the ICG  Preferred  Stock  of
 approximately  $0.9 million.  The Company's  liabilities  at September 30, 1999
 include  approximately  $1.1  million  in  preferred  dividends  accrued on the
 Redeemable  Preferred  Securities and approximately $4.7 million due to ICG for
 advances for the offering costs  associated with the issuance of the Redeemable
 Preferred Securities.

         The  Company  is  dependent  upon  ICG to  declare  and  pay  preferred
dividends  on the ICG  Preferred  Stock in order to pay  dividends  on,  and the
redemption  price of, the  Redeemable  Preferred  Securities.  ICG is a Delaware
corporation that files annual, quarterly and current reports with the Securities
and Exchange Commission. Its Commission File Number is 1-11965.

 Net Cash Provided By Operating Activities

         Net cash  provided  by  operating  activities  was  approximately  $1.7
 million and $0.6 million for the nine months ended September 30, 1998 and 1999,
 respectively,  and  consists  of  interest  income  earned on  restricted  cash
 invested in U.S. Treasury securities.

 Net Cash Provided By Investing Activities

          The Company's investing activities provided approximately $1.7 million
 and $6.1  million  for the nine  months  ended  September  30,  1998 and  1999,
 respectively.  Net cash  provided by investing  activities  for the nine months
 ended  September 30, 1998  consists of the purchase of the ICG Preferred  Stock


                                       11
<PAGE>

 for approximately $112.4 million,  offset by the proceeds from the sale of U.S.
 Treasury  securities  of  approximately  $108.3  million  and the  decrease  in
 restricted  cash of  approximately  $5.8  million.  Cash  provided by investing
 activities  for the nine  months  ended  September  30,  1999  consists  of the
 decrease in restricted cash.

 Net Cash Used In Financing Activities

          Financing  activities used approximately $3.3 million and $6.7 million
 for the nine months ended September 30, 1998 and 1999,  respectively.  Net cash
 used in  financing  activities  for the nine months  ended  September  30, 1998
 consists of the proceeds from the sale of the  contributed  ICG Common Stock of
 $3.4 million,  offset by payments of cash dividends on the Redeemable Preferred
 Securities of approximately $6.7 million. Cash used in financing activities for
 the nine months ended September 30, 1999 consists of payments of cash dividends
 on the  Redeemable  Preferred  Securities.  The  Company  expects  cash used in
 financing  activities  in future  periods  to  include  only  payments  of cash
 dividends on, and the redemption price of, the Redeemable Preferred Securities.

Cash Commitments

          The Redeemable  Preferred  Securities require payments of dividends to
 be made in cash and are being paid  currently  through  November 15,  2000.  At
 September 30, 1999, the Company has cash dividend obligations on the Redeemable
 Preferred  Securities  of  approximately  $2.2  million  remaining  in 1999 and
 approximately $8.9 million in 2000. The Redeemable  Preferred Securities have a
 liquidation preference of $50 per security,  plus accrued and unpaid dividends,
 and are mandatorily  redeemable in 2009. The Company's  management  believes it
 has sufficient resources to meet these future cash requirements.

Year 2000 Compliance

         As a wholly owned subsidiary of ICG, the Company's Year 2000 compliance
plan is embedded  within ICG's Year 2000  compliance  plan for its  consolidated
operations.  It is not  practicable  for ICG to  address  the state of Year 2000
readiness,  compliance costs, risks or contingency plans of the Company,  or for
any other legal  entity on a  stand-alone  basis,  as ICG's plan was designed to
resolve Year 2000 compliance issues for all entities combined, which is the most
cost-effective  manner.  Moreover, as a result of the Company's and ICG's shared
management and  administrative  personnel and the Company's  dependence upon the
successful  operations  of ICG in  order  that  ICG's  Board of  Directors  will
continue to declare and pay dividends on the ICG Preferred Stock, evaluating the
Company's  plan  for  Year  2000  compliance  on  a  stand-alone  basis  is  not
meaningful.  ICG is a Delaware  corporation  that files  annual,  quarterly  and
current reports with the Securities and Exchange Commission. Its Commission File
Number is 1-11965.

                                       12
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The  Company's  restricted  cash  balances are invested in fixed income
U.S. Treasury securities with staggered maturities matching the dividend payment
dates of the Redeemable  Preferred  Securities.  Accordingly,  changes in market
interest rates have no effect on the Company's liquidity, financial condition or
results of operations.

         At September 30, 1999,  the Company had $122.8 million of ICG Preferred
Stock,  which is  exchangeable  into shares of ICG Common Stock,  at an exchange
rate based on the exchange rate of the Redeemable  Preferred  Securities.  There
exists no established  public trading  market for the ICG Preferred  Stock.  The
risk of changes in the fair market  value of the  underlying  ICG Common  Stock,
which is listed and trades on the Nasdaq National  Market,  is eliminated by the
adjustable rate of exchange of shares of ICG Preferred  Stock. The ICG Preferred
Stock  pays  dividends  in cash or  additional  shares  of ICG  Preferred  Stock
sufficient  to  meet  the  dividend  requirements  on the  Redeemable  Preferred
Securities.  Although  changes in the fair market value of ICG Common Stock have
no effect on the Company's  financial  condition or results of operations,  such
changes may influence the Company's decision to redeem the Redeemable  Preferred
Securities or a Redeemable Preferred Securityholder's decision to exchange those
securities for ICG Common Stock.


                                       13
<PAGE>


                          PART II


ITEM 1.  LEGAL PROCEEDINGS

            None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

            None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

            None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            Effective July 29, 1999,  ICG, Sole Common Member and Manager of the
Company,  caused the  Company to declare a cash  dividend in the amount of $0.47
per Redeemable  Preferred Security to holders of record at the close of business
on July 29, 1999, which was paid on August 16, 1999.

ITEM 5.  OTHER INFORMATION

            None.

ITEM 6.  EXHIBIT AND REPORT ON FORM 8-K

         (A)      Exhibit.

                  (27)   Financial Data Schedule.

                         27.1:   Financial Data Schedule of ICG Funding, LLC for
                                 the Nine Months Ended September 30, 1999.

         (B)      Report on Form 8-K.

                  (i)    Current Report on Form 8-K dated September 22, 1999 for
                         events   of   September   21,   1999,   regarding   the
                         announcement  by  ICG   Communications,   Inc.  of  the
                         September   16,  1999   arbitration   decision  by  the
                         California  Public  Utilities  Commission  in a  matter
                         between Pacific Bell and MFS/WorldCom.

                                       14
<PAGE>


                                INDEX TO EXHIBITS
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



<PAGE>


                                     EXHIBIT

  27.1: Financial Data Schedule of ICG Funding, LLC for the Nine Months Ended
                              September 30, 1999.



<PAGE>


                                  EXHIBIT 27.1

Financial Data Schedule of ICG Funding, LLC for the Nine Months Ended September
                                   30, 1999.


<PAGE>

                                    SIGNATURE

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on October 25, 1999.

                                 ICG Funding, LLC

                                 By:   ICG Communications, Inc.
                                       Common Member and Manager


                                 By:   /s/ Harry R. Herbst
                                       --------------------------------------
                                       Harry R. Herbst
                                       Executive Vice President and Chief
                                       Financial Officer (Principal Financial
                                       Officer)