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

                                   FORM 10-Q

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

                  For the quarterly period ended March 31, 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
                 (State or other jurisdiction of organization)

                                   84-1434980
                      (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 March 31, 
               1999 (unaudited).. . . . . . . . . . . . . . . . . . . .       3
              Statements of Operations (unaudited) for the Three 
               Months Ended March 31, 1998 and 1999 . . . . . . . . . .       4
              Statement of Member's Equity (unaudited) for the 
               Three Months Ended March 31, 1999. . . . . . . . . . . .       5
              Statements of Cash Flows (unaudited) for the Three
               Months Ended March 31, 1998 and 1999 . . . . . . . . . .       6
              Notes to Financial Statements, December 31, 1998
               and March 31, 1999 (unaudited) . . . . . . . . . . . . .       7
     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . .       9
     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 REPORTS ON FORM 8-K . . . . . . . . . . . . .      14
              Exhibit . . . . . . . . . . . . . . . . . . . . . . . . .      14
              Reports on Form 8-K . . . . . . . . . . . . . . . . . . .      14

                                       2
<PAGE>


                                ICG FUNDING, LLC

                                 Balance Sheets
                December 31, 1998 and March 31, 1999 (unaudited)
<TABLE>
<CAPTION>

                                                    December 31,           March 31,
                                                        1998                  1999
                                                --------------------  -------------------
                                                             (in thousands)
<S>                                                     <C>                    <C>                                                 
Assets

Current assets:
   Dividends receivable                                 $      875                 888
   Restricted cash                                           8,693               8,693
                                                --------------------  -------------------

       Total current assets                                  9,568               9,581
                                                --------------------  -------------------

Investment in ICG Preferred Stock                          117,507             119,256
Restricted cash                                              8,219               6,208
                                                --------------------  -------------------

       Total assets                                     $  135,294             135,045
                                                ====================  ===================

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 March 31, 1999)                                        128,042             128,137

Member's equity:
    Additional paid-in capital (note 3)                      3,385               3,385
    Accumulated deficit                                     (1,948)             (2,292)
                                                --------------------  -------------------
       Total member's equity                                 1,437               1,093
                                                --------------------  -------------------

Commitments and contingencies

       Total liabilities and member's equity            $  135,294             135,045
                                                ====================  ===================
</TABLE>

                 See accompanying notes to financial statements.

                                       3
<PAGE>


                                ICG FUNDING, LLC

                      Statements of Operations (unaudited)
                   Three Months Ended March 31, 1998 and 1999

<TABLE>
<CAPTION>

                                                                                   Three months ended
                                                                                        March 31,
                                                                         ----------------------------------------
                                                                                 1998                1999
                                                                         --------------------- ------------------
                                                                                     (in thousands)
<S>                                                                          <C>                         <C>
Interest income                                                              $      1,056                  221
Dividend income                                                                       837                1,762
                                                                         --------------------- ------------------

      Net income                                                                    1,893                1,983
                                                                         --------------------- ------------------

Preferred dividends on redeemable preferred securities,
    including accretion of offering costs                                          (2,327)              (2,327)
                                                                         --------------------- ------------------

      Net loss available to common member                                   $        (434)                (344)
                                                                         ===================== ==================
</TABLE>

                       See accompanying notes to financial statements.


                                       4
<PAGE>



                                ICG FUNDING, LLC

                    Statement of Member's Equity (unaudited)
                        Three Months Ended March 31, 1999

<TABLE>
<CAPTION>

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

<S>                                                                      <C>                   <C>              <C>  
Balances at December 31, 1998                                            $     3,385           (1,948)          1,437
  Net income                                                                       -            1,983           1,983
  Preferred dividends on redeemable preferred 
    securities, including accretion of offering costs                              -           (2,327)         (2,327)
                                                                      ----------------  -----------------  ----------------

Balances at March 31, 1999                                               $     3,385           (2,292)          1,093
                                                                      ================  =================  ================
</TABLE>

                 See accompanying notes to financial statements.


                                       5
<PAGE>



                                ICG FUNDING, LLC

                      Statements of Cash Flows (unaudited)
                   Three Months Ended March 31, 1998 and 1999

<TABLE>
<CAPTION>

                                                                                       Three months ended
                                                                                            March 31,
                                                                           --------------------------------------------
                                                                                   1998                   1999
                                                                           ---------------------  ---------------------
                                                                                          (in thousands)
<S>                                                                          <C>                                 <C>   
Cash flows from operating activities:
    Net income                                                               $            1,893                  1,983
    Adjustment to reconcile net income to net cash provided by operating
       activities:
          Non-cash preferred dividends earned on ICG Preferred Stock
                                                                                           (837)                (1,762)
                                                                             -------------------    -------------------

                 Net cash provided by operating activities                                1,056                    221
                                                                             -------------------    -------------------

Cash flows from investing activities:
    Proceeds from sale of short-term investments                                        108,310                      -
    Purchase of ICG Preferred Stock                                                    (112,413)                     -
    Decrease in restricted cash                                                           1,894                  2,011
                                                                             -------------------    -------------------

       Net cash (used in) provided by investing activities                               (2,209)                 2,011
                                                                             -------------------    -------------------

Cash flows from financing activities:
    Proceeds from sale of ICG Common Stock                                                3,385                      -
    Payment of preferred dividends on redeemable preferred securities
                                                                                         (2,232)                (2,232)
                                                                             -------------------    -------------------

          Net cash provided by (used in) financing activities                             1,153                 (2,232)
                                                                             -------------------    -------------------
                                                                                                                    
Cash and cash equivalents at December 31, 1998 and March 31, 1999            $                -                      -  
                                                                             ===================    ===================
</TABLE>

                 See accompanying notes to financial statements.


                                       6
<PAGE>



                                ICG FUNDING, LLC

                          Notes to Financial Statements
                December 31, 1998 and March 31, 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 three months ended
               March 31, 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  ended
March 31, 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 March 31, 1999 of $14.9 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,


                                       8
<PAGE>



1999 through November 15, 2000. The Redeemable  Preferred Securities are subject
to mandatory redemption on November 15, 2009.

         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
                                                             March 31,
                                                     --------------------------
                                                         1998          1999
                                                     ------------  ------------
                                                            (in thousands)
<S>                                                    <C>             <C>
Statement of Operations Data:
Interest income                                        $ 1,056           221
Dividend income                                            837         1,762
                                                     ------------  ------------
  Net income                                             1,893         1,983
                                                     ------------  ------------
Preferred dividends on redeemable preferred
 securities, including accretion of offering costs      (2,327)       (2,327)
                                                     ------------  ------------

  Net loss available to common member                  $  (434)         (344)
                                                     ============  ============
Other Data:
Net cash provided by operating activities              $ 1,056           221
Net cash (used in) provided by investing activities     (2,209)        2,011
Net cash provided by (used in) financing activities      1,153        (2,232)
</TABLE>


                                       9
<PAGE>


Three Months Ended March 31, 1999 Compared To Three Months Ended March 31, 1998

         Interest  income.  Interest income of $1.1 million and $0.2 million for
the three months ended March 31, 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 due to the decrease
in average  balances held in short-term  investments as restricted cash balances
are  used to pay cash  dividends  on the  Redeemable  Preferred  Securities.  On
November 15, 2000, the Company's restricted cash balances will be depleted.

         Dividend  income.  Dividend income of $0.8 million and $1.8 million for
the three  months  ended  March 31,  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 $1.9 million and $2.0 million
for the three  months ended March 31, 1998 and 1999,  respectively,  consists of
interest income, net, 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 March 31, 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 $0.4  million and $0.3  million for the three  months  ended March 31,
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 March 31, 1999,  the Company has assets of  approximately  $135.0 million
 which  consist  of  the  Company's   investment  in  ICG  Preferred   Stock  of
 approximately  $119.3  million,  restricted  cash  invested  in  U.S.  Treasury
 securities of  approximately  $14.9  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 March 31, 1999 include
 

                                       10
<PAGE>


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  $1.1
 million and $0.2  million for the three  months  ended March 31, 1998 and 1999,
 respectively,  and  consists  of  interest  income  earned on  restricted  cash
 invested in U.S. Treasury securities.

 Net Cash (Used In) Provided By Investing Activities

          The Company's investing activities used approximately $2.2 million for
 the three months ended March 31, 1998 and provided  approximately  $2.0 million
 for the  three  months  ended  March  31,  1999.  Net  cash  used in  investing
 activities  for the three months ended March 31, 1998  consists of the purchase
 of the ICG Preferred  Stock 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 $1.9 million. Cash
 provided by  investing  activities  for the three  months  ended March 31, 1999
 consists of the decrease in restricted cash of approximately $2.0 million.

 Net Cash Provided By (Used In) Financing Activities

          Financing activities provided approximately $1.2 million for the three
 months ended March 31, 1998 and used  approximately  $2.2 million for the three
 months ended March 31, 1999. Net cash provided by financing  activities for the
 three months ended March 31, 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 $2.2 million.
 Cash used in  financing  activities  for the three  months ended March 31, 1999
 consists of payments of cash dividends on the Redeemable  Preferred  Securities
 of  approximately  $2.2  million.  The Company  expects  cash used by financing
 activities in future years 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
 March 31, 1999,  the Company has cash dividend  obligations  on the  Redeemable
 

                                       11
<PAGE>


 Preferred  Securities  of  approximately  $6.7  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.

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 March 31,  1999,  the  Company had $119.3  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  Security  holder's  decision to exchange
those securities for ICG Common Stock.


                                       12
<PAGE>


                               PART II


ITEM 1.  LEGAL PROCEEDINGS

            None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

            None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES AND USE OF PROCEEDS

            None.

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

            Effective  February 2, 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 February 1, 1999, which was paid on February 15, 1999.

ITEM 5.  OTHER INFORMATION

            None.

ITEM 6.  EXHIBIT AND REPORTS ON FORM 8-K

         (A)      Exhibit.

                  (27)     Financial Data Schedule.

                           27.1:    Financial Data Schedule of ICG Funding, LLC
                                    for the Three Months Ended March 31, 1999.

         (B)      Reports on Form 8-K.

                  (i)      Current  Report on Form 8-K dated  February 26, 1999,
                           regarding the announcement of earnings information
                           and results of operations for the quarter and year
                           ended December 31, 1998 of ICG Communications, Inc.

                  (ii)     Current  Report  on Form 8-K  dated  March  4,  1999,
                           regarding the disposition of the operations of NETCOM
                           On-Line Communication Services, Inc. by ICG Services,
                           Inc., including pro forma financial information.


                                       13
<PAGE>


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

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                               EXHIBIT


27.1:         Financial Data Schedule of ICG Funding, LLC for the
              Three Months Ended March 31, 1999.



                                       



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                              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 May 6, 1999.

                                ICG Funding, LLC

                                By: ICG Communications, Inc.
                                Common Member and Manager


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