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 June 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 June 30, 1999
                (unaudited).................................................   3
              Statements of Operations (unaudited) for the Three Months and
                Six Months Ended June 30, 1998 and 1999 ....................   4
              Statement of Member's Equity (unaudited) for the Six Months
                Ended June 30, 1999 ........................................   5
              Statements of Cash Flows (unaudited) for the Six Months Ended
                June 30, 1998 and 1999 .....................................   6
              Notes to Financial Statements, December 31, 1998 and June 30,
                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 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 June 30, 1999 (unaudited)

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

Current assets:
<S>                                                  <C>                          <C>
   Dividends receivable                              $         875                    900
   Restricted cash                                           8,693                  8,693
                                                   --------------------   ------------------

       Total current assets                                  9,568                  9,593
                                                   --------------------   ------------------

Investment in ICG Preferred Stock                          117,507                121,031
Restricted cash                                              8,219                  4,169
                                                   --------------------   ------------------

       Total assets                                  $     135,294                134,793
                                                   ====================   ==================

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 June 30, 1999)                      128,042                128,233

Member's equity:
    Additional paid-in capital                               3,385                  3,385
    Accumulated deficit                                     (1,948)                (2,640)
                                                   --------------------   ------------------
       Total member's equity                                 1,437                    745
                                                   --------------------   ------------------

Commitments and contingencies

       Total liabilities and member's equity         $     135,294                134,793
                                                   ====================   ==================
</TABLE>

                See accompanying notes to financial statements.

                                       3
<PAGE>


                                ICG FUNDING, LLC

                      Statements of Operations (unaudited)
            Three Months and Six Months Ended June 30, 1998 and 1999

<TABLE>
<CAPTION>

                                                            Three months ended                      Six months ended
                                                                 June 30,                               June 30,
                                                    ------------------------------------  -------------------------------------
                                                          1998               1999               1998               1999
                                                    ------------------ -----------------  ------------------ ------------------
                                                                                  (in thousands)

<S>                                                   <C>                       <C>                <C>                <C>
Interest income                                       $         312                193              1,368                414
Dividend income                                               1,685              1,788              2,522              3,550
                                                    ------------------ -----------------  ------------------ ------------------

     Net income                                               1,997              1,981              3,890              3,964
                                                    ------------------ -----------------  ------------------ ------------------

Preferred dividends on redeemable preferred
    securities, including accretion of offering
    costs                                                    (2,329)            (2,329)            (4,656)            (4,656)
                                                    ------------------ -----------------  ------------------ ------------------

    Net loss available to common member               $        (332)              (348)              (766)              (692)
                                                    ================== =================  ================== ==================
</TABLE>

                See accompanying notes to financial statements.


                                       4
<PAGE>


                                ICG FUNDING, LLC

                    Statement of Member's Equity (unaudited)
                         Six Months Ended June 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                                                          -              3,964             3,964
  Preferred dividends on redeemable preferred
    securities, including accretion of offering costs                 -             (4,656)           (4,656)
                                                         ----------------  -------------------  ------------------
Balances at June 30, 1999                                   $     3,385             (2,640)              745
                                                         ================  ===================  ==================
</TABLE>

                See accompanying notes to financial statements.


                                       5
<PAGE>


                                ICG FUNDING, LLC

                      Statements of Cash Flows (unaudited)
                     Six Months Ended June 30, 1998 and 1999

<TABLE>
<CAPTION>

                                                                                        Six months ended
                                                                                            June 30,
                                                                           --------------------------------------------
                                                                                   1998                   1999
                                                                           ---------------------  ---------------------
                                                                                          (in thousands)

Cash flows from operating activities:
<S>                                                                          <C>                                <C>
    Net income                                                               $            3,890                  3,964
    Adjustment to reconcile net income to net cash provided by operating
       activities:
          Non-cash preferred dividends earned on ICG Preferred Stock                     (2,522)                (3,550)
                                                                             -------------------    -------------------

                 Net cash provided by operating activities                                1,368                    414
                                                                             -------------------    -------------------

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                                                           3,814                  4,050
                                                                             -------------------    -------------------

       Net cash (used in) provided by investing activities                                 (289)                 4,050
                                                                             -------------------    -------------------

Cash flows from financing activities:
    Proceeds from sale of ICG Common Stock                                                3,385                      -
    Payment of preferred dividends on redeemable preferred securities                    (4,464)                (4,464)
                                                                             -------------------    -------------------

          Net cash used in financing activities                                          (1,079)                (4,464)
                                                                             -------------------    -------------------

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

                See accompanying notes to financial statements.


                                       6
<PAGE>


                                ICG FUNDING, LLC

                          Notes to Financial Statements
                 December 31, 1998 and June 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 six months ended June
               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 six
months  ended  June 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 June 30, 1999 of $12.9 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,
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                  Six months ended
                                                                 June 30,                           June 30,
                                                       ---------------------------      -----------------------------
                                                           1998            1999             1998              1999
                                                       -----------     -----------      -----------       -----------
Statement of Operations Data:
<S>                                                    <C>                 <C>              <C>                 <C>
Interest income                                        $      312             193            1,368               414
Dividend income                                             1,685           1,788            2,522             3,550
                                                       -----------     -----------      -----------       -----------
     Net income                                             1,997           1,981            3,890             3,964
                                                       -----------     -----------      -----------       -----------
Preferred dividends on redeemable preferred
  securities, including accretion of offering costs        (2,329)         (2,329)          (4,656)           (4,656)
                                                       -----------     -----------      -----------       -----------

     Net loss available to common member               $     (332)           (348)            (766)             (692)
                                                       ===========     ===========      ===========       ===========
Other Data:
Net cash provided by operating activities              $      312             193            1,368               414
Net cash provided by (used in)investing activities          1,920           2,039             (289)            4,050
Net cash used in financing activities                      (2,232)         (2,232)          (1,079)           (4,464)
</TABLE>

                                       9
<PAGE>
Three Months Ended June 30, 1999 Compared To Three Months Ended June 30, 1998

     Interest  income.  Interest income of $0.3 million and $0.2 million for the
three  months  ended June 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 June 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 June 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  June 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 June 30, 1998 and 1999 is a result
of preferred dividends on redeemable preferred securities, offset by net income,
as noted above.

Six  Months Ended June 30, 1999 Compared To Six Months Ended June 30, 1998

     Interest  income.  Interest income of $1.4 million and $0.4 million for the
six months ended June 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 $2.5 million and $3.6 million for the
six months  ended June 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.

     Net income.  The  Company's net income of $3.9 million and $4.0 million for
the six months ended June 30, 1998 and 1999, respectively,  consists of interest
income and dividend income, as noted above.

                                       10
<PAGE>

     Preferred dividends on redeemable preferred securities, including accretion
of offering  costs.  Preferred  dividends on  redeemable  preferred  securities,
including  accretion of offering  costs was $4.7 million for both the six months
ended  June 30,  1998 and 1999,  and  includes  approximately  $4.4  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
$0.8  million and $0.7  million for the six months ended June 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 June 30,
1999,  the Company has assets of  approximately  $134.8 million which consist of
the Company's investment in ICG Preferred Stock of approximately $121.0 million,
restricted  cash invested in U.S.  Treasury  securities of  approximately  $12.9
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 June 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  $1.4 million
and $0.4 million for the six months ended June 30, 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 $0.3 million for the
six months ended June 30, 1998 and provided  approximately  $4.1 million for the
six months ended June 30, 1999.  Net cash used in investing  activities  for the
six months ended June 30, 1998  consists of  the  purchase of  the ICG Preferred


                                       11
<PAGE>


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  $3.8  million.  Cash  provided by  investing
activities  for the six months  ended June 30, 1999  consists of the decrease in
restricted cash of approximately $4.1 million.

 Net Cash Used In Financing Activities

     Financing  activities used  approximately $1.1 million and $4.5 million for
the six months  ended  June 30,  1998 and 1999,  respectively.  Net cash used in
financing  activities  for the six months  ended June 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 $4.5 million. Cash used in financing activities for the six months
ended June 30, 1999  consists of payments of cash  dividends  on the  Redeemable
Preferred  Securities of  approximately  $4.5 million.  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 June 30,
1999,  the Company has cash dividend  obligations  on the  Redeemable  Preferred
Securities of  approximately  $4.5 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 June 30, 1999,  the Company had $121.0  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.


                                       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 AND USE OF PROCEEDS

         None.

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

         Effective  May 6, 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 May 6, 1999, which was paid on May 17, 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 Six Months Ended June 30, 1999.

         (B)      Report on Form 8-K.

                  (i)      Current  Report  on Form 8-K dated  April  30,  1999,
                           regarding the  announcement  of earnings  information
                           and results of operations for the quarter ended March
                           31, 1999 of ICG Communications, Inc.


                                       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 Six Months Ended
          June 30, 1999.


<PAGE>
                                  EXHIBIT 27.1

 Financial Data Schedule of ICG Funding, LLC for the Six Months Ended June 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 July 19, 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)