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 March 31, 2000

                                       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                (I.R.S. Employer Identification No.)
of organization)

                            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, 1999 and March 31, 2000
                  (unaudited) .................................................3
                Statements of Operations  for the Three Months Ended March
                  31, 1999 and 2000 (unaudited) ...............................4
                Statement of Member's Equity for the Three Months Ended
                  March 31, 2000 (unaudited) ..................................5
                Statements of Cash Flows for the Three Months Ended March
                  31, 1999 and 2000 (unaudited) ...............................6
                Notes to Financial Statements (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  ..12

PART II  .....................................................................13
        ITEM 1. LEGAL PROCEEDINGS  ...........................................13
        ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS  ...................13
        ITEM 3. DEFAULTS UPON SENIOR SECURITIES  .............................13
        ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  .........13
        ITEM 5. OTHER INFORMATION  ...........................................13
        ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K  .............................13
                Exhibit  .....................................................13
                Reports on Form 8-K ..........................................13



                                       2
<PAGE>


                                ICG FUNDING, LLC

                                 Balance Sheets
                December 31, 1999 and March 31, 2000 (unaudited)


                                                   December 31,       March 31,
                                                       1999             2000
                                                  -------------     ------------
                                                           (in thousands)
Assets

Current assets:
  Dividends receivable from ICG                   $       927             942
  Restricted cash                                       8,697           6,568
                                                  -------------     ------------

      Total current assets                              9,624           7,510
                                                  -------------     ------------

Investment in ICG Preferred Stock                     124,661         126,516
                                                  -------------     ------------

      Total assets                                $   134,285         134,026
                                                  =============     ============

Liabilities and Member's Equity (Deficit)

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 December
  31, 1999 and March 31, 2000)                        128,428         128,524

Member's equity (deficit):
  Additional paid-in capital                            3,385           3,385
  Accumulated deficit                                  (3,343)         (3,698)
                                                  -------------     ------------
      Total member's equity (deficit)                      42            (313)
                                                  -------------     ------------

Commitments and contingencies

      Total liabilities and member's
         equity (deficit)                         $   134,285         134,026
                                                  =============     ============

                 See accompanying notes to financial statements.



                                       3
<PAGE>


                                ICG FUNDING, LLC

                            Statements of Operations
             Three Months Ended March 31, 1999 and 2000 (unaudited)


                                                       Three months ended
                                                              March 31,
                                                    ----------------------------
                                                        1999           2000
                                                    -------------  -------------
                                                          (in thousands)

Interest income                                     $     221            103
Dividend income                                         1,762          1,869
                                                    -------------  -------------

     Net income                                         1,983          1,972
                                                    -------------  -------------
Preferred dividends on redeemable
   preferred securities, including
   accretion of offering costs                         (2,327)        (2,327)
                                                    -------------  -------------

      Net loss available to common member           $    (344)          (355)
                                                    =============  =============

                 See accompanying notes to financial statements.




                                       4
<PAGE>


                                ICG FUNDING, LLC

                     Statement of Member's Equity (Deficit)
                  Three Months Ended March 31, 2000 (unaudited)

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

Balances at January 1, 2000          $    3,385        (3,343)            42
  Net income                                  -         1,972          1,972
  Preferred dividends on
    redeemable preferred
    securities, including
    accretion of offering costs               -        (2,327)        (2,327)
                                     ------------  --------------   ------------

Balances at March 31, 2000           $    3,385        (3,698)          (313)
                                     ============  ==============   ============

                 See accompanying notes to financial statements.



                                       5
<PAGE>


                                ICG FUNDING, LLC

                            Statements of Cash Flows
             Three Months Ended March 31, 1999 and 2000 (unaudited)


                                                         Three months ended
                                                             March 31,
                                                    ----------------------------
                                                         1999           2000
                                                    -------------  -------------
                                                           (in thousands)

Cash flows from operating activities:
  Net income                                        $   1,983          1,972
  Adjustment to reconcile net income to
     net cash provided by operating activities:
        Non-cash preferred dividends earned on
           ICG Preferred Stock                         (1,762)        (1,869)
                                                    -------------  -------------

              Net cash provided by operating
                activities                                221            103
                                                    -------------  -------------

Cash flows from investing activities:
  Decrease in restricted cash                           2,011          2,129
                                                    -------------  -------------

    Net cash provided by investing activities           2,011          2,129
                                                    -------------  -------------

Cash flows from financing activities:
  Payment of preferred dividends on redeemable
     preferred securities                              (2,232)        (2,232)
                                                    -------------  -------------

        Net cash used in financing activities          (2,232)        (2,232)
                                                    -------------  -------------

Cash and cash equivalents at end of period          $       -              -
                                                    =============  =============

                 See accompanying notes to financial statements.



                                       6
<PAGE>


                                ICG FUNDING, LLC

                          Notes to Financial Statements
                December 31, 1999 and March 31, 2000 (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,
            1999, 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, 2000 are not
            necessarily  indicative  of the results that may be expected for the
            year ending December 31, 2000.

        (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 and
information  that is based on the beliefs of management  as well as  assumptions
made by and information  currently  available to the Company.  When used in this
document, the words "anticipate", "believe", "estimate" and "expect" and similar
expressions,  as they relate to the Company or its  management,  are intended to
identify forward-looking  statements.  Such statements reflect the current views
of the Company with respect to future  events and are subject to certain  risks,
uncertainties   and   assumptions.   Should  one  or  more  of  these  risks  or
uncertainties  materialize,  or should  underlying  assumptions prove incorrect,
actual results may vary materially from those described in this document.  These
forward-looking statements 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, 1999 and 2000 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;
(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;  and (iv) purchasing U.S. Treasury Securities pending the
purchase of shares of ICG Preferred Stock.

        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, 2000 of $6.6 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


                                       8
<PAGE>


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 the exchange
price by 150%, for at least 20 days of any  consecutive  30-day trading  period,
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 which 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.

                                       9
<PAGE>


                                                       Three months ended
                                                              March 31,
                                                    ----------------------------
                                                        1999           2000
                                                    -------------  -------------
                                                          (in thousands)

Statement of Operations Data:
Interest income                                     $     221            103
Dividend income                                         1,762          1,869
                                                    -------------  -------------
  Net income                                            1,983          1,972
                                                    -------------  -------------
Preferred dividends on redeemable
   preferred securities, including
   accretion of offering costs                         (2,327)        (2,327)
                                                    -------------  -------------

      Net loss available to common member           $    (344)          (355)
                                                    =============  =============

Other Data:
Net cash provided by operating activities           $     221            103
Net cash (used in) provided by ivesting
   activities                                           2,011          2,129
Net cash provided by (used in) financing
   activities                                          (2,232)        (2,232)

Three Months Ended March 31, 2000 Compared To Three Months Ended March 31, 1999

     Interest  income.  Interest income of $0.2 million and $0.1 million for the
three  months  ended March 31, 1999 and 2000,  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 $1.8 million and $1.9 million for the
three months ended March 31, 1999 and 2000, respectively,  consists of preferred
dividends  earned on the ICG Preferred  Stock,  which  dividends  were paid with
additional shares of ICG Preferred Stock.

     Net income.  The  Company's  net income was $2.0 million for both the three
months  ended  March 31,  1999 and 2000 and  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  March 31,  1999 and 2000,  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  and $0.4  million for the three  months  ended March 31, 1999 and
2000,  respectively,  is a result of preferred dividends on redeemable preferred


                                       10
<PAGE>


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,
2000,  the Company has assets of  approximately  $134.0 million which consist of
the Company's investment in ICG Preferred Stock of approximately $126.5 million,
restricted  cash  invested in U.S.  Treasury  securities of  approximately  $6.6
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, 2000 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  $0.2 million
and  $0.1  million  for  the  three  months  ended  March  31,  1999  and  2000,
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 $2.0 million and
$2.1 million for the three  months ended March 31, 1999 and 2000,  respectively.
Cash provided by investing  activities for the three months ended March 31, 1999
and 2000 consists of the decrease in restricted cash.

Net Cash Used In Financing Activities

     Financing  activities  used  approximately  $2.2 million for both the three
months ended March 31, 1999 and 2000. Cash used in financing activities for both
periods  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.



                                       11
<PAGE>


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, 2000, the Company has cash dividend  obligations on the Redeemable Preferred
Securities  of  approximately  $6.7 million  remaining 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  provided that ICG's board of directors  continues to declare
and pay dividends on the ICG Preferred Stock.

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, 2000, the Company had $126.5  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.


                                       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 1, 2000, ICG, Sole Common Member and Manager of the
Company, caused  the Company to declare  a cash dividend in  the amount of $0.84
per Redeemable Preferred  Security to holders of record at the close of business
on February 1, 2000, which was paid on February 15, 2000.

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, 2000.

      (B)  Reports on Form 8-K.

           (i)   Current  Report on Form 8-K dated March 7, 2000,  regarding the
                 announcement of earnings  information and results of operations
                 for  the  quarter and  year  ended  December  31, 1999  of  ICG
                 Communications, Inc.

           (ii)  Current Report  on Form 8-K dated March 8, 2000,  regarding the
                 announcement  of  ICG's definitive preferred  stock and warrant
                 purchase  agreement with  HMTF Bridge  ICG, LLC,  Liberty Media
                 Corporation, and Gleacher/ICG Investors LLC.


                                       13
<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 Three Months Ended
         March 31, 2000.

<PAGE>



                                  EXHIBIT 27.1

     Financial Data Schedule of ICG Funding, LLC for the Three Months Ended
                              March 31, 2000.


<PAGE>


                                  EXHIBIT-27.1
                         Summary Financial Information


<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 May 3, 2000.


                                               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)

                                               Date:  May 3, 2000