<PAGE>   1
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------

                                    FORM 10-Q

(MARK ONE)

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


                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                                       OR

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

                  FOR THE TRANSITION PERIOD FROM _____TO _____

                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                              --------------------

            DELAWARE                                             91-1921377
  (STATE OR OTHER JURISDICTION                                (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION)                            IDENTIFICATION NO.)

                510 L STREET, SUITE 500, ANCHORAGE, ALASKA 99501
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (907) 297-3000

--------------------------------------------------------------------------------

FORMER NAME, FORMER ADDRESS AND FORMER THREE MONTHS, IF CHANGED SINCE LAST
REPORT: Not Applicable


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
            ----------          ----------

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS AND
REPORTS REQUIRED TO BE FILED BY SECTIONS 12, 13, OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT.

        YES                  NO
            ----------          -----------

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

            INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE
                   ISSUER'S CLASSES OF COMMON STOCK, AS OF THE
                             LAST PRACTICABLE DATE.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

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<PAGE>   2
                                TABLE OF CONTENTS

                                                                           PAGE
PART I.    FINANCIAL INFORMATION                                          NUMBER

Item 1.    Financial Statements:

           Consolidated Balance Sheets (unaudited)
           As of March 31, 2001 and December 31, 2000..........................3

           Consolidated Statements of Operations (unaudited)
           For the Three Months Ended March 31, 2001 and 2000..................4

           Consolidated Statements of Cash Flows (unaudited)
           For the Three Months Ended March 31, 2001 and 2000..................5

           Notes to Consolidated Financial Statements (unaudited)..............6

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations..............................................11

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.........19

PART II.   OTHER INFORMATION

Item 1     Legal Proceedings..................................................20

Item 2     Changes in Securities and Use of Proceeds..........................21

Item 3     Defaults upon Senior Securities....................................21

Item 4     Submission of Matters to a Vote of Security Holders................21

Item 5     Other Information..................................................21

Item 6.    Exhibits and Reports on Form 8-K...................................21

SIGNATURE.....................................................................22


                                       2
<PAGE>   3
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEETS
               (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                           MARCH 31,    DECEMBER 31,
                                   ASSETS                                    2001           2000
                                                                           --------     ------------
<S>                                                                        <C>          <C>
Current assets:
    Cash and cash equivalents                                              $ 35,787       $ 61,896
    Accounts receivable-trade, net of allowance of $10,700 and $9,831        46,205         46,337
    Accounts receivable-affiliates                                            1,575          1,516
    Materials and supplies                                                   10,432         11,103
    Prepayments and other current assets                                      3,961          4,304
                                                                          ---------      ---------
       Total current assets                                                  97,960        125,156


Property, plant and equipment                                               995,516        953,557
Less:  accumulated depreciation                                             507,799        492,822
                                                                          ---------      ---------
    Property, plant and equipment, net                                      487,717        460,735

Goodwill, net of accumulated amortization of $13,684 and $11,753            256,301        258,236
Investments                                                                       -          1,370
Other assets                                                                 62,479         63,809
                                                                          ---------      ---------
Total assets                                                              $ 904,457      $ 909,306
                                                                          =========      =========

                    LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
    Current portion of long-term obligations                                  1,564          2,870
    Accounts payable-trade                                                   26,917         31,865
    Accounts payable-affiliates                                               1,427          1,145
    Advance billings and customer deposits                                    8,858          8,689
    Accrued and other current liabilities                                    30,187         25,860
                                                                          ---------      ---------
       Total current liabilities                                             68,953         70,429

Long-term obligations, net of current portion                               596,408        596,772
Unamortized investment tax credits                                              148            197
Other deferred credits and long-term liabilities                             14,926         10,755
Commitments and contingencies                                                     -              -

Stockholder's equity:
    Common stock, $.01 par value; 1,000 shares authorized, and
       1 share issued and outstanding                                             -              -
    Contributed capital                                                     300,777        287,242
    Accumulated deficit                                                     (73,846)       (56,089)
    Accumulated other comprehensive loss                                     (2,909)            -
                                                                          ---------      ---------
       Total stockholder's equity                                           224,022        231,153
                                                                          ---------      ---------
Total liabilities and stockholder's equity                                $ 904,457      $ 909,306
                                                                          =========      =========
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       3
<PAGE>   4
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            (UNAUDITED, IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED
                                                                        MARCH 31,
                                                                  ---------------------
                                                                    2001         2000
                                                                  --------     --------
<S>                                                               <C>          <C>
Operating revenues:
     Local telephone                                                54,697       58,137
     Cellular                                                        9,282        8,631
     Directory                                                       7,939        7,463
     Internet                                                        3,111        1,135
     Interexchange                                                   5,950        2,570
     Other                                                             255          290
                                                                  --------     --------
        Total operating revenues                                    81,234       78,226

Operating expenses:
     Local telephone                                                28,812       35,313
     Cellular                                                        5,578        5,482
     Directory                                                       3,499        3,289
     Internet                                                        3,743        1,430
     Interexchange                                                   9,544        3,961
     Other                                                             478          391
     Depreciation and amortization                                  19,547       17,126
                                                                  --------     --------
         Total operating expenses                                   71,201       66,992
                                                                  --------     --------
Operating income                                                    10,033       11,234

Other income (expense):
     Interest expense                                              (15,391)     (15,303)
     Interest income and other                                       1,017          248
     Equity in earnings (loss) of investments                           69         (142)
                                                                  --------     --------
         Total other expense                                       (14,305)     (15,197)
                                                                  --------     --------
Loss before income taxes                                            (4,272)      (3,963)

Income tax benefit                                                      50          115
                                                                  --------     --------
Net loss                                                          $ (4,222)    $ (3,848)
                                                                  ========     ========
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       4
<PAGE>   5
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (UNAUDITED, IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                                          MARCH 31,
                                                                    ---------------------
                                                                      2001         2000
                                                                    --------     --------
<S>                                                                 <C>          <C>

Cash Flows from Operating Activities:
Net loss                                                            $ (4,222)    $ (3,848)
Adjustments to reconcile net loss to net cash provided (used)
  by operating activities:
     Depreciation and amortization                                    19,547       17,126
     Amortization of debt issuance costs                               1,114        1,126
     Investment tax credits                                              (50)        (108)
     Other deferred credits                                            1,261       (1,105)
     Capitalized interest                                               (396)         (29)
     Changes in components of working capital:
       Accounts receivable and other current assets                    1,087        9,348
       Accounts payable and other current liabilities                   (170)     (10,929)
       Other                                                             (65)      (1,158)
                                                                    --------     --------
Net cash provided by operating activities                             18,106       10,423

CASH FLOWS FROM INVESTING ACTIVITIES:

Construction and capital expenditures, net of capitalized interest   (43,915)     (13,012)
Proceeds from liquidation of minority interest investment              1,370            -
Cost of acquisitions, net of cash received                                 -         (792)
                                                                    --------     --------
Net cash used by investing activities                                (42,545)     (13,804)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments on long-term debt                                            (1,670)      (1,376)
                                                                    --------     --------
Net cash used by financing activities                                 (1,670)      (1,376)

Decrease in cash                                                     (26,109)      (4,757)
Cash and cash equivalents at beginning of the period                  61,896        9,006
                                                                    --------     --------
Cash and cash equivalents at the end of the period                  $ 35,787     $  4,249
                                                                    ========     ========

SUPPLEMENTAL CASH FLOW DATA:

Interest paid                                                       $ 10,999     $ 10,741
Income taxes paid                                                          -            -

SUPPLEMENTAL NONCASH TRANSACTIONS:

Property acquired under capital lease                               $      -     $  2,918
Note payable in connection with acquisition                                -        2,250
Interest rate swap marked to market                                    2,909            -
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       5
<PAGE>   6
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       THREE MONTHS ENDED MARCH 31, 2001
                           (UNAUDITED, IN THOUSANDS)

1.      DESCRIPTION OF COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Alaska Communications Systems Holdings, Inc. and Subsidiaries (the
"Company" or "ACS Holdings"), a Delaware corporation, is an integrated
communications provider engaged principally in providing local telephone,
directory, cellular, Internet, and interexchange services to its customers in
the state of Alaska through its telecommunications subsidiaries. The Company was
organized in July of 1998 for the purpose of acquiring and operating
telecommunications properties. The principal activities in 1998 and through May
14, 1999 were the preparation of systems and obtaining financing for pending
acquisitions. On May 14, 1999, the Company was acquired and became a wholly
owned subsidiary of Alaska Communications Systems Group, Inc. (the "Parent" or
"ACS Group").

        The financial statements for the Company represent the consolidated
financial position, results of operations and cash flows of the following
entities:

        o    Alaska Communications Systems Holdings, Inc.
        o    ACS of Alaska, Inc. ("ACSAK")
        o    ACS of the Northland, Inc. ("ACSN")
        o    ACS of Fairbanks, Inc. ("ACSF")
        o    ACS of Anchorage, Inc. ("ACSA")
        o    ACS Wireless ("ACSW")
        o    ACS Long Distance, Inc. ("ACSLD")
        o    ACS Television, L.L.C. ("ACSTV")
        o    ACS Internet, Inc.
        o    ACS InfoSource, Inc.

        On January 1, 2001 the Company established its nonregulated directory
business as a separate operating entity under the name ACS InfoSource, Inc.

        Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to rules and regulations of the Securities and Exchange Commission; however, the
Company believes the disclosures which are made are adequate to make the
information presented not misleading. The consolidated financial statements and
footnotes included in this Form 10-Q should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000. Certain
reclassifications have been made to the 2000 financial statements to make them
conform to the current presentation.

        Comprehensive loss for the three months ended March 31, 2001 was $7,778.
The difference between net loss and comprehensive loss resulted from the
adoption of Statement of Financial Accounting Standards ("SFAS") 133, Accounting
for Derivative Instruments and Hedging Activities.

        In the opinion of management, the financial statements contain all
adjustments (consisting of normal recurring adjustments) necessary to present
fairly the consolidated financial position, results of operations and cash flows
for all periods presented. The results of operations for the three months ended
March 31, 2001 and 2000 are not necessarily indicative of the results of
operations which might be expected for the entire year or any other interim
periods.


                                       6
<PAGE>   7
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       THREE MONTHS ENDED MARCH 31, 2001
                           (UNAUDITED, IN THOUSANDS)


2.      ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

        Commencing January 1, 2001, ACS Holdings adopted SFAS 133, Accounting
for Derivative Instruments and Hedging Activities. ACS Holdings maintains an
interest rate risk management strategy as a condition of its bank credit
agreement that uses derivatives to minimize significant, unanticipated earnings
fluctuations caused by interest rate volatility. ACS Holdings' specific goals
are (1) to manage interest rate sensitivity by modifying the repricing
characteristics of certain of its debt and (2) to lower (where possible) the
cost of borrowed funds.

        By using derivative financial instruments to hedge exposure to changes
in interest rates, the Company exposes itself to credit risk and market risk.
ACS Holdings has minimized its credit risk by entering into a transaction with a
high-quality counterparty and monitoring the financial condition of that
counterparty. Market risk is managed through the setting and monitoring of
parameters that limit the types and degree of market risks that are acceptable.

        On January 1, 2001 ACS Holdings recognized a net charge of $1,243 in
Stockholders' Equity relating to its adoption of SFAS 133 as accumulated other
comprehensive loss. As of March 31, 2001, the Company had recorded $2,909 as
accumulated comprehensive loss. This increase in accumulated comprehensive loss
was due to the change in the fair market value of the Company's interest rate
swap as a result of declining interest rates experienced during the quarter.

3.      STOCK INCENTIVE PLANS

        The Company's employees participate in various plans of ACS Group, which
through its Compensation Committee of the board of directors, may grant stock
options, stock appreciation rights and other awards to officers, employees and
non-employee directors. At March 31, 2001, ACS Group has reserved a total of
6,060 shares of authorized common stock for issuance under the various plans. In
general, options under the plans vest ratably over three, four or five years and
the plans terminate in approximately 10 years. The plans allow forfeited options
to be reissued.

ALEC Holdings, Inc. 1999 Stock Incentive Plan

        The Parent has reserved 3,410 shares under this plan, which was adopted
in connection with the completion of the acquisition of the acquired companies
on May 14, 1999. At March 31, 2001, 4,003 options have been granted, 809 have
been forfeited, 237 have been exercised and 216 shares are available for grant
under the plan.

        On January 4, 2001, the Parent's Board of Directors approved the grant
of options to purchase 75,000 shares under the plan to certain members of
management at an exercise price equal to the fair market value of the common
stock on the date of grant, generally vesting over four years ratably.

Alaska Communications Systems Group, Inc. 1999 Stock Incentive Plan

        The Parent has reserved 1,500 shares under this plan, which was adopted
in November 1999 in connection with its initial public offering. At March 31,
2001, 1,247 options have been granted, 175 have been forfeited and 428 shares
are available for grant under the plan. The term of options granted under the
plan may not exceed 10 years. Unless otherwise determined by the Parent's
Compensation Committee, options will vest ratably on each of the first four
anniversaries after the grant date and will have an exercise price equal to the
fair market value of the common stock on the date of grant.

                                       7
<PAGE>   8
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       THREE MONTHS ENDED MARCH 31, 2001
                           (UNAUDITED, IN THOUSANDS)

3.      STOCK INCENTIVE PLANS

Alaska Communications Systems Group, Inc. 1999 Non-Employee Director Stock
Compensation Plan

        The Parent adopted its non-employee director stock compensation plan in
November 1999 in connection with its initial public offering. The Parent has
reserved 150 shares under this plan. At March 31, 2001, 36 shares have been
awarded and 114 shares are available for grant under the plan. ACS Group's
directors are required to receive not less than 25% of their annual retainer and
meeting fees in the form of the Parent's stock, and may elect to receive up to
100% of director's compensation in the form of stock.

        On March 30, 2001, 10 shares under the plan were awarded to directors,
of which seven were elected to be deferred until termination of service by the
directors.

Alaska Communications Systems Group, Inc. 1999 Employee Stock Purchase Plan

        This plan was also adopted in connection with the Parent's initial
public offering in November 1999. At March 31, 2001, 132 shares were issued
under the plan and 868 shares are available for issuance and sale. The plan will
terminate on December 31, 2009. All ACS Holdings employees and all of the
employees of designated subsidiaries generally will be eligible to participate
in the purchase plan, other than employees whose customary employment is 20
hours or less per week or is for not more than five months in a calendar year,
or who are ineligible to participate due to restrictions under the Internal
Revenue Code.

4.      BUSINESS SEGMENTS

        The Company now has five reportable segments: local telephone, cellular,
directory, Internet and interexchange. Beginning with the first quarter of 2001,
the Company will be reporting directory and interexchange as separate segments.
Prior year amounts have been reclassified to conform with the current
presentation. Local telephone provides landline telecommunications services, and
consists of local telephone service, network access and deregulated and other
revenues; cellular provides wireless telecommunications service; directory
provides yellow page advertising and other related products; Internet provides
Internet service; and interexchange provides long distance and private network
services. Each reportable segment is a strategic business under separate
management and offering different services than those offered by the other
segments. The Company also has a wireless cable television service segment that
does not currently meet the criteria for a reportable segment and is therefore
included in "All Other" below.

        The Company also incurs interest expense, interest income, equity in
earnings of investments, goodwill amortization on the original May 14, 1999
purchases, and other operating and non operating income and expense at the
corporate level which are not allocated to the business segments, nor are they
evaluated by the chief operating decision maker in analyzing the performance of
the business segments. These non operating income and expense items are provided
in the accompanying table under the caption "All Other" in order to assist the
users of these financial statements in reconciling the operating results and
total assets of the business segments to the consolidated financial statements.
Common use assets are held at ACS Holdings and are allocated below based on
operating revenues. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies.

                                       8
<PAGE>   9
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       THREE MONTHS ENDED MARCH 31, 2001
                           (UNAUDITED, IN THOUSANDS)

4.      BUSINESS SEGMENTS (CONTINUED)

        The following table illustrates selected financial data for each segment
as of and for the three months ended March 31, 2001:
<TABLE>
<CAPTION>
                                   Local Telephone  Cellular  Directory  Internet  Interexchange  All Other  Eliminations    Total
                                   ---------------  --------  ---------  --------  -------------  ---------  ------------  --------
<S>                                <C>              <C>       <C>        <C>       <C>            <C>        <C>           <C>
Operating revenues                     $ 54,697     $ 9,289    $ 7,939   $ 3,111      $ 8,072      $ 4,383     $ (6,257)   $ 81,234
Depreciation and amortization            13,047       1,399          -       620          584        3,897            -      19,547
Operating income (loss)                   9,509       1,045      4,423    (2,366)      (2,219)        (359)           -      10,033
Interest expense                           (483)         (3)         -       (34)         (75)     (14,796)           -     (15,391)
Interest income                               4          12          -         -            -        1,036            -       1,052
Income tax provision (benefit)            3,675         439      1,818         -            -       (5,982)           -         (50)
Net income (loss)                         5,323         619      2,605    (2,396)      (2,295)      (8,078)           -      (4,222)
Total assets                            628,915     102,054     37,032    36,599       73,607       26,250            -     904,457
Capital expenditures                     11,749         387          -    11,127       19,504        1,148            -      43,915
</TABLE>

        Operating revenues disclosed above include intersegment operating
revenues of $4,371 for local telephone, $228 for cellular, $250 for directory
and $6,480 for interexchange. In accordance with SFAS 71, intercompany revenues
between local telephone and all other segments are not eliminated above.

        The following table illustrates selected financial data for each segment
as of and for the three months ended March 31, 2000:

<TABLE>
<CAPTION>
                                   Local Telephone  Cellular  Directory  Internet  Interexchange  All Other  Eliminations    Total
                                   ---------------  --------  ---------  --------  -------------  ---------  ------------  --------
<S>                                <C>              <C>       <C>        <C>       <C>            <C>        <C>           <C>
Operating revenues                    $ 58,137       $ 8,636   $ 7,463   $ 1,137       $ 3,801     $ 4,343     $ (5,291)   $ 78,226
Depreciation and amortization           12,009         1,129         -       101           325       3,562            -      17,126
Operating income (loss)                  7,604         1,423     4,174    (1,024)         (487)       (456)           -      11,234
Interest expense                          (287)           (2)        -         -           (84)    (14,930)           -     (15,303)
Interest income                             74            41         -         -             -          68            -         183
Income tax provision (benefit)           4,616           565         -         -             -      (5,296)           -        (115)
Net income (loss)                        2,775           906     4,174    (1,021)         (568)    (10,114)           -      (3,848)
Total assets                           685,278       114,567    38,007    10,679        44,450      31,203            -     924,184
Capital expenditures                     7,560         3,971         -     1,367         3,032           -            -      15,930
</TABLE>

        Operating revenues disclosed above include intersegment operating
revenues of $1,489 for local telephone, $206 for cellular, $2 for Internet and
$1,293 for interexchange. In accordance with SFAS 71, intercompany revenues
between local telephone and all other segments are not eliminated above.

5.      RELATED PARTY TRANSACTIONS

        Fox Paine & Company, the majority stockholder of the Parent, receives an
annual management fee in the amount of 1% of the Company's net income before
interest expense, interest income, income taxes, depreciation and amortization
and equity in earnings (losses) of minority investments, calculated without
regard to the fee. The management fee expense for the three months ended March
31, 2001 and 2000 is $282 and $324, respectively. The management fee payable at
both March 31, 2001 and 2000 is $300.


                                       9
<PAGE>   10
                  ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       THREE MONTHS ENDED MARCH 31, 2001
                           (UNAUDITED, IN THOUSANDS)

6.      SEVERANCE AND RESTRUCTURING CHARGES

        The Company recorded $3,019 related to severance and restructuring
charges under several plans adopted during 2000. Employee force reductions
resulting from these restructuring plans are expected to total approximately 300
by their completion, which is expected to be during the fourth quarter of 2001.
Employee groups located in Alaska within the local telephone, cellular and
Internet operations are all included within the scope of the severance and
restructuring plans. The plans also call for the closure of a branch operation
in Vancouver, Washington. As of March 31, 2001, $1,086 has been paid under the
plans and approximately 100 employees have been terminated.

7.      COMMITMENTS AND CONTINGENCIES

        The Company is involved in various claims, legal actions and regulatory
proceedings arising in the ordinary course of business. The Company believes
that the disposition of these matters will not have a material adverse effect on
the Company's consolidated financial position, results of operations or cash
flows.


                                       10
<PAGE>   11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS AND ANALYSTS' REPORTS

        This report contains forward looking statements within the meaning of
the federal securities laws, including statements concerning future rates,
revenues, costs, capital expenditures, and financing needs and availability and
statements of management's expectations and beliefs. Actual results could differ
materially from these statements as a result of many factors, including future
economic, regulatory and political conditions in Alaska and the United States.

        Investors should also be aware that while ACS Holdings does, at various
times, communicate with securities analysts, it is against ACS Holdings' policy
to disclose to them any material non-public information or other confidential
information. Accordingly, shareholders should not assume that ACS Holdings
agrees with any statement or report issued by an analyst irrespective of the
content of the statement or report. To the extent that reports issued by
securities analysts contain any projections, forecasts or opinions, such reports
are not the responsibility of ACS Holdings.

INTRODUCTION

        On May 14, 1999, the Company acquired the incumbent providers of local
telephone services in Anchorage, Juneau, Fairbanks and approximately 70 rural
communities in Alaska, making it the largest provider of local telephone service
in the state and the fourteenth largest provider of local exchange services in
the United States. The Company also acquired on May 14, 1999 interexchange
operations primarily serving the Anchorage market and cellular and Internet
services providing statewide coverage. The Company has unified its statewide
branding under the ACS name.

        ACS Holdings generates revenue through:

        o       the provision of local telephone services, including:

                o       basic local service to retail customers within ACS
                        Holdings' service areas,

                o       wholesale service to competitive local exchange carriers
                        ("CLECs"),

                o       network access services to interexchange carriers for
                        origination and termination of interstate and intrastate
                        long distance phone calls,

                o       universal service payments,

                o       enhanced services, and

                o       ancillary services, such as billing and collection
                        ("B&C") ;

        o       the provision of cellular services;

        o       the provision of directory advertising;

        o       the provision of Internet services;

        o       the provision of interexchange services; and;

        o       the provision of wireless cable television services.

        ACS Holdings also recognizes its proportionate share of the net income
or loss of its minority-owned investments.


                                       11
<PAGE>   12
        Within the telecommunications industry, local exchange carriers ("LECs")
have historically enjoyed stable revenue and cash flow from local exchange
operations resulting from the need for basic telecommunications services, the
highly regulated nature of the telecommunications industry and, in the case of
rural LECs, the underlying cost recovery settlement and support mechanisms
applicable to local exchange operations. Basic local service is generally
provided at a flat monthly rate and allows the user to place unlimited calls
within a defined local calling area. Access revenues are generated by providing
interexchange carriers access to the LEC's local network and its customers.
Universal service revenues are a subsidy paid to rural LECs to support the high
cost of providing service in rural markets. Revenue is also generated from
ancillary and enhanced services and Internet access.

        Changes in revenue are largely attributable to changes in the number of
access lines, local service rates and minutes of use. Other factors can also
impact revenue, including:

                o       intrastate and interstate revenue settlement
                        methodologies,

                o       authorized rates of return for regulated services,

                o       whether an access line is used by a business or
                        residential subscriber,

                o       intrastate and interstate calling patterns,

                o       customers' selection of various local rate plan options,

                o       selection of enhanced calling services, such as voice
                        mail, or other packaged products, such as cellular and
                        Internet, and

                o       other subscriber usage characteristics.

        LECs have three basic tiers of customers:

                o       business and residential customers located in their
                        local service areas that pay for local phone service,

                o       interexchange carriers that pay for access to long
                        distance calling customers located within its local
                        service areas and

                o       CLEC's that pay for wholesale access to the Company's
                        network in order to provide competitive local service on
                        either a wholesale or unbundled network element ("UNE")
                        basis as prescribed under the Telecommunications Act of
                        1996 ("the 1996 Act").

        LECs provide access service to numerous interexchange carriers and may
also bill and collect long distance charges from interexchange carrier customers
on behalf of the interexchange carriers. The amount of access charge revenue
associated with a particular interexchange carrier varies depending upon long
distance calling patterns and the relative market share of each long distance
carrier.

        ACS Holdings' local service rates for end users are authorized by the
Regulatory Commission of Alaska ("RCA"). Authorized rates are set by the Federal
Communications Commission ("FCC") and the RCA for interstate and intrastate
access charges, respectively, and may change from time to time.


                                       12
<PAGE>   13
RESULTS OF OPERATIONS

        The following unaudited table summarizes ACS Holdings' consolidated
operations for the three months ended March 31, 2001 and 2000. Certain
reclassifications have been made to the 2000 operations to conform to the
current presentation of ACS Holdings' consolidated operations.

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                     MARCH 31,
                                                             -------------------------
                                                                2001           2000
                                                             ----------     ----------
                                                             (UNAUDITED, IN THOUSANDS)
<S>                                                          <C>            <C>
Operating revenues:
   Local telephone                                              54,697        58,137
   Cellular                                                      9,282         8,631
   Directory                                                     7,939         7,463
   Internet                                                      3,111         1,135
   Interexchange                                                 5,950         2,570
   Other                                                           255           290
                                                              --------      --------
       Total operating revenues                                 81,234        78,226

Operating expenses:
   Local telephone                                              28,812        35,313
   Cellular                                                      5,578         5,482
   Directory                                                     3,499         3,289
   Internet                                                      3,743         1,430
   Interexchange                                                 9,544         3,961
   Other                                                           478           391
   Depreciation and amortization                                19,547        17,126
                                                              --------      --------
     Total operating expenses                                   71,201        66,992
                                                              --------      --------

Operating income                                                10,033        11,234

Other income (expense):
   Interest expense                                            (15,391)      (15,303)
   Interest income and other                                     1,017           248
   Equity in earnings (loss) of investments                         69          (142)
                                                              --------      --------
     Total other expense                                       (14,305)      (15,197)
                                                              --------      --------

Loss before income taxes                                        (4,272)       (3,963)
Income tax benefit                                                  50           115
                                                              --------      --------
Net loss                                                      $ (4,222)     $ (3,848)
                                                              ========      ========
</TABLE>


                                       13
<PAGE>   14
THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

        Beginning with the first quarter of 2001, the Company will be reporting
directory and interexchange as separate segments. Prior year amounts have been
reclassified to conform with the current presentation. All amounts are discussed
at the consolidated level after the elimination of intercompany revenue and
expense.

        OPERATING REVENUES

        Operating revenues increased $3.0 million, or 3.8%, for the three months
ended March 31, 2001 compared to the three months ended March 31, 2000. Local
telephone revenues decreased compared to the prior period, while cellular,
Internet, directory advertising, and interexchange service revenues all
increased compared to the prior period.

        Local Telephone

        Local telephone revenues, which consist of local network service,
network access revenue and deregulated and other revenues, decreased $3.4
million, or 5.9%, for the three months ended March 31, 2001 compared to the same
period in 2000. The following unaudited table summarizes ACS Holdings'
consolidated local telephone revenues by category.

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                     MARCH 31,
                                                             -------------------------
                                                                2001           2000
                                                             ----------     ----------
                                                             (UNAUDITED, IN THOUSANDS)
<S>                                                          <C>            <C>
Local telephone revenue:
   Local network service                                      $ 23,263      $ 23,845
   Network access revenue                                       26,236        28,963
   Deregulated and other revenue                                 5,198         5,329
                                                              --------      --------
Total local telephone revenue                                 $ 54,697      $ 58,137
                                                              ========      ========
</TABLE>

        The local network service component of local telephone revenues was
$23.8 million during 2000 compared with $23.3 million during 2001. Revenue
decreased $0.5 million or 2.4% from the prior year, despite growth in average
total access lines in service of 1.4%. The net decrease was due primarily to
increased market penetration of lower margin wholesale lines in the Anchorage
market. Management believes that the continued loss of market share experienced
in the Anchorage market is attributable to below cost interconnection rates for
UNEs currently in place. The RCA has approved arbitrated interconnection rates
for UNEs for the Company's Fairbanks and Juneau markets which, in the opinion of
management, are also below cost. Competition in both Fairbanks and Juneau is
expected to commence during 2001. See "Outlook" under Item 2 of this Part and
"Legal Proceedings" under Item 1 of Part II of this report for further
discussion.

         Network access revenues decreased by $2.7 million, or 9.4%, from $29.0
million in 2000 to $26.2 million in 2001. Network access revenues are based on a
regulated return on rate base and recovery of allowable expenses associated with
the origination and termination of interstate and intrastate toll calls.
Universal service support revenue is also included in network access revenue.
The decrease in telephone access revenues from the corresponding period in 2000
is due primarily to reductions in regulated operating expense and its effect on
the interstate access revenue requirement. Also responsible for the decrease is
interstate access revenue recorded in 2000 that resulted from the allocation of
Internet Service Provider ("ISP") traffic minutes to the interstate jurisdiction
for which there is no corresponding revenue in 2001. Management expects that
network access revenues will decline as a component of local telephone revenues
for the foreseeable future.

        Deregulated and other revenues, which decreased $0.1 million, or 2.5%
over 2000, consists principally of B&C services, space and power rents,
deregulated equipment sales, paystation revenues, white pages directory listing
revenue, and other miscellaneous telephone revenues.


                                       14
<PAGE>   15
        Cellular

        Cellular revenues increased $0.7 million, or 7.5%, to $9.3 million for
the three months ended March 31, 2001 compared to $8.6 million for the three
months ended March 31, 2000. This growth in revenue is primarily due to a 5.1%
increase in average cellular subscribers from 72,669 in 2000 to 76,368 in 2001.
Average revenue per unit also increased from $39.59 in 2000 to $40.51 in 2001.
The increase in average revenue per unit is due the introduction of new digital
statewide and national pricing programs and an increase in average minutes of
use from approximately 115 minutes per month in 2000 to 141 minutes per month in
2001.

        Directory advertising

        Directory advertising revenues increased by $0.5 million, or 6.4%, to
$7.9 million in 2001 from $7.4 million in 2000. This increase is attributable to
increased market penetration for the current directory phone book cycles
combined with the growth in average access lines.

        Internet

        Internet revenues increased $2.0 million, or 174.1%, to $3.1 million in
2001 from $1.1 million in 2000. This increase is primarily due to revenues
resulting from the acquisition of Internet Alaska, Inc. ("IAI") in June of 2000.
Growth in Digital Subscriber Line ("DSL") subscribers also contributed to the
increase in Internet revenues.

        Interexchange

        Interexchange service revenues increased $3.4 million to $6.0 million in
2001 from $2.6 million in 2000, or an increase of 131.5%. The increase was
primarily due to growth in long distance subscribers from 33,745 in 2000 to
65,372 in 2001. The Company also experienced growth in long distance minutes of
use from 19.0 million in 2000 to 68.8 million in 2001. The growth in both
subscribers and minutes of use was due to the rollout of the Company's "Infinite
Minutes" long distance product offering in the fourth quarter of 2000. The
Company expects growth to continue at a slower pace than that experienced over
the previous two quarters as a result of the replacement of its "Infinite
Minutes" plan with a tiered long distance plan it markets as "Easy Choices," as
of April 20, 2001.

        Other

        Other revenues, which consist principally of wireless cable television
revenues, were $0.3 million for each of the three month periods ended March 31,
2001 and 2000.

        OPERATING EXPENSES

        Operating expenses increased $4.2 million, or 6.3%, to $71.2 million for
the quarter ended March 31, 2001 from $67.0 million for the quarter ended March
31, 2000.

        Local Telephone

        The components of local telephone expense are plant specific operations,
plant non-specific operations, customer operations, corporate operations and
property and other operating tax expense. Depreciation and amortization
associated with the operation of the local telephone segment is included in
total depreciation and amortization. Local telephone expenses decreased $6.5
million, or 18.4%, to $28.8 million for the quarter ended March 31, 2001 from
$35.3 million for the quarter ended March 31, 2000. As a percentage of local
telephone revenues, local telephone operating expenses dropped to 52.7% in 2001
from 60.7% in 2000. These results reflect continued improvements in the
Company's cost structure, including workforce reductions, benefits derived from
the deployment of information systems, and other synergies, realized through the
continued consolidation of the operations the Company acquired in 1999.


                                       15
<PAGE>   16
        Cellular

        Cellular expense increased $0.1 million, or 1.8%, for the three months
ended March 31, 2001 compared to the three months ended March 31, 2000. Cellular
expense was 60.1% of cellular revenue for 2001 compared to 63.5% of cellular
revenue for 2000, reflecting continued improvement in operating margin.

        Directory advertising

        Directory advertising expense increased $0.2 million, or 6.4%, for the
three months ended March 31, 2001 compared to the three months ended March 31,
2000. Directory advertising expense was 44.1% of directory advertising revenue
for 2001, consistent with 2000 results.

        Internet

        Internet expense increased by $2.3 million, or 161.7%, and decreased as
a percentage of revenue from 126.0% in 2000 to 120.3% in 2001. The increase in
Internet expenses was due to the acquisition of IAI in June of 2000, costs
associated with developing the Company's statewide Internet infrastructure and
the continued rollout of the Company's DSL product.

        Interexchange service

        Interexchange services increased $5.6 million, or 140.9%, from $4.0
million for the three months ended March 31, 2000 to $9.5 million for the three
months ended March 31, 2001. As a percentage of revenue, interexchange service
expense increased to 160.4% in 2001 from 154.1% in 2000. The majority of this
increase was the result of additional traffic sensitive, marketing, order
processing, and other costs incurred as a result of the dramatic increase in
customers with the rollout of the Company's flat rate calling plans as discussed
under interexchange service revenues.

        Depreciation and Amortization

        Depreciation and amortization expense increased $2.4 million, or 14.1%,
due principally to increases in plant in service for the three months ended
March 31, 2001 over the corresponding period of 2000.

        INCOME TAXES

        Income tax benefit represents the amortization of investment tax credits
of the Company's regulated operations. ACS Holdings has fully reserved the
income tax benefit resulting from the consolidated losses it has incurred since
May 14, 1999 - the date of the acquisition of substantially all of its
operations - since it has no historical income and limited operating history on
which to determine the realizable value of the tax benefit of net operating loss
carryforwards with reasonable certainty. The Company reserved $1.9 million of
income tax benefit resulting from its net loss before income taxes during the
quarter ended March 31, 2001. The Company's cumulative book basis income tax
valuation allowance is $21.4 million at March 31, 2001.

        NET LOSS

        The increase in net loss is primarily a result of the factors discussed
above.


                                       16
<PAGE>   17
LIQUIDITY AND CAPITAL RESOURCES

        ACS Holdings has satisfied its operational and capital cash requirements
primarily through internally generated funds, the sale of stock and debt
financing. For the three months ended March 31, 2001 the Company's cash flows
from operating activities were $18.0 million. At March 31, 2001, the Company had
approximately $35.8 million in cash and cash equivalents. As of March 31, 2001
the Company had $75.0 million of remaining capacity under its revolving credit
facility, representing 100% of available capacity.

        The Company has a $435.0 million credit agreement ("senior credit
facility") and $150.0 million in senior subordinated notes representing
substantially all of the Company's long-term debt. As of March 31, 2000 the
Company had $598.0 million of long-term debt. In addition $17.3 million in
senior discount debentures are recorded at ACS Group and are collateralized by
substantially all assets of the Company. Interest on ACS Group's senior discount
debentures and ACS Holdings' senior subordinated notes is payable semiannually.
Interest on borrowings under the senior credit facility is payable monthly,
quarterly or semi-annually at the Company's option, and the senior credit
facility requires annual principal payments commencing on May 14, 2002.

        The Company employs an interest rate hedge transaction, which fixes at
5.99% the underlying variable rate on one-half of the borrowings under the
Senior Credit Facility, or $217.5 million, expiring in June 2002. The underlying
variable rate for the Senior Credit Facility is based on the London Interbank
Offer Rate ("LIBOR"), which is adjusted at each monthly, quarterly or
semi-annual rollover date.

        On April 17, 2001, the Company placed a total of $6.7 million in two
separate escrow accounts pending the outcome of the Company's appeal of a
January 24, 2001 FCC Order awarding damages to an interexchange carrier. These
amounts were fully reserved as of March 31, 2001. See "Legal Proceedings" under
Item 1 of Part II of this report for further discussion.

        The local telephone network requires the timely maintenance of plant and
infrastructure. ACS Holdings' local network is of high quality, is technically
advanced and will have relatively predictable annual capital needs. The
Company's historical capital expenditures have been significant. The
construction and geographic expansion of ACS Holdings' cellular network has
required significant capital. The implementation of the Company's interexchange
and data services strategy is also capital intensive. ACS Holdings anticipates
total capital spending in 2001 to be between $75.0 to 80.0 million, including
the Company's purchase of additional fiber capacity for $19.5 million in January
2001. The Company intends to fund its future capital expenditures with cash on
hand, through internally generated cash flows, and if necessary, through
additional borrowings under the revolving credit facility.

        ACS Holdings' capital requirements may change, however, due to, among
other things: the Company's decision to pursue specific acquisition
opportunities, changes in technology, the effects of competition or changes in
the Company's business strategy. ACS Holdings believes that it will have
sufficient working capital provided by operations and available borrowing
capacity under the existing revolving credit facility to fund its operations and
capital expenditures over the next 12 months. ACS Holdings' ability to satisfy
its capital requirements will be dependent upon its future financial
performance, which is, in turn, subject to future economic and regulatory
conditions and to financial, business and other factors, many of which are
beyond the Company's control.


                                       17
<PAGE>   18
OUTLOOK

        ACS Holdings expects demand for telecommunications services in Alaska to
remain strong during 2001. Certain Alaskan economic indicators suggest a number
of factors within the state may help mitigate effects of a general slowdown in
the U.S. economy, including:

        o       A growth in employment during 2000, with jobs up 2.2%;

        o       Approval of projects to expand Ted Stevens International Airport
                in Anchorage, at which 90% of all freighter jets carrying cargo
                between the lower 48 state and the Pacific Rim now stop;

        o       Low office vacancy rates in Anchorage (2.4%) and projections by
                the home builders association of a robust home construction
                season; and

        o       A $100 million redevelopment of the Anchorage Ship Creek
                commercial area.

        In addition, there is the potential that one or more of the following
proposed undertakings may be approved, any one of which could offer significant
stimulation to the Alaskan economy:

        o       Construction of a pipeline to transport natural gas from the
                North Slope area to commercial markets in Canada and the lower
                48 states;

        o       Development of a new national missile defense system with
                deployments at Alaskan sites; and

        o       Opening of the Arctic National Wildlife Refuge (ANWR) to new oil
                exploration.

        ACS Holdings believes it is well-positioned to compete in the Alaska
telecommunications market as an integrated, diversified, facilities-based
provider of local telephone, long distance, cellular and Internet services.
Certain of the markets served by ACS Holdings experience vigorous competition.
Specifically, ACS Holdings faces competition in the Anchorage local telephone
market; in the Anchorage, Fairbanks, Southeast, and Kenai Peninsula areas for
cellular telephone and Internet services; and throughout the state for inter-
and intrastate long distance services.

        As a result of the June 30, 1999 termination of the "rural exemption"
applicable to ACS Holdings' operations in Fairbanks and Juneau and the
subsequent adoption of interconnection agreements by the RCA, those markets are
expected to experience competition for local telephone services during 2001. As
of the end of the first quarter of 2001, however, no customers in those markets
were being served by CLECs on either a wholesale or UNE basis. The Company
expects to provision circuits to support interconnection competition in
Fairbanks during the second quarter of 2001 and in Juneau later in the year.

        ACS Holdings is actively pursuing legal and regulatory objectives,
particularly with regard to local telephone services, to improve its competitive
and economic situation. Legal proceedings have been initiated in federal and
state courts challenging termination of the rural exemption and the
interconnection agreements applicable to Fairbanks and Juneau. ACS Holdings has
been seeking an increase in the rates charged to CLECs for UNE loops in
Anchorage. The current rate was adopted as "temporary" by the regulatory
commission in 1997 and, as it was not based on a forward looking cost
methodology, the Company believes it is not in compliance with the 1996 Act. ACS
Holdings is filing a request for an interim increased rate with the RCA pending
adjudication of a compliant rate. See "Legal Proceedings" under Item 1 of Part
II of this report for further discussion. ACS Holdings will also commence rate
proceedings before the RCA in July for all four of its local exchange companies.
These proceedings, which are not expected to be concluded during 2001, will
offer ACS Holdings the opportunity to rebalance rates and increase its revenues

        As previously reported, the Company has several restructuring plans in
place to reduce costs and continue to realize operating synergies resulting from
a consolidated organization. Effective April 1, 2001, the branch operation in
Vancouver, Washington was closed and severance benefits were paid to the
impacted employees. The Company anticipates achieving additional efficiencies
during 2001, most notably through the implementation of a new automated customer
care system. This system, the first phase of which is scheduled to be on-line
during by the third quarter, will offer the capacity to provide better customer
service with reduced staff.


                                       18
<PAGE>   19
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company has issued senior subordinated notes and has entered into a
bank credit facility. These on-balance sheet financial instruments, to the
extent they provide for variable rates of interest, expose the Company to
interest rate risk, with the primary interest rate risk exposure resulting from
changes in LIBOR or the prime rate, which are used to determine the interest
rates that are applicable to borrowings under the Company's bank credit
facilities. The Company uses off-balance sheet derivative financial instruments,
in particular an interest rate swap agreement, to partially hedge variable
interest transactions. The Company's derivative financial instrument transaction
has been entered into for non-trading purposes. The terms and characteristics of
the derivative financial instruments are matched with the underlying on-balance
sheet instrument or anticipated transactions and do not constitute speculative
or leveraged positions independent of these exposures. There have been no
material changes to the Company's outstanding debt instruments since December
31, 2000.


                                       19
<PAGE>   20
                                     PART II

                                OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

        The Company is involved in various claims, legal actions and regulatory
proceedings arising in the ordinary course of business. The Company believes
that the disposition of these matters will not have a material adverse effect on
the Company's consolidated financial position, results of operations or cash
flows.

        As previously reported, the Company filed a formal appeal of the RCA's
order terminating the rural exemption for Fairbanks and Juneau on November 10,
1999. The Company's request for an emergency stay of the RCA's order was denied
by the superior court on February 9, 2001. The Company subsequently filed a
Petition for Review of this decision with the Alaska Supreme Court. On May 1,
2001, the Alaska Supreme Court denied the petition for review. Meanwhile, on
February 22, 2001, the Company filed a motion to vacate the RCA's order in
superior court. That motion has now been fully briefed and oral argument is
scheduled for May 16, 2001. Although the Company believes its appeal is
well-founded, it cannot predict the timing and outcome of this litigation.

        The Company also previously reported a dispute concerning the Fairbanks
and Juneau interconnection agreements ordered by the RCA. On September 25, 2000,
the Company filed suit in federal district court in Anchorage, Alaska
challenging the legality of these interconnection agreements. On October 17,
2000, the RCA filed a motion to dismiss the complaint on sovereign immunity
grounds. On March 13, 2001, prior to the district court's March 20, 2001 denial
of the RCA's motion to dismiss, the Company sought to enjoin the RCA from
enforcing the agreements. Shortly thereafter, on March 22, 2001, the RCA filed
an appeal of the district court's sovereign immunity decision and also asked the
district court to stay any further proceedings on the case pending a decision on
its sovereign immunity appeal. On March 29, 2001, the district court granted the
RCA the stay it requested. Although the Company believes its action is
well-founded, it cannot predict the timing and outcome of this litigation.

        The Company also previously reported that on February 7, 2001, it filed
an appeal in the United States Court of Appeals for the District of Columbia
Circuit of a January 24, 2001 FCC Order to pay $2.7 million plus interest to
General Communication, Inc. ("GCI") for excess interstate access charges. On
April 4, 2001, the FCC released an order granting the Company's request for a
stay of the payment and allowed the Company to place the funds in question,
already fully reserved, in escrow pending the outcome of the appeal. In
addition, AT&T Alascom, made a demand for payment of approximately $3.5 million
dollars based on the FCC's January 24, 2001 Order in favor of GCI. These funds,
also fully reserved, have been placed in a similar escrow account pending
resolution of the Company's appeal of the FCC Order. The Company believes its
appeal is well-founded but it cannot predict the timing and outcome of this
litigation.

        Amongst the most notable regulatory matters, the RCA agreed, on April
23, 2001, to allow the Company to discontinue its intrastate Infinite Minutes
long distance plan. Also, the Company participated, on April 12, 2001, in an
initial RCA pre-hearing and scheduling conference concerning its rate cases
which are due to be filed in July 2001. The Company is involved in a number of
other on-going regulatory proceedings. However, the Company cannot predict the
timing or outcome of those proceedings.


                                       20
<PAGE>   21

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS.

        NONE.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.

         NONE.

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

        NONE.

ITEM 5.    OTHER INFORMATION.

        NONE.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

(a) EXHIBITS:
    --------

        NONE.

(b) REPORTS ON FORM 8-K:
    -------------------

No reports on Form 8-K were filed during the quarter ended March 31, 2001.


                                       21
<PAGE>   22
                                    SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report on Form 10-Q to be signed on its behalf
by the undersigned, thereunto duly authorized.

Date: May 7, 2001            ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.



                             /s/  Kevin P. Hemenway
                             ----------------------
                             Kevin P. Hemenway
                             Senior Vice President and
                             Chief Financial Officer
                             (Signing both in his capacity as
                             Senior Vice President on behalf of
                             the Registrant and as Chief
                             Financial Officer of the Registrant)


                                       22