Document:

Exhibit 10.25

                              SETTLEMENT AGREEMENT

         This "Settlement Agreement" is executed on May 15, 2000, by and between
the UNITED STATES OF AMERICA,  Department  of Energy,  acting by and through the
BONNEVILLE  POWER  ADMINISTRATION  ("Bonneville)  and ELECTRIC  LIGHTWAVE,  INC.
("ELI"),  a corporation  organized  and existing  under the laws of the State of
Delaware.  Both  Bonneville  and ELI may be referred to herein  individually  as
"Party" and collectively as "Parties".

                                    RECITALS

         WHEREAS,   the  Parties   heretofore   entered  into  separate  License
agreements  regarding ELI's use of fiber-optic  cable installed by Bonneville on
its power  transmission  system,  three (3) of which remain in effect (Agreement
Numbers  97TX-10072,  97TX-10080  and  98TX-10143,  collectively,  the "Existing
Agreements").

         WHEREAS,  various  disputes have arisen between the Parties  concerning
their  rights,  obligations  and  performance  under the  terms of the  Existing
Agreements, which disputes have led to litigation, now on appeal before the U.S.
Court of Appeals for the Ninth Circuit,  Electric Lightwave,  Inc. v. Bonneville
Power  Administration,   Case  No.  99-35593;  and  three  separate  arbitration
proceedings,  including  any  counterclaims,  now pending  through the  American
Arbitration  Association  (Case Nos. 23 19800010 99, 23 198 00085 99, and 23 198
00011 00).

         WHEREAS, both Parties desire to resolve their disputes by reforming and
replacing each of the Existing Agreements with a single new License Agreement.

         WHEREAS, each Party desires to release the other Party from present and
future  claims,  counterclaims  and causes of action  arising under the Existing
Agreements,  except as to the provisions expressly preserved by section 2 below,
upon payment of the liquidated  amounts specified herein,  and to seek dismissal
with  prejudice of all litigation and  arbitration  proceedings  relating to the
Existing Agreements.

         NOW THEREFORE, the Parties mutually covenant and agree as follows:

1)   Each Party  acknowledges  the  contemporaneous  execution of a new "license
     Agreement" which becomes  effective upon execution  (referenced  therein as
     the  "Effective  Date"),  and which  comprehensively  specifies all prices,
     terms and conditions pursuant to which Bonneville has granted a twenty-year
     (20)License  providing ELI with the right to access and the exclusive right
     to  use,  resell,  sublicense  and or  exchange  the  full  electromagnetic
     capacity of certain  designated  Bonneville  optical fibers.  A copy of the
     executed License Agreement is attached hereto as Exhibit A.

                                      -1-
<PAGE>

2)   Each of the Existing  Agreements is hereby terminated with no further force
     or effect on either Party, excepting only:

     a)   the indemnification provisions thereof, which shall survive and remain
          in effect until satisfied or until applicable  statutes of limitations
          expires,  but only concerning  reimbursement of any third-party claims
          regarding  actions,  taken or omitted by either  Party with respect to
          any Existing Agreement prior to the Effective Date,

     b)   the insurance provisions  thereof,  which shall  survive and remain in
          effect until all applicable  claims are recovered or until  applicable
          statutes of limitations  expire, but only concerning  reimbursement of
          any third-party claims regarding actions, taken or omitted by ELI with
          respect to any Existing Agreement prior to the Effective Date, and

     c)   the confidentiality  provisions  thereof,  regarding which the Parties
          hereby   restate  and   reaffirm   their   intention  to  protect  the
          confidentiality of each Existing Agreement,  which contain proprietary
          ELI business information and all proprietary or otherwise confidential
          information exchanged between them in performance thereof.

3)   Except as  specifically  reserved  pursuant to section 2 above,  each Party
     hereby  irrevocably  releases,  and  covenants  not to sue, the other Party
     regarding any and all past, present and future claims,  counterclaims,  and
     other  causes of action,  arising  from or relating to any of the  Existing
     Agreements,   including   but  not   limited  to  demands  for  payment  or
     performance, regardless of whether such claims, counterclaims, or causes of
     action have been previously  made,  identified,  or quantified.  Bonneville
     hereby acknowledges receipt from ELI of the following amounts:

     a)   Exactly  $1,100,000.00 which is the liquidated sum of all amounts that
          are,  have been,  or may ever be, due and payable by ELI to Bonneville
          under any and all of the Existing Agreements through and including May
          15,  2000,  the  date on  which  each of the  Existing  Agreements  is
          terminated  pursuant  to  section  2 above,  except  as  preserved  by
          sections 2(a) and 2(b) thereof, and

     b)   Exactly [*], which satisfies all ELI  obligations  under section 10 of
          Contract No.  98TX-10143  regarding  the  purchase,  installation  and
          testing of certain "BPA Terminal  Equipment",  which equipment is part
          of "Bonneville Facilities",  as defined in section 1(b) of the License
          Agreement.

4)   Bonneville  hereby  acknowledges  the  contemporaneous   execution  of  the
     Guaranty between Bonneville and ELI's corporate parent,  Citizens Utilities
     Company  ("Citizens"),  which,  as  stated  with  greater  detail  therein,
     provides  for  Citizens'   guarantee  of  ELI's  License  fees  and  Annual
     Maintenance  Payments,  specified in sections  8(a) and 8(b) of the License
     Agreement,  and Liquidated Damages payment specified in section 16(b)(4) of
     the License  Agreement,  throughout  the term of the License  Agreement but
     subject to an  aggregate  limit of  $20,000,000.00.  A copy of the executed
     Guaranty is attached hereto as Exhibit B.

* Confidential material has been omitted  pursuant to a request for confidential
treatment.  Such material has been filed  separately  with  the  Securities  and
Exchange Commission.

                                      -2-

<PAGE>

5)   ELI shall move to dismiss,  with  prejudice  and without  award of costs or
     attorney  fees to either Party,  all existing  litigation  and  arbitration
     actions between ELI and Bonneville. Each Party hereby acknowledges that the
     relevant pleadings have been signed by their respective counsel.  ELI shall
     file such  pleadings on or before May 17, 2000,  with  date-stamped  copies
     thereof to be  furnished  to  Bonneville  within four (4) days  thereafter.
     Nothing contained in this Settlement  Agreement is intended by either Party
     to  constitute  an  admission  of  liability  or  acknowledgement  of fact,
     allegation, or claim that has been or could have been made.

6)   The  Parties  shall  treat  this  Settlement   Agreement  and  the  License
     Agreement,  Exhibit A,  particularly  the pricing  provisions  thereof,  as
     confidential  and proprietary  and shall take  reasonable  steps to protect
     them against unauthorized use or disclosure. If a request is received under
     the Freedom of Information  Act, 5 U.S.C.  552,  Bonneville  shall promptly
     notify ELI of such  request to accord ELI  reasonable  time within which to
     seek to enjoin any administratively  determined  disclosure.  Neither Party
     shall make initial public announcement of this Settlement Agreement without
     the prior review by the other  Party,  unless such public  announcement  is
     necessary to comply with applicable law.

7)   Each Party  represents  and warrants  that the  individual  executing  this
     Settlement  Agreement on its behalf is unconditionally  authorized to do so
     with full authority to bind such party to each and every  provision of this
     Settlement Agreement.

     IN WITNESS WHEREOF,  the Parties have executed this Settlement Agreement in
two counterparts.

ELECTRIC LIGHTWAVE, INC.                 UNITED STATES OF AMERICA
                                         Department of Energy
                                         Bonneville Power Administration

By:      /s/ Rudy J. Graf                By:      /s/ Robert C. Lahmann
Name:    Rudy J. Graf                    Name:    Robert C. Lahmann
Title:   Chief Executive Officer         Title:   Transmission Account Executive
Date:    5/15/00                         Date:    5/15/00

Exhibits:
         Exhibit A:        License Agreement
         Exhibit B:        Guaranty Agreement

                                      -3-Exhibit 10.26

                                                    License Agreement 00TX-30407

                                LICENSE AGREEMENT
                                     between
                            UNITED STATES OF AMERICA
                              DEPARTMENT OF ENERGY
                            acting by and through the
                         BONNEVILLE POWER ADMINISTRATION
                                       and
                            ELECTRIC LIGHTWAVE, INC.
Index to Sections
-------------------------------------------------------------------------------
Section                                                                    Page
 1   Definitions..............................................................2
 2   Termination and Replacement of Existing Agreements.......................3
 3   Term.....................................................................4
 4   Exhibits.................................................................4
 5   Amendment of Agreement...................................................4
 6   Ownership................................................................4
 7   License..................................................................5
 8   License Fee and Payments for Maintenance and Restoration of ELI Fiber....5
 9   Maintenance, Repair, and Restoration of the Cable........................6
10   Regeneration Huts........................................................9
11   Rights and Obligations Concerning the Cable.............................10
12   Modification of the Cable...............................................11
13   Representations and Warranties..........................................12
14   Audit Procedures........................................................14
15   Insurance...............................................................15
16   Default.................................................................17
17   Indemnification; Waiver of Damages......................................19
18   Dispute Resolution......................................................21
19   General.................................................................23

Exhibit A        (Route Description)
Exhibit B        (Fiber Specifications)
Exhibit C        (Detailed Restoration Plan)
Exhibit D        (Regeneration Site Lease Agreements)
Exhibit E        (Acceptance Testing Standards)

                                      -1-
<PAGE>

         This LICENSE  AGREEMENT  ("Agreement")  is executed on May 15, 2000, by
and between the UNITED STATES OF AMERICA ,  Department of Energy,  acting by and
through  the  BONNEVILLE  POWER  ADMINISTRATION  ("Bonneville"),   and  Electric
Lightwave,  Inc. ("ELI"), a corporation organized and existing under the laws of
the  State of  Delaware.  Both  Bonneville  and ELI may be  referred  to  herein
individually as "Party" and collectively as "Parties."

1.       Definitions

         The  following  terms,  when  used in this  Agreement,  shall  have the
meanings set forth in this section:

         (a)      "Bonneville  Facilities"  means all  Bonneville-owned   and/or
                  leased  structures,  rights-of-way,  buildings,  land,  access
                  roads, and equipment along each Route,  including improvements
                  made thereto by Bonneville during the term of this Agreement.

         (b)      "Bonneville  Fiber" means all optical fibers within the Cables
                  except the Dark Fibers  licensed to ELI by this  Agreement and
                  defined below as "ELI Fiber".

         (c)      "Cable" means  Bonneville owned fiber optic cable installed by
                  Bonneville  along each  Route with the fiber  count and of the
                  type specified in Exhibit A.

         (d)      "Cable  Accessories" means the equipment  necessary to support
                  the attachment of the Cable to the Bonneville Facilities.

         (e)      "Cable  Restoration"  means  repairing and returning a damaged
                  Cable back to service following an unscheduled outage.

         (f)      "Cable  Specifications"  means the drawings and specifications
                  regarding  the hardware and  materials  incorporated  into the
                  project.

         (g)      "Dark Fiber" means optical fiber,  provided without electronic
                  and/or optronic equipment, which is not "lit" or activated.

         (h)      "Detailed   Restoration   Plan"  means  the  specification  of
                  guidelines  and  procedures for  notification  regarding,  and
                  restoration  of, damaged Cable along each Route as quickly and
                  safely as possible.  The Detailed  Restoration Plan shall be a
                  living  document and  changes/updates  may occur in accordance
                  with section 5 as deemed necessary.

         (i)      "Effective  Date" means the date this Agreement is executed by
                  the Parties.

         (j)      "ELI Fiber" means 1,646 route miles of Dark Fibers  within the
                  Cables   located  on  the  Routes  owned  by  Bonneville   and
                  designated  to be  licensed  to ELI  pursuant to the terms and
                  conditions  of,  and for the term of this  Agreement  and more
                  particularly described as follows and in Exhibit A:
<TABLE>
<CAPTION>

Route                                                      Cable Miles           Fiber Count          Fiber Miles
-----                                                      -----------           -----------          -----------
<S>                                                           <C>                     <C>               <C>
Keeler-Covington (Portland-Seattle)                             192                    56               10,752
Ross-Bell (Portland-Spokane)                                    548                     8                4,384
Bell-Covington (Spokane-Seattle)                                268                    14                3,752
Keeler-Alvey (Portland-Eugene)                                  140                    10                1,400
Ross-Malin (Portland-Malin)                                     384                    56               21,504
Alvey-Bandon (Eugene-Bandon)                                    114                     6                  684
                                                              -----                   ---               ------
Totals                                                        1,646                   N/A               42,476
</TABLE>

                                      -2-
<PAGE>

         (k)      "Fiber Specifications" means the performance attributes of the
                  fiber within the Cable as described in Exhibit B.

         (l)      "Guaranteed  Payments"  shall  have the  meaning  set forth in
                  section 2 of the Guaranty.

         (m)      "Guaranty"  means the Guaranty by Citizens  Utilities  Company
                  for the benefit of Bonneville dated as of May 15, 2000.

         (n)      "Hazardous  Material"  means  any  material  determined  to be
                  hazardous to health or the environment by virtue of being: (a)
                  a hazardous waste as defined by the Resource  Conservation and
                  Recovery  Act;  (b) a  hazardous  substance  as defined by the
                  Comprehensive  Environment,  Compensation,  and Liability Act;
                  (c) a substance  regulated under the Toxic Substances  Control
                  Act; (d) a substance regulated under the Federal  Insecticide,
                  Fungicide,  and  Rodenticide  Act;  or  (e)  applicable  state
                  environmental  statutes.  References  to statutes  include any
                  amendments thereto and any regulations promulgated thereunder.
                  The  foregoing  statutory   references  shall  be  revised  as
                  necessary  to  include  statutes  enacted  subsequent  to  the
                  Effective  Date, that impose new  environmental  or mitigation
                  obligations with regard to any Route.

         (o)      "Interest  Rate" means 1.25 percent per month to be compounded
                  monthly  for each  month,  or portion  thereof,  during  which
                  interest accrues.

         (p)      "License" means the right to access and the exclusive right to
                  use,   resell,    sublicense    and/or   exchange   the   full
                  electromagnetic  capacity  of  designated  Dark Fibers for the
                  purpose   of   providing   any  and  all  "lit"  and   "unlit"
                  communication  services  without  limitation,  but not to own,
                  construct,  possess,  maintain,  or repair  such Dark  Fibers.
                  "License"  does not  include any right or interest of any kind
                  in any  conductor,  tower,  substation,  or equipment used for
                  transmission  of  electric  energy.   When  used  as  a  verb,
                  "License"  means the act of granting a License  defined in the
                  foregoing sentence.

         (q)      "Regeneration  Hut" means each building  along each Route that
                  houses the terminal and  regeneration  equipment  necessary to
                  regenerate  the  signals   transmitted  over  optical  fibers,
                  including any optronics or electronics required to make use of
                  such fibers.  "ELI  Regeneration  Huts,"  installed by ELI for
                  regenerating  signals on ELI Fibers, shall include the conduit
                  and  optical-fiber  cable from each regeneration hut up to the
                  nearest  Splice Box on the Cable Route  and/or the nearest BPA
                  substation  fence,  as determined  by BPA.  "BPA  Regeneration
                  Huts"  are any  Regeneration  Huts  separately  installed  and
                  operated by BPA for regenerating the signals on BPA Fibers.

         (r)      "Route"  means  the Cable on each of the  paths  described  in
                  Exhibit A.

2.       Termination and Replacement of Existing Agreements
         License  Agreement Nos.  97TX-10072,  dated July 18, 1997,  97TX-10080,
         dated  January 8, 1998,  and  98TX-10143,  dated  March 20,  1998,  are
         terminated as of the Effective  Date, and replaced in their entirety by
         this  Agreement,  except as  specified  in section 2 of the  Settlement
         Agreement  between the Parties  executed on the  Effective  Date and to
         which this Agreement is attached as Exhibit A.

                                      -3-
<PAGE>

3.       Term
         (a)      This  Agreement  shall  be  effective  at  2400  hours  on the
                  Effective  Date and shall  continue  in effect for a period of
                  twenty (20) years or unless  sooner  terminated  in accordance
                  with its express provisions.

         (b)      The term of this  Agreement  may be  extended  only by  mutual
                  agreement in writing executed by authorized representatives of
                  both Parties.  Conditioned  upon the faithful  performance  of
                  this  Agreement,  the Parties  agree to commence,  immediately
                  after the 17th anniversary date of this Agreement,  good faith
                  negotiations  about possible terms and  conditions,  including
                  License  fees  and  other  payments,  for  extension  of  this
                  Agreement  beyond the termination date for all or some portion
                  of the fibers  Licensed  herein  with due  regard for  unusual
                  circumstances   and   Bonneville's    actual   and   projected
                  operational need for the fiber at that time. The provisions of
                  this  section  3(b)  are not  intended  to limit  any  Party's
                  discretion to determine what is in its interest and to approve
                  or deny any requested extension.

         (c)      All obligations  incurred under this Agreement by either Party
                  and  outstanding  at the time of expiration or  termination of
                  this Agreement shall survive until satisfied.

4.       Exhibits
         Exhibit  A  (Route  Description),  Exhibit  B  (Fiber  Specifications),
         Exhibit C (Detailed  Restoration  Plans),  Exhibit D (Regeneration Site
         Lease  Agreement ) and Exhibit E  (Acceptance  Testing  Standards)  are
         attached hereto and made a part of this Agreement.

5.       Amendment of Agreement
         This  Agreement  may be amended or modified  only by written  agreement
         executed by authorized  representatives  of both Parties.  Amendment or
         modification  of sections 8(a),  8(b) and/or  section  16(b)(4) of this
         Agreement  shall  require  the written  consent of  Citizens  Utilities
         Company. No course of performance or dealing nor any waiver or delay in
         the enforcement of any rights granted  hereunder shall operate to amend
         or modify this Agreement.

6.       Ownership
         (a)      The Cable,  including the ELI Fiber, the Bonneville Facilities
                  and  any  Bonneville  Regeneration  Huts  shall  be  owned  by
                  Bonneville.

         (b)      The ELI  Regeneration  Huts and the contents  thereof shall be
                  owned  and  controlled  by ELI  throughout  the  term  of this
                  Agreement. To the extent that any ELI property or equipment is
                  determined to be fixtures of Bonneville's real property at the
                  expiration or  termination of this  Agreement,  Bonneville may
                  elect to receive title to and ownership of such  fixtures,  at
                  no cost to Bonneville,  or Bonneville may direct ELI to remove
                  the  fixtures  and  reasonably  restore  the  property  to its
                  pre-fixture condition,  at ELI's expense.  Notwithstanding the
                  foregoing sentence, ELI shall have the right to remove, at its
                  expense,   all  ELI   prefabricated   Regeneration  Huts  from
                  Bonneville  property at the  expiration or termination of this
                  Agreement.
                                      -4-
<PAGE>

7.       License
         (a)      Grant.  Bonneville  hereby  grants to ELI a License to the ELI
                  Fibers  throughout the term of this Agreement,  subject to all
                  the terms and conditions set forth in this Agreement.

         (b)      No Property Interest.  Except with regard to the provisions of
                  section 6(b) regarding ELI  Regeneration  Huts, this Agreement
                  shall not confer upon ELI any ownership or possessory interest
                  in any Route or other property  owned by  Bonneville,  and ELI
                  agrees  that it shall  never  make any claim of such  interest
                  based upon this Agreement.

         (c)      Exclusivity As To ELI Fibers. The License hereby granted shall
                  be  exclusive as to the ELI Fiber.  Bonneville  shall have the
                  right to use all Bonneville Fibers and Bonneville  Facilities,
                  or any portion thereof, and to enter upon each Route to access
                  the  Cable at  points  outside  any  fence  surrounding  ELI's
                  Regeneration  Huts for any and all  purposes  consistent  with
                  this  Agreement.  Such use and access by  Bonneville  shall be
                  undertaken so as to minimize any interference  with the rights
                  granted ELI by this Agreement. Bonneville shall provide notice
                  to  ELI  of  such  access  as  early  as  possible  under  the
                  circumstances.  Bonneville  expressly  reserves  the  right to
                  grant Licenses to third parties  regarding  Bonneville  Fiber;
                  provided,  however,  that this  Agreement  is not  intended to
                  create any  obligations  on the part of ELI with regard to any
                  such third parties.

         (d)      Additional   Fiber.   During  the  term  of  this   Agreement,
                  Bonneville  will  entertain  proposals  from  ELI  to  license
                  additional  Dark Fiber on the Routes herein or other  existing
                  or future fiber-optic cable routes owned by Bonneville if such
                  fiber is available for  commercial  license.  Bonneville  will
                  respond to any such  proposal  within ten (10)  business  days
                  after receipt of such proposal with an  acceptance,  rejection
                  or counter-proposal.

8.       License Fee and Payments for  Maintenance and Restoration of ELI Fiber

         (a)      ELI shall pay to  Bonneville,  no later than the  execution of
                  this Agreement and annually  thereafter  upon the  anniversary
                  date of this  Agreement,  the sum of [*] as a License fee.

         (b)      Annual Maintenance Payment

                  (1)      ELI shall pay to  Bonneville  an "Annual  Maintenance
                           Payment"  of  [*]  per   route   mile  for  the 1,646
                           Cable miles shown on the table in section  1(j).  The
                           first  such  payment  shall be made on the  Effective
                           Date  of  this  Agreement.   All  subsequent   Annual
                           Maintenance  Payments  shall be payable  each year on
                           the anniversary date of the Effective Date.

* Confidential material has been omitted  pursuant to a request for confidential
treatment.  Such material has been filed  separately  with  the  Securities  and
Exchange Commission.
                                      -5-
<PAGE>

                  (2)      Commencing   with  the  first   anniversary   of  the
                           Effective  Date  and  continuing  thereafter  on each
                           anniversary  date,  the  Annual  Maintenance  Payment
                           shall  be  adjusted  annually  by the  amount  of any
                           increase or decrease in the Consumer Price Index, All
                           Urban  Consumers  (CPI-U),  U.S.  City  Average,  All
                           Items,  published by the United States  Department of
                           Labor,  Bureau  of  Labor  Statistics   (1982-84=100)
                           ("Index")  for the preceding  twelve (12) months.  If
                           the Index is  discontinued  or  revised,  the Parties
                           shall  select  a  mutually   agreeable   replacement,
                           published by a reputable third party. In the event of
                           impasse,  the issue shall be referred to arbitration,
                           in  accordance  with  section 18, for the limited and
                           specific purpose of determining the replacement index
                           that best  replicates the Index,  as it was in effect
                           on the Effective Date.

         (c)      For each Bonneville  Fiscal Year (October 1 through  September
                  30), ELI shall reimburse  Bonneville its pro-rata share (based
                  on ELI Fiber  count  compared  to the total fiber count of the
                  Cable) for Cable  Restoration  costs  pertaining to each Route
                  actually  incurred by Bonneville  during the preceding  Fiscal
                  Year (pro  rated for  partial  years  under  this  Agreement).
                  Bonneville shall invoice ELI for such reimbursement  amount on
                  or about  December 31 of each year,  commencing  in 2000.  ELI
                  shall  reimburse  Bonneville  no later than  January 30 of the
                  following year.

         (d)      ELI shall pay all  amounts  due to  Bonneville  by wire or ACH
                  transfer,  using  procedures  regularly  established  and made
                  known to ELI by Bonneville's Financial Services Group. ELI may
                  pay its bill by mail; provided,  however, that all checks must
                  be received allowing  sufficient time for funds to be credited
                  to Bonneville's account by the due date. ELI shall include the
                  Bonneville  contract number in the  description  field of each
                  transfer, check, or other payment instrument. If ELI is paying
                  by mail, payments shall be mailed to:

                  Bonneville Power Administration
                  P.O. Box 6040
                  Portland, OR 97228-6040

         (e)      Late  Payment.  Payments not received by  Bonneville  when due
                  shall bear interest at the Interest Rate from the date payment
                  was due until the date payment is made to Bonneville.  Nothing
                  in this  section  8(e)  shall be deemed to limit the rights of
                  Bonneville in accordance with sections 16 and 18 hereof.

9.       Maintenance, Repair, and Restoration of the Cable

         (a)      Maintenance of the Cable.

                  (1)      During the term of this Agreement,  Bonneville  shall
                           be responsible  for all  maintenance of the Cable and
                           the Cable  Accessories  along each Route.  Bonneville
                           shall maintain the Cable,  the Cable  Accessories and
                           the Routes at all times in good working  order and in
                           a safe  condition,  in  conformity  with the  License
                           rights   granted   ELI  by  this   Agreement,   Cable
                           Specifications,  Prudent  Utility  Practice  and  all
                           applicable laws and regulations.
                                      -6-

<PAGE>

                  (2)      ELI  shall  be  responsible  for  maintenance  of its
                           property,  including the Regeneration  Huts along the
                           Route.

         (b)      Detailed  Restoration Plan. Cable Restoration  activities will
                  be  integral  to ensuring  successful  implementation  of this
                  Agreement.  Timely  restoration  is dependent  upon the timely
                  coordination and cooperation  between  Bonneville and ELI. The
                  Parties  acknowledge  that  Detailed  Restoration  Plans  were
                  prepared  pursuant to the  Agreements  referenced in section 2
                  for all  Routes  except  Keeler-Alvey  and  Alvey-Bandon.  The
                  existing  Detailed  Restoration Plans are incorporated as part
                  of this  Agreement  as Exhibit C, until such times as they are
                  modified pursuant to section 5. The Parties agree to cooperate
                  in  completing   Detailed   Restoration   Plans  covering  the
                  remaining  Routes  within  thirty (30) days from the Effective
                  Date. Upon completion,  these remaining  Detailed  Restoration
                  Plans shall also become part of this Agreement as Exhibit C.

          (c)     Restoration Priorities and General Requirements.

                  (1)      Bonneville's  obligation  to maintain  and repair the
                           Cable and any activity  incidental  thereto  shall be
                           subordinate   to,  and  shall  not   conflict   with,
                           Bonneville's   rightful  use  and  operation  of  its
                           electric power transmission facilities.  In the event
                           both  Bonneville's  transmission  facilities  and the
                           Cable require  maintenance or repair, the restoration
                           of the Cable shall be at all times subordinate to the
                           timely   restoration  of  Bonneville's   transmission
                           facilities,  unless otherwise agreed to by Bonneville
                           in  advance.   With   regard  to  each   Route,   the
                           restoration of Bonneville's telecommunications system
                           and fibers for its  internal use and  restoration  of
                           any fibers  Licensed  to any other  party by contract
                           dated prior to the date  specified  in the  following
                           table shall take priority over restoration activities
                           related to ELI Fiber.  With regard to each Route, the
                           restoration of the ELI Fiber shall take priority over
                           restoration activities related to any fibers licensed
                           to any other  party in  contracts  subsequent  to the
                           date specified in the following table.

<TABLE>
<CAPTION>
                           Route                                                     Date
                           -----                                                     ----
<S>                        <C>                                                       <C>
                           Keeler-Covington (Portland-Seattle)                        March 20, 1998
                           Ross-Bell (Portland-Spokane)                               March 20, 1998
                           Bell-Covington (Spokane-Seattle)                           March 20, 1998
                           Keeler-Alvey (Portland-Eugene)                              July 18, 1997
                           Ross-Malin (Portland-Malin)                               January 8, 1998
                           Alvey-Bandon (Eugene-Bandon)                              Effective Date
                                                                                     --------------
</TABLE>

                                      -7-
<PAGE>

                  (2)      Any and all  Bonneville or ELI  representatives  that
                           construct,  install,  repair,  replace,  or otherwise
                           handle  the  Cable,  Cable  Accessories,  ELI  Fiber,
                           Bonneville   Fiber,  or  any  related  materials  and
                           equipment  shall be properly  trained and equipped to
                           meet all current  industry  standards.  To the extent
                           employees or agents of ELI will work near  Bonneville
                           transmission  facilities,   ELI  shall  utilize  only
                           representatives  that have been properly  trained and
                           equipped to perform  the work safely and  competently
                           in  that  environment.  Costs  of such  training  and
                           equipment for ELI employees and agents shall be borne
                           by ELI.

                  (3)      ELI   and   Bonneville   agree   that  a   Bonneville
                           representative  shall and must be on site  during all
                           repair and restoration work to perform functions such
                           as   safety   watch,   protection   of   Bonneville's
                           transmission  facilities,  or obtain line clearances.
                           Bonneville  shall  make  its best  efforts  to have a
                           representative   arrive  at  the  site  requiring  an
                           emergency  maintenance  activity  pursuant to section
                           9(d)(1)   of   this    Agreement.    The   Bonneville
                           representative  shall  have the  authority  as to the
                           workers of either  Party on the site to stop work for
                           reasons that involve potential health hazards, safety
                           concerns  or  potential  disruption  to  Bonneville's
                           transmission system.

                  (4)      The Party  performing  repairs and Cable  Restoration
                           shall use Prudent Utility  Practice to complete their
                           work in the most timely fashion,  using the most cost
                           effective   restoration   procedures   and  materials
                           available,  given  the  Cable  Specifications,  Fiber
                           Specifications,  and current industry standards,  and
                           given     Bonneville's      electric     transmission
                           responsibilities.

         (d)      Restoration of the Cable.

                  (1)      Bonneville shall immediately,  upon notification from
                           ELI, of a confirmed  cable  related  interruption  in
                           service, failure, disrepair, impairment or other need
                           for repair or restoration of the ELI Fiber,  begin to
                           mobilize  Bonneville  crews  and make its  continuous
                           best  effort  to  achieve  such  necessary  repair or
                           restoration, including making its best effort to have
                           maintenance  personnel  at the  affected  site within
                           four  (4)  hours  after   receipt  of  such   notice,
                           provided,  however,  that  in  the  event  any of ELI
                           rights are interrupted by events described in section
                           19(a),  repairs  and  restoration  shall  be  made as
                           expeditiously  as possible.  ELI recognizes  that the
                           four  (4)  hour  response  time  represents   optimal
                           conditions,   and  may  be   impossible   to  achieve
                           particularly   when   responding  to  certain  remote
                           locations and  including,  but not limited to, events
                           of  Force  Majeure.  Actual  response  times  will be
                           influenced  by factors such as the  terrain,  weather
                           conditions  present at the time the  request is made,
                           and the actual  mileage  from  Bonneville's  dispatch
                           station to the fault site.

                                      -8-
<PAGE>

                  (2)      Whenever,   in   accordance   with  this   Agreement,
                           Bonneville  is required to use its best  efforts,  it
                           shall be deemed to have done so if it acts consistent
                           with  Prudent  Utility   Practice.   Prudent  Utility
                           Practice  shall  mean  the  practice  that  would  be
                           employed under comparable  circumstances by a prudent
                           owner  and  operator  in  the  utility   business  in
                           accordance   with  good   industry   practices,   and
                           specifically   accounting   for   existing   contract
                           provisions   for   Bonneville's    hourly   employees
                           ("Collective Agreement between BPA and Columbia Power
                           Trades  Council"),  and  response  times  that do not
                           jeopardize   the  health  and  safety  of  Bonneville
                           employees,  agents of  Bonneville,  ELI  employees or
                           agents of ELI.

                  (3)      The  Detailed  Restoration  Plan  shall set forth the
                           roles and responsibilities of the respective Parties,
                           and  shall  address   issues   regarding   logistical
                           considerations,     response     interval    factors,
                           communication   between   the   Parties,   sequential
                           activity requirements,  and other related items which
                           would impact response time and restoration intervals.
                           The   aforementioned   issues   will  be  taken  into
                           consideration   in  the   determination   of  whether
                           Bonneville   has  used  its  best   efforts  in  such
                           restoration or repair activities.

                  (4)      If   Bonneville   is  unable  to  begin  to   provide
                           restoration within the agreed-upon timeframe pursuant
                           to section  9(d)(1),  Bonneville shall provide ELI or
                           ELI's Bonneville-approved subcontractor access to the
                           Cable,  pursuant to the  Detailed  Restoration  Plan,
                           after    notification    from   ELI   of    confirmed
                           Cable-related   interruption  in  service,   failure,
                           disrepair,  impairment,  or other need for repair, so
                           that ELI or its Bonneville-approved subcontractor can
                           make  necessary  repairs to the Cable  provided  such
                           repairs  are  made in  accordance  with  all  current
                           Bonneville  and industry  safety  standards.  Prudent
                           Utility   Practice   shall   govern  all   activities
                           undertaken pursuant to this section 9(c)(4).

                  (5)      To the  extent  the  Cable  has  been  maintained  by
                           Bonneville in accordance with section 9(a)(1), if the
                           Cable's  ability to transmit a signal  degrades  over
                           time to a level  reasonably  unacceptable  to  either
                           Party, the Parties will jointly  determine the action
                           to be taken and share any costs  associated  with the
                           action,  if any,  on a pro rata basis  based upon the
                           ratio of ELI  Fibers  to total  fibers  in the  Cable
                           along the relevant Route.

         (e)      Duty to Notify.  Each Party shall use commercially  reasonable
                  efforts  to  provide  timely  information  to the other  Party
                  (e.g., by telephone, electronic communication or in writing as
                  appropriate) of all plans, activities and changes in condition
                  that could affect the other Parties'  operations or the safety
                  of its personnel and contractors.

                                      -9-
<PAGE>

10.      REGENERATION HUTS

         (a)      ELI  shall  have  sole  responsibility  for  the  expense  and
                  acquisition  of any  property or utilities  necessary  for its
                  equipment along the Route. If space is available at Bonneville
                  substations,   taking  account  of  Bonneville's  current  and
                  projected  needs for space and ensuring no  interference  with
                  Bonneville's other operations, such space shall be provided to
                  ELI pursuant to the Regeneration Hut Site Lease Agreement form
                  attached as Exhibit D.

         (b)      Other than the  Bonneville  Facilities,  ELI shall provide all
                  components necessary for the operation of the ELI Fiber.

         (c)      Bonneville  shall  provide  to  ELI  updated  versions  of the
                  "Bonneville    Safety    Requirements."    ELI   shall    have
                  responsibility,    in   consultation   with   the   Bonneville
                  representative assigned pursuant to section 9(c)(3), to comply
                  with Bonneville Safety  Requirements as in effect from time to
                  time with regard to the  installation  and  maintenance of ELI
                  facilities on or about Bonneville  Facilities.  ELI shall bear
                  the  expense  of  its  compliance   with   Bonneville   Safety
                  Requirements,  as  modified,  including  environmental-control
                  procedures  such as  maintenance  of the  grounds  around  the
                  Regeneration Huts  and with  other  requirements  imposed  by\
                  governmental agencies other than BPA.

         (d)      The License  granted to ELI in Section 7 includes the right to
                  use  Bonneville's  access roads to access all ELI Regeneration
                  Huts;  provided,  however,  that ELI  shall  use  commercially
                  reasonable  efforts to ensure  that heavy  vehicles  and other
                  equipment  being used on an access  road do not impair its use
                  by  Bonneville.  Access to the roads  shall be  limited to the
                  times and frequency, as reasonably determined by ELI, required
                  for  maintenance  and operation of the  Regeneration  Huts and
                  equipment, and  any repair and restoration activities pursuant
                  to section 9. ELI shall,  at ELI's expense,  repair any damage
                  to the access roads caused as a result of ELI use thereof.

11.      RIGHTS AND OBLIGATIONS CONCERNING THE CABLE

         (a)      Permits.  Bonneville shall acquire,  at Bonneville's  expense,
                  all  necessary   regulatory  and   governmental   permits  and
                  approvals with the exception of any permits  and/or  approvals
                  that  may  be  required   for  the  ELI   Regeneration   Huts.
                  Notwithstanding  the foregoing,  Bonneville  shall, with ELI's
                  cooperation  and  assistance,  acquire all necessary  National
                  Environmental  Policy Act (NEPA) permits for the  Regeneration
                  Huts  pursuant  to section  11(d),  at  Bonneville's  expense,
                  except  for  expenses  related  to  mitigation  activities  as
                  described  in  section  11(d).  Nothing in this  Agreement  is
                  intended  to nor  does it  commit  any  agency  of the  United
                  States,  other  than  Bonneville,  to take  any  action  or to
                  administer any law or regulation in any particular manner.

                                      -10-
<PAGE>

         (b)      Taxes,  Mechanic's Liens, and Encumbrances.  ELI shall pay all
                  taxes as well as all  franchise  fees and other fees and other
                  obligations  to third  parties  relating to ELI's use of fiber
                  covered  by the  License  granted  pursuant  to Section 7. ELI
                  shall  keep each  Route  free from all liens and  encumbrances
                  resulting from its performance of this Agreement.  If ELI does
                  not pay any taxes,  fees or other obligations when such become
                  due and payable,  and such nonpayment results or may result in
                  the  imposition  of a lien on, or  encumbrance  of, the Route,
                  then Bonneville  shall have the right, but not the obligation,
                  to pay all amounts due and discharge such lien or encumbrance,
                  upon thirty (30) calendar days prior written notice to ELI and
                  charge the  amount  thereof  to ELI.  In the event  Bonneville
                  causes such liens or encumbrances to be discharged,  ELI shall
                  reimburse  such amounts to  Bonneville  upon demand,  together
                  with interest thereon at the Interest Rate,  accruing from the
                  date that Bonneville  makes payment  discharging such liens or
                  encumbrances   until  the  date   Bonneville   receives   full
                  reimbursement from ELI. Such discharge by Bonneville shall not
                  be  construed  to waive or release  any  defense  ELI may have
                  against  the third party that  placed the  discharged  lien or
                  encumbrance,  but any  such  defense  ELI may have  shall  not
                  affect  Bonneville's  right to reimbursement  from ELI for the
                  discharged  lien or  encumbrance.  If  requested  in  writing,
                  Bonneville  shall  reasonably   assist  ELI  in  disputing  or
                  challenging any tax, lien, or fee.

         (c)      Access to Local  Landowners.  Contacts  made by ELI with local
                  landowners adjacent to each Route,  regarding activities on or
                  related to Bonneville rights-of-way, shall be coordinated with
                  Bonneville, as specified in the Detailed Restoration Plan. ELI
                  may  contact  local  landowners   unilaterally  regarding  its
                  activities on other property.

         (d)      Environmental  Compliance  Activities.   Bonneville  shall  be
                  responsible for compliance with the Federal,  state, and local
                  laws and  regulations  pertaining  to NEPA and related  public
                  involvement and information  exchange  relating to the actions
                  of ELI under this  Agreement.  Bonneville  shall  acquire  all
                  necessary  permits   associated  with  any  Cable  operations,
                  maintenance  and   construction   along  each  Route.  If  any
                  mitigation   measures   are  required  as  part  of  the  NEPA
                  (including   state   and   local   requirements)    compliance
                  activities,  these  measures shall be undertaken by Bonneville
                  at the sole cost of ELI provided,  however, that ELI shall not
                  be  liable  for the  costs  of any  mitigation  measures  that
                  Bonneville  would  have  been  required  to  undertake  in the
                  absence  of  this  Agreement.  All  contacts  with  the  local
                  landowners  related to NEPA  compliance  shall be performed by
                  Bonneville-appointed representatives.

12.      MODIFICATION OF THE CABLE

         The Parties acknowledge that the Cable or a portion thereof may require
         relocation,  modification,  or  replacement  during  the  term  of this
         Agreement.  The cost of such  relocation,  modification  or replacement
         shall be allocated as follows:

                                      -11-
<PAGE>

         (a)      If requested by ELI for its  operational  purposes,  ELI shall
                  pay all such costs, provided,  however, that Bonneville shall,
                  in its sole discretion, determine whether such modification of
                  the Cable may be  accommodated  considering  Bonneville's  own
                  needs   to   provide    economical   and   reliable   electric
                  transmission,   Bonneville's  own  needs  for   communications
                  capabilities,   and   Bonneville's   provision  of  fiber  and
                  communications capabilities to others.

         (b)      If requested by Bonneville  due to  requirements  necessary to
                  provide   economical  and  reliable   electric   transmission,
                  Bonneville's  own needs for  communications  capabilities,  or
                  Bonneville's    provision   of   fiber   and    communications
                  capabilities  to others,  Bonneville  shall be responsible for
                  all such costs.

         (c)      If  the   Cable   must  be   relocated   due  to  the   final,
                  non-appealable  order  of any  court  or  governmental  agency
                  having  jurisdiction,  or  because of a Force  Majeure  event,
                  Bonneville shall, in consultation with ELI and other licensees
                  of the fiber on the relevant Route,  designate a new route for
                  the Cable. The costs associated with such required  relocation
                  that are not paid by a third party,  shall be allocated  among
                  the Parties and any other Licensees pro rata, based upon their
                  respective  numbers of fibers.  If the Cable must be relocated
                  pursuant to this Section 12(c),  Bonneville and ELI shall work
                  together to select  contractors  and  materials to achieve the
                  most timely and  cost-effective  relocation  available  in the
                  market place given the Fiber  Specifications  and then-current
                  Prudent Utility Practices.

13.      REPRESENTATIONS AND WARRANTIES

         (a)      ELI represents and warrants to Bonneville as follows:

                  (1)      ELI has full power and authority to execute, deliver,
                           and perform its obligations under this Agreement. The
                           execution of this  Agreement by ELI has been duly and
                           validly  authorized  by all  necessary  action on the
                           part of ELI. This  Agreement is a legal,  valid,  and
                           binding obligation of ELI enforceable  against ELI in
                           accordance with its terms. The execution and delivery
                           of this  Agreement by ELI and the  performance of the
                           terms,  covenants,  and conditions  contained  herein
                           will not violate the  articles  of  incorporation  or
                           bylaws of ELI or any  applicable law or regulation or
                           any  order of any court or  arbitrator,  and will not
                           conflict  with  and will not  constitute  a  material
                           breach of, or default  under,  the  provisions of any
                           contract by which ELI is bound.  Except as  otherwise
                           stated herein, no approval,  authorization,  or other
                           action by any  governmental  authority or filing with
                           any such  authority  which has not been  obtained  or
                           accomplished  is  required  in  connection  with  the
                           execution,  delivery,  and performance by ELI of this
                           Agreement.

                                      -12-
<PAGE>

                  (2)      There are no known  actions,  suits,  or  proceedings
                           pending or overtly  threatened against ELI before any
                           court or administrative  agency that would materially
                           impair ELIs performance of its obligations under this
                           Agreement.

                  (3)      ELI has  requested  Bonneville  to  enter  into  this
                           Agreement in reliance  upon the Guaranty and that ELI
                           is aware that, in light of prior  disputes  among the
                           parties,  Bonneville  would not be  willing  to enter
                           into this Agreement without the Guaranty or to permit
                           this  Agreement  to remain in effect if the  Guaranty
                           were no  longer  available.  ELI is also  aware  that
                           Bonneville  would not be  willing  to enter into this
                           Agreement were ELI's  obligation to make the payments
                           under   section  8(a)  and  (b)  hereof   subject  to
                           suspension  or delay by reason of a dispute  relation
                           to Bonneville's  performance of its obligations under
                           this Agreement.

         (b)      Bonneville represents and warrants to ELI as follows:

                  (1)      Bonneville  has full power and  authority to execute,
                           deliver,  and  perform  its  obligations  under  this
                           Agreement.  This  Agreement  constitutes  a legal and
                           valid   obligation  of  Bonneville   enforceable   in
                           accordance with its terms to the full extent provided
                           by law.

                  (2)      Upon execution of this Agreement, Bonneville warrants
                           that there are no known conflicts with this Agreement
                           and  that  neither  execution  and  delivery  of this
                           Agreement  nor   performance  by  Bonneville  of  its
                           obligations  hereunder  constitutes a material breach
                           of or a default under any  constitutional  provision,
                           or any law or administrative  regulation,  or violate
                           any judgment,  decree,  or other  instrument,  or any
                           other   contract   related  to  the  Route  to  which
                           Bonneville  is a Party or to which  Bonneville or any
                           of its property or assets is subject.

                  (3)      Bonneville  has  sufficient  interests  in  the  real
                           property  along  each Route to  construct  its Cable,
                           carry out its obligations under this Agreement; allow
                           ELI  to  access   ELI   Regeneration   Huts  and  BPA
                           Facilities;    and   allow   ELI   to   provide   all
                           telecommunication  services  over ELI Fiber  that are
                           contemplated by the License granted in section 7.

                  (4)      Compliance  with the  terms  and  conditions  of this
                           Agreement by ELI will not adversely  affect the safe,
                           efficient,  or  reliable  operation  of  Bonneville's
                           electric transmissions facilities.

                                      -13-
<PAGE>

         (c)      Materials Warranties.

                  (1)      Except  as  otherwise  specifically  set forth in the
                           representations, warranties, covenants and conditions
                           of this  Agreement,  each Party  makes no warranty to
                           the  other  Party or to any other  person or  entity,
                           whether  express,  implied  or  statutory,  as to the
                           installation,  description, quality, merchantability,
                           completeness  or  fitness  for  any  purpose  of  any
                           portion of the Cable or any, services,  facilities or
                           equipment  provided hereunder or described herein, or
                           as to any other matter,  all of which  warranties are
                           hereby excluded and disclaimed.

                  (2)      In  procuring  and  obtaining  materials,  each Party
                           shall  use  reasonable  efforts  to  obtain  from the
                           vendors  and  suppliers,  for the  mutual  benefit of
                           itself  and the  other  Party,  warranties  that such
                           materials are:

                           (A)      of the kind  and  quality  described  in the
                                    purchase order or supply contract;

                           (B)      free of  defects in  workmanship,  material,
                                    design and title;

                           (C)      of good and merchantable  quality; and where
                                    appropriate, fit for their intended purpose.

         (d)      No Bonneville Warranty  Concerning Route.  Bonneville makes no
                  representation or warranty whatsoever  concerning the physical
                  characteristics  of the Route or ELI's  economic or commercial
                  prospects hereunder.  ELI acknowledges that neither Bonneville
                  nor any of Bonneville's officers, employees,  representatives,
                  contractors,  or  subcontractors  or agents have made any such
                  representation  or  warranty.  Neither  Bonneville  nor ELI is
                  entering  into  this  Agreement  in  reliance  upon  any  such
                  representation   or   warranty.   ELI's   payment   and  other
                  obligations  hereunder  are in no way  contingent  upon  ELI's
                  success or failure in  marketing  the ELI Fiber,  or  services
                  based upon ELI fiber, to others.

14.      AUDIT PROCEDURES

         (a)      Records.  The Parties shall  maintain true and correct sets of
                  records, including accounting, billing and collection records,
                  in connection  with the  performance of this Agreement and all
                  transactions related thereto and shall retain all such records
                  for a period of not less  than  three  (3)  years  after  such
                  transaction or event or related time period.

                                      -14-
<PAGE>

         (b)      Reimbursement of Costs. If Bonneville or ELI is entitled under
                  this  Agreement to be paid amounts  determined  in whole or in
                  part  on a  reimbursement-of-costs  basis,  the  costs  to  be
                  reimbursed shall be only those  reasonably  necessary for that
                  Party to perform the work in an efficient manner in accordance
                  with the time schedule required.

         (c)      Audit Rights. A Party from whom any  reimbursement is required
                  under this Agreement may, at its sole  discretion and expense,
                  request and with reasonable notice perform a complete audit of
                  the  records  related to the  requested  reimbursement  of the
                  Party requesting reimbursement.  In the event that the Parties
                  agree that the amount of requested  reimbursement is accurate,
                  and that the demand for  reimbursement is justified under this
                  Agreement,  then the  nonauditing  Party shall  reimburse  the
                  auditing  Party the agreed upon amount.  In the event that the
                  nonauditing  Party  disagrees  with the results of the Party's
                  audit and resolution is not reached  between the Parties,  the
                  Parties agree to resolve the dispute pursuant to section 18 of
                  this Agreement.

15.      Insurance

         (a)      General.  At all times during the term of this Agreement,  ELI
                  at its own cost and expense,  shall procure,  maintain in full
                  force and effect, and pay for the insurance  specified by this
                  section 15.

         (b)      Evidence  Required.  Within  thirty (30) days of the Effective
                  Date of this  Agreement,  ELI shall provide  Bonneville with a
                  certificate   of   insurance   executed   by   an   authorized
                  representative  of Qualified  Insurers as described in section
                  15(d) evidencing that ELI has insurance in place that complies
                  in all respects with this section, and that such insurance was
                  effective as of the Effective Date.

         (c)      Notice  of  Cancellation,  Reduction,  or  Material  Change in
                  Coverage.  Each policy  shall  include a  provision  requiring
                  written  notice by the  insurer(s) to Bonneville not less than
                  thirty (30) calendar days prior to cancellation, reduction, or
                  material  change  in  coverage.   If  insurance   coverage  is
                  canceled,  reduced, or materially changed, ELI shall, prior to
                  the  effective  date  of  such  cancellation,   reduction,  or
                  material  change,  obtain  and  have in  effect  the  coverage
                  required under this section and provide to Bonneville prior to
                  the noticed  cancellation,  reduction or material  change date
                  documentation  evidencing the  effectiveness of such coverage.
                  ELI  shall  be   responsible  to  the  extent  not  caused  by
                  Bonneville's   negligence,   for  the  costs  of  any  damage,
                  liability,  or  injury  which  are not  otherwise  covered  by
                  insurance.

         (d)      Qualifying   Insurers.   Policies   shall  be  issued  by  and
                  maintained  in  force  with  companies  which  hold a  current
                  policyholders alphabetic and financial size category rating of
                  not less than "A-" according to Best's  Insurance  Report or a
                  similar rating from another recognized rating agency.

                                      -15-
<PAGE>

         (e)      Insurance Required.

                  (1)      Liability. Commercial general liability insurance for
                           bodily injury  (including  death) and property damage
                           shall provide limits of not less than $10 million per
                           occurrence.

                  Coverage included shall be:

                           (A)  premises and operations;
                           (B)  broad form property damage;
                           (C)  products and completed operations;
                           (D)  blanket contractual liability;
                           (E)  personal injury liability;
                           (F)  cross-liability  and  severability of interests;
                                and
                           (G)  independent contractors liability.

                  (2)      Business  Automobile  Liability  Insurance.  Business
                           Automobile  Liability  Insurance  for  bodily  injury
                           (including  death) and property  damage shall provide
                           total  limits  of not less than $2  million  combined
                           single limit per occurrence to all owned,  non-owned,
                           and hired vehicles.

                  (3)      Workers' Compensation/Employer's Liability Insurance.
                           Statutory   Workers'   Compensation   and  Employer's
                           Liability  Insurance for not less than $1 million per
                           occurrence   shall  apply  to  employer's   liability
                           coverage  for all  employees  engaged in  services or
                           operations  under this  Agreement.  The policy  shall
                           include broad form all-States/other States coverage.

                  (4)      All  coverage  identified  above shall be endorsed to
                           include the following:

                           (A)      inclusion  of   Bonneville,   its  officers,
                                    representatives,  agents,  and  employees as
                                    additional insureds in regard to services or

                           (B)      operations performed in connection with this
                                    Agreement; and

                           (C)      a stipulation  that the insurance is primary
                                    insurance   and   that   no   insurance   or
                                    self-insurance  of Bonneville will be called
                                    upon to contribute to a loss.

         (f)      Special Provisions.

                  (1)      Neither  the  foregoing  specification  of  insurance
                           requirements   nor   ELI's   conformance   with  such
                           requirements  is  intended  to limit or  qualify  the
                           liabilities and obligations  otherwise assumed by ELI
                           or Bonneville pursuant to this Agreement,  including,
                           but  not  limited  to,  the   provisions   concerning
                           indemnification.

                                      -16-
<PAGE>

                  (2)      Bonneville  acknowledges  and  agrees  that  ELI  may
                           fulfill some insurance requirements contained in this
                           section  15  by  means  of  a  formal  self-insurance
                           program of ELI or its parent  corporation;  provided,
                           however,  that  self-insurance  shall  not in any way
                           limit the potential  liabilities assumed by ELI under
                           this Agreement.  Any  self-insurance  program must be
                           first  approved  in  writing  by  Bonneville,   which
                           approval  shall  not  be  unreasonably   withheld  or
                           delayed.

16.      Default

         (a)      Events of Default.  If either Party is in breach or default of
                  this   Agreement   ("Defaulting   Party"),   the  other  Party
                  ("Nondefaulting  Party") may notify in writing the  Defaulting
                  Party  that it is in  breach  or  default,  such  notice to be
                  effective upon its receipt by the Defaulting  Party. A copy of
                  any notice of breach or default  under section 8(a) or section
                  8(b) shall also be provided to Citizens Utilities Company. The
                  following events shall constitute breach or default under this
                  Agreement:

                  (1)      failure to make any payment when due hereunder,  with
                           the  exception  of payments  that  become  payable to
                           either Party during the period of any Force  Majeure,
                           but only when the event of Force Majeure results in a
                           disruption  of  the  banking  system  and  a  Party's
                           physical  inability to make such  payment;  provided,
                           however,  that  the  Party  experiencing  such  Force
                           Majeure shall immediately  notify the other Party and
                           make alternative  arrangements  that are agreeable to
                           both Parties, but must in any case resume the regular
                           schedule for making  payments as soon as possible and
                           pay any unpaid bills  immediately upon the conclusion
                           of any period of Force Majeure;

                  (2)      failure  to  perform  in  any  material  respect  any
                           obligations  required  to be  observed  or  performed
                           hereunder;

                  (3)      any  representation  or warranty made by one Party to
                           the other  herein  proving  incorrect in any material
                           respect as of the date of the making thereof;

                  (4)      the  filing  by  ELI  of  a  voluntary   petition  in
                           bankruptcy, or a petition in bankruptcy filed against
                           ELI that is not dismissed  within sixty (60) days, or
                           the adjudication of as bankrupt or insolvent,  or the
                           filing  of  any   petition   or  answer   seeking  or
                           acquiescing  in  any   reorganization,   arrangement,
                           composition, readjustment,  liquidation, dissolution,
                           or  similar   relief  under  any  present  or  future
                           Federal,  State, or other statute, law, or regulation
                           relating to bankruptcy,  insolvency,  or other relief
                           for debtors, or seeks or consents to or acquiesces in
                           the appointment of any trustee, receiver,  custodian,
                           liquidator, or similar official of ELI or any general
                           assignment   of  ELI  assets   for  the   benefit  of
                           creditors;

                                      -17-
<PAGE>

                  (5)      willful and material  interference  by one Party with
                           the other Party's operations;

                  (6)      failure to make, or arrange with the other Party for,
                           full and timely  repair of any damage to one  Party's
                           property  or  equipment  caused  as a  result  of the
                           negligent or willful actions by the other Party; or

                  (7)      acceptable  alternative  arrangements  are not agreed
                           to,  or  an  acceptable   letter  of  credit  is  not
                           delivered, as contemplated and required by section 16
                           of the Guaranty.

          (b)     Remedies.

                  (1)      Defaulting Party's Right to Cure.

                           The Defaulting Party shall have the right to cure any
                           breach or default under this Agreement  (other than a
                           default  under  section  16(a)(7))  within  ten  (10)
                           calendar  days after the  receipt  by the  Defaulting
                           Party  of  notification  of such  breach  or  default
                           (thirty  (30)  calendar  days  after the  receipt  of
                           notification by both ELI and Citizens Utility Company
                           of a default under section 8(a) and/or 8(b)).

                  (2)      Nondefaulting  Party's Remedies.  Subject to sections
                           16(b)(3)(A)  and  (B),  after  the time  allowed  the
                           Defaulting  Party  to  cure  any  alleged  breach  or
                           default has  expired,  then the  Nondefaulting  Party
                           shall   have  the  right  to:  (A)   terminate   this
                           Agreement;  (B) cure any  breach  or  default  of the
                           Defaulting   Party  to  preserve  the   Nondefaulting
                           Party's  rights that may be prejudiced as a result of
                           such material breach or default; and (C) exercise and
                           pursue  cumulatively  any and all other legal  rights
                           and remedies, available to it under this Agreement or
                           applicable law.

                  (3)       Termination by Bonneville.

                           (A)      In the event  ELI fails to make any  payment
                                    when due pursuant to sections  8(a) and (b),
                                    and such  failure  is not cured  within  the
                                    time   specified   in   section    16(b)(1),
                                    notwithstanding  that at such time there may
                                    be disputes  between the parties relating to
                                    this   Agreement   and  despite   resolution
                                    procedures   have   commenced   pursuant  to
                                    section 18, this Agreement  shall  terminate
                                    at 12  midnight on the last day of the sixth
                                    (6th)  month  following  the  month in which
                                    such default occurred,  and ELI shall pay to
                                    Bonneville  the  Liquidation   Payment,   as
                                    defined  below,  within five (5) days of the
                                    end of the cure period  specified in section
                                    16(b)(1).

                                      -18-
<PAGE>

                           (B)      If a default shall occur pursuant to section
                                    16(a)(7),  this Agreement  shall  terminate,
                                    without any requirement of notice, effective
                                    as of 12  midnight  on  December  31 of such
                                    year or 12  midnight  on the last day of the
                                    sixth  (6th)  month  following  the month in
                                    which such  default  occurred,  whichever is
                                    earlier.

                  (4)      Liquidation  Payment.  In the event this Agreement is
                           to be terminated pursuant to section 16(b)(3)(A), ELI
                           shall  pay to  Bonneville  on the  date  provided  in
                           section  16(b)(3)(A) as liquidated damages the sum of
                           $20,000,000, which payment shall be Bonneville's sole
                           and   exclusive   remedy   (in   addition   to   such
                           termination)  for a failure to make any payment  when
                           due pursuant to sections  8(a) and (b), but shall not
                           in any way limit  Bonneville's  rights as provided in
                           section 18(d) hereof.  The Parties hereby acknowledge
                           and agree that such amount  represents  a  reasonable
                           estimate of the  revenues  Bonneville  would  receive
                           under  this  Agreement  over  the  time  that  may be
                           required   for   Bonneville,   in  the   exercise  of
                           reasonable   diligence,   to  License  or   otherwise
                           re-market all Dark Fibers covered by this  Agreement,
                           and is  not a  penalty  or  forfeiture.  The  Parties
                           further   acknowledge  and  agree  that  Bonneville's
                           damages are  difficult or  impossible  to  determine,
                           otherwise    obtaining   an   adequate    remedy   is
                           inconvenient  and that the  liquidated-damage  amount
                           constitutes a reasonable approximation of the harm or
                           loss that Bonneville would be expected to suffer upon
                           termination  of  this  Agreement  for  nonpayment  of
                           amounts  due under  sections  8(a) and (b) hereof and
                           the  risk  of  delay  in   licensing   or   otherwise
                           re-marketing such Dark Fibers.

17.      Indemnification; Waiver of Damages

         (a)      Indemnification by ELI.

                  (1)      To the extent  allowed by law, ELI shall  release and
                           indemnify,  defend, and hold harmless  Bonneville and
                           each  of  its  officers,   agents,   representatives,
                           subcontractors   and   employees   (the   "Bonneville
                           Indemnitees")   from   and   against   any   and  all
                           liabilities,  losses,  claims, demands and actions of
                           any  nature  ("Claims")  for  injury to or death of a
                           person,  including an employee of ELI or a Bonneville
                           Indemnitee,  or for  loss of or  damage  to  property
                           resulting   directly   or   indirectly   from   ELI's
                           performance  or  nonperformance  of  this  Agreement,
                           except to the extent that such Claim is the result of
                           negligence  or  willful  misconduct  of a  Bonneville
                           Indemnitee.

                  (2)      ELI shall indemnify and hold Bonneville harmless from
                           any  and  all  claims,   damages,  fines,  judgments,
                           penalties, costs, liabilities, or losses arising from
                           or due to the presence of  Hazardous  Materials at or
                           within any  Regeneration  Hut or along any Route,  if
                           ELI or its agent,

                                      -19-
<PAGE>

                           contractor,  employee,  or invitee is responsible for
                           the  introduction  of the  Hazardous  Material.  This
                           indemnity  obligation  includes,  without limitation,
                           any and all costs  due to  Hazardous  Materials  that
                           flow,  diffuse,  migrate,  or percolate into, onto or
                           under  the   property,   or  from  the   property  to
                           neighboring property or groundwater,  prior to, on or
                           after the Effective Date.

                  (3)      If negligence  or willful  misconduct of a Bonneville
                           Indemnitee has contributed to a Claim,  ELI shall not
                           be obligated to indemnify the Bonneville  Indemnitees
                           for the proportionate  share of such Claims caused by
                           such  negligence  or willful  misconduct.  Bonneville
                           shall  have the  right,  at its own  cost,  to retain
                           counsel, to monitor, or participate in the defense of
                           any  Claim  that  is   covered  by  ELI's   indemnity
                           hereunder.  Bonneville  shall  reimburse ELI for that
                           portion of a Claim  determined or agreed to be caused
                           by  Bonneville's  negligence  or willful  misconduct.
                           Reimbursement   shall  be  due  to  ELI  thirty  (30)
                           calendar  days after the  determination  or agreement
                           with respect thereto,  and shall bear interest at the
                           Interest  Rate  from  said  date  until  the  date of
                           payment by Bonneville.

         (b)      Indemnification by Bonneville.

                  (1)      To  the  extent  allowed  by  law,  Bonneville  shall
                           release and indemnify,  defend, and hold harmless ELI
                           and  each  of  its   directors,   officers,   agents,
                           representatives,  subcontractors,  and employees (the
                           "ELI  Indemnitees")  from  and  against  any  and all
                           Claims as defined in section  17(a)(1)  for injury to
                           or  death  of a  person,  including  an  employee  of
                           Bonneville  or an ELI  Indemnitee,  or for loss of or
                           damage to property  resulting  directly or indirectly
                           from  Bonneville's  performance or  nonperformance of
                           this Agreement,  except to the extent that such Claim
                           is the result of negligence or willful  misconduct of
                           an ELI Indemnitee.

                  (2)      Bonneville shall indemnify and hold ELI harmless from
                           any  and  all  claims,   damages,  fines,  judgments,
                           penalties, costs, liabilities, or losses arising from
                           or due to the presence of  Hazardous  Materials at or
                           on any Bonneville Facility or Route, if Bonneville or
                           its  agent,  contractor,   employees,   co-owner,  or
                           invitee is responsible  for the  introduction  of the
                           Hazardous   Material.   This   indemnity   obligation
                           includes,  without limitation,  any and all costs due
                           to Hazardous Materials that flow,  diffuse,  migrate,
                           or percolate  into,  onto or under the  property,  or
                           from  the   property  to   neighboring   property  or
                           groundwater,  either prior to or after the  Effective
                           Date.

                  (3)      If  negligence  or  willful   misconduct  of  an  ELI
                           Indemnitee  has  contributed  to a Claim,  Bonneville
                           shall  not  be  obligated   to   indemnify   the  ELI
                           Indemnitees  for  the  proportionate  share  of  such
                           Claims

                                      -20-
<PAGE>

                           caused by such negligence or willful misconduct.  ELI
                           shall  have the  right,  at its own  cost,  to retain
                           counsel; to monitor, or participate in the defense of
                           any Claim that is covered by  Bonneville's  indemnity
                           hereunder.  ELI shall  reimburse  Bonneville for that
                           portion of a Claim  determined or agreed to be caused
                           by   ELI's   negligence   or   willful    misconduct.
                           Reimbursement  shall be due to Bonneville thirty (30)
                           calendar  days after the  determination  or agreement
                           with respect thereto,  and shall bear interest at the
                           Interest  Rate  from  said  date  until  the  date of
                           payment by ELI.

                  (4)      Bonneville agrees to indemnify ELI against any claims
                           of underlying landowners along the Route of damage to
                           property resulting from Bonneville's construction and
                           maintenance of the Cable.

         (c)      Waiver of Certain Damages.

                  Each  Party   hereby   waives  any  right  to   consequential,
                  incidental,  special or indirect damages,  or damages for lost
                  profits or exemplary damages with respect to any claim arising
                  out of or related to this Agreement  provided that such waiver
                  shall not be construed in any way to limit  Bonneville's right
                  to the  Liquidation  Payment as provided in section  16(b)(4).
                  The Parties  acknowledge  that the foregoing  waiver shall not
                  prejudice  the right of indemnity  respecting  any Claim under
                  this section.

         (d)      The provisions of this section shall survive the expiration or
                  termination  of this  Agreement  and  until  such  time as all
                  potential  claims  contemplated  by  this  section  have  been
                  precluded by operation of law.

18.      Dispute Resolution

         (a)      Any  controversy,  claim, or other dispute of any kind between
                  the Parties  arising out of or relating to this  Agreement  or
                  the alleged breach thereof,  or out of performance  under this
                  Agreement  ("the  Dispute"),  shall be subject to the  dispute
                  resolution  process set forth in this section.  If the Dispute
                  is not resolved by the process set forth in section (b) below,
                  then the Dispute  shall be  submitted  to binding  arbitration
                  administered by the American  Arbitration  Association ("AAA")
                  before  a  single,  independent  arbitrator  selected  by  the
                  parties in  accordance  with the  then-effective  AAA  Complex
                  Commercial  Arbitration  Rules  ("AAA  Rules").  Mediation  or
                  arbitration  pursuant  to this  section  shall  take  place in
                  Portland, Oregon or Vancouver,  Washington.  The Parties shall
                  continue performance of their respective obligations hereunder
                  pending resolution of the Dispute,  provided that the pendency
                  of any Dispute shall not  interfere  with the  termination  of
                  this Agreement pursuant to section 16(b)(3) or the requirement
                  for a Liquidation Payment pursuant to section 16(4).

                                      -21-
<PAGE>

         (b)      Upon request by either Party,  a meeting shall be held between
                  the Parties to attempt in good faith to negotiate a resolution
                  of the  Dispute.  Such  meeting  shall be held within five (5)
                  days after the Party  asserting  the Dispute has  provided the
                  other Party  written  notice  thereof.  The  meeting  shall be
                  attended  by  individuals   with   decision-making   authority
                  regarding the Dispute. If, within five (5) calendar days after
                  such meeting,  the Parties have not succeeded in resolving the
                  Dispute through good faith negotiation, then either Party may,
                  within  thirty (30) calendar  days  thereafter,  serve written
                  notice to the other Party and submit the Dispute to a mutually
                  acceptable  third-party  mediator  who has at  least  five (5)
                  years experience with dispute resolution of complex commercial
                  contracts.  If the Dispute is not resolved by mediation within
                  seven (7) days after completion of mediation  sessions,  then,
                  within  thirty (30) days of the  completion  of the  mediation
                  process and upon written notice from either Party to the other
                  Party,  either Party may initiate  arbitration  of the Dispute
                  with the AAA.

         (c)      Arbitration  under this section  shall  proceed in  accordance
                  with the following procedures:

                  (1)      The   arbitration    shall   be   governed   by   the
                           then-effective AAA Rules and the Federal  Arbitration
                           Act,  9   U.S.C.1,   et  seq.   Discovery  in  the
                           arbitration  shall be governed by the  then-effective
                           Federal Rules of Civil Procedure.

                  (2)      Under no circumstances  shall either Party seek or be
                           entitled to recover  punitive  damages as part of any
                           arbitration award under this Agreement.

                  (3)      The  arbitrator  shall apply  Federal  law, and in no
                           circumstances  shall the  arbitrator  apply a rule of
                           decision or adopt a remedy that is inconsistent  with
                           the  governing  precedents  of Federal law.  Judgment
                           upon any  award  rendered  by the  arbitrator  may be
                           entered in any court of competent jurisdiction.

         (d)      In the event that ELI fails to make a payment  required  under
                  section 8(a) and/or (b) of this Agreement,  either prior to or
                  during the course of an  arbitration,  the Parties' rights and
                  the  arbitrator's  authority shall be subject to the following
                  restrictions:

                  (1)      Any claim by ELI asserting  damages as a result of an
                           alleged breach of this Agreement by Bonneville  shall
                           be  limited  in time and  scope to  damages  directly
                           incurred  within the period  between the date of such
                           breach and the date of  termination of this Agreement
                           by   Bonneville   pursuant  to  section  16  of  this
                           Agreement,   and  the   arbitrator   shall  not  have
                           authority  to  entertain  any  claims  by ELI for any
                           damages other

                                      -22-
<PAGE>

                           than  those to which  ELI has  been  limited  by this
                           provision,  to award any  damages  inconsistent  with
                           this provision, or to impede , prevent or reverse the
                           implementation of sections 16(b)(3) and (4) hereof.

                  (2)      In the event that  Bonneville  recovers  payments due
                           from ELI through the Guaranty,  Bonneville shall have
                           no right to seek damages from ELI for those payments;
                           provided,  however,  that  Bonneville  shall have the
                           absolute  right  to  pursue   additional  claims  and
                           damages against ELI not related to such payments, and
                           arising  under or  relating  to this  Agreement.  The
                           recovery  of any  damages  by  Bonneville  for claims
                           other than for payments  under section 8(a) and/or(b)
                           of this Agreement shall not be limited or lessened by
                           any  recovery   obtained  by  Bonneville   under  the
                           Guaranty.

         (e)      The parties specifically agree and intend that the pendency of
                  any dispute shall not interfere  with the obligation of ELI to
                  make  payments  under  section  8(a),  8(b) or 16(b)(4) or the
                  termination of this Agreement pursuant to section 16(b)(3).

         (f)      The Parties  agree to share equally the costs of mediation and
                  arbitration, including any mediator's fees, AAA administration
                  fee, the arbitrator's fee, and costs for the use of facilities
                  during the  hearings.  At the  discretion  of the  arbitrator,
                  reasonable  attorneys'  fees may be awarded to the  prevailing
                  Party  in  any  arbitration.  Each  Party's  other  costs  and
                  expenses shall be borne by the Party incurring them.

19.      General

         (a)      Force Majeure.

                  (1)      As used in this  Agreement,  the term "Force Majeure"
                           means  acts of God  (including  but not  limited  to,
                           earthquakes,  fires, floods, windstorms,  landslides,
                           and ice storms);  strikes,  lockouts,  or other labor
                           disputes;  acts of public  enemy;  acts of vandalism,
                           wars,  riots,  and  insurrection;   epidemics;  civil
                           disturbances;    explosions;    train    derailments;
                           breakdown  or failure  of  machinery,  equipment,  or
                           facilities  (excluding the Cable,  Cable  Accessories
                           and  Regeneration  Huts);   accidents  to  machinery,
                           equipment,  or facilities (excluding the Cable, Cable
                           Accessories  and  Regeneration  Huts),  and  delay in
                           delivery of equipment to the extent such  occurrences
                           are  beyond  the  reasonable  control  of  the  Party
                           claiming   Force  Majeure;   electrical   disturbance
                           originating  in or  transmitted  through such Party's
                           electrical  system  or  equipment  or any  electrical
                           system with which such Party's system or equipment is
                           interconnected;   and  any  other  event,  cause,  or
                           condition beyond the Party's reasonable control,

                                      -23-
<PAGE>

                           which,  by  the  exercise  of  reasonable  diligence,
                           prevents  the  Party   claiming  Force  Majeure  from
                           performing its obligations under this Agreement.

                  (2)      If   either   Party  is   unable  to  carry  out  its
                           obligations  under this  Agreement  as a result of an
                           event,  cause,  or  condition of Force  Majeure,  the
                           Party  claiming  Force  Majeure shall give notice and
                           full  particulars  of  such  Force  Majeure  both  by
                           telephone  and in writing to the other  Party as soon
                           as  possible,  but no later than  three (3)  calendar
                           days  from the  beginning  of the  occurrence  of the
                           Force  Majeure  event,   cause,  or  condition.   Any
                           obligations  that such Party is unable to perform due
                           to an event,  cause,  or condition  of Force  Majeure
                           shall be  suspended  during the  continuance  of such
                           event of Force Majeure,  provided that the obligation
                           to  make  payments  shall  only be  suspended  to the
                           extent  provided  in  section  16(a)(1).   The  Party
                           claiming  Force  Majeure  shall use best  efforts  to
                           remedy  and  minimize  the  effects  of such event of
                           Force Majeure with all reasonable dispatch.

                  (3)      Neither  Party shall be liable  under this  Agreement
                           for, or be  considered  to be in  material  breach or
                           default under, this Agreement on account of any delay
                           in or failure  of  performance  due to Force  Majeure
                           unless  specifically  stated to the  contrary in this
                           Agreement.

                  (4)      If Force  Majeure  prevents  restoration  or complete
                           performance  by Bonneville or ELI within one (1) year
                           from the event of such Force Majeure,  then the Party
                           not claiming  Force  Majeure shall have the option to
                           terminate this Agreement.

         (b)      Notices.  All  notices  and other  communications  under  this
                  Agreement shall be properly given only if made in writing; and

                  (1)      mailed by certified mail,  return receipt  requested,
                           postage prepaid; or

                  (2)      delivered  by  facsimile   transmission  followed  by
                           certified  mail to the Party or  specified  entity at
                           the  address  or  facsimile  number set forth in this
                           section or such other address or facsimile  number as
                           such  Party or  specified  entity  may  designate  by
                           notice to the other  Party.  Such  notices  and other
                           communications  shall  be  effective  on the  date of
                           receipt.  If any such notice or  communication is not
                           received  or cannot be  delivered  due to a change in
                           the  address  of the  receiving  Party  or  specified
                           entity of which  notice was not  previously  given to
                           the  sending  Party or due to a refusal  to accept by
                           the receiving Party or specified entity,  such notice
                           or other communication shall be effective on the date
                           delivery is attempted.

                                      -24-
<PAGE>

         If to Bonneville:

         The Bonneville Power Administration
         P.O. Box 491
         Vancouver, WA  98666-0491
         Attn:  Robert C. Lahmann - TM/DITT-2
         Telephone:  (360) 418-2092
         Fax:  (360) 418-8320

         If to ELI:

         Electric Lightwave, Inc.
         4400 NE 77th Avenue
         Vancouver, WA  98662
         Attn:    Leslie Brown, Vice President, Finance
         Telephone:  (360) 816-3312     Fax:  (360) 816-4425

         With a copy to:

         Electric Lightwave, Inc.

         4400 NE 77th Avenue
         Vancouver, WA  98662
         Attn:  General Counsel
         Telephone:  (360) 816-3725
         Fax:     (360) 816-3309

         If to Citizens Utility Company:

         Citizens Utilities Company
         3 High Ridge Park
         Stamford, CT 06905
         Facsimile No.: (203) 614-4625
         Attn: Chief Financial Officer

         with a copy to:

         Citizens Utilities Company
         3 High Ridge Park
         Stamford, CT 06905
         Facsimile No.: (203) 614-5047
         Attn:  Vice President, General Counsel

                                      -25-
<PAGE>

Names and  addresses  specified  above may be changed  through  notice  given in
accordance with this provision.

         (c)      Assignment.  Neither Party shall assign this  Agreement or any
                  of its  rights or  obligations  under this  Agreement  without
                  prior  written  consent of the other Party,  which consent may
                  not be unreasonably  withheld or delayed;  provided,  however,
                  that  ELI  shall  have  a  right  to  assign  its  rights  and
                  obligations under this Agreement to Citizens Utilities Company
                  or  its  successors  (collectively   "Citizens")  so  long  as
                  Citizens   guarantees  ELI's  payments  under  this  Agreement
                  pursuant to the  Guaranty.  For  purposes of this  provision a
                  merger or consolidation of ELI, a sale of substantially all of
                  the assets of ELI or a sale or other  disposition  by Citizens
                  Utility Company of more than fifty percent (50%) of the voting
                  securities  of ELI shall be deemed  to be an  "assignment"  of
                  this  Agreement  requiring  the consent of  Bonneville,  which
                  consent shall not be unreasonably  withheld or delayed. In the
                  event that ELI sells, assigns, leases, subleases, or otherwise
                  allows use of ELI's License under this  Agreement,  ELI or its
                  assigned   entity,   shall  continue  to  serve  as  a  single
                  point-of-contact  to Bonneville for all activities relating to
                  this  Agreement.  Nothing  in  this  paragraph  shall  require
                  Bonneville's   consent  to  agreements  entered  into  by  ELI
                  regarding  any  activity  in the  ordinary  course of business
                  permitted under the License.

         (d)      Partial  Invalidity.  If any  provision  of this  Agreement is
                  determined  by a  proper  court  or  government  entity  to be
                  invalid, illegal or unenforceable, such invalidity, illegality
                  or unenforceability  shall not affect the performance of other
                  provisions of this Agreement and this  Agreement  shall remain
                  in full  force and effect  without  such  invalid,  illegal or
                  unenforceable provision.

         (e)      Governing  Law.  This  Agreement  shall  be  governed  by  and
                  construed in accordance with Federal law.

         (f)      Terms  Generally.  The defined terms in this  Agreement  shall
                  apply equally to both the singular and the plural forms of the
                  terms defined.  Whenever the context may require,  any pronoun
                  shall  include  the  corresponding  masculine,  feminine,  and
                  neuter  forms.   The  term  "person"   includes   individuals,
                  corporations,  limited  partnerships,   partnerships,  trusts,
                  other legal entities, organizations, and associations, and any
                  Government  or  governmental   agency.  The  words  "include,"
                  "includes" and  "including"  shall be deemed to be followed by
                  the  phrase  "without   limitation."  The  words   "approval,"
                  "consent"  and "notice"  shall be deemed to be preceded by the
                  word "written."

         (g)      Waivers.  No  waiver  of  any  provision  or  breach  of  this
                  Agreement shall be effective  unless such waiver is in writing
                  and signed by the waiving  Party and any such waiver shall not
                  be deemed a waiver of any other provision of this Agreement or
                  any other breach of this Agreement.

                                      -26-
<PAGE>

         (h)      Confidentiality.  If and  to the  extent  any  information  or
                  documents  furnished  by one  Party to the  other  under  this
                  Agreement is  confidential  or  proprietary  to the furnishing
                  Party,  the receiving  Party shall treat such  information  or
                  documents  as  confidential  and  proprietary  and shall  take
                  reasonable  steps to protect against the  unauthorized  use or
                  disclosure of such  information or documents;  provided,  that
                  such  information  and documents are  conspicuously  marked or
                  otherwise  clearly  identified as  confidential or proprietary
                  when furnished; and provided, further, that this section 19(h)
                  shall not apply to  information  or  documents  in the  public
                  domain or to information or documents required to be disclosed
                  by any law, rule,  regulation,  order, or other requirement of
                  any governmental  authority having jurisdiction.  If a request
                  is  received  under the Freedom of  Information  Act, 5 U.S.C.
                  552, by Bonneville for such written  information or documents,
                  Bonneville shall promptly notify ELI of such request to accord
                  ELI  reasonable  time  within  which  to  seek to  enjoin  any
                  disclosure.   Neither   Party   shall  make   initial   public
                  announcement   of   this   Agreement   or   the   transactions
                  contemplated by this Agreement without the prior review by the
                  other Party,  unless such public  announcement is necessary to
                  comply  with  applicable  law;  provided,  however,  that this
                  provision shall not apply to the regular marketing  activities
                  of either Party.

         (i)      No Third-Party  Beneficiaries.  This Agreement  creates rights
                  and obligations  only between the Parties hereto.  The Parties
                  hereto  expressly do not intend to create any  obligations  or
                  promise of performance to any other third person or entity nor
                  have the Parties conferred any rights or remedy upon any third
                  person  or  entity  other  than  the  Parties  hereto,   their
                  respective successor or assigns to enforce this Agreement. ELI
                  shall  not make any  representations  to the  contrary  in any
                  agreement with any third party.

         (j)      Successors  and  Assigns.  This  Agreement is binding upon the
                  Parties, and their respective successors and assigns.

         (k)      Counterparts.   This   Agreement   may  be   executed  in  two
                  counterparts,  each of  which  shall  be  deemed  an  original
                  agreement  for all  purposes,  but  both  of  which  shall  be
                  considered one instrument and shall become a binding agreement
                  when any one or more  counterparts  has been signed by each of
                  the Parties.

         (l)      Entire Agreement. This Agreement reflects the entire agreement
                  of the Parties with respect to the License and  supercedes all
                  prior  contracts  (except  to  the  extent  the  Parties  have
                  separately  agreed to preserve  any  provisions  of such prior
                  contracts),   discussions,   negotiations,    representations,
                  conditions  and other prior  communications,  whether  oral or
                  written, concerning the subject matter of this Agreement.

                                      -27-
<PAGE>

         (m)      Advice of Counsel/Construction. Each of the Parties represents
                  that in the execution of this Agreement,  and the negotiations
                  leading  thereto,  it has had the opportunity to consult legal
                  counsel of its own selection, and that, prior to the execution
                  of this Agreement by each Party, the Party's attorney reviewed
                  this Agreement,  suggested any desired changes and advised the
                  Party  with  respect to the  advisability  of  executing  this
                  Agreement. This Agreement shall be deemed to have been drafted
                  by both Parties,  and no rule of construction shall be applied
                  against any Party as the drafter.

         (n)      Headings.  Titles and  headings of sections or  paragraphs  in
                  this Agreement are inserted for  convenience of reference only
                  and  are  not  intended  to  affect  the   interpretation   or
                  construction of this Agreement.

         (o)      Survival  of  Certain  Provisions.  Notwithstanding  any other
                  provisions of this  Agreement,  the obligations of the parties
                  under  sections  15 (to the extent of any claim  arising  with
                  respect to the period prior to  expiration or  termination  of
                  this Agreement), 17, 18 and 19(h) shall survive the expiration
                  or termination of this Agreement.

         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement in
two counterparts.

<TABLE>
<CAPTION>

ELECTRIC LIGHTWAVE, INC.                             UNITED STATES OF AMERICA
                                                     Department of Energy
                                                     Bonneville Power Administration

<S>              <C>                                 <C>          <C>
By:              /s/ Rudy J. Graf                    By:          /s/ Robert C. Lahmann
                 ---------------------------------                ------------------------------------

Name:            Rudy J. Graf                        Name:        Robert C. Lahmann
                 ---------------------------------                ------------------------------------
Print/Type                                           Print/Type

Title:           Chief Executive Officer             Title:       Transmission Account Executive
                 ---------------------------------                ------------------------------------

Date:            May 15, 2000                        Date:        May 15, 2000
                 ---------------------------------                ------------------------------------
</TABLE>
                                      -28-

<PAGE>

                                    EXHIBIT A
                                  SMF-28 CPC-6
                                 72 STRAND FIBER

             ROUTE DESCRIPTION - Keeler-Covington (Portland-Seattle)

The southern  terminus of the route begins at BPA's  Keeler  Substation  located
eight (8) miles west of Portland.  The cable is attached to the St. Johns-Keeler
No. 2 wood pole line and deadends at St. Johns Substation located ten (10) miles
northwest of Portland.  The cable is then  attached to the Ross-St.  Jones No. 1
steel tower line,  crosses the Columbia  River and  deadends at Ross  Substation
located twelve (12) miles north of Portland.  Going north out of Ross Substation
the cable is attached to the  Ross-Lexington No. 1 steel tower line and deadends
at Lexington substation located a few miles north of Longview. The cable is then
attached  to the  Lexington-Longview  No. 1 wood  pole  line  that  deadends  at
Longview  substation  located  in the west part of  Longview.  The cable then is
attached  from a point two (2) miles north of  Lexington  out of Longview on the
Longview-Chehalis  No. 1 steel tower line and  deadends  at Chehalis  substation
located  four (4) miles  south of  Chehalis.  The cable  then goes  north out of
Chehalis  for eleven (11) miles on the  Chehalis-Covington  steel tower line and
then is  attached to the  Paul-Allston  No. 2 for the last three (3) miles going
into Paul substation  located three (3) miles  northeast of Chehalis.  The cable
goes north out of Paul on the Paul-Satsop No. 1 steel tower line and deadends on
the wood pole lines south of Olympia substation located in the southwest part of
Olympia.  The cable then goes west and north on the Olympia-Grand  Coulee No. 1,
the Olympia-White River No. 1 and the Chehalis-Covington No. 1 steel tower lines
until it  terminates at Covington  substation.  The total length of the route is
approximately 192 miles and requires five (5) regeneration stations located near
BPA facilities along the way.

                                   -1 of 11-
<PAGE>

                ROUTE DESCRIPTION - Ross-Bell (Portland-Spokane)

                        ROSS-FRANKLIN FIBER ROUTE SEGMENT
                                  SMF/DS CPC-6
                                 36 STRAND FIBER

                                       i)

Ross Substation To North Bonneville Substation - 36.0 Miles

Dittmer Control Center

North Bonneville - Ross No. 2
   AFB 187 (37/2) To AFX 1 (1/1)

Hanford - Ostrander No. 1
   FY 703 (151/5)

Fiber Optic Wood Pole
   AMV 4 (1/1A)

Substation Dead End Structure
   Bay 11, 230 kV Switchyard
   North Bonneville Substation

North Bonneville Substation To Big Eddy Substation -
50.2 Miles

Substation Dead End Structure
   Bay 13, 230 kV Switchyard
   North Bonneville Substation

North Bonneville - Midway No. 1
   AS 1 (1/1) To HB 152 (29/2)

Fiber Optic Wood Pole Parallel to McNary - Ross No. 1
   AMV 5 (116/3) To AMV 88 (97/4A)

Spearfish Tap To Chenoweth - Goldendale No. 1
   4/3 To 1/1

Fiber Optic Wood Pole
   AMV 89 (2/4A) To AMV 90 (2/4B)

Big Eddy - Midway No. 1
   AN 5 (2/3) To AN 2 (1/2)

The Dalles Powerhouse - Big Eddy Switchyard Line No. 1
   EN 3 (1/3) To EN  4 (1/4)

Substation Dead End Structure
   Bay 10, 115 kV Switchyard
   Big Eddy Substation

                                   -2 of 11-
<PAGE>

Big Eddy Substation To John Day Substation - 18.9 Miles

Substation Dead End Structure
   Bay 35, 230 kV Switchyard
   Big Eddy Substation

Fiber Optic Wood Pole
   AMV 130 (1/1) To AMV 131 (1/2)

Substation Dead End Structure
   Bay 9E, 500 kV Switchyard
   Big Eddy Substation

John Day - Big Eddy No. 2
   BG 79 (19/4) To BG 1 (1/1)

Substation Dead End Structure
   Bay 11 W, 500 kV Switchyard
   John Day Substation

John Day Substation To Slatt Substation - 30.3 Miles

Substation Dead End Structure
   Bay 6E, 500 kV Switchyard
   John Day Substation

Slatt - John Day No. 1
  CD 658 (31/1) To CD 521A (1/1)

Fiber Optic Wood Pole
   AMV 92 (46/1A)
   Slatt Substation

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

Slatt Substation To McNary Substation - 45.5 Miles

Fiber Optic Wood Pole
   AMV 92 (46/1A)
   Slatt Substation

McNary - Slatt No. 1
   CD 520A (46/1) To CD 394 (19/5)

Fiber Optic Wood Pole
   AMV 94 (19/4A) To AMV 96 (19/4C)

McNary - Slatt No. 1
   CV 393 (19/3) To CD 312 (2/2)

Fiber Optic Wood Pole
   AMV 98 (2/1A)

McNary - Roundup No. 1
   TL 9 (2/8) To TL 1 (1/1)

Substation Dead End Structure
   Bay 10, 230 kV Switchyard
   McNary Substation

                                   -3 of 11-
<PAGE>

McNary Substation To Franklin Substation - 26.5 Miles

Substation Dead End Structure
   Bay 2, 69 kV Switchyard
   McNary Substation

Fiber Optic Wood Pole
   AMV 99 (1/7A) To AMV 100 (1/7B)

McNary - Franklin No. 2
   SN 7 (1/7) To SN 149R (20/8)

Fiber Optic Wood Pole Parallel To McNary - Franklin No. 2
   AMV 101 (21/1) To AMV 119 (24/5)

McNary - Franklin No. 2
   Sh 4 (24/6) To ABH 1 (27/7)

Substation Dead End Structure
   Bay 5, 230 kV Switchyard
   Franklin Substation

                       FRANKLIN - BELL FIBER ROUTE SEGMENT
                                  SMF-28 CPC-6
                                 36 STRAND FIBER

Franklin Substation to Benton Substation - 21.0 Miles

Substation Dead End Structure
   Bay 9, 115 kV Switchyard
   Franklin Substation

Benton - Franklin No. 1
   UH 150 (21/13) To UH 1 (1/1)

Substation Dead End Structure
   Bay 5, 115 kV Switchyard
   Benton Substation

Benton Substation To Ashe Substation - 3.9 Miles

Substation Dead End Structure
   Bay 19, 230 kV Switchyard
   Benton Substation

Midway - Benton No. 2
   AFA 143 (29/6) To AFA 130 (27/4)

Lower Monumental - Ashe No. 1
   ACF 183 (39/2) To ACF 191 (40/5)

Substation Dead End Structure
   Bay 8, 500 kV Switchyard
   Ashe Substation

                                   -4 of 11-
<PAGE>

Ashe Substation to Hanford Substation - 19.6 Miles

Midway - Benton No. 2
   AFA 130 (27/4) To AFA 74 (15/3)

Ashe - Hanford No. 1
   AAV 54 (11/3) To CA 261 (18/4)

Substation Dead End Structure
   Bay 4, 500 kV Switchyard
   Hanford Substation

Hanford Substation To Midway Substation - 14.3 Miles

Midway - Benton No. 2
   AFA 74 (15/3) To AFA 10 (2/3)

Midway Benton No. 1
   TV 11 (2/3) To TV 1 (1/1)

Substation Dead End Structure
   Bay 7, 115 kV Switchyard
   Midway Substation

Midway Substation To Moxee Substation - 34.0 Miles

Substation Dead End Structure
   Bay 4, 115 kV Switchyard
   Midway Substation

Midway - Moxee No. 1
   YC 1A (1/1) To YC 222 (34/8)

Substation Dead End Structure
   Bay 4, 115 kV Switchyard
   Moxee Substation

Moxee Substation To Schultz Substation - 40.0 Miles

Substation Dead End Structure
   Bay 9, 114 kV Switchyard
   Moxee Substation

Columbia - Moxee No. 1
   YD 1 (66/10) To FF 388A (26/5)

Substation Dead End Structure
   Bay 5W (26/4), 500 kV Switchyard
   Schultz Substation

                                   -5 of 11-
<PAGE>

Schultz Substation To Columbia Substation - 26.0 Miles

Substation Dead End Structure
   Bay 5E (26/3), 500 kV Switchyard
   Schultz Substation

Columbia - Moxee No. 1
   FF 389A (26/2) To FF 442 (19/1)

Olympia - Grand Coulee No. 1
   AF 664 (137/5) To AF 736 (155/3)

Substation Dead End Structure
   Bay 17, 230 kV Switchyard
   Columbia Substation

Columbia Substation to Valhalla Substation - 5.4 Miles

Substation Dead End Structure
   Bay 5, 230 kV Switchyard
   Columbia Substation

Rocky Reach - Columbia No. 1
   AC 98 (21/3) To AC 79 (17/3)

Columbia - Valhalla No. 1
   NJ 34 (4/9) To NJ 47 (5/12)

Substation Dead End Structure
   Bay 5, 115 kV Switchyard
   Valhalla Substation

Valhalla Substation To Sickler Substation - 16.7 Miles

Rocky Reach - Columbia No. 1
   AC 79 (17/3) To AC 7 (2/2)

Sickler - Schultz No. 1
   DL 14 (2/1) To DL 10 (1/1)

Substation Dead End Structure
   Bay 3, 500 kV Switchyard
   Sickler Substation

                                   -6 of 11-
<PAGE>

Sickler Substation To Chief Joseph Substation - 44.6 Miles

Substation Dead End Structure
   Bay 4, 500 kV Switchyard
   Sickler Substation

Chief Joseph - Sickler No. 1
   GU 221 (45/6) To GU 10 (2/3)

Grand Coulee - Chief Joseph No. 1
   FB 257 (33/1) To FB 261 (33/5)

Substation Dead End Structure
   Bay 10, 230 kV Switchyard
   Chief Joseph Substation

Chief Joseph Substation To Grand Coulee Substation - 31.7 Miles

Grand Coulee - Chief Joseph No. 1
   FB 257 (33/1) To FB 1R (1/1)

Substation Dead End Structure
   Bay Y25, 230 kV Switchyard
   Grand Coulee Substation

Grand Coulee Substation To Monroe Control Center - 82.9 Miles

Substation Dead End Structure
   Bay Y19, 230 kV Switchyard
   Grand Coulee Substation

Grand Coulee - Bell No. 5
   AH 14R (1/1) to AH 413 (82/4)

Grand Coulee - Bell
   ZC 717 (82/8) To ZC 729 (84/2)

Monroe Control Center

                                   -7 of 11-
<PAGE>
<TABLE>
<CAPTION>
              ROUTE DESCRIPTION - Bell-Covington (Spokane-Seattle)
                                  SMF-28 CPC-6
                                 72 STRAND FIBER
Bell To Covington (Southern Route)                 3/19/98
<S>                          <C>                   <C>                            <C>
        Station or                   Line
      (Tower Ser. #)               Distance            Operational Line Name                  Comments
                                   (miles)
Bell
---------------------------- --------------------- ------------------------------ ----------------------------------
                             52                    Grand Coulee - Bell no. 2      115 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
Creston
---------------------------- --------------------- ------------------------------ ----------------------------------
                             30                    Grand Coulee - Bell no. 2      115 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
Grand Coulee
---------------------------- --------------------- ------------------------------ ----------------------------------
                             9                     Columbia - Grand Coulee no. 3  230 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 66/2
---------------------------- --------------------- ------------------------------ ----------------------------------
                             0                     Transition
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 66/1
---------------------------- --------------------- ------------------------------ ----------------------------------
                             21                    Columbia - Grand Coulee no. 1  230 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
St. Andrews (regen)
---------------------------- --------------------- ------------------------------ ----------------------------------
                             44                    Columbia - Grand Coulee no. 1
---------------------------- --------------------- ------------------------------ ----------------------------------
Columbia
---------------------------- --------------------- ------------------------------ ----------------------------------
                             26                    Olympia - Grand Coulee no. 1   230 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
Schultz
---------------------------- --------------------- ------------------------------ ----------------------------------
                             38                    Olympia - Grand Coulee no. 1   287 kV (Dbl. Cir.)
---------------------------- --------------------- ------------------------------ ----------------------------------
Easton R.S. (regen)                                                               Splice at structure 92/2
---------------------------- --------------------- ------------------------------ ----------------------------------
                             2                     Olympia - Grand Coulee no. 1
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 90/3
---------------------------- --------------------- ------------------------------ ----------------------------------
                                   Transition
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 80/3
---------------------------- --------------------- ------------------------------ ----------------------------------
                             8                     Schultz - Raver no. 4          Stampede Pass
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 89/1
---------------------------- --------------------- ------------------------------ ----------------------------------
                                   Transition
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 81/5
---------------------------- --------------------- ------------------------------ ----------------------------------
                             11                    Olympia - Grand Coulee no. 1   287 kV (Dbl. Cir.)
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 70/6
---------------------------- --------------------- ------------------------------ ----------------------------------
                             0                     Transition
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 27/3
---------------------------- --------------------- ------------------------------ ----------------------------------
                             15                    Covington - Columbia no. 3     230 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 12/1
---------------------------- --------------------- ------------------------------ ----------------------------------
                             0                     Transition
---------------------------- --------------------- ------------------------------ ----------------------------------
Str. 4/1
---------------------------- --------------------- ------------------------------ ----------------------------------
                             3                     Raver - Echo Lake no. 1        500 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
Raver
---------------------------- --------------------- ------------------------------ ----------------------------------
                             10                    Raver - Covington no. 2        500 kV
---------------------------- --------------------- ------------------------------ ----------------------------------
Covington
---------------------------- --------------------- ------------------------------ ----------------------------------
Total distance               268
---------------------------- --------------------- ------------------------------ ----------------------------------
Notes:
---------------------------- --------------------- ------------------------------ ----------------------------------
1.  All cable is 72 count.
---------------------------- --------------------- ------------------------------ ----------------------------------
</TABLE>

                                   -8 of 11-
<PAGE>

               ROUTE DESCRIPTION - Keeler-Alvey (Portland-Eugene)

                                  SMF-28 CPC-6
                                 72 STRAND FIBER

The  northern  origination  point of the  Route  begins at  Bonneville's  Keeler
Substation,  located eight (8) miles west of Portland, Oregon. The Cable will be
attached to the Keeler-Oregon  City No. 2, 115-kV H-frame wood pole line running
for a distance of approximately  21.4 miles to the Oregon City  Substation.  The
Cable will then run from the Oregon City Substation a distance of  approximately
0.7 miles on the Oregon City to Chemawa No. 2, 115-kV  H-frame wood pole line to
the 1/10 structure location. From the 1/10 structure,  the Cable will traverse a
distance  of  approximately  24.7 miles on the Big  Eddy-Chemawa  No. 1,  230-kV
lattice steel tower line to the Chemawa  Substation.  The Cable will then run on
the   Chemawa-to-Salem   No.1,   230-kV  double  circuit  steel  tube  line  for
approximately  10.7 miles until it reaches the Salem Substation.  From the Salem
Substation,  the Cable will then traverse a distance of approximately 23.9 miles
to the Albany Substation on the  Salem-to-Albany  No.1, 115-kV H-frame wood pole
line,  encountering two river crossings on steel towers. From Albany Substation,
the  Cable  will span a  distance  of  approximately  39.8  miles to the  Eugene
Substation, traveling along the Albany-to-Eugene No. 1, 115-kV H-frame wood pole
line,  with  one  river  crossing  on steel  towers.  From a point  near  Eugene
Substation, the Cable will run a distance of  approximately  five (5.0) miles on
the Marion-Lane  500-kV lattice steel tower line to Lane  Substation.  From Lane
Substation,  the Cable will run a distance  of  approximately  13.4 miles on the
Alvey-Lane 230-kV lattice steel tower line to the southern terminus of the Cable
to be located at the Alvey Substation.

                                   -9 of 11-
<PAGE>

--------------------------------------------------------------------------------
                             ROUTE DESCRIPTION - Ross-Malin (Portland-Malin)
<TABLE>
<CAPTION>

                                  SMF-28 CPC 6
                                 72 STRAND FIBER

ROUTE DESCRIPTION
Station or (Tower               Line Distance                Line                         Comments
Serial No.)                     (miles)                      Name

<S>                             <C>                          <C>                          <C>
------------------------------- ---------------------------- ---------------------------- ----------------------------
Ross
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                14.7                         North Bon. - Ross No. 1      From Ross to structure
                                                                                           AFX 113A
------------------------------- ---------------------------- ---------------------------- ----------------------------
(AFX 113A)                                                                                Line Transition
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                6.7                          North Bon.- Troutdale        From Structure
                                                             No. 2                        AFX 113A to Troutdale
------------------------------- ---------------------------- ---------------------------- ----------------------------
Troutdale
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                53.4                         Big Eddy-Troutdale No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Parkdale
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                24.0                         Big Eddy - Troutdale
                                                             No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Big Eddy
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                29.4                         Big Eddy - Redmond  No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Maupin
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                68.0                         Big Eddy - Redmond No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Redmond
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                15.1                         Redmond - Pilot Butte  No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Pilot Butte
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                29.6                         Pilot Butte - LaPine No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
LaPine
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                45.5                         LaPine - Fort Rock No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
(ALC 308)                                                                                 From LaPine to str. 46/3
                                                                                          (Serial No. ALC 308)
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                0.1                                                       Line Transition
------------------------------- ---------------------------- ---------------------------- ----------------------------
(CG 406)                                                                                  Starting point on Grizzly
                                                                                          - Captain Jack (86/5)
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                   -10 of 11-
<PAGE>

------------------------------- ---------------------------- ---------------------------- ----------------------------
                                1.5                          Grizzly - Captain Jack No.1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Fort Rock                                                                                 BPA Compensation Station
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                28.5                         Grizzly - Captain Jack No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Sycan
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                60.0                         Grizzly - Captain Jack No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Captain Jack
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                7.4                          Captain Jack - Malin  No. 1
------------------------------- ---------------------------- ---------------------------- ----------------------------
Malin
------------------------------- ---------------------------- ---------------------------- ----------------------------
Total Miles =                   383.9
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

               ROUTE DESCRIPTION - Eugene e-Bandon (Eugene-Bandon)
                                  SMF-28 CPC-6
                                 36 STRAND FIBER

The Route consists of a 36 count ADSS  single-mode  fiber optic cable from Alvey
Substation in Eugene,  Oregon, to Bandon Substation in Bandon, Oregon. The route
will follow two of Bonneville's existing transmission lines. These lines are the
Alvey-Fairview No. 1 230 kilovolt (kV) line and the Fairview-Bandon No. 1 115 kV
line.  The 230 kV line has steel towers  along it for about  fifteen (15) miles.
The rest of the line is constructed  of wood pole H-frame  structures as well as
the  Fairview-Bandon  line. The line begins at Alvey Substation and travels in a
southwest  direction  through  Bonneville's  Reston  Substation  near  Roseburg,
Oregon. A Regenerator Building may be located on Bonneville property near Reston
Substation.  From Reston the line continues due west to Fairview Substation near
Coquille, Oregon. This part of the line is located in some very rough terrain in
the coast  range.  From  Fairview  Substation  the cable  route will  follow the
Fairview-Bandon  115 kV line in a southwest  direction  into Bandon  Substation.
This part of the route is still located in the rough terrain of the coast range.

                                   -11 of 11-
<PAGE>

                                    EXHIBIT B
                              FIBER SPECIFICATIONS
                           CORNING(R) SMF-28(TM) CPC6
                            SINGLE-MODE OPTICAL FIBER

GENERAL

Corning(R)  SMF-28(TM)  single mode fiber is considered the  "standard"  optical
fiber  for  telephony,   cable  television,   submarine,   and  private  network
applications in the transmission of data, voice, and/or video services.  Corning
SMF-28  fiber  is  manufactured  to the  most  demanding  specifications  in the
industry.

SMF-28  fiber  is  optimized  for use in the  1310  nm  wavelength  region.  The
information-carrying   capacity   of  the  fiber  is  at  its  highest  in  this
transmission window, and it is also where dispersion is the lowest. SMF-28 fiber
can also be effectively used in the 1550 nm wavelength region.

Corning's  enhanced,  dual layer acrylate CPC6 coating provides  excellent fiber
protection and is easy to work with. CPC6 can be  mechanically  stripped and has
an outside diameter of 245 (micro)m.  CPC6  is  optimized for use in many single
and multi-fiber cable designs including  loose  tube,  ribbon, slotted core, and
tight buffer cables.

SMF-28 fiber is manufactured  using the Outside Vapor  Deposition (OVD) process,
which  produces a totally  synthetic,  ultra-pure  fiber.  As a result,  Corning
SMF-28 has consistent geometric properties,  high strength, and low attenuation.
Corning SMF-28 fiber can be counted on to deliver excellent performance and high
reliability, reel after reel.

FEATURES AND BENEFITS

* Versatility in 1310 nm and 1550 nm applications.
* Outstanding geometrical properties for low splice loss and high splice yields.
* OVD manufacturing reliability and product consistency.
* Optimized for use in ribbon, loose tube, and other common cable designs.

                                    -1 of 8-
<PAGE>

<TABLE>
<CAPTION>

OPTICAL SPECIFICATIONS

Attenuation

---------------------------------------------------  Point Discontinuity
Uncabled Fiber Attenuation Cells
----------------------- ----------------------------
<S>                                                  <C>
                        Attenuation Cells            No point of discontinuity greater than 0.10 dB at either 1310 nm
                        (dB/km)                      or 1550 nm.
----------------------- ----------------------------
Wavelength (nm)         Standard
----------------------- ----------------------------
1310                    <= 0.40                      Attenuation at the Water Peak
----------------------- ----------------------------
1550                    <= 0.30                      The attenuation at 1383 +/- 3 nm shall not exceed 2.1 dB/km.
----------------------- ----------------------------

Attenuation vs. Wavelength
------------------- ------------------- ------------------
Range               Ref. (lambda)       Max Increase       <-    The attenuation in a given wavelength range does not
(nm)                (nm)                (alpha) (dB/km)          exceed the attenuation of the reference
------------------- ------------------- ------------------
1285-1330           1310                0.05                     wavelength ((lambda)) by more than the value (alpha).
------------------- ------------------- ------------------
1525-1575           1550                0.05
------------------- ------------------- ------------------

Attenuation With Bending
---------------- -------------- --------------- ------------------
Mandrel          Number of      Wavelength      Induced            <-    The induced attenuation due to fiber wrapped
Diameter         Turns          (nm)            Attenuation              around a mandrel of a specified
(mm)                                            (dB)                     diameter.
---------------- -------------- --------------- ------------------
32               1              1550            <= 0.50
---------------- -------------- --------------- ------------------
75               100            1310            <= 0.05
---------------- -------------- --------------- ------------------
75               100            1550            <= 0.10
---------------- -------------- --------------- ------------------

*    Cable Cutoff Wavelength ((lambda)ccf)         *              Mode-Field Diameter
     (lambda)ccf < 1260 nm                                          9.30 +/- 0.50 (mu)m at 1310 nm
                                                                  10.50 +/- 1.00 (mu)m at 1550 nm

*    Dispersion
     Zero Dispersion Wavelength ((lambda)o):  1301.5 nm <= (lambda)o <= 1321.5 nm

     Zero Dispersion Slope (So): <= 0.092 ps/(nm2 x km)

     Fiber Polarization Mode Dispersion Coefficient (PMD): <= 0.5 psec/square root km
</TABLE>

                                    -2 of 8-
<PAGE>

<TABLE>
<CAPTION>

Dispersion Calculation
----------------------------------------------------------------------------------------------------------------------
Dispersion=D(lambda):approximately So/4 [(lambda)-(lambda)o to the 4th power/(lambda) to the 3rd power]ps/
(nm x km), for 1200 nm <=(lambda)<=1600 nm   (lambda)=Operating Wavelength
----------------------------------------------------------------------------------------------------------------------

ENVIRONMENTAL SPECIFICATIONS
<S>                                       <C>           <C>              <C>
                                          Induced Attenuation            Operating Temperature Range
Environmental Test Condition              (dB/km)                        -60(Degree)C to +85(Degree)C

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

                                          1310 nm       1550 nm
----------------------------------------- ------------- ----------------
Temperature Dependence                    <= 0.05       <= 0.05
-60(Degree) to +85(Degree)C
----------------------------------------- ------------- ----------------
Temperature-Humidity Cycling              <= 0.05       <= 0.05
-10(Degree)C to +85(Degree)C, up to 98%
RH
----------------------------------------- ------------- ----------------
Water Immersion, 23(Degree)C              <= 0.05       <= 0.05
----------------------------------------- ------------- ----------------
Heat Aging, 85(Degree)C                   <= 0.05       <= 0.05
----------------------------------------- ------------- ----------------
</TABLE>

<TABLE>
<CAPTION>

DIMENSIONAL SPECIFICATIONS

Standard Length (km/reel):  2.2 - 25.0

<S>                                                          <C>
Glass Geometry                                               Coating Geometry
Fiber Curl:  => 2.0 m radius of curvature                    Coating Diameter:  245 +/- 10 (mu)m
Cladding Diameter:  125.0 +/- 1.0 (mu)m                      Coating-Cladding Concentricity:  < 12 (mu)m
Core-Clad Concentricity:  <= 0.8 (mu)m
Cladding Non-Circularity: < 1.0%

Defined as: [1-(Min. Cladding Diameter/Max. Cladding Diameter)] x 100
</TABLE>

                                    -3 of 8-
<PAGE>

MECHANICAL SPECIFICATIONS

Proof Test:
The entire  length of fiber is subjected  to a tensile  proof stress => 100 kpsi
(0.7 GN/m2)

PERFORMANCE CHARACTERIZATIONS
Characterized parameters are typical values.
<TABLE>
<CAPTION>
<S>                                                       <C>

Core Diameter:                                            Refractive Index Difference:
8.3 (mu)m                                                 0.36%

Numerical Aperture:                                       Effective Group Index of Refraction (Neff):
0.13                                                      1.4675 at 1310 nm
NA was measured at the one percent power angle of a       1.4681 at 1550 nm
one-dimensional far-field scan at 1310 nm.

Zero Dispersion Wavelength ((lambda)o):                   Fatigue Resistance Parameter (nd):
1312 nm                                                   => 20

Zero Dispersion Slope (So):                               Coating Strip Force:
0.090 ps/(nm2okm)                                         Dry:  0.7 lbs. (3.2 N)
                                                          Wet:  14 days room temperature:  0.7 lbs. (3.2 N)
</TABLE>

                                    -4 of 8-
<PAGE>

                              FIBER SPECIFICATIONS
                           CORNING(R) SMF/DS(TM) CPC6
                  SINGLE-MODE DISPERSION-SHIFTED OPTICAL FIBER

GENERAL

Corning(R)  SMF/DS(TM)  single-mode  fiber is designed for the  requirements  of
long-haul  and high  capacity  applications  where 1550 nm systems offer reduced
regeneration frequency,  and use of Erbium-doped Fiber Amplifiers.  Applications
for this product include  telephony,  cable  television,  private  network,  and
submarine systems where long-link spans and high data rates are required.

SMF/DS fiber is optimized  for use in the 1550 nm  wavelength  region.  With low
dispersion in this operating window, fiber  information-carrying  capacity is at
its highest.  The  patented  segmented  core design has achieved low  dispersion
attenuation, and bond loss at the 1550 operating wavelength.

Corning's  enhanced,   dual  acrylate  CPC6  coating  provides  excellent  fiber
protection and is easy to work with. CPC6 can be  mechanically  stripped and has
an outside  diameter of 245 (mu)m.  CPC6 is optimized for use in many single and
multi-fiber cable designs including loose tube, ribbon,  slotted core, and tight
buffer cables.

SMF/DS fiber is manufactured  using the Outside Vapor  Deposition (OVD) process,
that produces a totally synthetic, ultra-pure fiber. As a result, Corning SMF/DS
has consistent geometric properties, high strength and low attenuation.  Corning
SMF/DS  fiber  can be  counted  on to  deliver  excellent  performance  and high
reliability reel after reel.

FEATURES AND BENEFITS

* Patented segmented core design provides low attenuation,  dispersion, and bend
  loss at 1550 nm.
* Outstanding geometrical properties for low splice loss and high splice yields.
* OVD manufacturing reliability and product consistency.
* Optimized for use in loose tube, ribbon, and other common cable designs.

                                    -5 of 8-
<PAGE>

<TABLE>
<CAPTION>

OPTICAL SPECIFICATIONS

Attenuation
Attenuation Cell:                                    Point Discontinuity:
<=0.25 dB/km at 1550 nm                              No point discontinuity greater than 0.10 dB at 1550 nm.

Attenuation vs. Wavelength
----------------------------------------------------------
------------------- ------------------- ------------------
<S>                 <C>                 <C>                <C>
Range               Ref. (lambda)       Max Increase       <-    The attenuation in a given wavelength range does
(nm)                (nm)                (alpha) (dB/km)    not exceed the attenuation of the reference wavelength
                                                           ((lambda)) by more than the value (alpha).
------------------- ------------------- ------------------
1525-1575           1550                0.05
------------------- ------------------- ------------------
</TABLE>

<TABLE>
<CAPTION>

Attenuation With Bending
------------------------------------------------------------------
<S>              <C>            <C>             <C>                <C>
Mandrel          Number of      Wavelength      Induced            <- The induced attenuation due to fiber wrapped
Diameter         Turns          (nm)            Attenuation        around a mandrel of a specified diameter.
(mm)                                            (dB)
---------------- -------------- --------------- ------------------
32               1              1550            <= 0.50
---------------- -------------- --------------- ------------------
40               100            1550            <= 0.05
---------------- -------------- --------------- ------------------
</TABLE>

*    Fiber Cutoff Wavelength ((lambda)cf)         *    Mode-Field Diameter
         1120 nm  </- (lambda)cf </- 1350 nm      8.10 +/- 0.65 (mu)m at 1550 nm

*    Cable Cutoff Wavelength ((lambda)ccf)
     (lambda)ccf < 1250 nm

*    Dispersion
     Zero Dispersion Wavelength ((lambda)o):  1535 nm <= (lambda)o <= 1565 nm

     Zero Dispersion Slope (So):  <= 0.085 ps/(nm2okm)

     Total Dispersion:  </- 2.7 ps/(nmokm) over the range 1525 to 1575

Dispersion Calculation

   Dispersion = D(????? So (? x ?o???ps/(nm x km)))  for 1500 nm <=? <= 1600 nm
   ?= Operating Wavelength

                                   -6 of 8 -
<PAGE>

ENVIRONMENTAL SPECIFICATIONS

<TABLE>
<CAPTION>
<S>                                              <C>                     <C>

                                                 Induced Attenuation     Operating Temperature Range
Environmental Test Condition                     (dB/km)                 -60(Degree) C to +85(Degree) C

                                                 -----------------------
                                                 -----------------------
                                                 1550 nm
------------------------------------------------ -----------------------
------------------------------------------------ -----------------------
Temperature Dependence                           <= 0.03
-60(Degree) C to +85(Degree)C
------------------------------------------------ -----------------------
------------------------------------------------ -----------------------
Temperature-Humidity Cycling                     <= 0.05
-10(Degree)C to +85(Degree)C and 4% to 98% RH
------------------------------------------------ -----------------------
------------------------------------------------ -----------------------
Water Immersion, 23(Degree)C                     <= 0.05
------------------------------------------------ -----------------------
------------------------------------------------ -----------------------
Heat Aging, 85(Degree)C                          <= 0.05
------------------------------------------------ -----------------------
</TABLE>

<TABLE>
<CAPTION>

DIMENSIONAL SPECIFICATIONS

Standard Length (km/reel):  2.2 - 25.0
<S>  <C>                                                     <C>  <C>               <C>

     Longer spliced lengths available at a premium.

Glass Geometry                                               Coating Geometry
     Fiber Curl:  => 2.0 m radius of                              Coating Diameter:  245 +/- 10 (mu)m
     Curvature
     Cladding Diameter:  125.0 +/- 1.0 (mu)m                      Coating Concentricity:  > 0.70
                                                                                          -
     Core-Clad Concentricity:  <= 1.0 (mu)m
     Cladding Non-Circularity: < 2.0%

                                                           Defined as:              Min. Coating Thickness
                                                                                    ---------------------------------
                                                                                    Max. Coating Thickness

</TABLE>

                                    -7 of 8-
<PAGE>

Defined as: [1-Min. Cladding Diameter/Max. Cladding Diameter] x 100

MECHANICAL SPECIFICATIONS

Proof Test:

The entire  length of fiber is subjected  to a tensile  proof stress => 100 kpsi
(0.7 GN/m2)*

         *Higher proof test available at a premium.

<TABLE>
<CAPTION>
PERFORMANCE CHARACTERIZATIONS
<S>  <C>                                                     <C>  <C>

Characterized parameters are typical values.

Attenuation at 1310 nm:                                      Refractive Index Difference:

     0.38 dB/km                                                   The refractive index difference between the
                                                                  peak of the core and the cladding is 0.9%, and
                                                                  the difference between the peak of the ring
                                                                  and the cladding is 0.3%.

Numerical Aperture:                                          Effective Group Index of Refraction (Neff):

0.17                                                              1.4718 at 1310 nm
     NA was measured at the one percent                           1.4711 at 1550 nm
     Power angle of a one-dimensional far-
     Field scan at 1550 nm.

Zero Dispersion Wavelength ((lambda)o):                      Fatigue Resistance Parameter (nd);
     1550 nm                                                      => 20

Zero Dispersion Slope (So):                                  Coating Strip Force:
     0.075 ps/(nm2xkm)                                            Dry: 0.7 lbs: (3.2 N)
                                                                  Wet, 14 days room temperature:  0.7 lbs. (3.2 N)

</TABLE>

                                    -8 of 8-
<PAGE>

                                    EXHIBIT C
                            DETAILED RESTORATION PLAN

The Detailed  Restoration Plans shall be attached and incorporated within thirty
(30) days from the Effective Date.

                                    -1 of 1
<PAGE>

                              Lease No.___________
                              Tract No.___________

                                    EXHIBIT D
                              REGENERATOR HUT LEASE

This Exhibit D to the License  Agreement  constitutes  the Lease for Regenerator
Huts  located on Property  owned by the UNITED  STATES of  AMERICA,  through the
Bonneville  Power  Administration,  Department  of Energy.  By and through  this
Exhibit the UNITED  STATES of AMERICA,  Department of Energy,  Bonneville  Power
Administration  (hereinafter called "Lessor"),  does hereby, subject to existing
rights, if any, of other parties,  lease Electric Lightwave,  Inc.  (hereinafter
called "Lessee"),  the following described property (Property) LEGAL DESCRIPTION
OF PROPERTY or PROPERTIES,  more  particularly  shown in Attachment XX, attached
and incorporated herein, subject to following covenants and conditions.

     1)   Purpose.  The Lessee  shall use and occupy said  Property for the sole
          and  exclusive   purpose  of  operating,   repairing,   replacing  and
          maintaining a Regenerator  Hut and shall be restricted to such use and
          include the following egresses;

          a)   fiber  cable  buried  from  Lessee's  shelter  to vaults in which
               Lessee splices into Lessor's line cable; b) electrical cable from
               Lessee's  shelter to electrical  service  location;  c) telephone
               cable from Lessee's shelter to telephone service location; and d)
               fiber cable buried from Lessee's station to Lessee's customer(s).

          The Lessor  shall use the Property for a  Regeneration  Hut,  which is
          more  particularly  shown in the "as  built"  drawings  that  includes
          drawings of Lessee's  cables on Lessor's  property,  in Attachment XX,
          attached and incorporated herein, located thereon, as part of the NAME
          OF PROJECT and for no other purpose. NOTE IF A SINGLE SITE, DELETE THE
          PHRASE AS PART OF THE NAME OF PROJECT.  ALSO  INCLUDE A DRAWING OF THE
          FACILITIES AND ATTACH AS AN EXHIBIT.

     2)   Use of Equipment and  Activities at the Site.  Lessee shall maintain a
          distance  of  fifteen  (15)  feet  between  its  equipment,  including
          maintenance  equipment,  and the  transmission  line  conductors.  The
          Lessee  shall  limit  the  height of any  bushes  and  shrubs  used in
          landscaping  to ten (10) feet.  Lessee  shall not  connect  any of its
          equipment,  structures or fences,  to the Lessor's fences.  The Lessor
          shall  have the right to cut any brush or  shrubs of the  Lessee  that
          interfere  with the Lessor access to and operation and  maintenance of
          its facilities.

     3)   Other  Restrictions on Use of Property.  Lessee's use of this Property
          shall exclude the following  unless  otherwise agreed to by the Lessor
          in writing:

                                    -1 of 5-
<PAGE>

          a)   Lessee shall not install towers,  buildings,  or other structures
               for cellular, PCS, digital, or analog radio communications of any
               type.

          b)   Lessee shall not use the Property to store any waste or materials
               other than  incidental  test  equipment  or spare parts needed to
               maintain the integrity of the Lessee's fiber optic network.  Such
               test  equipment  and spare parts shall be stored in the  Lessee's
               building on the Property.

          c)   Lessor shall not use the Property for lodging persons.

     4)   Modifications to the Lease or Property.  This Lease may be modified to
          change the number or location of sites for the Regeneration  Hut. Such
          modification  shall be in writing.  The parties may agree to add sites
          or delete sites from  coverage of this Lease.  If the parties agree to
          change the number of sites,  the Lessor  shall  change the  payment to
          reflect the different  number of sites.  Lessee shall  provide  design
          plans for approval prior to modification  of the Property.  Plans will
          include  location  of  the  proposed   facility,   and  shall  include
          measurements  from BPA facilities  such as substation  fences,  poles,
          transmission  lines,  etc.  Also  included in design plans shall be an
          electrical  grounding plan for the Lessee facility.  Lessee shall mark
          the as-built location of all buried cables, including fiber, electric,
          phone,  etc.  Marking  will be such as to insure the  location  of the
          buried cable can be readily seen.  The Lessee shall  provide  as-built
          drawings at a scale and  accuracy so they can be readily  incorporated
          into Lessor's records.  Lessee may be requested to install  additional
          conduits  for  future  fiber  needs  to  prevent  the  need to dig new
          trenches and to keep the underground fiber in designated areas. Lessor
          retains the unilateral  right to require removal of a Regeneration Hut
          or Huts from any site or sites if in the Lessor's sole  determination,
          the Lessor  requires  use of the site or sites.  Lessor  shall  notify
          Lessee  of  Lessor's  required  use of the  sites  180  days  prior to
          removal.  If removal is required by Lessor, the Lessor shall reimburse
          the  Lessee  for  the  reasonable  expenses  incurred  to  remove  the
          Regeneration  Hut and the associated  machinery and equipment.  If the
          modifications  described in this paragraph  reduce the number of sites
          to zero, this Lease shall be void.

     5)   Term.  This Lease shall become  effective upon execution by the Lessor
          and the Lessee of both the License  Agreement  and this Exhibit to the
          License  Agreement  and shall  continue  so long as the Fiber  License
          remains in effect and the Lessee continues to have  Regeneration  Huts
          located on Lessor's property related to the License.

     6)   Lease Payment.  For and in consideration  of this Lease,  Lessee shall
          pay to Lessor  the sum of  ___________________________________________
          DOLLARS ($ ) annually,  monthly,  one-time  -payment  (pick one).  The
          payment  under this Lease is in  addition  to any  payments  under the
          License Agreement unless specifically stated herein. The first payment
          is due upon  signature of this Lease by both parties.  Checks shall be
          made payable to Bonneville  Power  Administration  and shall be mailed
          with  a   remittance   copy  of  the  invoice  to   Bonneville   Power
          Administration  (FRO), at P.O. Box 6040, Portland,  Oregon 97228-6040.
          The check shall be marked with Lease No. _____________

                                    -2 of 5
<PAGE>

     7)   Late Payments.  Payments not received  within five (5) days of the due
          date will accrue  interest at the rate of 18.25 percent per annum from
          the  effective  date of the Lease term until  payment is  received.  A
          twenty-five dollar ($25) charge to cover costs incurred for processing
          and  handling  a  delinquent  account  will also be  assessed.  If the
          payment is not paid within  thirty (30) days after the due date,  this
          Lease shall be subject to termination by the Lessor.

     8)   Modifications  to Property or  Regeneration  Huts.  Lessee shall limit
          digging at the Property to that necessary for initial construction and
          subsequent   maintenance  and  repair.  Lessee  shall  make  no  other
          alterations  or  modifications  in or to the Property or equipment and
          buildings located thereon without the prior written consent of Lessor.

     9)   Posting   Requirements.   The  Lessee  shall  post  on  or  about  the
          regeneration  hut in a  visible  location  that no  digging  shall  be
          allowed in or around the Property.  Such posting shall also state that
          no equipment or structures  shall be connected to the Bonneville Power
          Administration fences.

     10)  Condition of Property during the Lease.  During the term of the Lease,
          Lessee shall not use or occupy the Property,  or permit the same to be
          used or  occupied,  for any purpose  which may  endanger the safety of
          personnel  at the site or may  create  a  hazardous  condition  to the
          Lessor's equipment,  including fire or otherwise. Nor shall the Lessee
          use or occupy the Property in a manner  contrary to the  provisions of
          the License Agreement.

     11)  Termination.  Lessor  may  terminate  this  Lease for any  default  or
          deviation by the Lessee of any  provision  contained  herein or of any
          provision  contained in the License  Agreement.  Lessee may  terminate
          this  Lease  if  the  Property  is no  longer  needed  for  operating,
          repairing,  replacing and maintaining a Regenerator Hut. Any waiver by
          Lessor of any default(s) or deviation(s) shall not constitute a waiver
          of the right to  terminate  this Lease for any  subsequent  default or
          deviation.  Termination  of this Lease shall not relieve Lessee of any
          liabilities  or  responsibilities  incurred  prior  to the date of the
          termination.

     12)  Condition of Property  upon  Expiration or  Termination  of the Lease.
          Lessee shall leave the premises at the  expiration  of this Lease,  or
          any renewal or extension  thereof,  in as good a condition as prior to
          this  Lease.  Also,  except  for  Lessor's  right to  elect to  retain
          fixtures at the  termination  of this Lease as provided in the License
          Agreement, Lessee shall remove all its equipment and building(s),  and
          repair any  damage to the  Property  to a  condition  satisfactory  to
          Lessor caused by Lessee's  equipment,  building(s) or removal thereof.
          Any of Lessee's  equipment  or  building(s)  remaining on the Property
          thirty (30) days after the  termination  date of the Lease  become the
          property of the Lessor and may be  disposed of by Lessor,  at Lessee's
          sole expense, in a manner that the Lessor deems appropriate. If Lessee
          fails to restore the  Property to  Lessor's  satisfaction,  Lessor may
          restore the Property to such condition at the Lessee's expense.

                                    -3 of 5-
<PAGE>

     13)  Weed Control.  Lessee shall eradicate and control any noxious weeds or
          brush  located  within the Leased area as  required by local,  county,
          state,  or federal  law,  as well as the  cutting of all dry  grasses,
          weeds, etc., determined by Lessor or the local fire-control officer to
          present a possible fire hazard.  Lessee shall not store  herbicides on
          the  Property.  Misuse or  misapplication  of herbicides by the Lessee
          that result in damage to human health or the environment  shall be the
          responsibility  of the Lessee.  Should Lessee fail to adhere to a weed
          control program,  Lessor, at its option,  may authorize the work to be
          done and the Lessee shall pay for the work authorized.  Such work will
          be  authorized  only after Lessor gives the  Lessee  seventy-two  (72)
          hours to perform such work by giving notice of Lessee's failure.

     14)  Subleasing and Assignment. Lessee is permitted to allow other users of
          fiber-optic  cable  installed  by Lessor to  co-locate on the Property
          however,  Lessee  shall  not have the right to  assign  this  Lease to
          others.

     15)  Utilities and Other Services.  This Lease includes the right to occupy
          the site for  utilities  and other  services  necessary to support the
          Regeneration  Hut as long as those  services  are  included in the "as
          built"  drawing.  Lessor shall pay for all water,  gas,  heat,  light,
          power,  telephone  service  and any  other  services  supplied  to the
          premise.

     16)  Notices and Correspondence. All notices and correspondence required or
          permitted to be given under this Exhibit shall be in writing and shall
          be delivered  personally,  by courier service or express mail service,
          or by prepaid first class mail, addressed as follows:

          If to Lessor                                        If to Lessee

          The Bonneville Power Administration - TR-3         ________________
          Attention:  Manager, Real Property Services
          P.O. Box 3621                                      ________________
          Portland, OR  97208-3621
          (if by courier or express mail)
          905 N.E. 11th Avenue
          Portland, OR  97232

          All   correspondence  or  notices  pertaining  to  this  Lease  should
          reference Lease No. XXXXXX.  Any notice or document shall be deemed to
          have been  delivered when delivered in person or by courier or express
          mail service or three (3) business days after it has been deposited in
          the U.S.  Mail,  first class postage  prepaid,  addressed as specified
          above.  Either  party  may  change  the  address  to which  notice  or
          documents shall be sent by giving notice of such a change to the other
          party.

     17)  Other Provisions:

          a)   Lessee  warrants  that no  person  or  selling  agency  has  been
               employed  or  retained  to solicit  or secure  this Lease upon an
               agreement  or   understanding   for  a  commission,   percentage,
               brokerage,  or  contingent  fee,  except  bona  fide  established
               commercial  or  selling  agencies  maintained  by Lessee  for the
               purpose of securing business.

                                    -4 of 5-
<PAGE>

          b)   For breach or  violation of this  warrant,  Lessor shall have the
               right to annul this Lease without liability.

          c)   Lessee  shall pay to the proper  authority,  when and as the same
               become due and  payable,  all  assessments  and similar  charges,
               which,  at any time during the term of this Lease,  may be taxed,
               assessed,  or imposed  upon or against the Lessee with respect to
               or upon the Leased premises.

          d)   Lessee  shall not permit or take any action  that would  encumber
               title to the Property.

          e)   Whenever an attorney,  agent,  or other person or  corporation on
               behalf of the Lessee, executes the Lease the name of Lessee shall
               appear above the signature of the person signing.

     18)  Headings.  The  headings contained  in this  Exhibit  are used for the
          convenience and reference of the parties and do not limit the scope or
          intent of the clauses contained herein.

This  Lease  is  hereby  accepted  and  its  terms  agreed  to  this ___ day  of
_________, 2000.

UNITED STATES OF AMERICA
Bonneville Power Administration

By: ______________________________

ELECTRIC LIGHTWAVE, INC

By: ______________________________

                                    -5 of 5-

<PAGE>

                                    EXHIBIT E
                          ACCEPTANCE TESTING STANDARDS
               (Applicable only to Alvey-Bandon portion of Route)

Bonneville shall meet the Acceptance  Testing  Standards set forth below. In the
event  Bonneville's  performance  requirements  for  its  communications  system
requires  Bonneville to exceed the standards and requirements  specified in this
Exhibit, Bonneville shall apply the higher standard.

Client Network Span and Final Acceptance Requirements:

     1. Design Criteria

     The number of cable  splices at the time of original  construction  will be
     designed to  maximize  reel  lengths  between  splices.  Due to cable cuts,
     project changes and cable relocation,  additional  splices may be necessary
     and are  allowed.  The number of splices  will be  monitored to insure that
     attenuation and reflection tolerances are maintained.

     2. Construction

     Cable must be constructed in accordance  with sound  commercial  practices.
     Bonneville  requirements  will in general be more  stringent  however.  The
     National Electric Code shall be followed as a minimum.

     3. Typical Fiber Cable Information

     Single  mode  fiber   specifications  may  vary,  depending  on  the  fiber
     manufacturer.  Typical  concatenated levels of 0.40 dB per km @ 1310nm (for
     SMF-28) and 0.25 per km @ 1550nm (for SMF - 28 fibers and LEAF TM).

     4. Span Requirements

     Span loss measurements  must be performed using the two following  methods:
     OTDR (optical time domain  reflectometer)  and insertion  loss  (stabilized
     light  source and power  meter)  measurement  in each  direction  at 1550nm
     wavelength.  Insertion  loss  testing  will not be  completed  until Client
     fibers have been terminated at each site.

     (a)  Maximum  dB/km  loss must not exceed  0.35  dB/km at 1550nm  including
          splice losses.

                                    -1 of 2-
<PAGE>

     (b)  In no case  shall a fiber  show a  point  discontinuity  greater  than
          0.1dB.  Discontinuities  (known  as  steps,  splices,  or  attenuation
          non-uniformity's) shall be measured with an OTDR to determine the loss
          of  the  localized  attenuation.  The  least  squares  fit  method  of
          measurement  must be used to determine  the magnitude of the loss of a
          point discontinuity.

     (c)  Client  shall  provide  Bonneville  access to it's  fiber  termination
          panels at each hut on the route to perform these measurements.

     (d)  Preliminary  power meter  testing  consisting  of a  mechanical  fiber
          coupler,  stabilized light source and a power meter (to assure that no
          transposed fibers are spliced) may be completed within sixty (60) days
          of the completion of construction.

     (e)  Test data including OTDR trace data in hard copy or electronic  format
          must be  submitted to Client  within  sixty (60) days of  Bonneville's
          receipt  of a written  request  for this  data.  This data will not be
          available until after construction is complete.

In the event the measured span values exceeds the calculated values,  Bonneville
will perform corrective  maintenance as required to restore the Commercial Fiber
to the tolerances noted in this exhibit.

5.   Splice Loss

         The bi-directional splice loss average shall be 0.10dB or less over the
         span. All splicing will be performed by the proprietor  pursuant to the
         Fiber Lease Agreement. All fiber splicing must be fusion type.

6.   Compliance

         Client, at its discretion,  may choose to physically monitor any or all
         testing   associated  with  acceptance  of  the  Commercial  Fiber.  If
         requested  in  writing  test data  including  OTDR  trace data in- hard
         copies or  electronic  form must be  submitted  to Client  for  review.
         Client has the option to waive any specifications  and/or  requirements
         listed in the  technical  specification  criteria by providing  written
         notice to Bonneville.

7.   Key Optical Performance  Characteristics  Required For Single-Mode and LEAF
     Optical Cables

         Client fiber shall be Corning LEAF TM (see attachment) and a portion of
         Bonneville's fiber shall be Single Mode (see attachment).

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