Document:

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                                                                 Exhibit 10.1.38

                               AT&T ADOPTED TERMS

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                                                             Washington Contract

                                     RESALE
                                 AND UNBUNDLING

                                    AGREEMENT

                                     between

                           GTE NORTHWEST INCORPORATED

                                       and

                       AMERICAN TELEPHONE TECHNOLOGY INC.

The filing of this arbitrated Agreement with the Washington Utilities and
Transportation Commission in accordance with the Arbitrator's Report dated
December 11, 1996, the Arbitrator's Supplemental Report dated February 4,1997,
the Decision Maker's Resolution of Contract Language Disputes dated June 2,1997
and the Commission Order Approving Interconnection Agreement effective August
25, 1997 (collectively, the "Order") with respect to AT&T Communications of the
Pacific Northwest, Inc.'s Petition for Arbitration pursuant to Section 252(b) of
the Telecommunications Act of 1996 to establish an interconnection agreement
between AT&T Communications of the Pacific Northwest, Inc. and GTE Northwest
Incorporated, Docket No. UT-960307, does not in any way constitute a waiver by
either AT&T Communications of the Pacific Northwest, Inc. or GTE Northwest
Incorporated, of any right which any such Party may have to appeal to a
competent court of law, or to petition the Washington Utilities and
Transportation Commission for reconsideration of any determination contained in
the Order. or any provision included in this Agreement pursuant to the Order.

In this document the Parties attempt to comply with the Order which directs the
Parties to reduce to contractual language the substantive provisions and
directives of the Order. Nothing contained herein shall be construed or is
intended to be a concession or admission by either Party that any such provision
of the Order or the language herein complies with the duties imposed by the
Telecommunications Act of 1996, the decisions of the FCC and the Washington
Utilities and Transportation Commission, or other law and each Party thus
expressly reserves its full right to assert and pursue claims that the Order
does not comport with applicable law.

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                                                             Washington Contract

                                TABLE OF CONTENTS

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SECTION                                                                                                            PAGE
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PREFACE...............................................................................................................1

AGREEMENT.............................................................................................................1

RECITALS..............................................................................................................1

SCOPE, INTENT AND DEFINITIONS.........................................................................................2

GENERAL TERMS AND CONDITIONS..........................................................................................3

1.   PROVISION OF LOCAL SERVICE UNBUNDLED NETWORK ELEMENTS............................................................3

2.   TERM OF AGREEMENT................................................................................................3

3.   TERMINATION OF AGREEMENT; TRANSITIONAL SUPPORT...................................................................3

4.   GOOD FAITH PERFORMANCE...........................................................................................5

5.   OPTION TO OBTAIN LOCAL SERVICES OR NETWORK ELEMENTS UNDER OTHER AGREEMENTS

6.   RESPONSIBILITY OF EACH PARTY.....................................................................................5

7.   GOVERNMENTAL COMPLIANCE..........................................................................................6

8.   RESPONSIBILITY FOR ENVIRONMENTAL CONTAMINATION...................................................................6

9.   REGULATORY MATTERS...............................................................................................9

10.   LIABILITY AND INDEMNITY........................................................................................10

11.   SERVICE PARITY AND STANDARDS...................................................................................12

12.   CUSTOMER CREDIT HISTORY........................................................................................12

13.   FORCE MAJEURE..................................................................................................13

14.   CERTAIN STATE AND LOCAL TAXES..................................................................................14

15.   ALTERNATIVE DISPUTE RESOLUTION.................................................................................14

16.   NOTICES........................................................................................................15

17.   CONFIDENTIALITY AND PROPRIETARY INFORMATION....................................................................16

18.   BRANDING.......................................................................................................18

19.   DIRECTORY LISTINGS AND DIRECTORY DISTRIBUTION..................................................................19
</TABLE>

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                                                             Washington Contract

<TABLE>
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20.   DIRECTORY ASSISTANCE LISTING INFORMATION.......................................................................22

21.   BUSY LINE VERIFICATION AND BUSY LINE VERIFICATION INTERRUPT....................................................22

22.   NUMBER ASSIGNMENT..............................................................................................22

23.   MISCELLANEOUS..................................................................................................23

PART I LOCAL SERVICES RESALE.........................................................................................28

24.   TELECOMMUNICATIONS SERVICES PROVIDED FOR RESALE................................................................28

25.   GENERAL TERMS AND CONDITIONS FOR RESALE........................................................................28

26.   REQUIREMENTS FOR SPECIFIC SERVICES.............................................................................30

27.   ADVANCED INTELLIGENT NETWORK...................................................................................32

28.   ROUTING TO DIRECTORY ASSISTANCE, OPERATOR AND REPAIR SERVICES..................................................32

29.   SERVICE SUPPORT FUNCTIONS......................................................................................35

30.   PAY PHONE LINES AND PAY PHONE SERVICES.........................................................................40

PART II:  UNBUNDLED NETWORK ELEMENTS.................................................................................43

31.   INTRODUCTION...................................................................................................43

32.   UNBUNDLED NETWORK ELEMENTS.....................................................................................43

PART III:  ANCILLARY FUNCTIONS.......................................................................................46

33.   INTRODUCTION...................................................................................................46

34.   GTE PROVISION OF ANCILLARY FUNCTIONS...........................................................................46

35.   STANDARDS FOR ANCILLARY FUNCTIONS..............................................................................46

PART IV:  DELETED, INTENTIONALL LEFT BLANK
</TABLE>

ATTACHMENTS

Attachment I  Alternative Dispute Resolution

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                                                             Washington Contract

Attachment 2  Services Description: Unbundled Network Elements ("UNE")

Attachment 3  Service Description: Ancillary Functions

Attachment 4  Provisioning and Ordering - UNE

Attachment 5  Maintenance for Local Services Resale and UNE

Attachment 6  Local Services Resale and UNE Billing and Recording

Attachment 7  Provision of Customer Usage Data

Attachment 8  Local Number Portability

Attachment 9  Network Security

Attachment 10 Acronyms

Attachment 11 Definitions

Attachment 12 Service Quality Standards and Processes

Attachment 13 Electronic Interface for Operations Support Systems

Attachment 14 Pricing

Attachment 15 Reciprocal Compensation For Call Termination Agreement

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                                                                          Page 1

                                     PREFACE

                                    AGREEMENT

     This Agreement is entered into as of the ____ day of ___________ 1997, by
and between American Telephone Technology Inc. having an office at 12668
Interurban Avenue South, Seattle, WA 98168, in its capacity as a certified
provider of local dial-tone service ("ATTI"), and GTE Northwest Incorporated, a
Washington Corporation, having an office for purposes of this Agreement at 600
Hidden Ridge Drive, Irving, Texas 75038 ("GTE"), in its capacity as an incumbent
local exchange carrier. This Agreement covers services only in the state of
Washington (the "State").

                                    RECITALS

         WHEREAS, The Telecommunications Act of 1996 (the "Act") was signed into
law on February 8,1996; and

         WHEREAS, the Act places certain duties and obligations upon, and grants
certain rights to, Telecommunications Carriers, with respect to the
interconnection of their networks, resale of their telecommunications services,
access to their poles, ducts, conduits and rights of way and, in certain cases,
the offering of certain unbundled network elements and physical collocation of
equipment in Local Exchange Carrier premises, and

         WHEREAS, GTE is an Incumbent Local Exchange Carrier; and

         WHEREAS, ATTI is a Telecommunications Carrier and has requested that
GTE negotiate an agreement with ATTI for the provision of Network Elements,
Local Services for resale, collocation and access to poles, ducts, conduits and
rights of way pursuant to the Act and in conformance with GTE's and ATTI's
duties under the Act; and

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                          SCOPE, INTENT AND DEFINITIONS

This Agreement governs the purchase by ATTI of certain telecommunications
services provided by GTE in its service areas for resale by ATTI ,the purchase
by ATTI of certain unbundled network elements from GTE, the terms and conditions
of the collocation of certain equipment of AT&T in the premises of GTE, the
provision by GTE of access to its poles, conduits and rights of way.

The Parties agree that their entry into this Agreement is without prejudice to
any positions they may have taken previously, or may take in the future, in any
legislative, regulatory, judicial or other public forum addressing any matters,
including matters related to the same types of arrangements covered in this
Agreement.

For purposes of this Agreement, certain terms have been defined in Attachment 11
and elsewhere in this Agreement to encompass meanings that may differ from the
normal connotation of the defined word. A defined word intended to convey its
special meaning is capitalized when used. Unless the context clearly indicates
otherwise, any term defined or used in the singular shall include the plural.
The words "shall" and "will" are used interchangeably throughout this Agreement
and the use of either connotes a mandatory requirement. The use of one or the
other shall not mean a different degree of right or obligation for either Party.
Other terms that are capitalized, and not defined in this Agreement, shall have
the meaning given them in the Act. For convenience of reference only, Attachment
10 provides a list of acronyms used throughout this Agreement.

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                          GENERAL TERMS AND CONDITIONS

1.       PROVISION OF LOCAL SERVICE AND UNBUNDLED NETWORK ELEMENTS

         This Agreement, which consists of these General Terms and Conditions
         and Attachments 1-15 and their accompanying Appendices, sets forth the
         terms conditions and prices under which GTE agrees to provide (a)
         telecommunications services for resale (hereinafter referred to as
         "Local Services") and (b) certain unbundled Network Elements, Ancillary
         Functions and additional features to ATTI or combinations of such
         Network Elements ("Combinations"), for purposes of offering
         telecommunications services of any kind, including, but not limited to,
         local exchange services, intrastate toll services, and intrastate and
         interstate exchange access services and (c) access to GTE's poles,
         conduits and rights of way. The Network Elements, Combinations or Local
         Services provided pursuant to this Agreement may be connected to other
         Network Elements, Combinations or Local Services provided by GTE or to
         any Network Elements, Combinations or Local Services provided by ATTI
         itself or by any other vendor. Subject to the requirements of this
         Agreement, ATTI may, at any time add or delete the Local Services, or
         Network Elements or Combinations purchased hereunder.

2.       TERM OF AGREEMENT

         This Agreement shall become effective in accordance with Section 23.8
         (the "Effective Date"), and shall remain effective for a period of
         three (3) years. This Agreement shall continue in effect for
         consecutive one (1) year terms thereafter unless either Party gives the
         other Party at least ninety (90) calendar days written notice of
         termination, which termination shall be effective at the end of the
         initial term.

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3.       TERMINATION OF AGREEMENT; TRANSITIONAL SUPPORT

3.1      Subject to any applicable restrictions and requirements contained
         elsewhere in this Agreement, ATTI may elect at any time to terminate
         this entire Agreement at ATTI's sole discretion, upon ninety (90) days
         prior written notice to GTE. Unless otherwise provided in this
         Agreement, in such case, ATTI's liability shall be limited to payment
         of the amounts due for Local Services, Network Elements, and
         Combinations provided up to and including the date of termination. The
         Parties recognize that provision of uninterrupted service to customers
         is vital and services must be continued without interruption. Upon the
         termination or expiration of this Agreement, ATTI may itself provide or
         retain another vendor to provide comparable Local Services, Network
         Elements, or Combinations. GTE agrees to cooperate in an orderly and
         efficient transition to ATTI or another vendor such that the level and
         quality of the Local Services, Network Elements and Combinations are
         not degraded and to exercise reasonable efforts to assist in an orderly
         and efficient transition.

3.2      ATTI may terminate any Local Service(s), Network Element(s) or
         Combination(s) provided under this Agreement upon thirty (30) days
         written notice to GTE, unless a different notice period or different
         conditions are specified for termination of such Local Service(s),
         Network Element(s) or Combination(s) in this Agreement, in which event
         such specific period and conditions shall apply.

3.3      GTE will not discontinue any unbundled Network Element, Ancillary
         Function or Combination thereof during the term of this Agreement
         without ATTI's written consent which consent shall not be unreasonably
         withheld, except (1) to the extent required by network changes or
         upgrades, in which event GTE will comply with the network disclosure
         requirements stated in the Act and the FCC's implementing regulations;
         or (2) if required by a final order of the Court, the FCC or the
         Commission as a result of remand or appeal of the FCC's order In the
         Matter of Implementation of Local Competition Provisions of the
         Telecommunications Act of 1996, Docket 96-98. In the event such a final
         order allows but does not require discontinuance, GTE shall make a
         proposal for ATTI's approval, and if the Parties are unable to agree,
         either Party may submit the matter to the Dispute resolution procedures
         described in Attachment 1. GTE will not discontinue any Local Service
         or Combination of Local Services without providing 45 days advance
         written notice to ATTI, provided however, that if such services are
         discontinued with less than 45 days notice to the regulatory authority,
         GTE will notify ATTI at the same time it determines to discontinue the
         service. If GTE grandfathers a Local Service or combination of Local
         Services, GTE shall grandfather the service for ATTI resale customers
         who subscribe to the service as of the date of discontinuance.

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3.4      Either Party may terminate this Agreement at any time by giving written
         notice in writing to the other Party in the event the other Party files
         a petition for bankruptcy, is declared bankrupt, is insolvent, makes an
         assignment for the benefit of creditors, or goes into liquidation or
         receivership. In addition, either Party may terminate this Agreement in
         the event of a Party's refusal or failure to pay all or any portion of
         any amount required to be paid to the other Party as and when due;
         provided however that the Party allegedly due payment (1) notifies the
         other Party of the amounts due, (2) utilizes the ADR process set forth
         in Attachment 1, (3) obtains a favorable final ruling in that process
         and (4) does not receive payment within thirty (30) calendar days of
         the final ruling. There shall be no other reason for the unilateral
         termination of this Agreement.

4.       GOOD FAITH PERFORMANCE

         In the performance of their obligations under this Agreement, the
         Parties shall act in accordance with the good faith requirements of the
         Act. In situations in which notice, consent, approval or similar action
         by a Party is permitted or required by any provision of this Agreement,
         (including, without limitation, the obligation of the Parties to
         further negotiate the resolution of new or open issues under this
         Agreement), such action shall not be unreasonably delayed, withheld or
         conditioned.

5.       SECTION 252(i) ELECTION

         GTE shall allow ATTI to elect terms other than those set forth in this
         Agreement to the extent required by Section 252 of the Act, final
         regulations thereunder and relevant court decisions.

6.       RESPONSIBILITY OF EACH PARTY

         Each Party is an independent contractor, and has and hereby retains the
         right to exercise full control of and supervision over its own
         performance of its obligations under this Agreement and retains full
         control over the employment, direction, compensation and discharge of
         all employees assisting in the performance of such obligations. Each
         Party will be solely responsible for all matters relating to payment of
         such employees, including compliance with social security taxes,
         withholding taxes and all other regulations governing such matters.
         Subject to the limitations on liability contained in this Agreement and
         except as otherwise provided in this Agreement, each Party shall be
         responsible for (i) its own acts and performance of all obligations
         imposed by Applicable Law in connection with its activities, legal
         status and property, real or personal and, (ii) the acts of its own
         affiliates, employees,

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                                                                          Page 6

         agents and contractors during the performance of that Party's
         obligations hereunder.

7.       GOVERNMENTAL COMPLIANCE

         ATTI and GTE each shall comply with all Applicable Law that relates to
         i) its obligations under or activities in connection with this
         Agreement; or ii) its activities undertaken at, in connection with or
         relating to Work Locations. ATTI and GTE each agree to indemnify,
         defend (at the other Party's request) and save harmless the other, each
         of its officers, directors and employees from and against any losses,
         damages, claims, demands, suits, liabilities, fines, penalties and
         expenses (including reasonable attorneys' fees) that arise out of or
         result from its failure or the failure of its contractors or agents to
         so comply. Each Party will be solely responsible for obtaining from
         governmental authorities, building owners, other carriers, and any
         other persons or entities, all rights and privileges which are
         necessary for such Party to perform its obligations under this
         Agreement.

8.       RESPONSIBILITY FOR ENVIRONMENTAL CONTAMINATION

8.1      ATTI shall in no event be liable to GTE for any costs whatsoever
         resulting from the presence of any Environmental Hazard that ATTI did
         not introduce to the affected Work Location or the Release of any
         Environmental Hazard that ATTI did not cause at the affected Work
         Location. GTE shall indemnify, defend (at ATTI's request) and hold
         harmless ATTI T, each of its officers, directors and employees from and
         against any losses, damages, claims, demands, suits, liabilities,
         fines, penalties and expenses (including reasonable attorneys' fees)
         that arise out of or result from (i) any Environmental Hazard that GTE,
         its contractors or agents introduce to the Work Locations or (ii) any
         Environmental Hazard that GTE, its contractors or agents Releases at
         the Work Locations.

         GTE shall in no event be liable to ATTI for any costs whatsoever
         resulting from the presence of any Environmental Hazard that GTE did
         not introduce to the affected Work Location or the Release of any
         Environmental Hazard that GTE did not cause at the affected Work
         Location. ATTI shall indemnify, defend (at GTE's request) and hold
         harmless GTE, each of its officers, directors and employees from and
         against any losses, damages, claims, demands, suits, liabilities,
         fines, penalties and expenses (including reasonable attorney's fees)
         that arise out of or result from (i) any Environmental Hazard that
         ATTI, its contractors or agents introduce to the Work Locations or (ii)
         any Environmental Hazard that ATTl ,its contractor or agents Release at
         the Work Locations.

8.2      GTE and ATTI agree to comply with applicable federal, state and local
         environmental and safety laws and regulations including U.S.
         Environmental

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         Protection Agency (EPA) regulations issued under the Clean Air Act,
         Clean Water Act, Resource Conservation and Recovery Act, Comprehensive
         Environmental Response, Compensation and Liability Act, Superfund
         Amendments and Reauthorization Act and the Toxic Substances Control Act
         and OSHA regulations issued under the Occupational Safety and Health
         Act of 1970 applicable to their performance under this Agreement. Each
         Party has the responsibility to notify the other if compliance
         inspections occur, and/or citations are issued, at Work Locations that
         impact any aspect of performance under this Agreement or involve
         potential employee exposure.

8.3      GTE shall provide prompt reasonable notice to ATTI of known and
         discovered physical hazards or hazardous chemicals at any portion of an
         affected Work Location which ATTI uses, and ATTI shall provide prompt
         reasonable notice to GTE of known and discovered physical hazards or
         hazardous chemicals at any portion of an affected Work Location which
         ATTI uses. This includes Material Safety Data Sheets (MSDSs), when
         necessary, for materials existing at, or brought on site to, the
         affected Work Location by the party with the obligation to notify the
         other. Each Party is required to provide specific notice for imminent
         danger conditions which could include, but is not limited to. a
         defective utility pole or significant petroleum contamination in a
         manhole.

8.4      ATTI and GTE will make available to each other their respective
         internal environmental control or safety procedures for review in
         planning work at a GTE Work Location. These practices/procedures will
         represent the regular work practices required to be followed by the
         employees and contractors for safety and environmental protection. ATTI
         will follow its practices unless for a specific Work Location or
         emergency procedure, GTE's practice provides a greater degree of safety
         or environmental control.

8.5      Any materials brought to, stored at, or otherwise remaining at a Work
         Location belong to the party which brought the materials to, is storing
         the materials at, or is otherwise causing the materials to remain at
         the Work Location. Both parties have a duty to cooperate with each
         other in introducing new hazardous materials or other new environmental
         hazards at a Work Location to minimize adverse impacts on safety. Each
         party must demonstrate adequate emergency response capabilities for
         materials it uses, stores, or causes to remain at the other party's
         Work Location.

8.6      ATTI agrees to promptly notify GTE of any third-party contamination it
         discovers at a GTE affected Work Location. Notification obligations to
         regulatory authorities shall be the responsibility of GTE to evaluate
         and act upon, unless ATTI is required by applicable law to directly
         report.

8.7      ATTI agrees to obtain and use its own environmental permits, if
         necessary for its performance under this Agreement. If GTE's permit or
         EPA identification

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         number must be used, ATTI must comply with applicable GTE environmental
         procedures, including environmental "best management practices ("BMP")
         and/or selection of disposition vendors and disposal sites to the
         extent provided by GTE. In the event that ATTI must use GTE's vendors
         for waste disposal, GTE assumes all liability for such materials, and
         GTE agrees to indemnify ATTI for any and all claims that may arise from
         such waste disposal.

8.8      ATTI visitors must comply with GTE security, fire safety, safety,
         environmental and building practices/codes including equivalent
         employee training when working in GTE Work Locations, to the extent
         provided by GTE. GTE will, to the extent possible, supply such
         practices/codes to ATTI prior to ATTI's first entry into the Work
         Location.

8.9      GTE and ATTI shall coordinate plans or information required to be
         submitted to government agencies, such as emergency response plans and
         community reporting if applicable to their performance under this
         Agreement. If fees are associated with any required filing, GTE and
         ATTI will develop a cost sharing procedure. GTE and ATTl will determine
         for each Work Location which party has the lead responsibility for such
         filings and coordination.

8.10     Activities impacting safety or the environment of a Right of Way must
         be harmonized with the specific agreement and the relationship between
         GTE and the private land owner. This may include limitations on
         equipment access due to environmental conditions (e.g., wetland area
         with equipment restrictions).

8.11     For the purposes of this Section 8 only, the following terms have the
         meanings set forth in this subsection 8.11:

         hazardous chemical: Means any chemical which is a health hazard or
         physical hazard as defined in the U.S. Occupational Safety and Health
         (OSHA) hazard communication standard (29 CFR 1910.1200).

         third party contamination: Environmental pollution that is not
         generated by the LEC or CLEC but results from off-site activities
         impacting an affected Work Location.

8.12     SPILL AND RELEASE NOTIFICATIONS

         GTE and ATTI shall promptly notify the other of any spill or release of
         a Regulated Material at the facility. GTE's obligation under this
         Section is limited to those spills or releases likely to impact the
         portion of the facility used by ATTI, or any portion of the facility
         where ATTI personnel are reasonably expected to be present. ATTI shall
         be responsible for reporting any spill or release of a Regulated
         Material occurring as part of or in connection with its operations that
         must be reported to any

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                                                                          Page 9

         regulatory authority. ATTI will consult with GTE prior to making such
         report, unless the time required for prior consultation would preclude
         ATTI from complying with the applicable reporting requirement.

8.13     MANAGEMENT OF MANHOLE OR VAULT WATER

         When conducting operations in any GTE manhole or vault area, ATTI shall
         follow the ATTI or GTE practice/procedure that provides the greatest
         degree of environmental control in evaluating and managing any water
         present in the manhole or vault area. ATTI shall be responsible for
         obtaining any permit or other regulatory approval necessary for any of
         its operations involving the evaluation, collection, discharge,
         storage, disposal, or other management of water present in a GTE
         manhole or vault area. GTE shall not be responsible for any costs
         incurred by ATTI in meeting its obligations under this Section unless
         GTE placed or otherwise caused materials or substances to be present in
         the manhole or vault area.

9.       REGULATORY MATTERS

9.1      GTE shall be responsible for obtaining and keeping in effect all FCC,
         state regulatory commission, franchise authority and other regulatory
         approvals that may be required in connection with the performance of
         its obligations under this Agreement. ATTI shall be responsible for
         obtaining and keeping in effect all FCC, state regulatory commission,
         franchise authority and other regulatory approvals that may be required
         in connection with its offering of services to ATTI Customers
         contemplated by this Agreement. ATTI shall reasonably cooperate with
         GTE in obtaining and maintaining any required approvals for which GTE
         is responsible, and GTE shall reasonably cooperate with ATTI in
         obtaining and maintaining any required approvals for which ATTI is
         responsible.

9.2      Nothing in this Agreement shall be construed to deny either Party the
         right to file tariffs from time to time in the normal course of
         business. If GTE files a tariff that changes the price, term or other
         condition of a retail service offered for resale under Section 24
         hereunder, such tariff change shall apply to modify the appropriate
         price, term or condition of such retail service under this Agreement.
         In the case of tariff changes affecting other prices, terms or
         conditions of this Agreement other than retail services offered for
         resale, the Commission shall determine on a case by case basis whether
         any such tariff change will apply to modify the relevant price, term or
         condition of this Agreement.

9.3      If any effective legislative, regulatory, judicial or other legal
         actions, including a change in Applicable Law, materially affects any
         material terms of this Agreement, or the ability of ATTI or GTE to
         perform any material terms of this

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                                                                         Page 10

         Agreement, ATTI or GTE may, on thirty (30) days written notice
         (delivered not later than 30 days following the date on which such
         action has become effective) request that such term(s) be renegotiated,
         and the parties agree to so negotiate in good faith such mutually
         acceptable new term(s). If agreement is not achieved within thirty (30)
         days, either party may request mediation, in which case the parties
         shall submit to voluntary mediation.

10.      LIABILITY AND INDEMNITY

10.1     LIABILITIES OF AT&T - ATTI's `s liability to GTE during any Contract
         Year resulting from any and all causes under this Agreement, other than
         as specified in Sections 7, 8,10.3 and 10.4 below, shall not exceed an
         amount equal to the amount due and owing by ATTI to GTE under this
         Agreement during the Contract Year in which such cause accrues or
         arises.

10.2     LIABILITIES OF GTE - GTE's liability to ATTI during any Contract Year
         resulting from any and all causes under this Agreement, other than as
         specified in Sections 7, 8 and 10.4 below, shall not exceed an amount
         equal to any amounts due and owing by ATTI to GTE under this Agreement
         during the Contract Year in which such cause accrues or arises.

10.3     NO CONSEQUENTIAL DAMAGES - NEITHER ATTI NOR GTE SHALL BE LIABLE TO THE
         OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, RELIANCE, OR
         SPECIAL DAMAGES SUFFERED BY SUCH OTHER PARTY (INCLUDING WITHOUT
         LIMITATION DAMAGES FOR HARM TO BUSINESS, LOST REVENUES, LOST SAVINGS,
         OR LOST PROFITS SUFFERED BY SUCH OTHER PARTIES), REGARDLESS OF THE FORM
         OF ACTION, WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY, OR TORT,
         INCLUDING WITHOUT LIMITATION NEGLIGENCE OF ANY KIND WHETHER ACTIVE OR
         PASSIVE, AND REGARDLESS OF WHETHER THE PARTIES KNEW OF THE POSSIBILITY
         THAT SUCH DAMAGES COULD RESULT. EACH PARTY HEREBY RELEASES THE OTHER
         PARTY AND SUCH OTHER PARTY'S SUBSIDIARIES AND AFFILIATES, AND THEIR
         RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ANY SUCH
         CLAIM.

10.4     OBLIGATION TO INDEMNIFY

         Each Party shall, and hereby agrees to, defend at the other's request,
         indemnify and hold harmless the other Party and each of its officers,
         directors, employees and agents (each, an "Indemnitee") against and in
         respect of any loss, debt, liability, damage, obligation, claim,
         demand, judgment or settlement or any nature or kind, known or unknown,
         liquidated or unliquidated, including without limitation all reasonable
         costs and expenses incurred (legal, accounting or otherwise)
         (collectively, "Damages") arising out of, resulting from or based upon
         any pending or threatened claim, action, proceeding or

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                                                                         Page 11

         suit by any third party (a "Claim"): (i) based upon injuries or damage
         to any person or property or the environment arising out of or in
         connection with this Agreement, that are the result of such
         Indemnifying Party's actions, breach of Applicable Law, or breach of
         representations, warranties or covenants made in this Agreement, or the
         actions, breach of Applicable Law or of this Agreement by its officers,
         directors, employees, agents and subcontractors, or (ii) for actual or
         alleged infringement of any patent, copyright, trademark, service mark,
         trade name, trade dress, trade secret or any other intellectual
         property right now known or later developed (referred to as
         "Intellectual Property Rights") to the extent that such claim or action
         arises from the Indemnifying Party's or the Indemnifying Party's
         Customer's use of the Network Elements, Ancillary Functions,
         Combinations, Local Services or other services provided under this
         Agreement.

10.5     OBLIGATION TO DEFEND; NOTICE; CO-OPERATION - Whenever a Claim shall
         arise for indemnification under this Agreement, the relevant
         Indemnitee, as appropriate, shall promptly notify the Indemnifying
         Party and request the Indemnifying Party to defend the same. Failure to
         so notify the Indemnifying Party shall not relieve the Indemnifying
         Party of any liability that the Indemnifying Party might have, except
         to the extent that such failure prejudices the Indemnifying Party's
         ability to defend such Claim. The Indemnifying Party shall have the
         right to defend against such liability or assertion in which event the
         Indemnifying Party shall give written notice to the Indemnitee of
         acceptance of the defense of such Claim and the identity of counsel
         selected by the Indemnifying Party. Except as set forth below, such
         notice to the relevant Indemnitee shall give the Indemnifying Party
         full authority to defend, adjust, compromise or settle such Claim with
         respect to which such notice shall have been given, except to the
         extent that any compromise or settlement shall prejudice the
         Intellectual Property Rights of the relevant Indemnitees. The
         Indemnifying Party shall consult with the relevant Indemnitee prior to
         any compromise or settlement that would affect the Intellectual
         Property Rights of any Indemnitee, and the relevant Indemnitee shall
         have the right to refuse such compromise or settlement and at the
         refusing Party's or refusing Parties' cost, to take over such defense,
         provided that in such event the Indemnifying Party shall not be
         responsible for, nor shall it be obligated to indemnify the relevant
         Indemnitee against, any cost or liability in excess of such refused
         compromise or settlement. With respect to any defense accepted by the
         Indemnifying Party, the relevant Indemnitee shall be entitled to
         participate with the Indemnifying Party in such defense to the extent
         the Claim requests equitable relief or other relief that could affect
         the rights of the Indemnitee and also shall be entitled to employ
         separate counsel for such defense at such Indemnitee's expense. - In
         the event the Indemnifying Party does not accept the defense of any
         indemnified Claim as provided above, the relevant Indemnitee shall have
         the right to

<PAGE>

                                                                         Page 12

         employ counsel for such defense at the expense of the Indemnifying
         Party. Each Party agrees to cooperate and to cause its employees and
         agents to cooperate with the other Party in the defense of any such
         Claim and the relevant records of each Party shall be available to the
         other Party with respect to any such defense.

11.      SERVICE PARITY AND STANDARDS

11.1     Notwithstanding anything in this Agreement to the contrary, GTE shall
         meet any service standard imposed by the FCC or by any state regulatory
         authority for any Local Services, Unbundled Network Elements, and
         Ancillary Functions provided by GTE to ATTI for resale.

11.2     GTE shall ensure that the quality of Local Services, network elements
         and ancillary functions, provided to ATTI are at least equal in quality
         to that provided by GTE to itself.

11.3     GTE and ATTI agree to implement standards to measure the quality of the
         Local Services and Unbundled Network Elements supplied by GTE, in
         particular with respect to pre-ordering, ordering/provisioning,
         maintenance and billing. These quality standards are described in
         Attachment 12. In the event of a violation of Quality Standards by
         either Party, which the Complaining Party alleges constitutes a breach
         of this Agreement, the Complaining Party may elect, subject to the
         procedures set forth in Attachment 1, either (1) to seek such money
         damages as may be available at law; or (2) to claim the penalties
         specified in Attachment 12, but the Complaining Party may not seek both
         (1) and (2) based on the same alleged breach; provided, however, that
         nothing in this sentence shall prevent the Complaining Party from
         seeking equitable relief at the same time that it pursues a claim for
         money damages or a claim under Attachment 12.

11.4     [Intentionally Left Blank]

11.5     If ATTI requests a standard higher than GTE provides to itself, such
         request shall be made as a Bona Fide Request pursuant to Attachment 12,
         and GTE may provide such standard to the extent technically feasible.
         ATTI shall pay the incremental cost of such higher standard or other
         measurement of quality.

12.      CUSTOMER CREDIT HISTORY

12.1     ATTI and GTE agree to make available to a designated third-party credit
         bureau, on a timely basis, such of the following customer payment
         history information that is available solely from internal business
         records of the providing Party for each person or entity that applies
         for local or IntraLATA toll Telecommunications Service(s) from either
         carrier. Such information shall be

<PAGE>

                                                                         Page 13

         provided on the condition that the credit bureau will only make such
         information available to the carrier to which the person or entity in
         question has applied for Telecommunication Service.

                       Applicants name;
                       Applicant's address;
                       Applicant's previous phone number; if any; Amount, if
                       any, of unpaid balance in applicant's name; Whether
                       applicant is delinquent on payments; Length of service
                       with prior local or IntraLATA toll provider;

                       Whether applicant had local or IntraLATA toll service
                       terminated or suspended within the last six months with
                       an explanation of the reason therefor; and Whether
                       applicant was required by prior local or IntraLATA toll
                       provider to pay a deposit or make an advance payment,
                       including the amount of each.

         Nothing contained herein shall require either Party to undertake
         obligations which would subject that Party to requirements or
         liabilities as a consumer reporting agency under 15 U.S.C. Section 1681
         et seq. and its implementing regulations or any similar statute, order
         or administrative rule of the State.

12.2     COOPERATION ON FRAUD MINIMIZATION - The Parties shall cooperate with
         one another to investigate, minimize and take corrective action in
         cases of fraud. The Parties' fraud minimization procedures are to be
         cost effective and implemented so as not to unreasonably burden or harm
         one Party as compared to the other. At a minimum, such cooperation
         shall include, when permitted by law or regulation, providing the other
         Party, upon reasonable request, information concerning end users who
         terminate services to that Party without paying all outstanding
         charges, when that Party is notified that such end user seeks service
         from the other Party. If required, it shall be the responsibility of
         the Party seeking the information to secure the end user's permission
         (in the format required by law) to obtain the information. Although in
         most circumstances the end user's current telephone number may be
         retained by the end user when switching local service providers, if an
         end user has past due charges associated with the account, for which
         payment arrangements have not been made with one Party, the end user's
         previous telephone number will not be made available to the other Party
         until the end user's outstanding balance has been paid.

13.      FORCE MAJEURE

13.1     Except as otherwise specifically provided in this Agreement, neither
         Party shall be liable for any delay or failure in performance of any
         part of this Agreement caused by any condition beyond the reasonable
         control of the

<PAGE>

                                                                         Page 14

         Party claiming excusable delay or other failure to perform, including
         acts of the United States of America or any state, territory or
         political subdivision thereof, acts of God or a public enemy, fires,
         floods, freight embargoes, earthquakes, volcanic actions, wars, or
         civil disturbances. If any Force Majeure condition occurs, the Party
         whose performance fails or is delayed because of such Force Majeure
         condition shall give prompt notice to the other Party, and upon
         cessation of such Force Majeure condition, shall give like notice and
         commence performance hereunder as promptly as reasonably practicable,
         including implementation of disaster recovery plans.

13.2     Notwithstanding subsection 1, preceding, no delay or other failure to
         perform shall be excused pursuant to this Section:

         (i) by the acts or omission of a Party's subcontractors, material men,
         suppliers or other third persons providing products or services to such
         Party unless such acts or omissions are themselves the product of a
         Force Majeure condition, and
         (ii) unless such delay or failure and the consequences thereof are
         beyond the reasonable control and without the fault or negligence of
         the Party claiming excusable delay or other failure to perform.

14.      CERTAIN STATE AND LOCAL TAXES

         Any state or local excise, sales, or use taxes (excluding any taxes
         levied on income) resulting from the performance of this Agreement
         shall be borne by the Party upon which the obligation for payment is
         imposed under applicable law, even if the obligation to collect and
         remit such taxes is placed upon the other Party. The collecting Party
         shall charge and collect from the obligated Party, and the obligated
         Party agrees to pay to the collecting Party, all applicable taxes,
         except to the extent that the obligated Party notifies the collecting
         Party and provides to the collecting Party appropriate documentation
         that qualifies the obligated Party for a full or partial exemption. Any
         such taxes shall be shown as separate items on applicable billing
         documents between the Parties. The obligated Party may contest the same
         in good faith, at its own expense, and shall be entitled to the benefit
         of any refund or recovery, provided that such Party shall not permit
         any lien to exist on any asset of the other Party by reason of the
         contest. The collecting Party shall cooperate in any such contest by
         the other Party, provided that the contesting Party shall pay the
         reasonable expenses of the collecting Party for any such cooperative
         activities.

15.      ALTERNATIVE DISPUTE RESOLUTION

         All Disputes arising under this Agreement or the breach hereof, except
         those arising pursuant to Attachment 6, Connectivity Billing, shall be
         resolved according to the procedures set forth in Attachment 1.
         Disputes involving

<PAGE>

                                                                         Page 15

         matters subject to the Connectivity Billing provisions contained in
         Attachment 6, shall be resolved in accordance with the Billing Disputes
         section of Attachment 6. In no event shall the Parties permit the
         pendency of a Dispute to disrupt service to any customer of any Party
         contemplated by this Agreement except in the case of default and
         termination of this Agreement pursuant to Section 3.4. The foregoing
         notwithstanding, neither this Section 15 nor Attachment 1 shall be
         construed to prevent either Party from seeking and obtaining temporary
         equitable remedies, including temporary restraining orders.

16.      NOTICES

         Any notices or other communications required or permitted to be given
         or delivered under this Agreement shall be in hard-copy writing (unless
         otherwise specifically provided herein) and shall be sufficiently given
         if delivered personally or delivered by prepaid overnight express
         service or certified mail, return receipt requested or by facsimile
         (followed by a hard copy delivered by U.S. Mail or another method
         specified herein) to the following (unless otherwise specifically
         required by this Agreement to be delivered to another representative or
         point of contact):

         If to ATTI:

         Richard A. Smith
         Chief Operating Officer
         730 Second Avenue South
         Suite 1200
         Minneapolis, MN 55402

         If to GTE:

         Lida Tong
         State Director - External Affairs
         GTE Northwest Incorporated
         1800 41st Street
         MC:    WA0101RA
         Everett, WA 98201
         Facsimile number: 206-261-5262

         and

         Thomas R. Parker, Esq.
         Assistant Vice President and Associate General Counsel
         HQ E03J43
         600 Hidden Ridge Drive

<PAGE>

                                                                         Page 16

         Irving, TX 75038
         Facsimile Number: 972-718-1250

         Either Party may unilaterally change its designated representative
         and/or address for the receipt of notices by giving seven (7) days'
         prior written notice to the other Party in compliance with this
         Section. Any notice or other communication shall be deemed given when
         received.

17.      CONFIDENTIALITY AND PROPRIETARY INFORMATION

17.1     For the purposes of this Agreement, "Confidential Information" means
         confidential or proprietary technical or business information, in
         written or tangible form, given by the Discloser to the Recipient that
         is stamped, labeled, or otherwise designated as "Proprietary" or
         "Confidential" or that contains other words or symbols clearly
         indicating that the information is intended to be secure from public
         disclosure. "Confidential Information" also includes information that
         is intentionally provided or disclosed orally or visually if it is
         identified as proprietary or confidential when provided or disclosed
         and is summarized in a writing so marked and delivered within ten (10)
         days following such disclosure. "Confidential Information" also
         includes information that is observed or learned by one Party while it
         is on the premises (including leased collocation space) of the other
         Party. Notwithstanding the foregoing, all orders for Local Services,
         Network Elements or Combinations placed by ATTI pursuant to this
         Agreement, and information that would constitute Customer Proprietary
         Network Information of ATTI Customers pursuant to the Act and the rules
         and regulations of the FCC and Recorded Usage Data as described in
         Attachment 7, whether disclosed by ATTI to GTE or otherwise acquired by
         GTE in the course of the performance of this Agreement, shall be deemed
         Confidential Information of ATTI for all purposes under this Agreement
         whether or not specifically marked or designated as confidential or
         proprietary.

17.2     For the period set forth in Section 17.6, except as otherwise specified
         in this Agreement, the Recipient agrees (a) to use it only for the
         purpose of performing under this Agreement, (b) to hold it in
         confidence and disclose it to no one other than its employees or agents
         or consultants having a need to know for the purpose of performing
         under this Agreement, and (c) to safeguard it from unauthorized use or
         disclosure with at least the same degree of care with which the
         Recipient safeguards its own Confidential Information. Any agent or
         consultant must have executed a written agreement of non-disclosure and
         non-use comparable in scope to the terms of this Section 17 which
         agreement shall be enforceable by the Discloser.

<PAGE>

                                                                         Page 17

17.3     The Recipient may make copies of Confidential Information only as
         reasonably necessary to perform its obligations under this Agreement.
         All such copies shall be subject to the same restrictions and
         protections as the original and shall bear the same copyright and
         proprietary rights notices as are contained on the original.

17.4     The Recipient agrees to return to the Discloser all Confidential
         Information received in tangible form from the Discloser, including any
         copies made by the Recipient, within thirty (30) days after a written
         request is delivered to the Recipient, or to destroy or erase all such
         Confidential Information and certify as to such event, except for
         Confidential Information that the Recipient reasonably requires to
         perform its obligations under this Agreement or as otherwise required
         by applicable law. If either Party loses or makes an unauthorized
         disclosure of the other Party's Confidential Information, it shall
         notify such other Party as soon as is reasonably practicable after the
         loss is discovered and use reasonable efforts to retrieve the lost or
         wrongfully disclosed information.

17.5     The Recipient shall have no obligation to safeguard Confidential
         Information: (a) which was in the possession of the Recipient free of
         restriction on use or disclosure prior to its receipt from the
         Discloser; (b) after it becomes publicly known or available through no
         breach of this Agreement or other restriction on use or disclosure by
         the Recipient; (c) after it is rightfully acquired by the Recipient
         free of restrictions on its use or disclosure; or (d) after it is
         proven to be independently developed by personnel of the Recipient to
         whom the Discloser's Confidential Information had not been previously
         disclosed. In addition, either Party shall have the right to disclose
         Confidential Information to any mediator, arbitrator, state or federal
         regulatory body, the Department of Justice or any court in the conduct
         of any mediation, arbitration or approval of this Agreement subject to
         the requirements concerning notice and other measures specified in the
         last sentence of this Subsection. Additionally, the Recipient may
         disclose Confidential Information if so required by law, a court of
         competent jurisdiction, or governmental or administrative agency, so
         long as the Discloser has been notified of the requirement promptly
         after the Recipient becomes aware of the requirement, but prior to such
         disclosure and so long as the Recipient undertakes all lawful measures
         to avoid disclosing such information until Discloser has had reasonable
         time to seek a protective order and Discloser complies with any
         protective order that covers the Confidential Information to be
         disclosed.

17.6     Each Party's obligations with respect to Confidential Information
         disclosed prior to expiration or termination of this Agreement shall
         expire three (3) years from the date of receipt of the initial
         disclosure, regardless of any termination of this Agreement prior to
         such expiration date; provided that the duties with

<PAGE>

                                                                         Page 18

         respect to Confidential Information that is software, protocols and
         interfaces shall expire fifteen (15) years from the date of the initial
         disclosure.

17.7     Except as otherwise expressly provided elsewhere in this Agreement, no
         license is hereby granted under any patent, trademark, copyright or
         other Intellectual Property Right, nor is any such license implied,
         solely by virtue of the disclosure of any Confidential Information.

17.8     Each Party agrees that the Discloser would be irreparably injured by a
         breach of this Agreement by the Recipient or its representatives and
         that the Discloser shall be entitled to seek equitable relief,
         including injunctive relief and specific performance, in the event of
         any breach of the provisions of this Section 17. Such remedies shall
         not be deemed to be the exclusive remedies for a breach of this Section
         17, but shall be in addition to all other remedies available at law or
         in equity.

18.      BRANDING

18.1     ATTI may, at its option, use the Network Elements, Combinations and
         Local Services provided in accordance with this Agreement to provide to
         its customers services branded as ATTI. Except as otherwise provided in
         this Agreement or specified in a separate writing by ATTI, ATTI shall
         provide the exclusive interface to ATTI Customers in connection with
         the marketing or offering of ATTI services. When a GTE technical
         representative goes to a customer premise on behalf of ATTI, in the
         event the representative has contact with the customer, the
         representative will indicate to the customer that he or she works for
         GTE but is at the customer premise on behalf of ATTI regarding ATTI
         service. If the customer is not at the premise at the time that the
         technical representative is at the premise, GTE agrees to deliver
         generic material or documents to the customer, and the representative
         will write ATTI's name on the document or material left for the
         customer. GTE personnel acting on behalf of ATTI will not discuss,
         provide, or leave information or material relative to GTE's services
         and products.

18.2     Operator Services and Directory Assistance provided by GTE to ATTI
         local service customers under this Agreement will be branded
         exclusively as ATTI services, where technically feasible. GTE will
         perform the necessary software upgrades to allow for rebranding of its
         Operator Services and Directory Assistance in ATTI's name on a switch
         by switch basis, subject to capability and capacity limitations; until
         those upgrades have been completed, GTE will provide rebranded services
         through alternate means to the extent technically feasible. Where it is
         not technically feasible for GTE to provide Operator Services and
         Directory Assistance as rebranded services, then GTE will provide such
         services without any branding, if allowed by state laws and
         regulations. Live operators handling Operator Services and Directory

<PAGE>

                                                                         Page 19

         Assistance calls from ATTI local service customers will identify
         themselves as ATTI operators: where such rebranding is not technically
         feasible, live operator response will be provided on an unbranded
         basis.

19.      DIRECTORY LISTINGS AND DIRECTORY DISTRIBUTION

         GTE shall offer the following to AT&T:

19.1     DIRECTORY LISTINGS (WHITE PAGES) - A basic listing for each ATTI
         Customer shall be included in the GTE white pages directory for such
         ATTI Customer's specific geographic area at no charge to ATTI or ATTI's
         Customers. Where an ATTI Customer has two numbers for a line due to the
         implementation of interim Local Number Portability, the second number
         shall be considered part of the White pages basic listing. Other
         listings that are made available to GTE Customers (e.g. additional
         listings, non-published status, foreign listings, etc.,) will be made
         available to ATTI Customers on the same rates, terms and conditions as
         available to GTE Customers. ATTI Customer Government listings will be
         listed in the same manner as GTE Customer Government listings.

19.2     DIRECTORY LISTINGS (YELLOW PAGES) GTE will provide ATTI Customers with
         the same yellow page services on the same terms and conditions as those
         provided to GTE Customers. GTE will provide each ATTI Customer within
         the geographical area covered by the yellow pages directory a basic
         listing in GTE "yellow pages" under the classified heading that most
         accurately reflects the primary nature of the ATTI Customer's business
         at no charge to ATTI or ATTI Customers for this listing. GTE will
         supply ATTI with a list of authorized classified headings and will
         notify ATTI of any changes to such headings. ATTI agrees to supply GTE,
         on a regularly scheduled basis and in the format mutually agreed
         between ATTI and GTE, with a classified heading assignment for each
         ATTI Customer who wishes to receive this listing. GTE shall provide
         ATTI with monthly schedules (for a rolling twelve (12) month period)
         for Yellow Pages publications in the State.

19.3     LISTING INFORMATION - ATTI agrees to supply GTE, on a regularly
         scheduled basis and in the format mutually agreed between ATTI and GTE,
         all listing information for ATTI Customers who wish to be listed in the
         white or yellow pages of the GTE published directory for that
         subscriber area. Listing information will consist of names, addresses
         (including city and ZIP code where provided in that directory) and
         telephone numbers. GTE shall employ the listing information for the
         production of GTE-published white and yellow page directories. Listing
         inclusion in a given directory will be in accordance with directory
         configuration, scope and schedules established by GTE which are
         applicable to all GTE entities. GTE shall obtain ATTI' prior written
         approval for the use of ATTl Customers' listings for any other purpose.
         GTE

<PAGE>

                                                                         Page 20

         will not sell or license, nor allow any third party, the use of ATTI
         subscriber listing and GTE will not disclose non-listed name or address
         information for any purpose without the prior written consent of ATTI,
         which shall not be unreasonably withheld. GTE will charge ATTI a
         reasonable service bureau extraction fee for all third party
         translations and ATTI will be free to establish its own fees for direct
         billing the third parties.

19.4     DIRECTORY DISTRIBUTION - Initial directories will be provided to ATTI
         Customers for each ATTI Customer's specific geographic region on the
         same basis as GTE Customers within the same directory area. More
         specifically, GTE will not charge ATTI or ATTI Customers for annual
         distribution of directories. GTE will provide secondary distributions
         of directories (e.g. a new customer, requests for additional copies) to
         ATTI Customers at the same price that GTE is charged for secondary
         distribution by GTE Directories. ATTI shall pay GTE Directories for
         such secondary distributions based on GTE's agreement that the
         secondary distribution costs will be excluded from GTE's cost studies
         and resulting avoided cost discounts and prices for unbundled elements.
         Timing of such delivery and the determination of which Telephone
         Directories shall be delivered (by customer address, NPA/NXX or other
         criteria), and the number of Telephone Directories to be provided per
         customer, shall be provided under the same terms that GTE delivers
         Telephone Directories to GTE Customers. ATTI will supply GTE in a
         timely manner with all required subscriber mailing information,
         including non-listed and non-published subscriber mailing information,
         to enable GTE to perform its distribution responsibilities.

19.5     CRITICAL CUSTOMER CONTACT INFORMATION - GTE will list in the
         information pages of its directories at no charge to ATTI, ATTI's
         critical customer contact information for business and residential
         customers regarding emergency services, billing, sales and service
         information, repair service and ATTI's logo. GTE shall list Competitive
         Local Exchange Carrier critical customer contact information on an
         alphabetical basis.

19.6     GTE shall also include, in the customer call guide page(s) of each
         Telephone Directory, up to four full pages of consolidated space for
         the inclusion of information about ATTI products and services,
         including addresses and telephone numbers for AT&T customer service.
         The form and content of such customer information shall be provided by
         ATTI to GTE and shall be subject to GTE review and approval, which
         approval shall not be unreasonably withheld. ATTI agrees to pay a price
         per page to be determined by GTE Directories, provided that such price
         shall be nondiscriminatory to GTE and ATTI.

19.7     GTE shall, at no charge to ATTI, make available recycling services for
         Telephone Directories to ATTI Customers under the same terms and

<PAGE>

                                                                         Page 21

         conditions that GTE makes such services available to its own local
         service customers.

19.8     Notwithstanding anything to the contrary contained herein, GTE may
         terminate this Section 19 as to a specific GTE exchange in the event
         that GTE sells or otherwise transfers the exchange to an entity other
         than a GTE Affiliate. GTE shall provide ATTI with at least ninety (90)
         days' prior written notice of such termination, which shall be
         effective on the date specified in the notice. Notwithstanding
         termination as to a specific exchange, this Section 19 shall remain in
         full force and effect in the remaining exchanges.

19.9     Notwithstanding the termination of this Section 19, the Parties'
         obligations with respect to any directories whose annual publication
         cycle has begun prior to the effective date of termination shall
         survive such termination. For example, if a Party terminates this
         Section 19 effective as of June 30, 1997, the Parties' survival
         obligations shall apply as follows:

<TABLE>
<CAPTION>
            Exchange                       Beginning of                       Expiration of Obligations
                                           Publication Cycle

            <S>                            <C>                                <C>
            1                              January 1,1997                     December 31, 1997
            2                              June 1,1997                        May 31,1998
            3                              August 1,1997                      June 30, 1997
</TABLE>

         a publication cycle begins the day following the listing activity close
         date for the current year's publication.

19.10    Directory Listing criteria shall be specified by GTE. GTE shall provide
         any changes to its Directory Listing Criteria thirty (30) days in
         advance of such changes becoming effective. The Directory Listing
         criteria shall include:

19.10.1  Classified heading information

19.10.2  Rules for White Pages and Yellow Pages listings (e.g., eligibility for
         free Yellow Pages listing, space restrictions, unlisted and unpublished
         listings, abbreviated listings, foreign listings, and heading
         requirements);

19.10.3  Identification of Enhanced White Pages and Enhanced Yellow Pages
         listings available;

19.10.4  Publication schedules for White Pages and Yellow Pages;

19.10.5  Identification of which Telephone Directories are provided to which
         customers by customer address, NPA/NXX or other criteria;

19.10.6  Telephone Directory delivery schedules;

<PAGE>

                                                                         Page 22

19.10.7  Restrictions, if any, on number of Telephone Directories provided at no
         charge to customer;

19.10.8  Processes and terms and conditions for obtaining foreign Telephone
         Directories from GTE; and

19.10.9  Geographic coverage areas of each Telephone (by municipality and
         NPA/NXX).

20.      DIRECTORY ASSISTANCE LISTING INFORMATION

20.1     GTE shall include in its directory assistance database all directory
         assistance listing information, which consists of name and address ("DA
         Listing Information") for all ATTI Customers, including those with
         nonpublished and unlisted numbers, at no charge to ATTI.

         GTE shall provide to ATTI, at ATTI's request, for purposes of ATTI
         providing ATTI-branded directory assistance services to its local
         customers, within thirty (30) days after the Effective Date, all
         published GTE DA Listing Information via magnetic tape delivered within
         twenty-four (24) hours of preparation, at a the rate specified in
         Attachment 14. Changes to the DA Listing Information shall be updated
         on a daily basis through the same means used to transmit the initial
         list. DA Listing Information provided shall indicate whether the
         customer is a residence or business customer.

20.2     Neither Party will release, sell, or license DA Listing Information
         that includes the other Party's end user information to third parties
         without the other Party's approval. The other Party shall inform the
         releasing Party if it desires to have the releasing Party provide the
         other Party's DA Listing Information to the third party, in which case,
         the releasing Party shall provide the other Party's DA Listing
         Information at the same time as the releasing Party provides the
         releasing Party's DA Listing Information to the third party. The rate
         to be paid by the releasing Party to the other Party for such sales
         shall be negotiated on a case-by-case basis.

21.      BUSY LINE VERIFICATION AND BUSY LINE VERIFICATION INTERRUPT

         Prior to the exchange of traffic under this Agreement, each Party shall
         establish procedures whereby its operator bureau will coordinate with
         the operator bureau of the other Party to provide Busy Line
         Verification ("BLV") and Busy Line Verification Interrupt ("BLVI")
         services on calls between their respective end users. Each Party shall
         route BLV and BLVI inquiries over separate inward operator services
         trunks. Each Party's operator assistance bureau will only verify and/or
         interrupt the call and will not complete the call of the end-user
         initiating the BLV or BLVI. Each Party shall charge the other for the
         BLV and BLVI services on a bill-and-keep basis.

<PAGE>

                                                                         Page 23

22.      NUMBER ASSIGNMENT

22.1     GTE shall allocate Central Office Codes, i.e. NXXs, in a neutral manner
         at parity with itself in those LATAs where GTE is the number
         administrator. GTE shall not charge a fee for the allocation of NXXs to
         AT&T for any costs including, but not limited to, programming expenses
         incurred by GTE in their role as number administrator; provided,
         however, that when responsibility for number assignment is transferred
         to a neutral third party, GTE shall charge a fee for such services to
         recover costs incurred that is consistent with the applicable rules and
         regulations for such.

22.2     GTE shall process all ATTI NXX requests in a timely manner as per the
         ICCF Code Assignment Guidelines and will provide numbers in any NPA/NXX
         associated with a terminating line within the boundaries of an LSO, in
         those LATAs where GTE is the number administrator.

22.3     GTE, during the interim period, will maintain its current process of
         notifying public utility commissions and state regulatory bodies of
         plans for NPA splits and code relief.

22.4     GTE shall treat as confidential, and solely for use in its role as Code
         Administrator and for no other purpose, any and all information
         received from ATTI regarding NPA/NXX forecasts. This information shall
         be used only for the purposes of code administration, e.g. NPA code
         relief studies.

22.5     GTE shall participate in the transition of its code administration
         responsibilities to a neutral third party and will notify ATTI if there
         are not sufficient numbers to meet the forecasted requirements of ATTI.

22.6     GTE shall provide ATTI with a file, or files, containing a street
         address/LSO cross reference indicating which LSO serves the cross
         referenced street address.

23.      MISCELLANEOUS

23.1     DELEGATION OR ASSIGNMENT - Any assignment by either Party of any right,
         obligation, or duty, in whole or in part, or of any interest, without
         the written consent of the other Party shall be void, except that
         either Party may assign all of its rights, and delegate its
         obligations, liabilities and duties under this Agreement, either in
         whole or in part, to any entity that is, or that was, an Affiliate of
         that Party without consent, but with written notification, provided
         that in the case of ATTI, such Affiliate is a certified provider of
         local dial-tone service in the State to the extent such State requires
         such certification. The effectiveness of an assignment shall be
         conditioned upon the assignee's assumption of the rights, obligations,
         and duties of the assigning Party.

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                                                                         Page 24

23.2     SUBCONTRACTING - GTE may subcontract the performance of any obligation
         under this Agreement without the prior written consent of ATTI,
         provided that GTE shall remain fully responsible for the performance of
         this Agreement in accordance with its terms, including any obligations
         it performs through subcontractors, and GTE shall be solely responsible
         for payments due its subcontractors. No contract, subcontract or other
         Agreement entered into by either Party with any third party in
         connection with the provision of Local Services or Network Elements
         hereunder shall provide for any indemnity, guarantee or assumption of
         liability by, or other obligation of, the other Party to this Agreement
         with respect to such arrangement, except as consented to in writing by
         the other Party. No subcontractor shall be deemed a third party
         beneficiary for any purposes under this Agreement.

23.3     [Intentionally deleted].

23.4     BINDING EFFECT - This Agreement shall be binding on and inure to the
         benefit of the respective successors and permitted assigns of the
         Parties.

23.5     NONEXCLUSIVE REMEDIES - Except as otherwise expressly provided in this
         Agreement, each of the remedies provided under this Agreement is
         cumulative and is in addition to any remedies that may be available at
         law or in equity.

23.6     NO THIRD-PARTY BENEFICIARIES - Except as specifically set forth in
         Section 10.4 and 10.5, this Agreement does not provide and shall not be
         construed to provide third parties with any remedy, claim, liability,
         reimbursement, cause of action, or other privilege.

23.7     REFERENCED DOCUMENTS - Whenever any provision of this Agreement refers
         to A technical reference, technical publication, ATTI Practice, GTE
         Practice, any publication of telecommunications industry administrative
         or technical standards, or any other document expressly incorporated
         into this Agreement, it will be deemed to be a reference to the most
         recent version or edition (including any amendments, supplements,
         addenda, or successors) of such document that is in effect at the time
         of the execution of this Agreement, and will include the most recent
         version or edition (including any amendments, supplements, addenda, or
         successors) of each document incorporated by reference in such a
         technical reference, technical publication, ATTI Practice, GTE
         Practice, or publication of industry standards.

23.8     REGULATORY AGENCY CONTROL - This Agreement shall at all times be
         subject to changes, modifications, orders, and rulings by the FCC
         and/or the applicable state utility regulatory commission to the extent
         the substance of this Agreement is or becomes subject to the
         jurisdiction of such agency. This Agreement is subject to approval of
         the Commission in accordance with Section 252 of the Act. This
         Agreement shall not become effective until five

<PAGE>

                                                                         Page 25

          (5) Business Days after receipt by the Parties of written notice of
          such approval. "Business Day" shall mean Monday through Friday, except
          for holidays on which the U. S. Mail is not delivered.

23.9      [Intentionally deleted].

23.10     PUBLICITY AND ADVERTISING - Any news release, public announcement,
          advertising, or any form of publicity pertaining to this Agreement, or
          the provision of Local Services, Unbundled Network Elements, Ancillary
          Functions or Interconnection Services pursuant to it, or association
          of the Parties with respect to provision of the services described in
          this Agreement shall be subject to prior written approval of both GTE
          And ATTI. Neither Party shall publish or use any advertising, sales
          promotions or other publicity materials that use the other Party's
          logo, trademarks or service marks without the prior written approval
          of the other Party.

23.11     AMENDMENTS OR WAIVERS - Except as otherwise provided in this
          Agreement, no amendment or waiver of any provision of this Agreement,
          and no consent to any default under this Agreement, shall be effective
          unless the same is in writing and signed by an officer of the Party
          against whom such amendment, waiver or consent is claimed. In
          addition, no course of dealing or failure of a Party strictly to
          enforce any term, right or condition of this Agreement shall be
          construed as a waiver of such term, right or condition. By entering
          into this Agreement, neither Party waives any right granted to it
          pursuant to the Act.

23.12     SEVERABILITY - If any term, condition or provision of this Agreement
          is held by a governmental body of competent jurisdiction to be invalid
          or unenforceable for any reason, such invalidity or unenforceability
          shall not invalidate the entire Agreement. The Agreement shall be
          construed as if it did not contain the invalid or unenforceable
          provision or provisions, and the rights and obligations of each Party
          shall be construed and enforced accordingly.

23.13     ENTIRE AGREEMENT - This Agreement, which shall include the
          Attachments, Appendices and other documents referenced herein,
          constitutes the entire Agreement between the Parties concerning the
          subject matter hereof and supersedes any prior agreements,
          representations, statements, negotiations, understandings, proposals
          or undertakings, oral or written, with respect to the subject matter
          expressly set forth herein.

23.14     SURVIVAL OF OBLIGATIONS - Any liabilities or obligations of a Party
          for acts or omissions prior to the cancellation or termination of this
          Agreement; any obligation of a Party under the provisions regarding
          indemnification, Confidential Information, limitations on liability,
          and any other provisions of this Agreement which, by their terms, are
          contemplated to survive (or to be performed after) termination of this
          Agreement, shall survive cancellation or termination thereof.

<PAGE>

                                                                         Page 26

23.15     [Intentionally deleted].

23.16     HEADINGS OF NO FORCE OR EFFECT - The headings of Articles and Sections
          of this Agreement are for convenience of reference only, and shall in
          no way define, modify or restrict the meaning or interpretation of the
          terms or provisions of this Agreement.

23.17     TRADEMARKS AND TRADE NAMES - Except as specifically set out in this
          Agreement, nothing in this Agreement shall grant, suggest, or imply
          any right, license or authority for one Party to use the name,
          trademarks, service marks, or trade names of the other Party for any
          purpose whatsoever.

23.18     NOTICE OF NETWORK AND TECHNOLOGY CHANGES - GTE shall establish
          quarterly reviews of network and technologies plans. GTE shall notify
          ATTI at least six (6) months in advance of changes that would impact
          ATTI's provision of service.

23.19     TECHNICAL REFERENCES -

23.19.1   The technical references cited throughout this Agreement shall apply
          unless GTE shall offer, within ninety (90) days following Commission
          approval of this Agreement, GTE's proposed substitute technical
          references, for consideration and review by subject matter experts
          designated, respectively, by ATTI and GTE. Within ten (10) business
          days following ATTI's receipt of true and complete copies of GTE's
          proposed substitute technical references, ATTI and GTE subject matter
          experts shall meet in person or via teleconference to review the
          substitute reference(s) with a view toward achieving agreement on the
          suitability of such references for implementation and incorporation
          into this Agreement. The subject matter experts may agree to implement
          and incorporate, to modify or supplement, or to replace any such
          substitute technical reference proposed by GTE. Where they so agree,
          the resulting substitute technical reference shall be implemented and
          incorporated forthwith, by formal amendment in writing, into this
          Agreement. Where they disagree with respect to the suitability or
          adequacy of any such proposed substitute technical reference, the
          GTE-proposed substitute technical reference shall be incorporated into
          this Agreement at the conclusion of the ten business day period cited
          above, by formal amendment in writing, subject to ATTI's right to
          pursue the dispute and the implementation of more suitable technical
          references through the ADR procedures set forth in Attachment I to
          this Agreement. ATTI may initiate such ADR procedures within sixty
          (60) days following the incorporation of the challenged technical
          reference into this Agreement.

23.19.2   The parties recognize the possibility that some equipment vendors may
          manufacture telecommunications equipment that does not fully
          incorporate or may deviate from the technical references contained in
          this Agreement. To

<PAGE>

                                                                         Page 27

          the extent that, due to the manner in which individual manufacturers
          may have chosen to implement industry standards into the design of
          their product, or due to the differing vintages of these individual
          facility components and the presence of embedded technologies that
          pre-date certain technical references, some of the individual facility
          components deployed with GTE's network may not adhere to the technical
          references, then, within forty-five (45) days after the Effective Date
          of this Agreement:

                    (a) the Parties will develop processes by which GTE will
          inform ATTI of any such deviations from technical standards for
          Network Elements or Combinations ordered by ATTI;

                    (b) the Parties will develop further processes and
          procedures designed, upon notice of such deviations from technical
          standards, to address the treatment of GTE and ATTI customers at
          parity; and

                    (c) the parties will take such other mutually agreed upon
          actions as shall be appropriate in the circumstances.

23.20     Any figures and/or schematics used throughout this Agreement,
          including, but not limited to, the figures and/or schematics used in
          Attachment 2 to this Agreement, are for the convenience of reference
          only, and shall in no way define, modify or restrict the meaning or
          interpretation of the terms or provisions of this Agreement.

<PAGE>

                                                                         Page 28

                          PART I LOCAL SERVICES RESALE

24.       TELECOMMUNICATIONS SERVICES PROVIDED FOR RESALE

          Upon request by ATTI in accordance with Section 25.1 and subject to
          the restrictions contained in Section 25.3 hereunder, GTE shall make
          available to ATTI at the applicable rate set forth in Attachment 14,
          any Telecommunications Service that GTE currently offers or may
          hereafter offer at retail to subscribers that are not
          telecommunications carriers. Such Telecommunications Services provided
          by GTE pursuant to this Section are collectively referred to as "Local
          Services.

25.       GENERAL TERMS AND CONDITIONS FOR RESALE

25.1      ORDERING

25.1.1    Orders for resale of Local Services will be placed utilizing a
          standard Local Service Request ("LSR") form. A complete and accurate
          LSR must be provided by ATTI before a request can be processed;
          provided, however, that immaterial deviations or omissions in the LSR
          will not prevent an order from being processed. Each Party shall
          transfer the customer's service features and functionalities "as is"
          to the other Party when requested by a customer. For purposes of this
          Section 25, an "as is transfer" is the transfer of all the
          telecommunications services and features available for resale that are
          currently being provided for the specified account without the
          requirement of a specific enumeration of the services and features on
          the LSR.

25.1.2    A Letter of Authorization ("LOA") will be required before Local
          Services will be provided for resale to a subscriber that currently
          receives local exchange service from GTE or from a local service
          provider other that ATTI. Such LOA may be a blanket letter of
          authorization (Blanket LOA) or such other form as agreed upon by ATTI
          and GTE. When a Blanket LOA has been provided by ATTI, GTE shall not
          require an additional disconnect order, LOA or other writing from a
          customer, or another LEC, in order to process an order for Local
          Service. Each Party will provide the capability for customers to
          retain their current phone number in the event that they change local
          service providers to the extent technically feasible, allowing them to
          retain all existing features and functionalities.

25.1.3    GTE shall include an ATTI Customer's listing in its Directory
          Assistance database as part of the Local Service Request ("LSR")
          process. GTE will honor ATTI Customer's preferences for listing
          status, including non-published and unlisted, as noted on the LSR and
          will enter the listing in the GTE

<PAGE>

                                                                         Page 29

          database which is used to perform Directory Assistance functions as it
          appears on the LSR.

25.1.4    GTE shall accept requests for a change in the primary interexchange
          carrier of a local exchange customer of ATTI only from ATTl.

25.2      PRICING

          The prices to be charged to ATTI for Local Services under this
          Agreement are set forth in Part V of this Agreement.

25.3      RESTRICTIONS ON RESALE

          To the extent consistent with the applicable rules and regulations of
          the FCC and the Commission, ATTI may resell all GTE Local Services as
          defined in GTE's tariffs. The following restrictions shall apply to
          the resale of Local Services, as described in Section 24 of this
          Agreement by ATTI: (i) ATTI shall not resell residential services to
          business customers; (ii) GTE shall not be required to offer at a
          wholesale discount to ATTI any GTE promotional offering that is made
          available to any GTE customer for a period of ninety (90) days or
          less; (iii) and GTE shall not be required to provide to ATTI for
          resale any retail service which a telecommunications carrier is by law
          required to provide as a social benefit to a specially designated
          class of customer. ATTI shall determine whether its customers qualify
          for any such social programs and shall bear the costs associated with
          the provision of such programs.

25.4      [Intentionally deleted]

25.5      DIALING AND SERVICE PARITY

25.5.1    GTE will provide the same dialing parity to ATTI Customers as
          similarly-situated GTE Customers, such that, for all call types, an
          ATTI Customer is not required to dial any greater number of digits
          than a similarly-situated GTE Customer; provided however with respect
          to intra-LATA dialing, GTE shall provide dialing parity to ATTI
          customers in the State in accordance with the provisions and schedule
          established by the Commission.

25.5.2    GTE will provide service levels for Local Services for resale that are
          equal to service levels for similarly-situated GTE Customers, such
          that there is no loss of features or functionalities including, but
          not limited to: same dial tone and ringing; same capability for either
          dial pulse or touch tone recognition; flat and measured services;
          speech recognition as available; same extended local free calling
          area; 1+ IntraLATA toll calling; InterLATA toll calling and
          international calling; 500, 700, 800, 900, 976 and Dial Around (10xxx)
          Services; restricted collect and third number billing; all available
          speeds of

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                                                                         Page 30

          analogue and digital private lines; off-premise extensions; CENTRANET
          and ISDN.

25.6      CHANGES IN RETAIL SERVICE

          GTE will notify ATTI of proposed new retail services or modifications
          to existing retail services forty-five (45) days prior to the expected
          date of regulatory approval of the new or modified services. If new
          services or modifications are introduced with less than forty-five
          (45) days notice to the regulatory authority, GTE will notify ATTI at
          the same time it determines to introduce the new or modified service.
          With respect to changes in prices for existing retail services or
          related resale rates, GTE will notify ATTI at the same time as GTE
          begins internal implementation efforts (i.e., at least at the time
          that GTE's Product Management Committee is notified of the proposed
          change) or obtains internal approval to make the price change,
          whichever is sooner.

26.       REQUIREMENTS FOR SPECIFIC SERVICES

26.1      [Intentionally deleted]

26.2      CLASS/LASS and Custom Features Requirements

          ATTI may purchase the entire set of CLASS/LASS and Custom features and
          functions, or a subset of any one or any combination of such features,
          on a customer-specific basis, without restriction on the minimum or
          maximum number of lines or features that may be purchased for any one
          level of service, provided such CLASS/LASS and Custom features are
          available to GTE Customers served by the same GTE Central Office. GTE
          shall provide to ATTI a list of CLASS/LASS and Custom features and
          functions within ten (10) business days of the Effective Date and
          shall provide updates to such list when new features and functions
          become available. GTE shall provide to ATTI a list of all services,
          features, and products including a definition of the service (by
          specific reference to the appropriate tariff sections) and how such
          services interact with each other. GTE shall provide features and
          services by street address guide and by switch. All features shall be
          at least at parity with the GTE service offering.

26.3      This Section intentionally left blank.

26.4      INTERCEPT AND TRANSFER SERVICE

          GTE shall provide intercept and transfer service to ATTI for ATTI
          Customers on the same basis and for the same length of time as such
          service is available to similarly-situated GTE Customers. To that end,
          when an end-user customer transfers service from GTE to ATTI , or from
          ATTI to GTE, and does

<PAGE>

                                                                         Page 31

          not retain its original telephone number, the Party formerly providing
          service to the end user will provide, upon request, a referral
          announcement on the original telephone number. The announcement will
          provide the new number of the customer.

26.5      E911/911 SERVICES

          GTE shall provide to ATTI, for ATTI Customers, E911/911 call routing
          to the appropriate PSAP. ATTI shall provide ATTI Customer information
          to GTE, and GTE shall validate and provide ATTI Customer information
          to the PSAP. GTE shall use its service order process to update and
          maintain, on the same schedule that it uses for its end users, the
          ATTI Customer service information -in the ALI/DMS (Automatic Location
          Identification/Location Information Database Management System) used
          to support E911/911 services, pursuant National Emergency Number
          Agency (NENA) standards. ATTI shall have the right to verify the
          accuracy of the information regarding ATTI Customers in the ALI
          database.

26.6      TELEPHONE RELAY SERVICE

          GTE will provide the following information to ATTI at no additional
          charge: (i) information concerning a customer's qualification for
          Telephone Relay Service (TRS) on the Customer Service Record (CSR)
          when that customer chooses ATTI for local service; and (ii) all usage
          billing information which GTE receives from a provider of TRS for TRS
          usage by an ATTI Customer.

26.7      VOICE MAIL RELATED SERVICES

          Nothing in this Agreement shall limit the right of ATTI to purchase
          features capabilities of voice mail services in accordance with GTE's
          tariffs. In addition, nothing in this Agreement shall limit the right
          of ATTI to combine features capabilities of voice mail services
          purchased in accordance with GTE's tariffs with any Local Services
          purchased for resale in accordance with this Agreement.

26.8      VOLUNTARY FEDERAL CUSTOMER FINANCIAL ASSISTANCE PROGRAMS

          Local Services provided to low-income subscribers, pursuant to
          requirements established by the appropriate state or federal
          regulatory body, include programs such as Voluntary Federal Customer
          Financial Assistance Programs, such as Lifeline, and Link-up America
          (collectively referred to as "Voluntary Federal Customer Financial
          Assistance Programs") and Directory Assistance - Exempt. When a GTE
          Customer eligible for these services chooses to obtain Local Service
          from ATTI , GTE shall forward to ATTI on the Customer Service Record
          information regarding such customer's eligibility to participate in
          such programs. If GTE under the applicable laws of the State

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                                                                         Page 32

          cannot provide the CSR to ATTI, GTE shall otherwise inform ATTI of
          such customer's eligibility.

27.       ADVANCED INTELLIGENT NETWORK

27.1      GTE will provide ATTI access to the GTE Service Creation Environment
          (SCE) to design, create, test, deploy and provision AIN-based
          features, equivalent to the access GTE provides to itself, providing
          that security arrangements can be made. ATTI requests to use the GTE
          SCE will be subject to request, review and testing procedures to be
          agreed upon by the parties.

27.2      When ATTI utilizes GTE's Local Switching network element and requests
          GTE to provision such network element with a technically feasible AIN
          trigger, GTE will provide access to the appropriate AIN Call Related
          Database for the purpose of invoking either a GTE AIN feature or an
          ATTI developed AIN feature described in 27.1, above.

27.3      When ATTI utilizes its own local switch, GTE will provide access to
          the appropriate AIN Call Related Database for the purpose of invoking
          either a GTE AIN feature or an ATTI developed AIN feature described in
          27.1, above.

27.4      Any mediation to GTE's AIN database will be performed on a
          competitively neutral, nondiscriminatory basis. Any network management
          controls found necessary to protect the SCP from an overload condition
          must be applied on a nondiscriminatory basis for all users of that
          database, including GTE. GTE and ATTI agree that any load mediation
          will affect all links to the STP, including GTE's, in a like manner.
          ATTI will provide the information necessary to ensure that GTE is able
          to engineer sufficient capacity on the AIN SOP platform.

28.       ROUTING TO DIRECTORY ASSISTANCE AND OPERATOR SERVICES

28.1      Where ATTI purchases either Local Services or Local Switching as an
          Unbundled Element, unless ATTI requests otherwise, GTE will, where
          technically feasible, provide the functionality and features required
          to modify the ATTI Customer's line at GTE's local switch (LS) to route
          all calls to the ATTI Network for local Directory Assistance and the
          ATTI Platform for Operator Services.

28.2      DIRECTORY ASSISTANCE

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                                                                         Page 33

          Upon ATTI's request, and where technically feasible GTE shall route
          local Directory Assistance calls, including 411 and (NPA) 555-1212,
          dialed by ATTI Customers directly to the ATTI platform, unless ATTI
          requests otherwise pursuant to Section 28.7.2.

28.3      OPERATOR SERVICES

          Upon ATTI's request, and where technically feasible, GTE shall route
          local Operator Services calls (0+, 0-) dialed by ATTI Customers
          directly to the ATTI Local Operator Services platform, unless ATTI
          requests otherwise pursuant to Section 28.7.1. Such traffic shall be
          routed over trunk groups specified by ATTI which connect GTE end
          offices and the ATTI Local Operator Services platform, using standard
          Operator Services dialing protocols of 0+ or 0-. Where intraLATA
          presubscription is not available, GTE will provide the functionality
          and features within its local switch (LS), to route ATTI Customer
          dialed 0- and 0+ intraLATA calls to the ATTI T designated line or
          trunk on the Main Distributing Frame (MDF) or Digital Cross Connect
          (DSX) panel via Modified Operator Services (MOS) Feature Group C
          signaling. Where intraLATA presubscription is available, ATTI Customer
          dialed 0- and 0+ intraLATA calls will be routed to the intraLATA PlC
          carrier's designated operator services platform. In all cases, GTE
          will provide post-dial delay no greater than that provided by GTE for
          its end user customers. For switches lacking the existing capacity and
          capability to provide the customized rerouting described in this
          Section 28, GTE shall develop alternative forms of customized routing.

28.4      REPAIR CALLS

          In the event an ATTI Customer calls GTE with a request for repairs,
          GTE shall provide the ATTI Customer with ATTI's repair 800-telephone
          number. ATTI agrees to provide GTE with ATTI's repair 800-telephone
          numbers.

          In the event a GTE Customer calls ATTI with a request for repairs,
          ATTI shall provide the GTE Customer with GTE's repair 800-telephone
          number. GTE agrees to provide ATTI with GTE's repair 800-telephone
          number.

28.5      NON-DISCRIMINATORY TREATMENT

          All direct routing capabilities described herein shall permit ATTI
          Customers to dial the same telephone numbers for ATTI Directory
          Assistance, Local Operator and the same number of digits for Repair
          Services that similarly-situated GTE Customers dial for reaching
          equivalent GTE services. ATTI and GTE will use 800/888 numbers where
          necessary to achieve this result.

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                                                                         Page 34

28.6      EMERGENCY CALLS

          Within thirty (30) days of ATTI's request, GTE shall provide to ATTI
          the emergency public agency (e.g., police, fire, ambulance) telephone
          numbers linked to each NPA-NXX. Such data will be transmitted in a
          mutually agreeable format.

28.7      OPTIONAL ROUTING

28.7.1    Operator Services: ATTI may request GTE to route ATTI Customers to GTE
          Operator Services. In this case, the requirements for GTE-provided
          Operator Services as part of the Total Services Resale service shall
          be those requirements specified in Attachment 2, "Unbundled Elements",
          Section 5.1 "Operator Services."

28.7.2    Directory Assistance: ATTI T may request GTE to route ATTI Customers
          to GTE's Directory Assistance. In this case, the requirements for
          GTE-provided Directory Assistance Services as part of the Total
          Services Resale service shall be those requirements specified in
          Attachment 2, "Unbundled Elements", Section 6, "Directory Services."

28.8      LINE INFORMATION DATABASE UPDATES

          GTE shall update and maintain ATTI Customer information in the GTE
          Line Information Database ("LIDB") in the same manner and on the same
          schedule that it maintains information in LIDB for GTE Customers.

28.9      TELEPHONE LINE NUMBER CALLING CARDS

          Upon request by an ATTI Customer or by ATTI on behalf of an ATTI
          Customer, and effective as of the date of an end user's subscription
          to ATTI service (or such later date as such request is received), GTE
          will remove any GTE-assigned telephone line calling card number
          (including area code) ("TLN") from GTE's LIDB. ATTI may issue a new
          telephone calling card to such customer, utilizing the same TLN, and
          ATTI shall have the right to enter such TLN in ATTI's LIDB for calling
          card validation purposes.

28.10     END OFFICE FEATURES

          GTE shall provide the following end-office features in those end
          offices in which such features are available to GTE Customers: CLASS
          features; Repeat Dial Capability; Multi-line Hunting; and trunk
          connectivity to private branch exchange switches (PBX's) and Direct
          Inward Dialed Services and all other end-office features that GTE
          makes available to GTE Customers.

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                                                                         Page 35

28.11     CALL BLOCKING

          Upon ATTI's `s request and when available to similarly-situated GTE
          Customers, GTE will provide blocking on a line by line basis of an
          ATTI Customer's access to any or all of the following call types:
          900/976; bill to third and collect; and such other call types for
          which GTE provides blocking to similarly situated GTE Customers.

28.12     LAW ENFORCEMENT AND SERVICE ANNOYANCE

          Not later than forty-five (45) business days after the Effective Date,
          GTE and ATTI will begin the process of developing procedures to handle
          requests from law enforcement agencies for service termination, wire
          taps and provisions of Customer Usage Data pursuant to a lawful
          process as well as procedures to handle ATTI Customer complaints
          concerning harassing or annoying calls. Such procedures will include,
          but not be limited to, a process for ATTI to interface with GTE
          regarding law enforcement and service annoyance issues on a 24 hour
          per day, 7 days a week basis and otherwise on the same basis as GTE
          provides access for its own customers.

29.       SERVICE SUPPORT FUNCTIONS

29.1      ELECTRONIC INTERFACE

29.1.1    Until such time as GTE and ATTI are able to fully implement electronic
          interfaces ("El"), GTE and ATTI agree to use interim processes for
          Pre-Ordering, Ordering, Provisioning, Maintenance, Repair and Billing.

29.1.1.1  The schedule for implementing an interim electronic interface shall be
          subject to the memorandum of understanding ("MOU") relating to
          electronic interfaces negotiated by GTE and AT&T under the direction
          of the California Commission in connection with the decision in
          96-07-022.

29.1.2    In accordance with the schedule set out in the MOU, GTE shall provide
          a Real Time electronic interface ("El") for sending and receiving
          information on demand for Pre-Ordering, for Ordering/Provisioning data
          and materials (e.g., access to Street Address Guide ("SAG") and
          Telephone Number Assignment database), and for scheduling service
          delivery. GTE shall provide an electronic interface ("El") for sending
          and receiving information on agreed, pre-defined schedules ("batch
          communications") for reports and Billing. These interfaces shall be
          administered through a national ordering platform that will serve as a
          single point of contact for the transmission of such data from ATTI to
          GTE, and from GTE to ATTI.

29.1.3    No later than six (6) months after the Effective Date of this
          Agreement, GTE will: (i) establish the national gateway standards to
          be used by ATTI and all

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                                                                         Page 36

          other carriers connecting to GTE's Operations Support Systems ("OSS");
          and (ii) establish the date by which GTE will provide permanent
          national gateway access to its OSS. GTE will provide this permanent
          national gateway access at the earliest practical date but in no case
          later than twelve (12) months after the Effective Date of this
          Agreement, which shall include ensuring that all interfaces are
          operational and end-to-end testing has been successfully completed.

29.1.4    [DELETED]

29.1.5    The Parties agree that the principles outlined in Attachment 13 and
          related time schedules will be used as a starting point for the
          development of the permanent national gateway.

29.1.6    GTE shall provide the same information, of the same quality and within
          the same time frames for Pre-Ordering, Ordering/Provisioning,
          Maintenance! Repairs and Billing to ATTI as GTE provides to itself.
          The Parties recognize that GTE is not required to establish new
          systems or processes in order to provide information to ATTI which GTE
          does not provide to itself.

29.1.7    GTE shall recover its costs of creating the permanent OSS gateway and
          any interim interfaces in a competitively neutral manner.

29.2      SERVICE STANDARDS

29.2.1    GTE shall ensure that all Service Support Functions used to provision
          Local Service to ATTI for resale are provided at a quality level which
          GTE is required to meet by its own internal procedures or by law, or
          is actually meeting, in providing Local Service to itself, to its end
          users or to its affiliates.

29.2.2    Not later than twenty (20) business days after the Effective Date of
          this Agreement, GTE and TATTI shall begin the process of developing
          mutually agreed-upon escalation and expedite procedures to be employed
          at any point in the Local Service Pre-Ordering, Ordering/Provisioning,
          Testing, Maintenance, Billing and Customer Usage Data transfer
          processes to facilitate rapid and timely resolution of Disputes.

29.3      POINT OF CONTACT FOR THE AT&T CUSTOMER

29.3.1    Except as otherwise provided in this Agreement or as directed by ATTI,
          ATTI shall be the single and sole point of contact for all ATTI
          Customers with respect to ATTI Local Services.

29.3.2    GTE shall refer all questions regarding any ATTI service or product
          directly to ATTI at a telephone number specified by ATTI and provided
          to GTE for that purpose.

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                                                                         Page 37

29.3.3    GTE representatives who receive inquiries regarding ATTI services: (i)
          shall refer callers who inquire about ATTI services or products to the
          numbers provided; and (ii) will not in any way disparage or
          discriminate against ATTl, or its products or services.

29.4      SINGLE POINT OF CONTACT

          Each Party shall provide the other Party with a single point of
          contact ("SPOC") for each functional area for all inquiries regarding
          the implementation of this Part. Each Party shall accept all inquiries
          from the other Party and provide timely responses.

29.5      SERVICE ORDER

          To facilitate the ordering of new service for resale or changes to
          such service to an ATTI Customer, ATI's representative will have
          access to GTE Customer information to enable the ATTI representative
          to perform the tasks enumerated below. Until electronic interfaces are
          established, these functions will be performed with the use of an 800
          number.

29.5.1    Obtain customer account information through the same nondiscriminatory
          access to Operation Support Systems for pre-ordering, ordering,
          provisioning, maintenance and repair, and billing as GTE provides
          itself including information regarding the facilities and services
          assigned to individual customers.

29.5.2    Obtain information on all features and services available, including
          new services, by LSO identified by switch, NPA-NXX and customer street
          address.

29.5.3    Submit the ATTI T Customer order by submitting an LSR using the agreed
          upon electronic interface (the Network Data Mover or NDM) for all
          desired features and services;

29.5.4    Assign a telephone number, including a vanity number, (if the ATTI
          Customer does not have one assigned). As an interim step prior to the
          implementation of the electronic interface specified in Section 29.1,
          GTE will establish an 800 (toll-free) number for ATTI;

29.5.5    Submit the appropriate directory listing using the agreed to El;

29.5.6    Determine if a service call is needed to install the line or service;

29.5.7    Schedule dispatch and installation, if applicable;

29.5.8    Provide service availability dates to customer;

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                                                                         Page 38

29.5.9    Order local and intraLATA toll service and enter ATTI Customer's
          choice of primary interexchange carrier on a single, unified order;
          and

29.5.10   Suspend, terminate or restore service to an ATTI Customer using agreed
          to methods (temporary disconnects for nonpayment may not be requested
          using the LSR).

29.6      PROVISIONING

29.6.1    After receipt and acceptance of an LSR, GTE shall provision such LSR
          in accordance with the following Intervals and in accordance with the
          service parity standards and other performance standards specified in
          Section 11 and Attachment 12.

29.6.2    GTE shall provide ATTI with service status notices, on a Real Time
          basis. Such status notices shall include the following:

29.6.2.1  Firm order confirmation, including service availability date and
          information regarding the need for a service dispatch for
          installation;

29.6.2.2  Notice of service installation issued at time of installation,
          including any additional information, such as material charges;

29.6.2.3  Changes/rejections/errors in LSRs;

29.6.2.4  Service completion;

29.6.2.5  Jeopardies and missed appointments;

29.6.2.6  Charges associated with necessary construction;

29.6.2.7  Order status at critical intervals;

29.6.2.8  Test results of the same type that GTE records for itself or its own
          customers.

29.6.3    GTE shall inform ATTI of overall change order flexibility and any
          changes thereto on a Real Time basis.

29.6.4    GTE shall notify ATTI prior to making any changes in the services,
          features or functions specified on the LSR. If an ATTI Customer
          requests a service change at the time of installation GTE shall refer
          the ATTI Customer to ATTI.

29.6.5    GTE shall provide provisioning support to ATTI on the same basis that
          it provides to other competitive LECs and to itself. GTE retains full
          discretion to control the scheduling of its provisioning workforce.

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                                                                         Page 39

29.6.6    GTE shall provide training for all GTE employees who may communicate,
          either by telephone or face-to-face, with ATTI Customers, during the
          provisioning process. Such training shall include training on
          compliance with the branding requirements of this Agreement.

29.7      PROVISION OF CUSTOMER USAGE DATA

          GTE shall provide the Customer Usage Data recorded by GTE. Such data
          shall include complete ATTI Customer usage data for Local Service,
          (i.e., the same usage data that GTE records for billing its own
          customers), in accordance with the terms and conditions set forth in
          Attachment 7.

29.8      SERVICE/OPERATION READINESS TESTING

29.8.1    In addition to testing described elsewhere in this Section 29, GTE
          shall test the systems used to perform the following functions at a
          negotiated interval and in no event less than ten (10) business days
          prior to commencement of GTE's provision of Local Service to ATTI, in
          order to establish system readiness capabilities:

29.8.1.1  All interfaces between TATTI and GTE work centers for Service Order
          Provisioning;

29.8.1.2  Maintenance, Billing and Customer Usage Data;

29.8.1.3  The process for GTE to provide customer profiles;

29.8.1.4  The installation scheduling process;

29.8.1.5  Network alarm reporting;

29.8.1.6  Telephone number assignment;

29.8.1.7  Procedures for communications and coordination between ATTI SPOC and
          GTE SPOC;

29.8.1.8  Procedures for transmission of Customer Usage Data; and

29.8.1.9  Procedures for transmitting bills to AT&T for Local Service.

29.8.2    The functionalities identified above shall be tested in order to
          determine whether GTE performance meets the service parity
          requirements and other performance standards specified in Section 11.
          GTE shall make available sufficient technical staff to perform such
          testing. GTE technical staff shall be available to meet with ATTI as
          necessary to facilitate testing. GTE and ATTI shall mutually agree on
          the schedule for such testing.

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                                                                         Page 40

29.8.3    At ATTI's request, GTE shall provide to ATTI any results of the
          testing performed pursuant to the terms of this Part. ATTI may review
          such results and may notify GTE of any failures to meet the
          requirements of this Agreement.

29.8.4    GTE shall provide to ATTI the same type and quality of loop testing
          information that it provides to and records for itself. Where GTE
          develops loop testing information as a matter of course, it will make
          that information available to ATTI where such information is relevant
          to ATTI's business. Where GTE maintains the internal discretion to
          test loops as needed, GTE will provide similar testing discretion to
          ATTI. ATTI shall pay the full cost of any such discretionary testing.

29.8.5    Within 60 days of the Effective Date of this Agreement, ATTI and GTE
          will agree upon a process to resolve cooperative testing issues and
          technical issues relating to GTE's provision of Local Services to
          ATTI. The agreed upon process shall include procedures for escalating
          disputes and unresolved issues up through higher levels of each
          company s management. If ATTI and GTE do not reach agreement on such a
          process within 60 days, any issues that have not been resolved by the
          Parties with respect to such process shall be submitted to the ADR
          procedures set forth in Section 14 and Attachment I of this Agreement
          unless both Parties agree to extend the time to reach agreement on
          such issues.

29.9      MAINTENANCE

          GTE shall provide maintenance in accordance with the requirements and
          standards set forth in Attachment 5 and in accordance with the service
          parity requirements set forth in this Agreement.

29.10     BILLING FOR LOCAL SERVICE

29.10.1   GTE shall bill ATTI for Local Service provided by GTE to ATTI pursuant
          to the terms of this Part, and in accordance with the terms and
          conditions for Connectivity Billing and Recording in Attachment 6.

29.10.2   GTE shall recognize ATTI as the customer of record for all Local
          Service and will send all notices, bills and other pertinent
          information directly to ATTI.

30.       PAY PHONE LINES AND PAY PHONE SERVICES

30.1      Intentionally left blank.

30.2      "Pay phone lines" are defined as the loop from the pay phone point of
          demarcation to the Service Wiring Center and includes all supporting
          central office functions and features.

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                                                                         Page 41

30.3      GTE shall make available to ATTI for resale the following classes of
          pay phone lines:

30.3.1    Customer Owned Coin Operated Telephone (COCOT) Lines;

30.3.2    Coinless COCOT Lines;

30.3.3    Coin Lines in those jurisdictions where provision of such lines is
          required by law

30.3.4    [This section left intentionally blank]

30.3.5    Semi Public Lines.

30.4      GTE shall also make available to ATTI for resale any future class of
          pay phone lines that GTE provides at retail to subscribers other than
          telecommunication carriers.

30.5      GTE shall make available pay phone line service options as follows:

30.6      When providing COCOT Lines to ATTI for resale, GTE shall offer the
          following, to the extent that GTE provides such services and in those
          jurisdictions and/or central offices where available: originating line
          screening; billed number screening; PlC protection for all 1+ inter
          and intraLATA traffic (when presubscription is authorized); one way
          and/or two way service (if so provided in the applicable tariff) on
          the line; detailed billing showing all 1+ traffic; ATTI's service
          center phone number to all ATTI end users that contact GTE service
          centers; number portability for end users; touchtone service; line
          side answer supervision; GTE designated contact center as single point
          of contact for customer service; provisioning of 9 1 1 service; access
          to Answer Number Identifier (ANI) Information; all information
          necessary to permit ATTI to bill end users for access line usage; the
          same monitoring and diagnostic routines as GTE utilizes on its own
          facilities; one directory for each line installed; blocking for 1+
          international calls, 10XXX1+ international calls 1-900 calls, 1-976
          calls DA link, any 1+ service that can be billed to the line but that
          is not rated, 1-700 calls, 1-500 calls, and in bound international
          calls where SS7 signalling is available.

30.7      When providing Coinless COCOT Lines to ATTI for resale, GTE shall
          offer the following, to the extent that GTE provides such services and
          in those jurisdictions and/or central offices where available:
          originating line screening; billed number screening; PlC protection
          for all 1+ inter and intraLATA traffic (where inter and intraLATA
          presubscription is available); one way and/or two way service on the
          line (if so provided in the tariff); flat service where flat service
          is required by the applicable tariff, measured service where measured
          service is required by the applicable tariff, and both flat and
          measured service

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                                                                         Page 42

          where both flat and measured service are required by the applicable
          tariff; detailed billing showing all 1+ traffic; ATTI's service center
          phone number to all ATTI end users that contact GTE service center;
          number portability for end users; touchtone service; GTE designated
          contact center as single point of contact for customer service;
          provisioning of 911 service; access to ANI information; all
          information necessary to permit ATTI to bill end users for access line
          usage; the same monitoring and diagnostic routines as GTE utilizes on
          its own facilities; one directory for each line installed; blocking
          for any service that can be billed to the line but not rated and all
          1+ calls except where local mandate requires access to Directory
          Assistance.

30.8      [Intentionally deleted.]

30.9      When providing Customer Owned Pay Telephone (COPT) Lines to ATTI for
          resale, GTE shall offer the following to the extent that GTE provides
          such services and in those jurisdictions and/or central offices where
          available. Access to all Central Office intelligence required to
          provide COPT Line pay phone services; far end disconnect recognition;
          call timing for intra- and interLATA calls; at the customer's option,
          one way or two way service on the line in those jurisdictions where
          available; detailed billing showing all 1+ traffic ATTI's service
          center phone number to all ATTI end users; touchtone service; line
          side supervision in those jurisdictions where available; GTE
          designated contact center for use by ATTI only as single point of
          contact for customer service; provisioning of 911 service; access to
          ANI information; all information necessary to permit ATTI to bill end
          users for access line usage; the same monitoring and diagnostic
          routines as GTE utilizes on its own facilities; one directory for each
          line installed; blocking for 1+ international calls and any 1+ service
          that cannot be rated by the phone pay line or any operator service.

30.10     For any pay phone line provided to ATTI for resale, GTE shall also
          make available to ATTI any future pay phone line option that GTE
          provides to any of its own customers using such a pay phone line.

30.11     GTE shall adhere to the following additional requirements when
          providing pay phone lines for resale:

30.11.1   GTE shall provide ATTI with the same call restrictions and fraud
          protections used by GTE in connection with its pay phones;

30.11.2   GTE shall not block ATTI's existing access to [NAI] codes;

30.11.3   GTE shall forward all ATTI pay phone customers to the designated ATTI
          line or trunk group for handling Operator Services or Directory
          Assistance calls;

30.11.4   [Intentionally Deleted]

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                                                                         Page 43

                       PART II: UNBUNDLED NETWORK ELEMENTS

31.       INTRODUCTION

          This Part II sets forth the unbundled Network Elements that GTE agrees
          to offer to ATTI in accordance with its obligations under Section 251
          (c)(3) of the Act and 47 CFR 51.307 to 51.321 of the FCC Rules. The
          specific terms and conditions that apply to the unbundled Network
          Elements are described below and in Attachment 2. Prices for Network
          Elements are set forth in Part V and Attachment 14 of this Agreement.

32.       UNBUNDLED NETWORK ELEMENTS

32.1      GTE will offer Network Elements to ATTI on an unbundled basis at rates
          set forth in Attachment 14.

32.2      GTE will permit ATTI to interconnect ATTI's facilities or facilities
          provided by ATTI or by third parties with each of GTE's unbundled
          Network Elements at any point designated by ATTI that is technically
          feasible.

32.3      ATTI, at its option, may designate any technically feasible network
          interface at a Served Premises, including without limitation, DSO,
          DS-1, DS-3, and STS-1.

32.4      Pursuant to the terms of this Agreement, ATTI may use one or more
          Network Elements to provide any Telecommunications Service that such
          Network Element is capable of providing.

32.5      GTE shall offer each Network Element individually and in combination
          with any other Network Element or Network Elements, so long as such
          combination is technically feasible, in order to permit ATTI to
          combine such Network Element or Network Elements with another Network
          Element or other Network Elements obtained from GTE or with network
          components provided by itself or by third parties to provide
          telecommunications services to its customers.

32.6      For each Network Element, GTE shall provide a demarcation point (e.g.,
          an interconnection point at a Digital Signal Cross-Connect or Light
          Guide Cross-Connect panels or a Main Distribution Frame) and, if
          necessary, access to such demarcation point, which ATTI agrees is
          suitable. However, where GTE provides contiguous Network Elements to
          ATTI, GTE may provide the existing interconnections and no demarcation
          point shall exist between such contiguous Network Elements.

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                                                                         Page 44

32.7      [Intentionally deleted].

32.8      [Intentionally deleted].

32.9      Except with respect to the Loop Distribution, Loop
          Concentrator/Multiplexer, and Loop Feeder elements, which shall in all
          cases be subject to the bona fide request process described in
          Attachment 12, set forth below is a list of Network Elements that ATTI
          and GTE have identified as of the Effective Date of this Agreement and
          will be offered by GTE. ATTI and GTE agree that ATTI may identify
          additional or revised Network Elements that it desires. All such
          additional or modified Network Elements shall be subject to the Bona
          Fide Requests Procedures outlined in Attachment 12. Descriptions and
          requirements for each Network Element identified below are set forth
          in Attachment 2. The Network Elements described in Attachment 2
          consist of:

                       Loop or Loop Combination
                       Network Interface Device (NID)
                       Loop Distribution, otherwise known as Distribution Media
                       Loop Concentrator/Multiplexer
                       Loop Feeder Local Switching
                       Operator Service
                       Directory Assistance Service
                       Common Transport
                       Dedicated Transport
                       Signaling Link Transport
                       Signaling Transfer Points
                       Service Control Points (SCPs)/Data bases
                       Tandem Switching
                       Unused Transmission Media

32.10     Standards for Network Elements

32.10.1   [Intentionally Deleted]

32.10.2   [Intentionally left blank]

32.10.3   [Intentionally Deleted]

32.10.3.1 If ATTI contends that GTE has failed to meet the requirements of this
          Section 32, ATTI will provide GTE documentation of such purported
          failure. Within a reasonable time period after receiving such
          documentation, GTE shall provide to ATTI engineering, design,
          performance and other network data that the parties mutually agree

<PAGE>

                                                                         Page 45

          is necessary and sufficient for ATTI to determine that the
          requirements of this Section 32 are being met. In the event that such
          data establishes that the requirements of this Section 32 are not
          being met, GTE shall, within ten (10) business days, cure any design,
          performance or other deficiency and provide new data that the parties
          mutually agree is sufficient for ATTI to determine that such
          deficiencies have been cured. To the extent that GTE is unable to meet
          the above timeframe, GTE shall promptly notify ATTI prior to the
          expiration of such timeframe and the Parties shall agree on a revised
          completion date.

32.10.3.2 [Intentionally deleted].

32.10.4   [Intentionally Deleted].

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                                                                         Page 46

                          PART III: ANCILLARY FUNCTIONS

33.       INTRODUCTION

          This Part III sets forth the Ancillary Functions that GTE agrees to
          offer to ATTI so that ATTI may interconnect to GTE's network and
          obtain access to unbundled Network Elements to use to provide services
          to its customers.

34.       GTE PROVISION OF ANCILLARY FUNCTIONS

34.1      [Intentionally deleted].

34.2      GTE will permit ATTI to interconnect ATTI's equipment and facilities
          or equipment and facilities provided by ATTI or by third parties for
          purposes of interconnection or access to Network Elements at any point
          that is technically feasible in accordance with the terms and
          conditions of this Agreement.

34.3      Pursuant to the terms of this Agreement, ATTI may use any Ancillary
          Function to provide any Telecommunications Service that such Ancillary
          Function is capable of providing.

34.4      Set forth below is the list of the Ancillary Functions that ATTI and
          GTE have identified as of the Effective Date of this Agreement. Either
          Party may identify additional or revised Ancillary Functions that it
          desires. All such additional or revised Ancillary Functions shall be
          subject to the Bona Fide Requests procedures outlined in Attachment
          12. Descriptions and requirements for each Ancillary Function are set
          forth in Attachment 3. The Ancillary Functions described in Attachment
          3 consist of:

                       Collocation
                       Right of Way (ROW)
                       Conduit
                       Pole attachment

35.       STANDARDS FOR ANCILLARY FUNCTIONS

35.1      Subject to Section 23.19, each Ancillary Function shall meet or exceed
          the requirements set forth in applicable technical references, as well
          as the performance and other requirements, identified in this
          Agreement.

35.2      Each Ancillary Function provided by GTE to ATTI shall be equal in the
          quality of design, performance, features, functions and other

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                                                                         Page 47

          characteristics, including, but not limited to levels and types of
          redundant equipment and facilities for diversity and security, that
          GTE provides in the GTE network to itself, its affiliates or any other
          carrier.

35.3      If ATTI contends that GTE has failed to meet the requirements of Part
          III and Attachment 3, ATTI will provide GTE documentation of such
          purported failure. Within a reasonable time period after receiving
          such documentation, GTE shall provide to ATTI engineering, design,
          performance and other network data that the parties mutually agree is
          necessary and sufficient for ATTI to determine that the requirements
          of Part III and Attachment 3 of this Agreement are being met. In the
          event that such data establishes that the requirements of Part III and
          Attachment 3 of this Agreement are not being met, GTE shall, within 30
          business days, cure any design, performance or other deficiency and
          provide new data that the parties mutually agree is sufficient for
          ATTI to determine that such deficiencies have been cured. To the
          extent that GTE is unable to meet the above timeframe, GTE shall
          promptly notify ATTI prior to the expiration of such timeframe and the
          Parties shall agree on a revised completion date.

35.4      Unless otherwise designated by ATTI, each Ancillary Function provided
          by GTE to ATTI shall be made available to ATTI on a priority basis
          that is at least equal to the priorities that GTE provides to itself,
          its affiliates or any other carrier.

35.5      (Intentionally deleted)

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                                                                         Page 48

35.6      911/E911 ARRANGEMENTS

35.6.1    DESCRIPTION OF SERVICE

          ATTI shall have the right to utilize the existing GTE 911/E911
          infrastructure (as agreed in Sections 37.10.3 and 37.10.5 below) to
          provide all 911/E911 capabilities to its end users. ATTI will
          install a minimum of two dedicated trunks to GTE's 911/E911
          selective routers (i.e., 911 tandem offices) that serve the areas in
          which ATTI provides Exchange Services, for the provision of 911/E911
          services and for access to all subtending PSAPs. The dedicated trunks
          shall be, at minimum, DSO level trunks configured as a 2-wire analog
          interface or as part of a digital (1.544 Mbps) interface. Either
          configuration shall use CAMA type signaling with multifrequency (MF)
          tones that will deliver ANI with the voice portion of the call. At the
          request of ATTI, GTE will provide ATTI with the appropriate CLLI codes
          and specifications of the tandem office serving area. If an ATTI
          Central Office serves end users in an area served by more than one GTE
          911/E911 selective router, ATTI will install a minimum of two
          dedicated trunks in accordance with this section to each of such
          911/E911 selective routers.

35.6.2    TRANSPORT

          If ATTI desires to obtain transport from its end office to the GTE 911
          selective routers, ATTI may purchase such transport from GTE at the
          rates set forth in GTE's intrastate switched access tariff or in GTE's
          intrastate special access tariff.

35.6.3    COOPERATION AND LEVEL OF PERFORMANCE

35.6.3.1  The Parties agree to provide access to 911/E911 in a manner that is
          transparent to the end user. The Parties will work together to
          facilitate the prompt, reliable and efficient interconnection of
          ATTI's systems to the 911/E911 platforms to ensure that 911/E911
          service is fully available to ATTI's end users, with a level of
          performance that will provide the same grade of service as that which
          GTE provides to its own end users and that meets State requirements.
          To this end, GTE will provide documentation to ATTI showing the
          correlation of its rate centers to its E911 tandems.

35.6.3.2  In the event of an GTE or ATTI 911 trunk group failure, the Party
          that owns the trunk group will notify, on a priority basis, the other
          Party of such failure, which notification shall occur within two (2)

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                                                                         Page 49

          hours of the occurrence or sooner if required under Applicable Law.
          The Parties will exchange a list containing the names and telephone
          numbers of the support center personnel responsible for maintaining
          the 911 Service between the Parties.

35.6.3.3  When ATTI purchases transport, GTE will provide ATTI with the order
          number and the circuit identification code in advance of the service
          due date.

35.6.3.4  ATTI or its third party agent will provide CNA data to GTE for use in
          entering the data into the 911 data base. The initial CNA data will
          be provided to GTE in a format prescribed by NENA (National Emergency
          Number Association). ATTI is responsible for providing GTE updates to
          the CNA data and error corrections which may occur during the entry of
          CNA data to the GTE 911 Database System. GTE will confirm receipt of
          such data and corrections by close of business on the next Business
          Day by providing ATTI with a report of the number of items sent, the
          number of items entered correctly, and the number of errors.

35.6.3.5  ATTI will monitor the 911 circuits for the purpose of determining
          originating network traffic volumes. ATTI will notify GTE if the
          traffic study information indicates that additional circuits are
          required to meet the current level of 911 call volumes.

35.6.3.6  [Intentionally deleted.]

35.6.3.7  Inter-office trunks provided for 911 shall be engineered to assure
          minimum P.01 transmission grade of service as measured during the busy
          day/busy hour. A minimum of two trunks shall be provided by ATTI.

35.6.4    UPDATES TO MSAG

          It shall be the responsibility of ATTI to ensure that the address of
          each of its end users is included in the Master Street Address Guide
          ("MSAG") via information provided on ATTI's Local Service Request
          ("LSR") or via a separate feed established by ATTI and GTE pursuant to
          section 37.10.5 of this Article. Any MSAG change that appears to be
          required by ATTI must be approved by the County. Within thirty (30)
          days after the Effective Date of this Agreement, GTE shall provide
          ATTI with an initial electronic copy and a paper copy of the MSAG or
          its equivalent. Prior to the time that updates are available
          electronically, GTE will provide updates to ATTI on a monthly basis.
          Thereafter, GTE will provide updates to ATTI as changes are made.

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                                                                         Page 50

35.6.5    UPDATES TO DATABASE

          GTE and ATTI will work together to develop the process by which the
          911/E911 database will be updated with ATTI's end user 911/E911
          information. ATTI shall have the right to verify the accuracy of the
          information regarding ATTI's end users in the 911/E911 database.

35.6.6    COMPENSATION

          In situations in which GTE is responsible for maintenance of the
          911/E911 database and can be compensated for maintaining ATTI's
          information by the municipality, GTE will seek such compensation from
          the municipality. GTE will seek compensation from ATTI only if and to
          the extent that GTE is unable to obtain such compensation from the
          municipality.

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                                                                         Page 51

                                 PART V: PRICING

36.       GENERAL PRINCIPLES

          All services currently provided hereunder including resold Local
          Services, Network Elements and Combinations, and any new and
          additional services or Network Elements to be provided hereunder shall
          be priced in accordance with all applicable provisions of the Act and
          the rules and orders of the FCC and any state public utility
          commission having jurisdiction over this Agreement.

37.       PRICE SCHEDULES

37.1      LOCAL SERVICE RESALE

          The prices to be charged to ATTI for Local Services shall be as
          specified in Attachment 14.

37.2      UNBUNDLED NETWORK ELEMENTS

          The prices charged to ATTI for Unbundled Network Elements shall be as
          specified in Attachment 14 and shall be nondiscriminatory.

37.2.1    If implementation of an unbundled loop feeder supports shared used of
          required unbundling facilities, the cost of such facilities shall be
          allocated and prorated among all users in a non-discriminatory and
          competitively neutral manner. If such implementation supports only
          ATTI's use, then ATTI shall pay to GTE the incremental cost of such
          implementation.

37.2.2    If implementation of an unbundled loop concentrator /mutiplexer
          element supports shared used of required unbundling facilities, the
          cost of such facilities shall be allocated and prorated among all
          users in a non-discriminatory and competitively neutral manner. If
          implementation supports only ATTI's use, then ATTI shall pay to GTE
          the incremental cost of such implementation.

37.2.3    ATTI will be responsible for the costs (if any) required to create an
          interface at the main distribution frame if such interface does not
          already exist, such as in the case of an Integrated Digital Loop
          Carrier System.

<PAGE>

                                                                         Page 52

In witness whereof, the Parties have executed this Agreement through their
authorized representatives.

GTE Northwest Incorporated                  American Telephone Technology Inc.

By:                                         By:
   -----------------------------               ----------------------------
Signature                                   Signature

   -----------------------------               ----------------------------
Name                                        Name

   -----------------------------               ----------------------------
Title                                       Title

   -----------------------------               ----------------------------
Date                                        Date<PAGE>

                                                                 Exhibit 10.1.39

                                    AGREEMENT
                 FOR LOCAL WIRELINE NETWORK INTERCONNECTION
                                      AND
                                 SERVICE RESALE

                                     BETWEEN

                       AMERICAN TELEPHONE TECHNOLOGY, INC.
                                       AND
                          U S WEST COMMUNICATIONS, INC.

                             FOR THE STATE OF OREGON

                                CDS-991206-0204

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

SECTION                                                      PAGE
<S>                                                             <C>

PREAMBLE ....................................................   1

RECITALS AND PRINCIPLES .....................................   1

SCOPE OF AGREEMENT ..........................................   2

PART I: GENERAL TERMS AND CONDITIONS ........................   3

1. Term ......................................................  3

2. Payment ...................................................  4

3. Taxes .....................................................  5

4. Audits and Inspections ..................................    5

5. Indemnification .........................................    6

6. Responsibility for Environmental Contamination ..........    7

7. Limitation of Liability .................................    8

8. Remedies For Failure to Meet Service Quality Standards ..    9

9. Warranties ..............................................    9

10. Non-exclusive Remedies ..................................   12

11. Dispute Resolution ......................................   13

12. Nondisclosure/Confidentiality and Proprietary Information   14

13. Customer Credit History .................................   16

14. Branding ................................................   16

15. Patents,-Trademarks .....................................   17

16. Publicity and Advertising ...............................   17

17. Force Majeure ...........................................   17

18. Waiver ..................................................   18

19. Governing Law/Compliance with Laws ......................   18

</TABLE>

<PAGE>

<TABLE>

<S>                                                             <C>
20. No Third Party Beneficiaries ............................   20

21. Responsibility of Each Party ............................   20

22. Assignment/Subcontracting ...............................   20

23. Entire Agreement ........................................   21

24. Severability ............................................   21

25. Amendments ..............................................   21

26. Heading of No Force or Effects ..........................   21.

27. Notices .................................................   21

28. Joint Work Product ......................................   22

29. Executed in Counterparts ................................   23

30. Referenced Documents ....................................   23

31. Survival ................................................   23

32. Successors and Assigns ..................................   23

PART II: LOCAL SERVICES RESALE

33. Introduction ............................................   23

34. Local Services Resale ...................................   24

PART Ill: UNBUNDLED NETWORK ELEMENTS

35. Introduction ............................................   26

36. Unbundled Network Elements ..............................   26

PART IV: ANCILLARY FUNCTIONS

37. Introduction ............................................   34

38. ILEC Provision of Ancillary Functions ...................   35

39. Standards for Ancillary Functions .......................   36

</TABLE>

<PAGE>

<TABLE>

<S>                                                             <C>
PART V: PRICING

40. General Principles ......................................   37
41. Price Schedules .........................................   38

</TABLE>

SCHEDULES

Schedule 1 Total Services Resale Pricing
Schedule 2 Unbundled Network Elements Pricing

ATTACHMENTS

Attachment 1      [intentionally deleted]

Attachment 2      Services Description: Total Services Resale

Attachment 3      Services Description: Unbundled Network Elements

Attachment 4      Services Description: Ancillary Functions

Attachment 5      Provisioning and Ordering

Attachment 6      Maintenance

Attachment 7      Connectivity Billing and Recording

Attachment 8      Provision of Customer Usage Data

Attachment 9      Local Number Portability

Attachment 10     Network Security

Attachment 11     Credit for Failure to Meet Service Quality Standards

Attachment 12     Definitions and Acronyms

<PAGE>

                                   AGREEMENT
                   FOR LOCAL WIRELINE NETWORK INTERCONNECTION
                                       AND
                                 SERVICE RESALE

         Pursuant to this Agreement for Local Wireline Network Interconnection
and Service Resale ("Agreement"), by and between American Telephone Technology,
Inc., a subsidiary of Advanced Telecommunications, Inc. (a Competitive Local
Exchange Carrier ("CLEC" or "Reseller", as applicable), on behalf of itself and
its Affiliates, and U S WEST Communications, Inc. (the lncumbent Local Exchange
Carrier or ("ILEC"), on behalf of itself and its Affiliates, (collectively, "the
Parties") will extend certain arrangements to one another within each LATA in
which they both operate within the state of Oregon.

                             RECITALS AND PRINCIPLES

         WHEREAS, interconnection between competing Local Exchange Carriers
("LECs") is necessary for the termination of each company's originating traffic
on the other carrier's network; and

         WHEREAS, The Telecommunications Act of 1996 (the "Act") was signed into
law on February 8,1996; and

         WHEREAS, the Act places certain duties and obligations upon, and grants
certain rights to, Telecommunications Carriers; and

          WHEREAS, ILEC is an Incumbent Local Exchange Carrier or has a majority
ownership interest in local exchange companies ("LECs") which are Incumbent
Local Exchange Carriers; and

         WHEREAS, ILEC for itself and its Affiliates is willing to sell
unbundled Network Elements and Ancillary Functions and additional features, as
well as services for resale, on the terms and subject to the conditions of this
Agreement; and

         WHEREAS, CLEC is a Telecommunications Carrier and has requested that
ILEC negotiate an Agreement with CLEC for the provision of interconnection, and
unbundled Network Elements (including Ancillary Functions and additional
features) pursuant to the Act and in conformance with ILEC's duties under the
Act; and

         WHEREAS, the Parties have arrived at this Agreement;

         NOW, THEREFORE, in consideration of the mutual provisions contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, CLEC and ILEC hereby covenant and agree as
follows:

<PAGE>

                               SCOPE OF AGREEMENT

A.       This Agreement sets forth the terms, conditions and prices under which
         ILEC agrees to provide (1) services for resale (hereinafter referred to
         as "Local Services") and (2) certain unbundled Network Elements,
         Ancillary Functions and additional features to CLEC (hereinafter
         collectively referred to as `Network Elements") or combinations of such
         Network Elements ("Combinations") for CLEC's own use or for resale to
         others, and for purposes of offering voice, video, or data services of
         any kind, including, but not limited to, local exchange services,
         intrastate toll services, and intrastate and interstate exchange access
         services.

         This Agreement also sets forth the terms and conditions for the
         interconnection of CLEC's network to ILEC's network and the reciprocal
         compensation for the transport and termination of telecommunications.
         ILEC may fulfill the requirements imposed upon it by this Agreement by
         itself or may cause its Affiliated ILECs to take such actions to
         fulfill the responsibilities. Unless otherwise provided in this
         Agreement, ILEC will perform all of its obligations hereunder
         throughout its entire service area.

         The Network Elements, Combinations or Local Services provided pursuant
         to this Agreement may be connected to other Network Elements,
         Combinations or Local Services provided by ILEC or to any Network
         Elements, Combinations or Local Services provided by CLEC itself or by
         any other vendor.

         Subject to the requirements of this Agreement, CLEC may, at any time
         add, delete, relocate or modify the Local Services, Network Elements or
         Combinations purchased hereunder. ILEC will not discontinue any Network
         Element, Combination or Local Service provided hereunder without the
         prior mutual agreement of the Parties or the approval of the
         Commission.

B.       In the performance of their obligations under this Agreement, the
         Parties shall act in good faith and consistently with the intent of the
         Act. Where notice, approval or similar action by a Party is permitted
         or. required by any provision of this Agreement, (including, without
         limitation, the obligation of the Parties to further negotiate the
         resolution of new or open issues under this Agreement) such action
         shall not be unreasonably delayed, withheld or conditioned.

C.       ILEC shall not reconfigure, re-engineer or otherwise redeploy its
         network in a manner which would impair CLEC's ability to offer
         Telecommunications Services in the manner contemplated by this
         Agreement, the Act or the FCC's Rules and Regulations. The Parties
         agree that all obligations undertaken pursuant to this Agreement,
         including without limitation, performance standards, intervals, and
         technical requirements are material obligations hereof and that time is
         of the essence.

<PAGE>

D.       Whenever CLEC requests the use of facilities not currently in place or
         when it requests services or facilities superior in quality to the
         highest quality of these three items: (1) requirements of FCC rules,
         (2) requirements of Commission rules or orders, or (3) the level of
         quality ILEC provides to itself or its Affiliates or its end user
         subscribers, CLEC must compensate ILEC fully for the additional costs
         of providing the requested facilities or superior services or
         facilities.

                      PART I: GENERAL TERMS AND CONDITIONS

1.        TERM

         1.1      When executed by authorized representatives of ILEC and CLEC,
         this Agreement shall become effective upon Commission approval, and
         shall expire on September 11, 2000, unless renewed by agreement of the
         Parties or terminated earlier in accordance with the provisions of this
         Agreement. Notwithstanding the foregoing sentence, the provisions for
         bill and keep set forth elsewhere in this Agreement shall exist for an
         interim period only and shall be coterminous with the interim period
         for bill and keep established in the Commission's Order 96-021 in
         Docket CP 1, including any changes thereto that may be ordered by the
         Commission.

         1.2      ILEC shall give CLEC notice of the impending expiration of
         this Agreement (or any renewable term thereof) ninety (90) days before
         such expiration. The Parties shall have the right to extend the term of
         this Agreement, upon mutual agreement, for successive one-year periods
         ("Renewal Year") upon expiration of the initial term or any subsequent
         Renewal Year. At the expiration of the term of this Agreement, or any
         renewal thereof, this Agreement shall continue in effect, on a
         month-to-month basis, at the same terms, conditions and prices as those
         in effect at the end of the latest term or renewal.

         1.3      CLEC may elect at any time to terminate this Agreement, in
         whole or in part, upon sixty (60) days written notice to ILEC. In such
         case, and except as provided in this paragraph, CLEC's liability shall
         be limited to payment of the amounts due for Network Elements,
         Combinations and Local Services provided up to and including the date
         of termination. ILEC recognizes that the Network Elements, Combinations
         and Local Services provided hereunder are vital to CLEC and must be
         continued without interruption, and that upon the termination or
         expiration of this Agreement, CLEC may itself provide or retain another
         vendor to provide such comparable Network Elements, Combinations or
         Local Services. ILEC agrees to cooperate in an orderly and efficient
         transition to CLEC or another vendor. ILEC further agrees to
         co-ordinate the orderly transition to CLEC or another vendor such that
         the level and quality of the Network Elements, Combinations and Local
         Services is not degraded and to exercise its best efforts to effect an
         orderly and efficient transition. CLEC may terminate any Local
         Service(s), Network Element(s) or Combination(~) provided under this
         Agreement upon thirty (30) days written notice to ILEC, unless a
         different notice period or different conditions are specified for
         termination of such Local

<PAGE>

         Service(s), Network Element(s) or Combination(s) in this Agreement, in
         which event such specific period and conditions shall apply.

         1.4      In the event of breach of any material provision of this
         Agreement by either Party, the non-breaching Party shall give the other
         Party written notice thereof, and:

                  1.4.1 If such material breach is for non-payment of amounts
                  due hereunder pursuant to Attachment 7, Section 13, the
                  breaching Party shall cure such breach within thirty (30) days
                  of receiving such notice. The non-breaching Party shall be
                  entitled to pursue all available legal and equitable remedies
                  for such breach. Amounts disputed in good faith and withheld
                  or set off shall not be deemed "amounts due hereunder" for the
                  purpose of this provision.

                  1.4.2 If such material breach is for any failure to perform in
                  accordance with this Agreement, which, in the sole judgment of
                  the non-breaching Party, adversely affects the non-breaching
                  Party's subscribers, the non-breaching Party shall give notice
                  of the breach and the breaching Party shall cure such breach
                  to the non-breaching Party's reasonable satisfaction within
                  ten (10) days or within a period of time equivalent to the
                  applicable interval required by this Agreement, whichever is
                  shorter, and if breaching Party does not, the non-breaching
                  Party may, at its sole option, terminate this Agreement, or
                  any parts hereof. The non-breaching Party shall be entitled to
                  pursue all available legal and equitable remedies for such
                  breach. For the purpose of this Subsection 1.4.2, notice may
                  be given electronically or by facsimile and in such case shall
                  be deemed received when sent.

                  1.4.3 If such material breach is for any other failure to
                  perform in accordance with this Agreement, the breaching Party
                  shall cure such breach to the non-breaching Party's reasonable
                  satisfaction within forty-five (45) days, and if the breaching
                  Party does not, the non-breaching Party may, at its sole
                  option terminate this Agreement, or any parts hereof. The
                  non-breaching Party shall be entitled to pursue all available
                  legal and equitable remedies for such breach.

         1.5      In the event of such termination as described in this Section
         1, for service arrangements made available under this Agreement and
         existing at the time of termination, those arrangements shall continue
         without interruption.

2.       PAYMENT

         2.1      Amounts payable under this Agreement are due and payable
         within thirty (30) days after the receipt of ILEC's invoice unless
         properly disputed under this Agreement or applicable Tariff.

<PAGE>

3.       TAXES

         3.1      Any federal, state or local excise, sales, or use taxes
         (excluding any taxes levied on income) resulting from the performance
         of this Agreement shall be borne by the Party upon which the obligation
         for payment is imposed under applicable law, even if the obligation to
         collect and remit such taxes is placed upon the other Party. Any such
         taxes shall be shown as separate items on applicable billing documents
         between the Parties. The Party so obligated to pay any such taxes may
         contest the same in good faith, at its own expense, and shall be
         entitled to the benefit of any refund or recovery, provided that such
         Party shall not permit any lien to exist on any asset of the other
         Party by reason of the contest. The Party obligated to collect and
         remit shall cooperate in any such contest by the other Party.

4.       AUDITS AND INSPECTIONS

         4.1      As used herein "Audit" shall mean a comprehensive review of
         services performed under this Agreement; "lnspection" shall mean an
         inquiry into a specific element of or process related to services
         performed under this Agreement. CLEC may perform up to four (4) Audits
         per 12-month period commencing with the Effective Date. CLEC may
         perform Inspections as CLEC deems necessary. Subject to ILEC's
         reasonable security requirements and-except as may be otherwise
         specifically provided in this Agreement, CLEC may audit ILEC's books,
         records, documents, and processes, among other things, to ensure the
         accuracy of ILEC's billing and invoicing and evaluating compliance with
         the terms and conditions of this Agreement and ILEC performance related
         thereto. CLEC may employ other persons or firms for this purpose. Such
         audit shall take place at a time and place agreed on by the Parties no
         later than thirty (30) days after notice thereof to ILEC.

         4.2      ILEC shall promptly correct any billing error that is revealed
         in an audit, including making refund of any overpayment by CLEC in the
         form of a credit on the invoice for the first full billing cycle after
         the Parties have agreed upon the accuracy of the audit results. Any
         Disputes concerning audit results shall be resolved pursuant to the
         Alternate Dispute Resolution procedures described in Section 11 below.

         4.3      ILEC shall co-operate fully in any such audit, providing
         reasonable access to any and all appropriate ILEC employees, ILEC
         facilities (e.g., conference rooms, telephones, copying machines),
         books, records and other documents reasonably necessary to assess the
         accuracy of ILEC's bills.

         4.4      CLEC may audit ILEC's books, records and documents more
         frequently than provided in Section 4.1 preceding during any Contract
         Year if the previous audit found previously uncorrected net variances
         or errors in invoices in ILEC's favor with an aggregate value of at
         least one percent (1%) of the amounts payable by CLEC for Local
         Services, Network Elements or Combinations provided during the period
         covered by the audit.

<PAGE>

         4.5      Audits shall be at CLEC's expense, subject to reimbursement-
         by ILEC in the event that an audit finds an adjustment in the charges
         or in any invoice paid or payable by CLEC hereunder by an amount that
         is, on an annualized basis, greater than one percent (1%) of the
         aggregate charges for the Local Services, Network Elements and
         Combinations during the period covered by the audit.

         4.6      The reasonable cost of special data extractions required by
         CLEC to conduct the Audit Examination will be paid for by CLEC. For
         purposes of this Section 4.6, a "Special Data Extraction" shall mean
         the creation of an output record or informational report (from existing
         data files) that is not created in the normal course of business. If
         any program is developed to CLEC's specifications and at CLEC's
         expense, CLEC shall specify at the time of request. whether the program
         is to be retained by ILEC for reuse for any subsequent CLEC Audit or
         Examination.

         4.7      Upon (a) the discovery by ILEC of overcharges not previously
         reimbursed to CLEC or (b) the resolution of disputed audits, ILEC shall
         promptly reimburse CLEC the amount of any overpayment times the highest
         interest rate (in decimal value) which may be levied by law for
         commercial transactions, compounded daily for the number of days from
         the date of overpayment to and including the date that payment is
         actually made. In no event, however, shall interest be assessed on any
         previously assessed or accrued late payment charges.

         4.8      This Section 4 shall survive expiration or termination of this
         Agreement for a period of two (2) years after expiration or termination
         of this Agreement.

5.        INDEMNIFICATION.

         5.1      Each of the Parties agrees to release, indemnify, defend and
         hold harmless the other Party and each of its officers, directors,
         employees and agents (each, an "Indemnitee") from and against and in
         respect of any loss, debt, liability, damage, obligation, claim,
         demand, judgment or settlement of any nature or kind arising out of,
         resulting from or based upon any pending or threatened claim, action,
         proceeding or suit by any third party known or unknown, liquidated or
         unliquidated, including, but not limited to, costs and attorneys' fees,
         accounting or otherwise, whether suffered, made, instituted, or
         asserted by any other party or person alleging any breach of any
         representation, warranty or covenant made by such indemnifying Party
         (the "Indemnifying Party") in this Agreement, for invasion of privacy,
         personal injury to or death of any person or persons, or for loss,
         damage to, or destruction of property, whether or not owned by others,
         resulting from the Indemnifying Party's performance, breach of
         Applicable Law, or status or the actions, breach of Applicable Law, or
         status of its employees, agents and subcontractors; for actual or
         alleged infringement of any patent, copyright, trademark, service mark,
         trade name, trade dress, trade secret or any other intellectual
         property right, now known or later developed (referred to as
         "Intellectual Property Rights"); or for failure to perform under this
         Agreement, regardless of the form of action.

<PAGE>

         5.2      The indemnification provided herein shall be conditioned upon:

                  5.2.1 Whenever a Claim shall arise for indemnification under
                  this Section 5, the relevant Indemnitee, as appropriate, shall
                  promptly notify the Indemnifying Party and request the
                  Indemnifying Party to defend the same. Failure to so notify
                  the Indemnifying Party shall not relieve the Indemnifying
                  Party of any liability that the Indemnifying Party might have,
                  except to the extent that such failure prejudices the
                  Indemnifying Party's ability to defend such Claim.

                   5.2.2 The Indemnifying Party shall have the right to defend
                   against such liability or assertion in which event the
                   lndemnifying Party shall give written notice to the
                   Indemnitee of acceptance of the defense of such Claim and the
                   identity of counsel selected by the Indemnifying Party.
                   Except as set forth below, such notice to the relevant
                   Indemnitee shall give the Indemnifying Party full authority
                   to defend, adjust, compromise or settle such Claim with
                   respect to which such notice shall have been given, except to
                   the extent that any compromise or settlement shall prejudice
                   the Intellectual Property Rights of the relevant Indemnitees.
                   The Indemnifying Party shall consult with the relevant
                   Indemnitee prior to any compromise or settlement that would
                   affect the Intellectual Property Rights or other rights of
                   any Indemnitee, and the relevant Indemnitee shall have the
                   right to refuse such compromise or settlement and, at the
                   refusing Party's or refusing Parties' cost, to take over such
                   defense, provided that in such event the Indemnifying Party
                   shall not be responsible for, nor shall it be obligated to
                   indemnify the relevant Indemnitee against, any cost or
                   liability in excess of such refused compromise or settlement.
                   With respect to any defense accepted by the Indemnifying
                   Party, the relevant Indemnitee shall be entitled to
                   participate with the Indemnifying Party in such defense if
                   the Claim requests equitable relief or other relief that
                   could affect the rights of the Indemnitee and also shall be
                   entitled to employ separate counsel for such defense at such
                   Indemnitee's expense. In the event the Indemnifying Party
                   does not accept the defense of any indemnified Claim as
                   provided above, the relevant Indemnitee shall have the right
                   to employ counsel for such defense at the expense of the
                   Indemnifying Party. Each Party agrees to cooperate and to
                   cause its employees and agents to cooperate with the other
                   Party in the defense of any such Claim and the relevant
                   records of each Party shall be available to the other party
                   with respect to any such defense.

6.       RESPONSIBILITY FOR ENVIRONMENTAL CONTAMINATION

         6.1      Neither Party shall be liable to the other for any costs
         whatsoever resulting from the presence or release of any Environmental
         Hazard that the other Party introduced to the affected Work Location.
         Both Parties shall defend and hold harmless the other, its officers,
         directors and employees from and against any losses, damages, claims,
         demands, suits, liabilities, fines, penalties and expenses (including
         reasonable attorneys' fees) that arise out of or result from

<PAGE>

         (a) any Environmental Hazard that the indemnifying Partj, its
         contractors or agents introduce to its Work Locations, or (b) the
         presence or release of any Environmental Hazard for which the
         indemnifying Party is responsible under Applicable Law.

         6.2      In the event any suspect materials within ILEC-owned, operated
         or leased facilities are identified to be asbestos-containing, CLEC
         will ensure that to the extent any activities which it undertakes in
         the facility disturb such suspect materials, such CLEC activities will
         be in accordance with applicable local, state and federal environmental
         health and safety statutes and regulations. Except for abatement
         activities undertaken by CLEC or equipment placement activities that
         result in the generation of asbestos containing material, CLEC shall
         not have any responsibility for managing, nor be the owner of, not
         have any liability for, or in connection with, any asbestos containing
         material. ILEC agrees to immediately notify CLEC if ILEC undertakes any
         asbestos control or asbestos abatement activities that potentially
         could affect CLEC equipment or operations, including, but not limited
         to, contamination of equipment.

7.       LIMITATION OF LIABILITY

         7.1      Liabilities of CLEC - CLEC's liability to ILEC during any
         Contract Year resulting from any and all causes, other than as
         specified in this Agreement shall not exceed the amount due and owing
         by CLEG to ILEC under this Agreement during the Contract Year during
         which such cause accrues or arises.

         7.2      Liabilities of ILEC - ILEC's liability to CLEC during any
         Contract Year resulting from any and all causes, other than as
         specified below in Section 8 following, and in Section 10 shall not
         exceed the total of any amounts due and owing to CLEC pursuant to
         Service Parity; Service Guarantees and the Attachment related thereto,
         plus any amounts due and owing by CLEC to ILEC under this Agreement
         during the Contract Year during which such cause accrues or arises.

         7.3      Neither Party shall be liable to the other for any indirect,
         incidental, special or consequential damages arising out of or related
         to this Agreement or the provision of service hereunder.
         Notwithstanding the foregoing limitations, a Party's liability shall
         not be limited by the provisions of this Section 7 in the event of its
         willful or intentional misconduct, including gross negligence, or its
         repeated breach of any one or more of its material obligations under
         this Agreement. A Party's liability shall not be limited with respect
         to its indemnification obligations.

         7.4      The limitations set forth in Sections 7.1, 7.2 and 7.3 shall
         not apply to a Party's liability in the event of its willful or
         intentional misconduct, including its gross negligence, or its repeated
         breach of any one or more of its material obligations under this
         Agreement.

<PAGE>

         FOR PURPOSES OF THIS SECTION 7, AMOUNTS DUE AND OWING TO CLEC PURSUANT
         TO THE SECTION ON SERVICE PARITY, SERVIGE GUARANTEES AND THE ATTACHMENT
         REFERENCED IN THAT SECTION SHALL NOT BE CONSIDERED TO BE INDIRECT,
         INCIDENTAL, CONSEQUENTIAL, RELIANGE, OR SPEGIAL DAMAGES.

8.       REMEDIES FOR FAILURE TO MEET SERVICE QUALITY STANDARDS

         8.1      ILEC will provide all Local Services, Network Elements or
         Combinations in accordance with service standards, measurements, and
         performance requirements, that are expressly specified in this
         Agreement and the Commission's rules. In cases where such service
         quality standards are not expressly specified, ILEC will provide all
         Local Services, Network Elements or Combinations in accordance with
         quality standards which are at least equal or superior to the level of
         service quality that ILEC is required to meet by its own internal
         procedures, or by standards set forth in Oregon statutes or rules or in
         FCC rules or regulations, in providing Local Service, Network Elements
         or Combinations to itself, to its end-users or to its Affiliates. In
         the event CLEC wants a level of service quality in excess or superior
         to that provided in this paragraph, CLEC must (a) request that quality
         of service through the BFR process specified herein; and (b) compensate
         ILEC fully for the additional incremental costs of providing the
         requested facilities or superior services or facilities.

         8.2      ILEC acknowledges that remedies at law alone are inadequate to
         compensate CLEC for failures to meet the service quality standards
         requirements specified by this Agreement, failures to install or
         provision Network Elements, Combinations or Services in accordance with
         the Due Dates specified in this Agreement, or for failures to provide
         Customer Usage Data in accordance with this Agreement. CLEC shall have
         the right to seek injunctive relief and other equitable remedies (in
         addition to remedies provided in this Agreement, at law and through
         administrative process) to require ILEC (a) to cause the Network
         Elements, Combinations or Services ordered by CLEC to meet the service
         quality standards requirements specified by this Agreement, (b) to
         install or provision the Network Elements, Combinations or Services
         ordered by CLEC within the Due Dates specific in this Agreement, and
         (c) to provide Customer Usage Data in accordance with this Agreement.

         8.3      Service quality concerns which cannot be addressed through
         informal processes may be dealt with through (a) the Dispute Resolution
         procedure set forth in this Agreement; (b) the formal complaint
         procedures established by the Commission; or (c) other available
         forums.

9.        WARRANTIES

         9.1      Except as otherwise provided herein, each Party shall perform
         its obligations hereunder at a performance level no less than the
         highest level which

<PAGE>

         it uses for its own operations, or those of its Affiliates, but in no
         event shall a Party use less than reasonable care in the performance of
         its duties hereunder.

         9.2      ILEC warrants that Local Interconnection will be provided in a
         competitively neutral fashion, at any technically feasible point within
         its network at CLEC's request, and that such interconnection will
         contain all the same features, functions and capabilities, and be at
         least equal in quality to the highest level provided by ILEC to itself
         or its Affiliates. ILEC shall have the full burden of proving that a
         requested Interconnection Point ("IP") is not technically feasible. To
         the extent ILEC proves infeasibility, ILEC shall be required to provide
         to CLEC an alternative IP which will not impair CLEC's ability to
         provide its Telecommunications Services. Such alternative P shall be
         technically equivalent to the requested IP.

         9.3      ILEC warrants that it will provide to CLEC on a
         nondiscriminatory basis unbundled Network Elements and ancillary
         services, including, but not limited to, local loop, local switching,
         tandem switching/transit switching, transport, data switching,
         intelligent network and advanced intelligent network, operator service,
         directory assistance, 911, white and yellow pages, and repair and
         maintenance, at any technically feasible points requested by CLEC, and
         all operations support systems used and useful in the preordering,
         ordering, provisioning, design, engineering, maintenance, repair,
         tracking, management, billing and any other function or functionality
         associated directly or indirectly with unbundled Network Elements and
         ancillary services. ILEC further warrants that these services, or their
         functional components, will contain all the same features, functions
         and capabilities and be provided at a level of quality at least equal
         to the highest level which it provides to itself or its Affiliates.
         ILEC shall have the full burden of proving that access requested by
         CLEC is not technically feasible. To the extent ILEC proves
         infeasibility, ILEC shall be required to provide to CLEC an alternative
         service, which will not impair CLEC's ability to provide its
         Telecommunications Services. Such alternative service shall be
         technically equivalent to the requested service.

         9.4      ILEC warrants that it will provide to CLEC nondiscriminatory
         access to poles, pole attachments, ducts, innerducts, conduits,
         building entrance facilities, building entrance links, equipment rooms,
         remote terminals, cable vaults, telephone closets, building risers,
         rights of way, and other pathways owned or controlled by ILEC, using
         capacity currently available or that can be made available. ILEC shall
         take all reasonable steps to accommodate requests for access to its
         facilities, including modifying or rearranging facilities to increase
         capacity. ILEC shall have the full burden of proving that such access
         is not technically feasible. To the extent ILEC proves infeasibility,
         ILEC shall be required to provide to CLEC alternative suitable access
         which will not impair CLEC's ability to provide its Telecommunications
         Services. Such alternative access shall be technically equivalent to
         the requested access.

         9.5      ILEC warrants that it will provide to CLEC, in a competitively
         neutral fashion, unbundled local loops, network interface devices or
         units, loop distribution, digital loop carrier/analog cross connect,
         and loop feeders, that

<PAGE>

         contain all the same features, functions, and capabilities that ILEC
         makes available to itself in provision of its Telecommunications
         Services or to its Affiliates, with at least the same quality of
         service, order processing, provisioning and installation, trouble
         resolution, maintenance, customer care, and billing, as the highest
         quality ILEC provides equivalent features, functions and capabilities
         to itself, its Affiliates, or its own subscribers. ILEC shall have the
         full burden of proving that access to the unbundled local loop or any
         of its unbundled components is not technically feasible. To the extent
         ILEC proves infeasibility, ILEC shall be required to provide to CLEC
         alternative suitable facilities which will not impair CLEC's ability to
         provide its Telecommunications Services. Such alternative facilities
         shall be technically equivalent to the requested access.

         9.6      ILEC warrants that it will provide to CLEC unbundled transport
         and its. components, including common transport, dedicated transport,
         with and without electronics, and multiplexing/digital cross connect,
         with all the same features, functions and capabilities, and with at
         least the same quality level which ILEC provides to itself or its
         Affiliates in provision of its, or such Affiliate's, Telecommunications
         Services, and that such services will be provided in a competitively
         neutral fashion. ILEC shall have the full burden of proving that access
         to unbundled transport or any unbundled transport components is not
         technically feasible. To the extent ILEC proves infeasibility, ILEC
         shall be required to provide to CLEC alternative suitable facilities
         which will not impair CLEC's ability to provide its Telecommunications
         Services. Such alternative facilities shall be technically equivalent
         to the requested access.

         9.7      ILEC warrants that it will provide unbundled local switching
         and its functional components, including line port, trunk port, and
         switching capacity, including all features, functions and capabilities,
         and nondiscriminatory access via electronic interface to databases and
         associated signaling needed for call routing, call completion, and
         service creation, and to create and bill the communications path, all
         at the same or better grade of service that ILEC provides to itself or
         its Affiliates, unless service degradation is due to CLEC purchasing
         insufficient capacity to meet its own demand. ILEC further warrants
         that unbundled local switching and its functional components will be
         provided in a competitively neutral fashion. ILEC shall have the full
         burden of proving that access to unbundled local switching or its
         functional components is not technically feasible. To the extent ILEC
         proves infeasibility, ILEC shall be required to provide to CLEC
         alternative suitable facilities which will not impair CLEC's ability to
         provide its Telecommunications Services. Such alternative facilities
         shall be technically equivalent to the requested access.

         9.8      ILEC warrants that it will provide nondiscriminatory access to
         telephone numbers.

         9.9      ILEC warrants that it will provide to CLEC, in a competitively
         neutral fashion, interim number portability with the same features,
         functions and capabilities that ILEC provides to itself or its
         Affiliates, and with as little impairment of functioning, quality,
         reliability, and convenience as possible, and that it will provide such
         service as required by the FCC in Telephone Number

<PAGE>

         Portability, CC Docket No. 95-116, First Report and Order, released
         July 2, 1996.

         9.10     ILEC warrants that it will provide to CLEC, in a competitively
         neutral fashion, dialing parity for local exchange service and
         interexchange service with the same features, functions and
         capabilities that ILEC provides to itself or its Affiliates, and that
         it will provide such service as required by the FCC in Implementation
         of the Local Competition Provisions of the Telecommunications Act of
         1996, so that CLEC's subscribers experience no greater post-dial delay
         than similarly-situated ILEC subscribers, and are not required to dial
         any greater number of digits than similarly situated ILEC subscribers.

         9.11     ILEC warrants that with respect to Local Resale, order entry,
         provisioning, installation, trouble resolution, maintenance, customer
         care, billing, and service quality will be provided at least as
         expeditiously as ILEC provides for itself or for its own retail local
         service or to others, or to its Affiliates, and that it will provide
         such services to CLEC in a competitively neutral fashion and at a level
         of quality which allows CLEC in turn to provide Local Resale at a level
         of quality equal to the highest level of quality ILEC provides for
         itself for its own retail local service or to others, or to its
         Affiliates. ILEC warrants further that it will impose no restrictions
         on CLEC's resale of these services unless specifically sanctioned by
         the FCC or the Commission.

         9.12     ILEC warrants that it will provide on a nondiscriminatory
         basis space on its premises for physical or virtual collocation, as
         CLEC may specify, consistent with FCC and Commission regulations and
         orders, for equipment necessary for CLEC's interconnection and access
         to unbundled network elements.

10.      NONEXCLUSIVE REMEDIES

         10.1     Except as otherwise expressly provided in this Agreement, each
         of the remedies provided under this Agreement is cumulative and is in
         addition to any remedies that may be available at law or in equity.

         10.2     In the event ILEC fails to switch a subscriber to CLEC service
         as requested through a CLEC service request, within the intervals set
         forth in this Agreement, the continued provision of Telecommunications
         Services by ILEC to such subscriber shall be deemed an illegal change
         in subscriber carrier selection commencing with the time at which ILEC
         failed to switch such subscriber. In such event ILEC shall reimburse
         CLEC in an amount equal to all charges paid by such subscriber to ILEC
         from the time of such failure to switch to the time at which the
         subscriber switch is accomplished. This remedy shall be in addition to
         all other remedies available to CLEC under this Agreement or otherwise
         available.

         This same remedy shall apply in the event that either CLEC or ILEC
         makes an unauthorized change in the local exchange service provider of
         an end user.

<PAGE>

         10.3     All rights of termination, cancellation or other remedies
         prescribed in this Agreement, or otherwise available, are cumulative
         and are not intended to be exclusive of other remedies to which the
         injured Party may be entitled at law or equity in case of any breach or
         threatened breach by the other Party of any provision of this
         Agreement. Use of one or more remedies shall not bar use of any other
         remedy for the purpose of enforcing the provisions of this Agreement.

11.      DISPUTE RESOLUTION

         11.1     All disputes, claims or disagreements (collectively
         "Disputes") arising under or related to this Agreement or the breach
         hereof, except those arising pursuant to Attachment 7 Connectivity
         Billing, shall be resolved according to the procedures set forth in
         Section 11.2 below. Disputes involving matters subject to the
         Connectivity Billing provisions contained in Attachment 7, shall be
         resolved in accordance with the Billing Disputes section of Attachment
         7. The foregoing notwithstanding, the provisions of this Section 11
         shall not be construed to prevent either Party from seeking and
         obtaining temporary equitable remedies, including temporary restraining
         orders. A request by a Party to a court or a regulatory authority for
         interim measures or equitable relief shall not be deemed a waiver of
         the obligation to comply with the provisions of this Section 11.

         11.2     The Parties recognize and agree that the Commission has
         continuing-jurisdiction to implement and enforce all terms and
         conditions of this Agreement. Accordingly, the Parties agree that any
         dispute arising out of or relating to this Agreement that the Parties
         themselves cannot resolve, may be submitted to the Commission for
         resolution. The Parties agree to seek expedited resolution by the
         Commission, and shall request that resolution occur in no event later
         than sixty (60) days from the date of submission of such dispute. If
         the Commission appoints an expert(s) or other facilitator(s) to assist
         in its decision making, the losing party shall pay the fees and
         expenses so incurred.

         11.3     In cases where the Commission determines that neither Party
         has, in some material respect, completely prevailed or lost in a
         proceeding, the Commission shall, in its discretion, apportion expenses
         to reflect the relative success of each Party. Those fees and expenses
         not directly related to a particular proceeding shall be shared
         equally. In the event that the Parties settle a dispute before the
         Commission reaches a decision with respect to that dispute, the
         Settlement Agreement must specify how the fees and expenses for the
         particular proceeding will be apportioned.

         11.4     During the Commission proceeding each Party shall continue to
         perform its obligations under this Agreement; provided, however that
         neither Party shall be required to act in any unlawful fashion. This
         provision shall not preclude the Parties from seeking relief available
         in any other forum.

<PAGE>

12.      NONDISCLOSURE/CONFIDENTIALITY AND PROPRIETARY INFORMATION

         12.1     All information which is disclosed by one Party to the other
         in connection with this Agreement shall automatically be deemed
         proprietary to the Discloser and subject to this Agreement, unless
         otherwise confirmed in writing by the Discloser. In addition, by way of
         example and not limitation, all orders for Local Services, Network
         Elements or Combinations placed by CLEC pursuant to this Agreement, and
         information that would constitute Customer Proprietary Network
         Information of CLEC customers pursuant to the Act and the rules and
         regulations of the Federal Communications Commission ("FCC"), and
         Recorded Usage Data as described in Attachment 8, whether disclosed by
         CLEC to ILEC or otherwise acquired by ILEC in the course of the
         performance of this Agreement, shall be deemed Confidential Information
         of CLEG for all purposes under this Agreement.

         12.2.    The Recipient may make copies of Confidential Information only
         as reasonably necessary to perform its obligations under this
         Agreement. All such copies shall bear the same copyright and
         proprietary rights notices as are contained on the original. Upon
         request by the Discloser, the Recipient shall return all tangible
         copies within thirty (30) days of Proprietary Information, whether
         written, graphic or otherwise, except that the Recipient may retain one
         copy for archival purposes. lf either Party loses or makes an
         unauthorized disclosure of the other Party's Confidential Information,
         it shall notify such other-Party immediately and use reasonable efforts
         to retrieve the lost or wrongfully disclosed information.

         12.3.    For a period of five (5) years from the receipt of
         Confidential Information, each Party shall keep all of the other
         Party's Proprietary Information confidential and shall use the other
         Party's Proprietary Information only for performing the covenants
         contained in this Agreement. Neither Party shall use the other Party's
         Proprietary Information for any other purpose except upon such terms
         and conditions as may be agreed upon between the Parties in writing.

         12.4     Unless otherwise agreed, the obligations of confidentiality
         and non-use set forth in this Agreement do not apply to such
         Proprietary Information as:

                  12.4.1 was at the time of receipt already known to the
                  receiving Party free of any obligation to keep it confidential
                  evidenced by written records prepared prior to delivery by the
                  disclosing Party; or

                  12.4.2 is or becomes publicly known through no wrongful act
                  of the receiving Party; or

                  12.4.3 is rightfully received from a third person having no
                  direct or indirect secrecy or confidentiality obligation to
                  the disclosing Party with respect to such information; or

                  12.4.4. is independently developed by an employee, agent, or
                  contractor of the receiving Party which individual is not
                  involved in any manner with

<PAGE>

                  the provision of services pursuant to this Agreement and does
                  not have any direct or indirect access to the Proprietary
                  Information; or

                  12.4.5 is disclosed to a third person by the disclosing Party
                  without similar restrictions on such third person's rights; or

                  12.4.6 is approved for release by written authorization of the
                  disclosing Party; or

                  12.4.7 is required to be made public by the receiving Party
                  pursuant to applicable law or regulation provided that the
                  receiving Party shall give sufficient notice of the
                  requirement to the disclosing Party to enable the disclosing
                  Party to seek protective orders.

         12.5     Each Party's obligations to safeguard Confidential Information
         disclosed prior to expiration or termination of this Agreement shall
         survive such expiration or termination.

         12.6     Each Party agrees that the Discloser would be irreparably
         injured by a breach of this Agreement by the Recipient or its
         representatives and that the Discloser shall be entitled to seek
         equitable relief, including injunctive relief and specific performance,
         in the event of any breach of the provisions of this Agreement. Such
         remedies shall not be deemed to be the exclusive remedies for a breach
         of this Agreement, but shall be in addition to all other remedies
         available at law or in equity.

         12.7     CPNI related to CLEC's subscribers obtained by virtue of Local
         Interconnection or any other service provided under this Agreement
         shall be CLEC's proprietary information and may not be used by ILEC for
         any purpose except performance of its obligations under this Agreement,
         and in connection with such performance, shall be disclosed only to
         employees with a need to know, unless the CLEC subscriber expressly
         directs CLEC to disclose such information to ILEC pursuant to the
         requirements of Section 222(c)(2) of the Act. If ILEC seeks and obtains
         written approval to use or disclose such CPNI from CLEC's subscribers,
         such approval shall be obtained only in compliance with Section
         222(c)(2) and, in the event such authorization is obtained, ILEC may
         use or disclose only such information as CLEC provides pursuant to such
         authorization and may not use information that ILEC has otherwise
         obtained, directly or indirectly, in connection with its performance
         under this Agreement. CPNI related to ILEC's subscribers obtained by
         virtue of Local Interconnection shall be ILEC's proprietary information
         and may not be used by CLEC for any purpose except performance of its
         obligations under this Agreement, and in connection with such
         performance shall be disclosed only to employees with a need to know,
         unless the ILEC subscriber expressly directs ILEC to disclose such
         information to CLEC pursuant to the requirements of Section 222(c)(2)
         of the Act. If CLEC seeks and obtains written approval to use or
         disclose such CPNI from ILEC's subscribers, such approval shall be
         obtained only in compliance with Section 222(c)(2) of the Act and, in
         the event such authorization is obtained, CLEC may use or disclose only
         such information as ILEC provides

<PAGE>

         pursuant to such authorization and may not use information that CLEC
         has otherwise obtained, directly or indirectly, in connection with its
         performance under this Agreement.

13.      CUSTOMER CREDIT HISTORY

         13.1     CLEC and ILEC agree to make available to a designated
         third-party credit bureau, on a timely basis, such of the following
         customer payment history information that is available for each person
         or entity that applies for local or IntraLATA toll Telecommunications
         Service(s) from either carrier. Such information shall be provided on
         the condition that the credit bureau will only make such information
         available to the carrier to which the person or entity in question has
         applied for Telecommunication Service.

                 Applicants name;
                 Applicant's address;
                 Applicant's previous phone number; if any;
                 Amount, if any, of unpaid balance in applicant's name
                 Whether applicant is delinquent on payments;
                 Length of service with prior local or IntraLATA toll provider;
                 Whether applicant had local or IntraLATA toll service
                 terminated or suspended within the last six months with an
                 explanation of the reason therefor; and
                 Whether applicant was required by prior local or IntraLATA
                 toll provider to pay a deposit or make an advance payment,
                 including the amount of each.

14.      BRANDING

         14.1     Services offered by CLEC that incorporate Network Elements or
         Combinations made available to CLEG pursuant to this Agreement, and
         Local Services that CLEC offers for resale shall, at CLEC's sole
         discretion, be branded exclusively as CLEC services, or otherwise, as
         CLEC shall determine. CLEC shall provide the exclusive interface to
         CLEC Customers in connection with the marketing, offering or provision
         of CLEC services, except as CLEC shall otherwise specify. In those
         instances where CLEC requires ILEC personnel to interface directly with
         CLEC Customers, either orally in person or by telephone, or in writing,
         such personnel shall identify themselves as representing CLEC, and
         shall not identify themselves as representing ILEC. All forms, business
         cards or other business materials furnished by ILEC to CLEC Customers
         shall be subject to CLEC's prior review and approval, and shall bear no
         corporate name, logo, trademark or trade name other than CLEC's or such
         other brand as CLEC shall determine. In no event shall ILEC personnel
         acting on behalf of CLEC pursuant to this Agreement provide information
         to CLEG local service customers about ILEC products or services. ILEC
         shall provide, for CLEC's review and approval, the methods and
         procedures, training and approaches to be used by ILEC to ensure that
         ILEC meets CLEC's branding requirements. No provision of this

<PAGE>

         Section 15 should be interpreted to require ILEC personnel to change
         placards on service vehicles or to remove uniforms bearing the ILEC
         logo. -

15.      PATENTS, TRADEMARKS

         15.1.    Except for a limited license to use patents or copyrights to
         the extent necessary for the Parties to use any facilities or equipment
         (including software) or to receive any service solely as provided under
         this Agreement, nothing in this Agreement shall be construed as the
         grant of a license, either express or implied, with respect to any
         patent, copyright, logo, trademark, trade secret or any other
         proprietary or intellectual property right now or hereafter owned
         controlled or licensable by each Party. CLEC or Reseller may not use
         any logo, trademark or other intellectual property right of ILEC
         without execution of. a separate agreement between the Parties. It is
         the responsibility of each Party to ensure at no additional cost to the
         other Party that it has obtained any necessary licenses in relation to
         intellectual property of third parties used in its network that may be
         required to enable the other Party to use any facilities or equipment
         (including software), to receive any service, or to perform its
         respective obligations under this Agreement.

         15.2     Unless otherwise mutually agreed upon, neither Party shall
         publish or use the other Party's logo, trademark, service mark, name,
         language, pictures, or symbols or words from which the other Party's
         name may reasonably be inferred or implied in any product, service,
         advertisement, promotion, or any other publicity matter.

16.      PUBLICITY AND ADVERTISING

         16.1     Neither Party shall publish or use any advertising, sales
         promotions or other publicity materials that use the other Party's
         logo, trademarks or service marks without the prior written approval of
         the other Party.

17.      FORCE MAJEURE

         17.1     Except as otherwise specifically provided in this Agreement,
         neither Party shall be responsible for any delay or failure in
         performance resulting from acts or occurrences beyond the reasonable
         control of such Party and without its fault or negligence, regardless
         of whether such delays or failures in performance were foreseen or
         foreseeable as of the date of this Agreement, including,, without
         limitation: fire, explosion, power failure, acts of God, war,
         revolution, civil commotion, or acts of public enemies; any law, order,
         regulation, ordinance or requirement of any government or legal body;
         or labor unrest, including, without limitation, strikes, slowdowns,
         picketing or boycotts; or delays caused by the other Party or by other
         service or equipment vendors; or any other circumstances beyond the
         Party's reasonable control. In such event, the Party affected shall,
         upon giving prompt notice to the other Party, be excused from such
         performance on a day-to-day basis to the extent of such interference
         (and the other Party shall likewise be excused from performance of its
         obligations on a day-to-day basis to

<PAGE>

         the extent such Party's obligations relate to the performance so
         interfered with). The affected Party shall use its best efforts to
         avoid or remove the cause of non-performance and both Parties shall
         proceed to perform with dispatch once the causes are removed or cease.
         In the event of such performance delay or failure by ILEC, ILEC agrees
         to resume performance in a nondiscriminatory manner and not favor its
         own provision of Telecommunications Services above that of CLEC. For
         purposes of this Agreement, Force Majeure shall not include acts of any
         Governmental Authority relating to environmental, health or safety
         conditions at work locations.

18.      WAIVER

         18.1     No waiver of any provisions of this Agreement and no consent
         to any default under this Agreement shall be effective unless the same
         shall be in writing and properly executed by or on behalf of the Party
         against whom such waiver or consent is claimed. No course of dealing or
         failure of any Party to strictly enforce any term, right, or condition
         of this Agreement in any instance shall be construed as a general
         waiver or relinquishment on its part of any such provision, but the
         same shall, nevertheless, be and remain in full force and effect.
         Waiver by either Party of any default by the other Party shall not be.
         deemed a waiver of any other default. By entering into this Agreement
         CLEC does not waive any right granted to it pursuant to the Act.

19.      GOVERNING LAW/COMPLIANCE WITH LAWS

         19.1     This Agreement shall be deemed to be a contract made under and
         shall be construed, interpreted and enforced in accordance with the
         laws of the state of Oregon. Insofar as matters of federal law or
         regulation are exclusively concerned, the Parties agree to the
         exclusive jurisdiction of the federal court for the state of Oregon.
         Issues or matters exclusively arising under state law or regulation may
         be heard by the state court which would otherwise have jurisdiction
         over such issue or matter. CLEC and ILEC each shall comply at its own
         expense with all Applicable Law that relates to (a) its obligations
         under or activities in connection with this Agreement; or (b) its
         activities undertaken at, in connection with or relating to Work
         Locations.

         ILEC will be solely responsible for obtaining from governmental'
         authorities, building owners, other carriers, and any other persons or
         entities, all rights and privileges (including, but not limited to,
         space and power), which are necessary for ILEC to provide the Network
         Elements and Local Services pursuant to this Agreement.

         19.2     ILEC shall be responsible for obtaining and keeping in effect
         all Federal Communications Commission, state regulatory commission,
         franchise authority and other regulatory approvals that may be required
         in connection with the performance of its obligations under this
         Agreement. CLEC shall be responsible for obtaining and keeping in
         effect all Federal Communications Commission, state regulatory
         commission, franchise authority and other regulatory approvals that

<PAGE>

         may be required in connection with its offering of services to CLEC
         Customers contemplated by this Agreement. CLEC shall reasonably
         cooperate with ILEC in obtaining and maintaining any required approvals
         for which ILEC is responsible, and ILEC shall reasonably cooperate with
         CLEC in obtaining and maintaining any required approvals for which CLEC
         is responsible.

         19.3     In the event that ILEC is required by any governmental
         authority to file a tariff or make another similar filing in connection
         with the performance of any action that would otherwise be governed by
         this Agreement, ILEG shall (a) consult with CLEC reasonably in advance
         of such filing about the form and substance of such filing, (b) provide
         to CLEC its proposed tariff prior to, or at the time of, such filing,
         and (c) take all steps reasonably necessary to ensure that such tariff
         or other filing imposes obligations upon ILEC that are identical to
         those provided in this Agreement and preserves for CLEC the full
         benefit of the rights otherwise provided in this Agreement.

         19.4     If, subsequent to the effective date of any such tariff, ILEC
         is ordered not to file tariffs with the State regulatory commission or
         the Federal Communications Commission, or is permitted not to file
         tariffs (and elects not to do so), either generally or for specific
         Network Elements, Combinations or Local Services, the terms and
         conditions of such tariffs as of the date on which the requirement to
         file such tariffs was lifted shall, to the degree not inconsistent
         with-this Agreement, be deemed incorporated in this Agreement by
         reference.

         19.5     In the event that any final and nonappealable legislative,
         regulatory, judicial or other legal action materially affects any
         material terms of this Agreement, or the ability of CLEC or ILEC to
         perform any material terms of this Agreement, CLEC or ILEC may, on
         thirty (30) days' written notice (delivered not later than thirty (30)
         days following the date on which such action has become legally binding
         and has otherwise become final and nonappealable) require that such
         terms be renegotiated, and the Parties shall renegotiate in good faith
         such mutually acceptable new terms as may be required. ln the event
         that such new terms are not renegotiated within ninety (90) days after
         such notice, the Dispute shall be referred to the Alternative Dispute
         Resolution procedures set forth in Section 11 above.

         19.6     The Parties shall incorporate into this Agreement the
         Commission's decision in Docket UT 132 concerning intraLATA dialing
         parity, as well as any price or contract provision modified as a result
         of the Commission's reconsideration of, or an appeal of, Commission
         Order No. 97-003 in ARB 3/ARB 6 (entered January, 6, 1997). The Parties
         shall negotiate mutually acceptable terms for implementing each such
         decision within ninety (90) days after it is entered notwithstanding
         the time frames established in the preceding paragraph.

<PAGE>

20.      NO THIRD-PARTY BENEFICIARIES

         20.1     Except as may be specifically set forth in this Agreement,
         this Agreement does not provide and shall not be construed to provide
         third parties with any remedy, claim, liability, reimbursement, cause
         of action, or other privilege.

21.      RESPONSIBILITY OF EACH PARTY

         21.1     Each Party is an independent contractor, and has and hereby
         retains the right to exercise full control of and supervision over its
         own performance of its obligations under this Agreement and retains
         full control over the employment, direction, compensation and discharge
         of all employees assisting in the performance of such obligations. Each
         Party will be solely responsible for all, matters relating to payment
         of such employees, including compliance with social security taxes,
         withholding taxes and all other regulations governing such matters.
         Each Party will be solely responsible for proper handling, storage,
         transport and disposal at its own expense of all (a) substances or
         materials that it or its contractors or agents bring to, create or
         assume control over at Work Locations, or (b) Waste resulting therefrom
         or otherwise generated in connection with its or its contractors' or
         agents' activities at the Work Locations. Subject to the limitations on
         liability and except as otherwise provided in this Agreement, each
         Party shall be responsible for (x) its own acts and performance of all
         obligations imposed by Applicable Law in connection with its
         activities, legal status and property, real or personal and, (y) the
         acts of its own Affiliates, employees, agents and contractors during
         the performance of that Party's obligations hereunder.

22.      ASSIGNMENT/SUBCONTRACTING

         22.1     Neither Party may assign any of its rights or delegate any of
         its obligations under this Agreement without the prior written consent
         of the other Party which will not be unreasonably withheld.
         Notwithstanding the foregoing, ILEC may assign its rights and benefits
         and delegate its duties and obligations under this Agreement without
         the consent of GLEC to a 100 percent owned affiliate company of ILEC,
         provided that the performance of any such assignee is guaranteed by the
         assignor. Any prohibited assignment or delegations shall be null and
         void.

         22.2     Neither Party may subcontract the performance of any
         obligation under this Agreement without the prior written consent of
         the other Party which shall not be unreasonably withheld. If any
         obligation is performed through a subcontractor, ILEC shall remain
         fully responsible for the performance of this Agreement in accordance
         with its terms, including any obligations it performs through
         subcontractors, and ILEC shall be solely responsible for payments due
         its subcontractors. No contract, subcontract or other Agreement entered
         into by either Party with any third Party in connection with the
         provision of Local Services or Network Elements hereunder shall provide
         for any indemnity, guarantee or assumption of liability by, or other
         obligation of, the other Party to

<PAGE>

         this Agreement with respect to such arrangement, except as consented
         to in writing by the other Party. No subcontractor shall be deemed a
         third party beneficiary for any purposes under this Agreement.

23.      ENTIRE AGREEMENT

         23.1     This Agreement which shall include the Attachments, Appendices
         and other documents referenced herein constitutes the entire agreement
         between the Parties and supersedes all prior oral or written
         agreements, representations, statements, negotiations, understandings,
         proposals and undertakings with respect to the subject matter hereof.

24.      SEVERABILITY

         25.1     Subject to Section 19, Governing Law/Compliance with Laws, if
         any term, condition or provision of this Agreement is held to be
         invalid or unenforceable for any reason, such invalidity or
         unenforceability shall not invalidate the entire Agreement, unless such
         construction would be unreasonable. This Agreement shall be construed
         as if it did not contain the invalid or unenforceable provision or
         provisions, and the rights and obligations of each Party shall be
         construed and enforced accordingly; provided, however, that in the
         event such invalid or unenforceable provision or provisions are
         essential elements of this Agreement-and substantially impair the
         rights or obligations of either Party, the Parties shall promptly
         negotiate a replacement provision or provisions.

25.      AMENDMENTS

         25.1     Except as otherwise provided in this Agreement, no amendment
         or waiver of any provision of this Agreement, and no consent to any
         default under this Agreement, shall be effective unless the same is in
         writing and signed by an officer of the Party against whom such
         amendment, waiver or consent is claimed. In addition, no course of
         dealing or failure of a Party strictly to enforce any term, right or
         condition of this Agreement shall be construed as a waiver of such
         term, any right granted to it pursuant to the Act, right or condition.
         By entering into this Agreement CLEC does not waive any right granted
         to it pursuant to the Act.

26.      HEADINGS OF NO FORCE OR EFFECT

         26.1 -   The headings of Articles and Sections of this Agreement are
         for convenience of reference only, and shall in no way define, modify
         or restrict the meaning or interpretation of the terms or provisions of
         this Agreement.

27.      NOTICES

         27.1     Any notices or other communications required or permitted to
         be given or delivered under this Agreement shall be in hard-copy
         writing (unless otherwise specifically provided herein) and shall be
         sufficiently given if delivered personally,

<PAGE>

         by certified U. S. Mail or delivered by prepaid overnight express
         service to the following (unless otherwise specifically required by
         this Agreement to be delivered to another representative or point of
         contact):

          CLEC

          F.   Lynne Powers
          Vice President-- Finance
          J.  Jeffrey Oxley-- Director of Regulatory Affairs
          Advanced Telecommunications, Inc.
          710 Second Avenue South, Suite 1200
          Minneapolis, MN 55402
          Phone:(612)519--6642
          Fax:  (612)376-4414

          Copy to:          Brian Robinson
                            ARTER & HADDEN LLP
                            1801 K Street, NW., Suite 400K
                            Washington, DC 20006
                            Phone:(202) 775-7126
                            Fax:     (202) 857-0172

          ILEC

          U S WEST Communications, Inc.
          Director - Interconnection Compliance
          1801 California, Room 2410
          Denver, CO 80202

          with a copy to:

          U S WEST Law Department
          Attention:   General Counsel
          Interconnection
          1801 California Street, 51st Floor
          Denver, CO 80202

         27.2     Either Party may unilaterally change its designated
                  representative and/or
         address for the receipt of notices by giving seven (7) days' prior
         written notice to the other Party in compliance with this Section. Any
         notice or other communication shall be deemed given when received.

28.      JOINT WORK PRODUCT

         28.1     This Agreement is the joint work product of representatives of
         the Parties. For convenience, it has been drafted in final form by one
         of the Parties. Accordingly, in the event of ambiguities, no inferences
         will be drawn against either Party solely on the basis of authorship of
         this Agreement.

<PAGE>

29.      EXECUTED IN COUNTERPARTS

         29.1     This Agreement may be executed in any number of counterparts,
         each of which shall be deemed an original; but such counterparts shall
         together constitute one and the same instrument.

30.      REFERENCED DOCUMENTS

         30.1     Whenever any provision of this Agreement refers to a technical
         reference, technical publication, CLEC Practice, ILEC Practice, any
         publication of telecommunications industry administrative or technical
         standards, or any other document specifically incorporated into this
         Agreement, it will be deemed to be a reference to the most recent
         version or edition (including any amendments,. supplements, addenda, or
         successors) of such document that is in effect, and will include the
         most recent version or edition (including any amendments, supplements,
         addenda, or successors) of each document incorporated by reference in
         such a technical reference, technical publication, CLEC Practice, ILEC
         Practice, or publication of industry standards (unless CLEC elects
         otherwise). Should there be an inconsistency between or among
         publications or standards, CLEC shall elect which requirement shall
         apply.

31.      SURVIVAL

         32.1     Any liabilities or obligations of a Party for acts or
         omissions prior to the cancellation or termination of this Agreement;
         any obligation of a Party under the provisions regarding
         indemnification, Confidential Information, limitations on liability,
         and any other provisions of this Agreement which, by their terms, are
         contemplated to survive (or to be performed after) termination of this
         Agreement, shall survive cancellation or termination thereof.

32.      SUCCESSORS AND ASSIGNS

         32.1     This Agreement shall be binding upon, and inure to the benefit
         of, the Parties hereto and their respective successors and permitted
         assigns.

                         PART II: LOCAL SERVICES RESALE

33.      INTRODUCTION

         33.1 -   At the request of CLEC, and pursuant to the requirements of
         the Act, ILEC will make available to CLEC for resale any
         Telecommunications Service that LEG currently provides, or may offer
         hereafter. ILEC shall also provide Support Functions and Services
         Functions as set forth in the Attachments to this Agreement. The
         Telecommunications Services, Service Functions and Support Functions
         provided by ILEC pursuant to this Agreement are collectively referred
         to as "Local Service." This Part, in summary form, and Attachment 2, in
         detail, describe several services which ILEC shall make available to
         CLEC for resale pursuant to this Agreement. These lists are neither all
         inclusive nor exclusive.

<PAGE>

34.      LOCAL SERVICES RESALE

         34.1     General

         ILEC shall apply the principles set forth in 47 C.F.R. Section 64.1100
         to the process for end-user selection of a primary local exchange
         carrier. The prices charged to CLEC for Local Service shall be
         wholesale rates determined on the basis of retail rates charged to
         subscribers for the telecommunications service requested excluding the
         portion thereof attributable to any marketing, billing, collection and
         other costs that will be avoided by ILEC. Except `as limited by
         Attachment 2, CLEC may resell Local Services to provide
         Telecommunications Services to any and all classes of end-users except
         for resale of residential service to other classes of customers if this
         exception is authorized by the Commission. ILEC shall ensure that all
         CLEC Customers experience the same dialing parity as similarly-situated
         customers of ILEC services. ILEC will notify CLEC of any changes in the
         terms and conditions under which it offers telecommunications services
         at retail to subscribers who are not telecommunications service
         providers or carriers.

         34.2     Specific Services

                  (a) At CLEC's option, CLEC may purchase the entire set of
                  CENTREX features or a subset of any one or any combination of
                  such features, tariffed or non-tariffed.

                  (b) CLEC may purchase the entire set of CLASS and Custom
                  features and functions, a subset of or any combination of such
                  features.

                  (c) Local Services include certain Voluntary Federal Customer
                  Financial Assistance Programs.

                  (d) ILEC shall provide E91 I and 911 Service to CLEC, for
                  CLEC's customers.

                  (e) Where ILEC provides Telephone Relay Service, ILEC shall
                  make such service available to CLEC at no additional charge,
                  for use by CLEC Customers who are speech or hearing-impaired.

                  (f) CLEC may purchase the entire set of Advance Intelligent
                  Network ("AIN") features or functions, or a subset or any one
                  or any combination of such features or functions, on a
                  customer-specific basis subject to protection of network
                  reliability and security.

         34.3.    Support Functions

                  (a) Routing to Directory Assistance, Operator and Repair
                  Services.

                  (b) Busy Line Verification and Emergency Line Interrupt.

<PAGE>

                  (c) Access to the Line Information Database. -

                  (d) Telephone line number calling cards.

         34.4.    Service Functions

                  (a) ILEC shall provide an electronic interface for
                  transferring and receiving Service Orders and Provisioning
                  data and materials as outlined in the Attachments hereto on or
                  before January 1, 1997.

                  (b) Work order processes shall meet service parity
                  requirements.

                  (c) The point of contact for CLEC customers shall be CLEC.

                  (d) Each Party shall provide the other Party with a single
                  point of contact for all inquiries regarding the
                  implementation of this Part.

                  (e) CLEC's representative will have real-time access to ILEC
                  Customer information to enable the CLEC representative to
                  perform tasks outlined on Attachments 2, 5, 6, and 9.

                  (f) After receipt and acceptance of a Service Order, ILEC
                  shall provision such Service Order in accordance with the
                  Intervals and service quality standards referenced in
                  Attachment 11.

                  (g) Maintenance shall be provided in accordance with the
                  requirements and standards referenced in Attachments 6 and 11.

                  (h) ILEC shall provide the Customer Usage Data recorded by
                  ILEC in accordance with the requirements and standards set
                  forth in Attachment 8.

                  (i) In addition to testing described elsewhere in this Section
                  and Attachment 3, ILEC shall test the systems used to perform
                  the functions set forth in Attachment 2 at least sixty (60)
                  days prior to commencement of ILEC's provision of Local
                  Service, in order to establish system readiness capabilities.

                  (j) ILEC shall bill CLEC for Local Service provided by ILEC to
                  CLEC pursuant to the terms of this Part and Schedules 1 and 2.
                  ILEC shall recognize CLEC as the customer of record for all
                  Local Service and will send all notices, bills and other
                  pertinent information directly to CLEC.

<PAGE>

                      PART III: UNBUNDLED NETWORK ELEMENTS

35.      INTRODUCTION

         35.1     This Part III sets forth the unbundled Network Elements that
         ILEC agrees to offer to CLEC in accordance with its obligations under
         Section 251(c)(3) of the Act. The specific terms and conditions that
         apply to the unbundled Network Elements are described below and in the
         Network Elements Service Description Attachment. The price for each
         Network Element is set forth in Part IV of this Agreement.

36.      UNBUNDLED NETWORK ELEMENTS

                  ILEC will offer Network Elements to CLEC on an unbundled basis
         on rates, terms and conditions that are just, reasonable, and
         non-discriminatory in accordance with the terms and conditions of this
         Agreement, the Oregon Statutes and Regulations and the requirements of
         Section 251 and Section 252 of the Federal Act. Unbundling of subloop
         Network Elements shall not be subject to the Bona Fide Request Process
         set forth in Section 36.12 below because ILEC is specifically required
         to provide unbundling of subloop Network Elements to CLEC by order of
         the Commission.

                  ILEC will permit CLEC to interconnect CLEC's facilities or
         facilities provided by CLEC or by third parties with each of ILEC's
         unbundled Network Elements at any point designated by CLEC that is
         technically feasible.

                  CLEC, at its option, may designate any technically feasible
         network interface at a Served Premises, including without limitation,
         DS-0, DS-1, DS-3, STS-1, and OC-n (where n equals I to C) interfaces,
         and any other interface described in the applicable technical
         references.

                  CLEC may use one or more Network Elements to provide any
         feature, function, or service option that such Network Element is
         capable of providing or any feature, function, or service option that
         is described in the technical references identified herein, or as may
         otherwise be determined by CLEC.

                  ILEC shall offer each Network Element individually and in
         combination with any other Network Element or Network Elements in order
         to permit CLEC to combine such Network Element or Network Elements with
         another Network Element or other Network Elements obtained from ILEC or
         with network components provided by itself or by third parties to
         provide telecommunications services to its customers.

                  For each Network Element, ILEC shall provide a demarcation
         point (e.g., an interconnection point at a Digital Signal Cross Connect
         or Light Guide Cross Connect panel or a Main Distribution Frame) and,
         if necessary, access to such demarcation point, which CLEC agrees is
         suitable. However, where ILEC provides contiguous Network Elements to
         CLEC, ILEC may provide the existing

<PAGE>

         interconnections and no demar6ation point shall exist between such
         `contiguous Network Elements.

                  ILEC shall not charge CLEC an interconnection fee or demand
         other consideration for directly interconnecting any Network Element or
         Combination to any other Network Element or Combination provided by
         ILEC to CLEC if ILEC directly interconnects the same two Network
         Elements or Combinations in providing any service to its own customers
         or an ILEC Affiliate, including the use of intermediate devices, such
         as a digital signal cross connect panel, to perform such
         interconnection.

                  The total charge to CLEC to interconnect any Network Element
         or Combination to any other Network Element or Combination provided by
         ILEC to CLEC if ILEC does not directly interconnect the same two
         Network Elements or Combinations in providing any service to its own
         customers or an ILEC Affiliate (e.g., the interconnection required to
         connect the Loop Feeder to an ILEC's collocated equipment), shall be
         ILEC's total service long-run incremental cost of providing the
         interconnection.

                  Subsections 1 through 11 below list the Network Elements that
         CLEC and ILEC have identified as of the Effective Date of this
         Agreement. CLEC and ILEC agree that the Network Elements identified in
         this Part II are not exclusive.. Either Party may identify additional
         or revised Network Elements as necessary to improve services to
         customers, to improve network or service efficiencies or to accommodate
         changing technologies, customer demand, or regulatory requirements.
         Upon the identification of a new or revised Network Element, the Party
         so identifying the new or revised Network Element shall notify the
         other Party of the existence of and the technical characteristics of
         the new or revised Network Element. If the Parties do not agree on the
         existence of and the technical characteristics of the newly identified
         or revised Network Element, any issues that have not been resolved by
         the Parties within thirty days of notification shall be submitted to
         the Dispute Resolution Procedures as set forth in this Agreement.
         Within thirty (30) days of CLEC and ILEC agreeing on the technical
         characteristics of the new or revised Network Element, the Parties will
         attempt to agree on the rates, terms and conditions that would apply to
         such Network Element and the effects, if any, on the price, performance
         or other terms and conditions of existing Network Elements. If the
         Parties do not agree on rates, terms and conditions and other matters
         set forth herein, any issues that have not been resolved by the Parties
         within thirty days shall be submitted to the Dispute Resolution
         Procedures as set forth in this Agreement. Additionally, if ILEC
         provides any Network Element that is not identified in this Agreement,
         to itself, to ILEC's own customers, to an ILEC Affiliate or to any
         other entity, ILEC will provide the same Network Element to CLEC on
         rates, terms and conditions no less favorable to CLEC than those
         provided to itself or to any other party. The Network Elements are
         described below. Additional descriptions and requirements for each
         Network Element are set forth in Attachment 3.

<PAGE>

         36.1     Loop Distribution

                  "Loop Distribution" is a Network Element that is composed of
         two distinct component parts: a Network Interface Device and
         Distribution Media.

         36.2     Network Interface Device

                  The "Network Interface Device (NID)" is a single-line
         termination device or that portion of a multiple-line termination
         device required to terminate a single line or circuit. The fundamental
         function of the NID is to establish the official network demarcation
         point between a carrier and its end-user customer. The NID features two
         independent chambers or divisions which separate the service provider's
         network from the customer's inside wiring. Each chamber or division
         contains the appropriate connection points or posts to which the
         service provider; and the end-user customer each make their
         connections. The NID provides a protective ground connection, and is
         capable of terminating cables such as twisted pair cable.

         36.3     Distribution Media

                  "Distribution Media" provides connectivity between the NID
         component of Loop Distribution and the terminal block on the
         customer-side of a Feeder Distribution lnterface (FDI). The FDI is a
         device that terminates the Distribution Media and the Loop Feeder, and
         cross-connects them in order to provide a continuous transmission path
         between the NID and a telephone company central office. For loop plant
         that contains a Loop Concentrator/Multiplexer, the Distribution Media
         may terminate at the FDI (if one exists), or at a termination and
         cross-connect field associated with the Loop Concentrator/Multiplexer.
         This termination and cross-connect field may be in the form of an
         outside plant distribution closure, remote terminal or fiber node, or
         an underground vault.

                  The Distribution Media may be copper twisted pair, coax cable,
         or single or multi-mode fiber optic cable. A combination that includes
         two or more of these media is also possible. In certain cases, CLEC may
         require a copper twisted pair Distribution Media even in instances
         where the Distribution Media for services that ILEC offers is other
         than a copper facility. In such cases, CLEC must compensate ILEC for
         all additional costs related to providing the copper facility.

         36.4     Loop Concentrator/Multiplexer

                  The "Loop Concentrator/Multiplexer" is the Network Element
         that: (a) aggregates lower bit rate or bandwidth signals to higher bit
         rate or bandwidth signals (multiplexing); (b) disaggregates higher bit
         rate or bandwidth signals to lower bit rate or bandwidth signals
         (demultiplexing); (c) aggregates a specified number of signals or
         channels to fewer channels (concentrating); (d) performs signal
         conversion, including encoding of signals (e.g., analog to digital and
         digital to analog signal conversion); and (e) in some instances
         performs electrical to optical (E/O) conversion.

<PAGE>

                  The Loop Concentrator/Multiplexer function may be provided
         through a Digital Loop Carrier (DLC) system, channel bank, multiplexer
         or other equipment at which traffic is encoded and decoded, multiplexed
         and demultiplexed, or concentrated.

         36.5     Loop Feeder

                  The "Loop Feeder" is the Network Element that provides
         connectivity between (a) an FDI associated with Loop Distribution and a
         termination point appropriate for the media in a central office, or (b)
         a Loop Concentrator/Multiplexer provided in a remote terminal and a
         termination point appropriate for the media in a central office. ILEC
         shall provide CLEC physical access to the FDI, and the right to connect
         the Loop Feeder to the FDI.

                  The physical medium of the Loop Feeder may be copper twisted
         pair, or single or multi-mode fiber as designated by CLEC. In certain
         cases, CLEC will require a copper twisted pair loop even in instances
         where the medium of the Loop Feeder for services that ILEC offers is
         other than a copper facility. In such cases, CLEC must compensate ILEC
         for all additional costs related to providing the copper facility.

         36.6     Local Switching

                  "Local Switching" is the Network Element that provides the
         functionality required to connect the appropriate originating lines or
         trunks wired to the Main Distributing Frame (MDF) or Digital Cross
         Connect (DSX) panel to a desired terminating line or trunk. Such
         functionality shall include all of the features functions, and
         capabilities that the underlying ILEC switch that is providing such
         Local Switching function is then capable of providing, including but
         not limited to: line signaling and signaling software, digit reception,
         dialed number translations call screening, routing, recording, call
         supervision, dial tone, switching, telephone number provisioning,
         announcements, calling features and capabilities (including call
         processing), Gentrex, Automatic Call Distributor (ACD), Carrier
         pre-subscription (e.g. long distance carrier, intraLATA toll), Carrier
         Identification Code (GIG) portability capabilities, testing and other
         operational features inherent to the switch and switch software. It
         also provides access to transport, signaling (ISDN) User Part (ISUP)
         and Transaction Capabilities Application Part (TCAP), and platforms
         such as adjuncts, Public Safety Systems (911), operator services,
         directory services and Advanced Intelligent Network (AIN). Remote
         Switching Module functionality is included in the Local Switching
         function. The switching capabilities used will be based on the line
         side features they support. Local Switching will also be capable of
         routing local, intraLATA, interLATA, and calls to international
         customer's preferred carrier; call features (e.g., call forwarding) and
         Centrex capabilities.

<PAGE>

                  Local Switching also includes Data Switching, which provides:

                  For Asynchronous Transfer Mode (ATM) and Frame Relay Service,
         data services switching functionality that is required to connect the
         facilities from the User to Network Interface (UNI) to either another
         UNI or to a communications path at the Network to Network Interface (NN
         I). In this case, the purpose of Data Switching is to terminate,
         concentrate, and switch data traffic from Customer Premises Equipment
         (CPE) in the digital format consistent with the UNI specification for
         the customer. Data Switching also provides connectivity for the purpose
         of conveying the customer data to its final destination. The UNI and
         NNI are industry standard interface specifications that contain
         physical transmission layer requirements for speeds and line formats;
         data link layer requirements for the format of the data units that are
         passed between the user and the network; and protocol requirements for
         control procedures used in managing the interface. Data Switching
         provides this functionality in two distinct formats, ATM and Frame
         Relay.

                  For ISDN Packet and Circuit Switched Data service, the data
         switching functionality that is required to connect between industry
         standard ISDN interfaces. In this case, the purpose of Data Switching
         is to terminate, concentrate, and switch data traffic from Customer
         Premises Equipment (CPE) in the digital format consistent with ISDN
         standards. Data Switching also-provides connectivity for the purpose of
         conveying the customer data to its final destination.

         36.7     Operator Systems

                  "Operator Systems" is the Network Element that provides
         operator and automated call handling and billing, special services,
         customer telephone listings and optional call completion services. The
         Operator Systems, Network Element provides two types of functions:
         Operator Service functions and Directory Service functions, each of
         which are described below.

                  Operator Service provides: (a) operator handling for call
         completion (for example, collect, third number billing, and manual
         credit card calls), (b) operator or automated assistance for billing
         after the customer has dialed the called number (for example, credit
         card calls); and (c) special services including but not limited to Busy
         Line Verification and Emergency Interrupt (BLV/EI), Emergency Agency
         Call, Operator-assisted Directory Assistance, and Rate Quotes.

                  Directory Service provides local customer telephone number
         listings with the option to complete the call at the callers direction.

         36.8     Transport

                  "Common Transport" is an interoffice transmission path between
         ILEC Network Elements. Where ILEC Network Elements are connected by
         intra-office wiring, such wiring is provided as a part of the Network
         ELEMENTS AND IS NOT Common Transport.

<PAGE>

                  "Dedicated Transport" is an interoffice transmission path
         between CLEC designated locations. Such locations may include ILEC
         central offices or other equipment locations, CLEC network components,
         other carrier network components, or customer premises. Dedicated
         Transport includes the Digital Cross-Connect System (DCS) functionality
         as an option.

                  "Signaling Link Transport" is a set of two or four dedicated
         56 Kbps. transmission paths between CLEC-designated Signaling Points of
         Interconnection (SPOI) that provides appropriate physical diversity.

         36.9     Signaling Transfer Points

                  "Signaling Transfer Points" is a signaling network function
         that includes all of the capabilities provided by the signaling
         transfer point switches (STPSs) and their associated signaling links
         which enable the exchange of SS7 messages among and between switching
         elements, database elements and signaling transfer points.

         36.10    Tandem Switching

                  "Tandem Switching" is the function that establishes a
         communications path between two switching offices through a third
         switching office (the tandem switch).

         36.11    Standards for Network Elements

                  Each Network Element shall be equal to or better than the
         requirements set forth in the technical references, as well as any
         performance or other requirements, identified herein. If another Bell
         Communications Research, Inc. ("Bellcore"), or industry standard (e.g.,
         American National Standards Institute ("ANSI") technical reference or a
         more recent version of such reference sets forth a different
         requirement, CLEC may elect, where technically feasible, which standard
         shall apply.

                  Each Network Element and the interconnections between Network
         Elements provided by ILEC to CLEC shall be at least equal in the
         quality of design, performance, features, functions and other
         characteristics, including but not limited to levels and types of
         redundant equipment and facilities for power, diversity and security,
         that ILEC provides in the ILEC network to itself, ILEC's own customers,
         to an ILEC Affiliate or to any other entity.

                  ILEC shall provide to CLEC, upon reasonable request, such
         engineering, design, performance and other network data sufficient for
         CLEC to determine that the requirements of this Section 36 are being
         met. In the event that such data indicates that the requirements of
         this Section 36 are not being met, ILEC shall, within 10 days, cure any
         design, performance or other deficiency and provide new data sufficient
         for CLEC to determine that such deficiencies have been cured.

<PAGE>

                  ILEC. agrees to work cooperatively with CLEC to provide
         Network Elements that will meet CLEC's needs in providing services to
         its customers.

                  Unless otherwise designated by CLEC, each Network Element and
         the interconnections between Network Elements provided by ILEC to CLEC
         shall be made available to CLEC on a priority basis that is equal to or
         better than the priorities that ILEC provides to itself, ILEC's own
         customers, to an ILEC Affiliate or to any other entity.

         36.12    Bona Fide Request Process

                  36.12.1 Any request for interconnection or access to an
                  unbundled Network Element that is not already available via
                  price lists, tariff, or as described herein shall be treated
                  as a Request under this Section.

                  36.12.2 ILEC shall use the Bona Fide Request (BFR) Process to
                  determine the technical feasibility of the requested
                  interconnection of Network Element(s) and, for those items
                  found to be technically feasible, to provide the terms and
                  timetable for providing the requested items. Additionally,
                  elements, services, and functions which are materially or
                  substantially different from those services, elements or
                  functions already. provided by ILEC to itself, its Affiliates,
                  customers, or end users may, at the discretion of CLEC, be
                  subject to this BFR process.

                  36.12.3 A Request shall be submitted in writing and, at a
                  minimum, shall include: (a) a complete and accurate technical
                  description of each requested Network Element or
                  interconnection; (b) the desired interface specifications; (c)
                  a statement that the interconnection or Network Element will
                  be used to provide telecommunications service; (d) the
                  quantity requested; (e) the location(s) requested; and (f)
                  whether CLEC wants the requested item(s) and terms made
                  generally available.

                  36.12.4 Within forty-eight (48) hours of receipt of a Request,
                  ILEC shall acknowledge receipt of the Request and review such
                  request for initial compliance with 36.12.3 above and in its
                  acknowledgment advise CLEC of any missing information
                  reasonably necessary to move the Request to the preliminary
                  analysis described in 36.12.5 below.

                  36.12.5 Unless otherwise agreed to by the Parties, within
                  thirty (30) calendar days of its receipt of the Request and
                  all information necessary to process it, ILEC shall provide to
                  CLEC a preliminary analysis of the Request. During the thirty
                  (30) day period, ILEC agrees to provide weekly status updates
                  to CLEC. ILEC will notify CLEC if the quote preparation fee,
                  if any, will exceed $5,000. CLEC will approve the continuation
                  of the development of the quote prior to ILEC incurring any
                  reasonable additional expenses. The preliminary analysis shall
                  specify whether or not the requested interconnection or access
                  to an unbundled Network

<PAGE>

                  Element is technically feasible and otherwise qualifies as a
                  Network Element or interconnection as defined under the Act.

                           36.12.5.1 If ILEC determines during the thirty (30)
                           day period that a Request is not technically feasible
                           or that the Request otherwise does not qualify as a
                           Network Element or interconnection that is required
                           to be provided under the Act, ILEC shall so advise
                           CLEC as soon as reasonably possible, and promptly
                           provide a written report setting forth the basis for
                           its conclusion in no case later than ten (10)
                           calendar days after making such determination.

                           36.12.5.2 If ILEC determines during the thirty (30)
                           day period that the Request is technically feasible
                           and otherwise qualifies under the Act, it shall
                           notify CLEC in writing of such determination in no
                           case later than ten (10) calendar days after making
                           such determination.

                           36.12.5.3 Unless otherwise agreed to by the Parties,
                           as soon as feasible, but no more than ninety (90)
                           calendar days after ILEC notifies CLEC that, the
                           Request is technically feasible, ILEC shall provide
                           to CLEC a Request quote which will include, at a
                           minimum, a description of each interconnection and
                           Network Element, the quantity to be provided, the
                           installation intervals (both initial and subsequent),
                           the impact on shared systems software interfaces,
                           ordering process changes, functionality
                           specifications, any interface specifications, and
                           either:

                                    36.12.5.3.1 the applicable rates (recurring
                                    and nonrecurring) including the amortized
                                    development costs, as appropriate, of the
                                    interconnection or the Network Element; or

                                    36.12.5.3.2 the payment for development
                                    costs, as appropriate, of the
                                    interconnection or Network Element and the
                                    applicable rates (recurring and
                                    nonrecurring) excluding the development
                                    costs.

                           36.12.5.4 The choice of using option 36.12.5.3.1 or
                           36.12.5.3.2 shall be at ILEC's sole discretion.
                           However, a payment for development cost is
                           appropriate only where CLEC is the only conceivable
                           user of the functionality (including consideration of
                           ILEC as a potential user) or where the requested
                           quantity is insufficient to provide amortization.

                  36.12.6 If ILEC has used option 36.12.5.3.1 in its Request
                  quote, then within thirty (30) days of its receipt of the
                  R6quest quote, CLEC. must indicate its non-binding interest in
                  purchasing the interconnection or Network Element at the
                  stated quantities and rates, cancel its Request, or seek
                  remedy under the Dispute Resolution section of this Agreement.

<PAGE>

                   36.12.7 If ILEC has used option 36.12.5;3.2 in its Request
                   quote, then, within thirty (30) days of its receipt of the
                   Request quote CLEC must either agree to pay the development
                   costs of the interconnection of Network Element, cancel its
                   Request, or seek remedy under the Dispute Resolution section
                   of this Agreement.

                   36.12.8 If ILEC has used option 36.12.5.3.2 in its Request
                   quote and CLEC has accepted the quote, CLEC may cancel the
                   Request at any time, but will pay ILEC's reasonable
                   development costs of the interconnection or Network Element
                   up to the date of the cancellation.

                   36.12.9 ILEC will use reasonable efforts to determine the
                   technical feasibility and conformance with the Act of the
                   Request within the first thirty-two (32) days of receiving
                   the Request. In the event ILEC has used option 36.12.5.3.2 in
                   its Request quotes and ILEC later determines that the
                   interconnection or Network Element requested in the Request
                   is not technically feasible or otherwise does not qualify
                   under the Act, ILEC shall notify CLEC within ten (10)
                   business days of making such determination and CLEC shall not
                   owe any compensation to ILEC in connection with the Request.
                   Any quotation preparation fees or development costs paid by
                   CLEC to the time of that notification shall be refunded by
                   ILEC. -

                   36.12.10 To the extent possible, ILEC will utilize
                   information from previously developed BFRs to address similar
                   arrangements in order to shorten the response times for the
                   currently requested BFR. In the event CLEC has submitted a
                   Request for an interconnection or a Network Element and ILEC
                   determines in accordance with the provisions of this Section
                   36.12, that the Request is technically feasible, the Parties
                   agree that CLEC's subsequent request or order for the
                   identical type of interconnection or Network Element shall
                   not be subject to the BFR process.

                   36.12.11 In the event of a dispute under this Section 36.12,
                   the Parties agree to seek expedited Commission resolution of
                   the dispute, with a request to the Commission to be completed
                   within twenty (20) days of ILEC's response that declined
                   CLEC's BFR, and in no event more than thirty (30) days after
                   the filing of CLEC's petition.

                          PART IV: ANCILLARY FUNCTIONS

37.       INTRODUCTION

          This Part IV sets forth the Ancillary Functions that ILEC agrees to
offer to CLEC so that CLEC may obtain and use unbundled Network Elements or ILEC
services to provide services to its customers.

<PAGE>

38.      ILEC PROVISION OF ANCILLARY FUNCTIONS

          ILEC will offer Ancillary Functions to CLEC on rates, terms and
conditions that are just, reasonable, and non-discriminatory and in accordance
with the terms and conditions of this Agreement.

          ILEC will permit CLEC to interconnect CLEC's equipment and facilities
or equipment and facilities provided by CLEC or by third parties at any point
designated by CLEC that is technically feasible.

          CLEC may use any Ancillary Function to provide any feature, function,
or service option that such Ancillary Function is capable of providing or any
feature, function, or service option that is described in the technical
references identified herein, or as may otherwise be designated by CLEC.

          Subsections 38.1 through 38.3 below list the Ancillary Functions that
CLEC and ILEC have identified as of the Effective Date of this Agreement. CLEC
and ILEC agree that the Ancillary Functions identified in this Part IV are not
exclusive. Either Party may identify additional or revised Ancillary Functions
as necessary to improve services to customers, to improve network or service
efficiencies or to accommodate changing technologies, customer demand, or
regulatory requirements. Upon the identification of a new or revised Ancillary
Function, the Party so identifying the new or revised Ancillary Function shall
notify the other Party of the existence of and the technical characteristics of
the new or revised Ancillary Function. If the Parties do not agree on the
existence of and the technical characteristics of the newly identified or
revised Ancillary Function, any issues that have not been resolved by the
Parties within thirty days of notification shall be submitted to the Dispute
Resolution Procedures as set forth in Section 11 above. Within thirty (30) days
of CLEC and ILEC agreeing on the technical characteristics of the new or revised
Ancillary Function, the Parties will attempt to agree on the rates, terms and
conditions that would apply to such Ancillary Function and the effects, if any,
on the price, performance or other terms and conditions of existing Network
Elements or Ancillary Functions. If the parties do not agree on rates, terms,
and conditions and other matters set forth herein, any issues that have not been
resolved by the Parties within thirty (30) days shall be submitted to the
Dispute Resolution Procedures as set forth in this Agreement. Additionally, if
ILEC provides any Ancillary Function that is not identified in this Agreement to
itself, to its own customers, to an ILEC Affiliate or to any other entity, ILEC
will provide the same Ancillary Function to CLEC at rates, terms and conditions
no less favorable to CLEC than those provided by ILEC to itself or to any other
party. The Ancillary Functions are described below. Additional descriptions, and
requirements for each Ancillary Function are set forth in Attachment 4.

          38.1 Collocation

                   "Collocation" is the right of CLEC to obtain dedicated space
          in the ILEC Local Serving Office (LSO) or at other ILEC locations and
          to place equipment in such spaces to interconnect with the ILEC
          network. Collocation also includes ILEC providing resources necessary
          for the operation and economical use of collocated equipment.

<PAGE>

             38.2 Right of Way (ROW), Conduits and Pole Attachments

                   "Right of Way (ROW)" is the right to use the land or other
          property of another party to place poles, conduits, cables, other
          structures and equipment, or to provide passage to access such
          structures and equipment. A ROW may run under, on, or above public or
          private property (including air space above public or private
          property) and may include the right to use discrete space in
          buildings, building complexes or other locations.

                   "Conduit" is a tube or protected trough that may be used to
          house communication or electrical cables. Conduit may be underground
          or above ground (for example, inside buildings) and may contain one or
          more inner ducts..

                   "Pole Attachment" is the connection of a facility to a
          utility pole. Some examples of facilities are mechanical hardware,
          grounding and transmission cable, and equipment boxes.

          38.3 Unused Transmission Media

                   "Unused Transmission Media" is physical inter-office
          transmission media (e.g., optical fiber, copper twisted pairs, coaxial
          cable) which has no lightwave or electronic transmission equipment
          terminated to such media to operationalize its transmission
          capabilities. This media may exist in aerial or underground structure
          or within a building.

                   Dark Fiber, one type of unused transmission media, is unused
          strands of optical fiber. Dark Fiber also includes strands of optical
          fiber existing in aerial or underground structure which have Iightwave
          repeater (regenerator or optical amplifier) equipment interspliced to
          it at appropriate distances, but which has no line terminating
          elements terminated to such strands to operationalize its transmission
          capabilities. Alternately, Dark Fiber means unused wavelengths within
          a fiber strand for purposes of coarse or dense wavelength division
          multiplexed (WDM) applications. Typical single wavelength transmission
          involves propagation of optical signals at single wavelengths (1.3 or
          1.55 micron wavelengths). In WDM applications, a WDM device is used to
          combine optical signals at different wavelengths on to a single fiber
          strand. The combined signal is then transported over the fiber strand.
          For coarse WDM applications, one signal each at 1.3 micron and 1.55
          micron wavelength are combined. For dense WDM applications, many
          signals in the vicinity of 1.3 micron wavelength or 1.55 micron
          wavelength are combined. Spare wavelengths on a fiber strand (for
          coarse or dense WDM) are considered Dark Fiber.

39.       STANDARDS FOR ANCILLARY FUNCTIONS

         Each Ancillary Function shall meet or exceed the requirements set forth
in the technical references, as well as the performance and other requirements,
identified herein. If another Bell Communications Research, Inc. ("Bellcore"),
or industry standard (e.g., American National Standards Institute ("ANSI"))
technical reference sets forth a

<PAGE>

different requirement, CLEC may elect, where technically feasible, which
standard shall apply.

          Each Ancillary Function provided by ILEC to CLEC shall be at least
equal in the quality of design, performance, features, functions and other
characteristics, including, but not limited to levels and types of redundant
equipment and facilities for diversity and security, that ILEC provides in the
ILEC network to itself, its own customers, its Affiliates or any other entity.

          ILEC shall provide to CLEC, upon reasonable request, such engineering,
design, performance and other network data sufficient for CLEC to determine that
the requirements of this Agreement are being met. In the event that such data
indicates that the requirements of this Agreement are not being met, ILEC shall,
within 30 days,. cure any design, performance or other deficiency and provide
new data sufficient for' CLEC to determine that such deficiencies have been
cured.

          ILEC agrees to work cooperatively with CLEC to provide Ancillary
Functions that will meet CLEC's needs in providing services to its customers.

          Unless otherwise designated by CLEC, each Ancillary Function provided
by ILEC to CLEC shall be made available to CLEC on a priority basis that is at
least equal to the priorities that ILEC provides to itself, its customers, its
Affiliates or any other entity. -

                                 PART V: PRICING

40.       GENERAL PRINCIPLES

          40.1 All services currently provided hereunder (including resold Local
          Services), Network Elements and Combinations and all new and
          additional services or Network Elements to be provided hereunder,
          shall be priced in accordance with all applicable provisions of the
          Act and the rules and orders of the Federal Communications Commission
          and the Commission.

          40.2 All services that ILEC provides at retail to subscribers who are
          not telecommunications carriers shall be provided at wholesale rates.
          Wholesale rates shall be determined on the basis of retail rates
          charged to subscribers for the telecommunications service requested,
          excluding the portion thereof attributable to any marketing, billing,
          collection, and other costs that will be avoided by ILEC.

          40.3 All such charges for Network Elements and Combinations shall be
          nondiscriminatory.

          40.4 All charges for Network Elements, Combinations, Interconnections
          and Local Services shall, as a general matter, be based on ILEC's
          Total Element Long Run Incremental Cost ("TELRlC") of providing such
          element or service. When ILEC incurs additional costs in fulfilling a
          CLEC request to build or modify a facility, and those costs are not
          included in existing charges, ILEC may recover

<PAGE>

          its excess costs. ILEC may recover its economically efficient charges,
          over and above those normally incurred in serving its own customers,
          that result from CLEC's request to extend or expand CLEC's services.
          In such a cases, ILEC bears the burden of showing that any claimed
          additional costs are not already recovered through its existing
          charges. ILEC shall not double recover charges. ILEC's recovery will
          be limited to charges not already recovered in prices charged and will
          be limited to the level of benefit that CLEC experiences as a result
          of its request. If ILEC or any third party or parties also benefit
          from the construction, ILEC's recovery from CLEC will be limited to a
          percentage share of the total charges, based on a reasonable estimate
          of CLEC's proportionate share of the benefit. Any nonrecurring costs
          incurred by ILEC shall be recovered through recurring charges based on
          cost.

41. PRICE SCHEDULES

          41.1     Local Service Resale - Schedule 1

          Retail services are subject to the greater of (a) the wholesale
discount set forth in Schedule 1 or (b) one half the discount in Schedule 1,
pIus any volume or term discount for which CLEC would be eligible if it were a
retail customer.

          41.2     Unbundled Network Elements - Schedule 2

          Charges for Network Elements will be based on the following: (a)
prices shall be those approved by the Commission in its Docket UM 351, Order No.
96-238. The UM351, Order No. 96-283 prices shall remain in effect until new
Unbundled Network Element prices are developed based on the revised cost
methodology approved in Docket UM-773, Order No. 96-284; and (b) where the
Commission has not yet developed prices for Unbundled Network Elements, the
applicable prices are those set forth in Schedule 2. Any price or contract
provision modified as a result of Commission reconsideration or appeal shall be
incorporated into this Agreement.

          41.3     Other Pricing Matters

          Within sixty (60) days after the Effective Date, the Parties shall
establish charges for the usage of Operations Support Systems (OSS). Such
charges shall be based on Total Element Long Run Incremental Costs. Such charges
shall appIy pending separate Commission action and shall be subject to true-up.

          Interim Number Portability costs shall be recovered on a bill and keep
basis.

          ILEC shall be entitled to recover legitimate and reasonable costs
incurred in complying with CLEC's requests for rebranding. ILEC shall have the
burden of proof in justifying any rebranding expenses it incurs on behalf of
CLEC.

         Costs associated with the transport and termination of local and EAS
traffic shall be recovered on a bill and keep basis on an interim basis as
provided in Commission Order No. 96-021. CLEC may be required to share direct
transport costs under circumstances similar to those addressed by the Commission
in Order No. 96-160.

<PAGE>

          With respect to conditioning charges, ILEC may charge CLEC for
conditioning of local loops in accordance with prices and terms set forth by the
Commission in Order No. 96-283.

          The wholesale discount applicable to services already subject to term
or volume discounts shall equal the greater of : (a) twenty-two percent (22%),
or (b) the sum of the term/volume discount plus eleven percent (11%).

          CLEC's pricing proposal for electronic interfaces shall be implemented
on an interim basis until the Commission can develop prices based on the revised
cost methodology approved in UM-773, Order No. 96-284.

          The charges for virtual collocation shall be those approved by the
Commission in Docket UT-i 19, Order No. 96-079.

          Pole attachment fees charged by ILEC to CLEC shall in all respects be
consistent with the provisions of 47 U.S.C. Sections 703 et seq. and any FCC
rules promulgated pursuant thereto. Pending, enactment of said FCC rules, but
not thereafter, ILEC may continue to use the fee structure developed under the
1978 Pole Attachment Act. Minimum purchase requirements shall not be imposed.
The cost of providing usable space shall be apportioned between and among all
entities according to the percentage of usable space required. Except to the
extent ILEC's fee structure, developed under the 1978 Pole Attachment Act, is
used hereunder, all applicable fees and charges shall be based on TELRIC.

          To the extent modification costs for poles and/or conduit are
initiated by and incurred for the sole benefit of CLEC, CLEC shall assume the
cost of said modifications. To the extent modification costs are initiated by
and incurred for the benefit of multiple parties, including ILEC, participating
directly in said modification, including, without limitation, "piggybacking" by
various parties, said cost shall be apportioned between and among the
participating parties based upon the ratio of new space to be occupied by each.
To the extent any entities, including ILEC, subsequently obtain access to a
facility previously modified and paid for by CLEC and/or, other parties, ILEC
shall notify CLEC and/or the other parties, and provide the opportunity for
calculation and collection from the new parties of their proportionate share of
the modification costs, adjusted to reflect depreciation.

<PAGE>

          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their respective duly authorized representatives.

AMERICAN TELEPHONE TECHNOLOGY, INC.*       U S WEST COMMUNICATIONS, INC.*

/s/ F. Lynne Powers                        /s/ Katherine Fleming
--------------------------------           ------------------------------------
Signature                                  Signed

F. Lynne Powers                            Katherine L. Fleminq
--------------------------------           ------------------------------------
Name Printed/Typed                         Name Printed/Typed

Vice President - Finance                   Executive Director - Lnterconnection
--------------------------------           ------------------------------------
Title                                      Title

   1-7-00                                     01/13/00
--------------------------------           ------------------------------------
Date                                       Date

*        This Agreement is made pursuant to Section 252 (i) of the Act and is
premised upon the Interconnection Agreement between AT&T Corp.. and U S WEST
Communications, Inc. (the "Underlying Agreement"). The Underlying Agreement was
approved by the Commission on September 5, 1997.

With respect to this Agreement, the Parties understand and agree:

i) The Parties shall request the Commission to expedite its review and approval
of this Agreement.

ii) Notwithstanding the mutual commitments set forth herein, the Parties are
entering into this Agreement without prejudice to any positions they have taken
previously, or may take in the future, in any legislative, regulatory, or other
public forum addressing any matters, including those relating to the types of
arrangements contained in this Agreement. During the proceeding in which the
Commission is to review and approve the Agreement, U S WEST may point out that
it has objected, and continues to object, to the inclusion of the terms and
conditions to which it objected in the proceedings involving the approval of the
Underlying Agreement.

iii) The Parties agree that traffic originated by either Party and delivered to
the other Party, which in turn delivers the traffic to an enhanced service
provider is not covered by this Agreement, since such traffic is interstate in
nature and this Agreement, including the reciprocal compensation provisions,
only apply to local traffic. American Telephone Technology, Inc. is responsible
for identifying enhanced service providers and associated usage.

iv) This Agreement contains provisions based upon the decisions and orders of
the FCC and the Commission under and with respect to the Act. Currently, court
and regulatory proceedings affecting the subject matter of this Agreement are in
various stages, including the proceedings where certain of the rules and
regulations of the FCC are being challenged In addition, there is uncertainty in
the aftermath of the Supreme Court's decision in AT&T CORP. ET AL. V. IOWA
UTILITIES BOARD. Based on that uncertainty, and the regulatory and judicial
proceedings which will occur as a result of that decision, the Parties
acknowledge that this Agreement may need to be changed to reflect any changes in
law. The Agreement has not been corrected to reflect the requirements, claims or
outcomes of any of the Proceedings,

<PAGE>

although the pricing does reflect the Commission's most current generic
order, if any. Accordingly, when a final, decision or decisions are made in
the Proceedings that automatically change and modify the Underlying
Agreement, then like changes and modifications will similarly be made to this
Agreement. In addition, to the extent rules or laws are based on regulatory
or judicial proceedings as a result of the recent Supreme Court decision,
this Agreement will be amended to incorporate such changes.

v) Subsequent to the execution of this Agreement, the FCC or the Commission may
issue decisions or orders that change or modify the rules and regulations
governing implementing of the Act. lf such changes or modifications alter the
state of the law upon which the Underlying Agreement was negotiated and agreed,
and it reasonably appears that the parties to the Underlying Agreement would
have negotiated and agreed to different term(s) condition(s) or covenant(s) than
as contained in the Underlying Agreement had such change or modification been in
existence before execution of the Underlying Agreement, then this Agreement
shall be amended to reflect such different terms(s), condition(s), or
covenant(s). Where the parties fail to agree upon such an amendment, it shall be
resolved in accordance with the Dispute Resolution provision of this Agreement.

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